We also discuss Wesley Jones, foreign competition, and artificial monopolies.

Recommended Book: The Quantum Thief by Hannu Rajaniemi

Transcript

In 1920, the then-Senator for the state of Washington, Wesley Jones, who was also the chairman of the Senate Commerce Committee, introduced the Merchant Marine Act as a method by which the American merchant marine could be sustained and remain competitive in the face of external competition, and in the wake of the destruction of a bunch of ship during WWI.

The US Merchant Marine is all the commercial water-going vessels that are US flagged, and the crews of these vessels. During peacetime, these boats and ships conduct trade and other services along the United States’ coasts and throughout its internal waterways, its rivers and lakes. During wartime, these vessels and their crews are tapped to help move troops and weapons and supplies for offensive or defensive military efforts.

The theory of this proposed Act, then, was to ensure that the US Merchant Marine would remain well-funded and well-taken-care-of, because lacking some kind of government support, there was a good chance it would either slowly degrade, not having enough business to pay for itself, or—and this has been a persistent concern for similar pseudo-fleets of merchant vessels around the world for the past few hundred years—it would fall into disrepair because it would be outcompeted by vessels and crew coming in from elsewhere that would charge lower prices, creating unsustainable economics for the locals and thus slowly degrading this economic and military asset.

When this Act was proposed, in 1920, the preservation of this asset was on the mind of many US politicians, as the world had just emerged from World War I, and in that and previous conflicts, the US Merchant Marine had been pretty vital to ensuring the US eventually came out on the right side of things. It was also fundamental to the rebuilding of the US economy following difficult conflicts, because the moving of cargo from city to city along coastlines, and throughout long expanses of rivers—getting food from place to place, getting building supplies where they need to go—has always been important, especially following periods in which there isn’t a lot of building going on, and when supplies chains are reoriented toward other purposes, like fighting.

So in addition to all the language the helps regulate trade within US waters and between US ports, and which says how the crew of such vessels have to be treated, this Act was also meant to provide protected status to US Merchant Marine vessels and crew, giving them a pseudo-monopoly on certain types of trade activities in the US.

It was also—and this is important context—meant to give Senator Jones’ state of Washington a de facto monopoly on trade with Alaska. But it was sold to the rest of Congress and the country as a means of bolstering the funds flowing into the US Merchant Marine. Section 27 of this act, often called the Jones Act, requires that all goods transported between US ports be carried by US vessels built in the US, flying the US flag, owned by US citizens and with majority US citizen and permanent US resident crews.

What I’d like to talk about today are the other consequences of the Merchant Marine Act of 1920, and in particular the Jones Act component of it, and why there’s been renewed opposition to the Jones Act in recent months.

—

The logic of the Jones Act, at least on the surface, is pretty straightforward.

If you’re worried about foreign competition coming in and taking all the shipping jobs, swooping in from areas where crews aren’t paid as much, and where ships can be built cheaper, so they can charge less than US-made and -manned ships, all you have to do is require all the ships and people on the ships are of US-origin, and you’re good to go. Those foreign competitors aren’t allowed to take the jobs, and that sets the standards in a different place, allowing US vessels and their crew and owners to charge whatever they need to charge to sustain themselves.

This, in theory at least, should also stimulate the US ship-building industry, as that monopoly means anyone who builds new ships stands a pretty good chance of making their money back. After all, there’s no dramatically cheaper competition out there, so you’ve got relatively little downward price pressure and seemingly plenty of customers, because there’s a lot of US coast, and a lot of internal waterways that have traditionally be used for trading purposes.

In practice, though—and this isn’t uncommon with protectionist measures; things that seem like they should work for the intended purpose actually leading to other, less ideal outcomes—the Jones Act is often blamed for increasing prices on pretty much everything, and for increasing prices dramatically in places like Hawaii, Alaska, Puerto Rico, and other US territories, like American Samoa and Guam, that are reliant on imports to survive.

If open competition isn’t allowed, prices don’t tend to go down, and in fact they can instead go up, especially if the number of entities providing these services drops over time.

That means places without other options, without the ability to ship food and electrical equipment and other such fundamentals using highways or regularly flying, large cargo planes, they are forced to pay increasingly high cargo ship prices, instead. And there’s no chance that a competitor will emerge, because there just aren’t enough ships available to haul all the stuff these places need at a regular, sustaining, cost-effective cadence.

These higher prices are kind of built into the monopoly model, but they’re made even worse by the state of the US shipbuilding industry, which for a while, from about the mid-1800s until the mid-20th century, was top of the line, producing more ships than any other country during WWII, and before that churning out some of the best and fastest ships in the world for trade purposes.

But after the two world wars, and a surge in shipbuilding infrastructure that was rapidly deployed in the first half of the 20th century, US government subsidies for the industry began to dry up, many of the ships built during the war were sold to foreign countries and private owners for a quick buck, and most of that infrastructure was mothballed, the more efficient processes it developed decommissioned in favor of less-efficient, more expensive approaches.

During WWI, the US churned out more then 5,000 ships at the over 100 shipyards it had operating at the time, and was able to produce more naval tonnage in three years than it had produced in the entire history of the nation’s existence, up till that point.

Post-WWI, though, the US was already less efficient than foreign competitors, especially European competition, and post-WWII, the emergence of overland infrastructure in the US, like the burgeoning national highway system, made shipping via trucks increasingly competitive with the previously dominant approach of shipping via internal waterways.

Airline shipping became a competitor, too, around that same time. So the technological developments and new overland infrastructure of the post-World War era meant that in the US, although coastal shipping in particular remained a solid option for many types of shipping, using trucks on the nation’s growing highway system usually ended up being cheaper and easier, and in some cases much faster, too, and eventually air cargo became even more competitive for some types of jobs and clientele.

The oil crises of the 1970s amplified this trend, collapsing the market for oil tanker ships and seriously damaging the overall shipbuilding industry, including in the US. Even with new US government subsidies meant to support the flailing industry, building ships in the US usually just didn’t make much economic sense, the cost of building on US soil costing nearly twice as much as it did in some foreign ports.

During the Reagan administration, even those 1930s-era subsidies were dropped, and that led to further collapse in the US shipbuilding industry. Before the end of these subsidies, the US was producing about 20 commercial ships per year, already a catastrophic drop from the World Wars era, but after the end of the subsidies, it produced five commercial vessels in the next eight years, combined.

Some new subsidies were introduced in the 90s, when the Cold War ended, but the industry was in such bad shape at that point, orders from the US military and from commercial traders often went unfulfilled, or went wildly over budget. Some ships were finished, but riddled with so many flaws that they were unusable.

US shipbuilders blamed foreign government subsidies, claiming they were really bad at their jobs because other countries were giving their shipbuilding entities more money to exist, and President Bill Clinton was able to secure an agreement with many of the US’s trading partners to temper these subsidies a bit, in response to those complaints. Though when US shipbuilders realized this agreement would also mean they would lose some of their subsidies, in the tradeoff, they switched to campaigning against it, and the US ultimately wasn’t involved in that agreement.

The US’s shipbuilding efforts improved a bit in the late-90s and early 2000s, but efforts elsewhere were better, and while the US produced about 3% of all commercial shipping tonnage, of all trade-related naval vessels, basically, in the early 1970s, by 1999, that was down to 0.25% of global tonnage.

At this point, following that aforementioned agreement to reduce subsidies and others like it, much of the world’s shipbuilding industries are on pretty solid footing without government support, while the US’s is protected by the Jones Act, and very much not in solid shape; it’s completely uncompetitive and wildly unproductive, and this has led to many secondary, knock-on issues, like increased prices, especially in places like Alaska, Hawaii, and Puerto Rico, but this actually reportedly costs the US economy something like 0.1 to 0.4% of its total GDP, so about $31.8 billion to $127.4 billion each year. And it’s also hobbled our efforts to invest in things like offshore wind farms and other such infrastructure, because we simply don’t have enough ships in operation to do that sort of thing. These ships also just cost so much to use, even when they’re available, that the price of shipping and deploying things is overwhelming, especially compared to doing the same in other countries.

In mid-March of 2026, the second Trump administration issued a Jones Act waiver for some types of product, including energy products, fertilizer, and related inputs, like ammonia. That means on an emergency basis, foreign-flagged, built, and staffed ships can operate in US waters, bringing these types of trade goods from US port to US port, without penalty.

Within just two months of the waiver going into effect, dozens of foreign vessels entered the US trade market, reinforcing slumping trade routes and even creating new ones. The Gulf Cost to West Coast route has proved to be especially popular, seeing four times the trade activity from the Gulf to California in just those two months as we previously saw over the whole of 2025, combined, and a an entirely new route emerged, too, shipping naphtha from California to Texas.

More shipping also arose between the US mainland and Puerto Rico, bringing propane to Puerto Rico in a usable volume for the first time because there are no liquified petroleum gas tankers in the Jones Act fleet; this meant that despite the large amounts of LPG produced in the US, Puerto Rico usually has to import their LPG from Chile and other foreign sources; this waiver allowed them to get it from the US mainland, instead.

In April of this year, the Trump administration announced a 90-day extension of the Jones Act waiver. This waiver is intended to help moderate surging prices on all sorts of good, especially energy products, at a moment in which the closure of the Strait of Hormuz has created shortages of such products on global markets. That shortage has stoked inflation, all over the place, but especially in the US, hence this effort to temper that inflation; it is an election year in the US, after all.

The waiver seems to be helping, in some limited regards at least, and it’s providing all sorts of data for groups that oppose it, illuminating what seems to be latent demand for such trade routes, that demand typically unmet because of the limitations of the Jones Act on waterway and coastal trade in the US; there just aren’t enough US-made and created and flagged ships performing this kind of trade because of that artificial monopoly.

The American Maritime Partnership, however, which is a lobbying group put together by the US domestic maritime industry, recently launched an ad campaign aimed at ending the waiver, saying, basically, that the Jones Act protects the US maritime industry from unfair foreign competition, and that it protects the US from foreign threats that might otherwise infiltrate and negatively impact US markets; the implication being that terrorists or some such might come to the US with trade vessels, and then wreak havoc by doing terrorist things via these vessels, or maybe use them to bring more drugs into the country.

Given the power such lobbying groups have in the US, there’s a solid possibility that when an agreement is eventually reached with Iran over the Strait of Hormuz, and if global trade then returns to something like its previous default, this waiver will go away. That would be the politically expedient move by the Trump administration, because most people don’t know enough about the Jones Act to care, but the maritime industry very much does, as without this artificial monopoly, they would probably be required to fundamentally change if they wanted to stay alive.

There’s evidence that getting rid of the Jones Act permanently might be beneficial on multiple fronts, especially in terms of inflation and overall economics, but also in terms of forcing the US maritime industry to make those costly, foundational changes. Despite the many possible benefits of doing away with this act, though, the ‘protect our borders from foreign invaders’ aspect of the Jones Act might be enough to sway this administration toward fully reinstating it as soon as the conflict in Iran and inflation allows.

Show Notes

https://apnews.com/article/jones-act-trump-trade-abcac596db839bff3679b3117d2e81b2

https://www.cato.org/blog/jones-act-waiver-data-reveals-universe-blocked-american-trade

https://www.oecd.org/content/dam/oecd/en/publications/reports/2019/04/local-content-requirements-and-their-economic-effect-on-shipbuilding_f81e0027/90316781-en.pdf

https://www.cato.org/blog/jones-act-contributes-offshore-wind-growing-pains

https://www.engine.online/news/us-maritime-group-urges-end-to-jones-act-waiver-7c1b

https://gcaptain.com/chinese-cosco-tanker-delivers-asphalt-to-connecticut-under-jones-act-waiver/

https://gcaptain.com/jones-act-waiver-reshapes-u-s-oil-trade-as-foreign-tankers-flood-domestic-routes/

https://www.investopedia.com/terms/j/jonesact.asp

https://www.winston.com/en/legal-glossary/what-is-the-jones-act

https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear

https://www.atlasnetwork.org/articles/the-jones-act-is-costly-harmful-and-dangerous

https://www.maritime.dot.gov/ports/domestic-shipping/domestic-shipping

https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920

https://en.wikipedia.org/wiki/United_States_Merchant_Marine

https://www.cato.org/blog/jones-act-contributes-offshore-wind-growing-pains

We also discuss militants, Uganda, and the Bundibugyo virus.

Recommended Book: We Should Get Together by Kat Vellos

Transcript

Ebola, which is more formally called Ebola Virus Disease or Ebola Hemorrhagic Fever, is caused by an infection by a type of RNA virus called an orthoebolavirus.

There are six known species of orthoebolavirus, and four of them have at some point infected and caused illness in humans. Those four are the ebola virus, sometimes called the Zaire ebolavirus, which historically has been the strain responsible for the biggest, most devastating outbreaks of this disease, the Sudan virus, the Taï Forest virus, and the Bundibugyo virus, the latter three each causing a variant of the disease that carries the same name.

The other two orthoebolavirus species that we know of, the Reston virus and the Bombali virus, have been known to infect animals, but have not, at this point at least, been known to make the jump to human hosts.

Ebola symptoms vary a bit between specific viruses and between hosts and infection conditions, but in general those who are afflicted by ebola begin to experience symptoms between a few days and a few weeks after infection, and they’ll start by experiencing cold and flu-like symptoms, like fever, sore throat, headaches, and general muscle pain. Soon after that, though, they’ll start experiencing diarrhea and rashes, they’ll begin vomiting, and they’ll begin to experience liver and kidney dysfunction, and around that same time, they’ll start to bleed internally and externally.

Once infected, a person has between a 25 and 90% chance of dying, depending on the strain of ebola, and if they die, usually due to what’s called hypovolemic shock—a severe and sudden loss of bodily fluids, including blood—they usually die between 6 and 16 days after those first symptoms are reported.

What I’d like to talk about today is a new outbreak of ebola centered in the Democratic Republic of Congo, and why this one stands out from other recent outbreaks in the region.

—

Ebola was first officially reported in medical literature in 1976, mostly in sub-Saharan Africa, and there have been semi-regular outbreaks in that region, of various sizes ever since, and very likely before that, too.

This disease is spread through direct contact with the body fluids of someone who’s infected, and it’s thought that this is probably how the disease made the leap from animals, like primates, to human beings: locals sometimes come into close contact with local primates, either while just coexisting, or while hunting bushmeat, hunting monkeys for food.

It’s thought that fruit bats serve as hosts for the virus, long-term, and it then spreads to other animals, and then sometimes to humans, in some cases causing illness along the way in those other species, but not always; bats are not negatively afflicted by it, for instance, but humans very much are.

Despite not being an airborne pathogen, so it’s not spread by coughing or talking too close to someone, like a cold or Covid-19, ebola can still be spread person-to-person through bodily fluid contact. That means fluids like saliva and blood and semen and breast milk, and research has shown that even after someone survives and recovers from ebola, the disease can linger in their fluids for months. So if someone catches it, survives, and then breast-feeds their child, or kisses or has sex with their partner, or gets a cut and then someone else comes into contact with their blood, like a health worker, that can lead to the transmission of the disease, despite their having been well and seemingly fully recovered for weeks or months.

That lingering contagiousness is a confounding factor with this disease, as it requires that people be very careful, even to an antisocial degree, and even well after it seems like that’s no longer necessary, because they feel good and healthy again.

This also means that if someone dies of ebola, contact with their bodies can be incredibly dangerous. And past outbreaks have stemmed from or been further enflamed by locals wanting to perform community funerals and wakes, during which the body is often on display and touched by attendees, and that has led to further spread of the disease—which in many cases is difficult to tie back to that wake, because again, symptoms don’t arrive right away, and ebola symptoms are similar to what locals experience all the time from other afflictions, like colds and malaria.

This past week, in Bunia, which is located in the Democratic Republic of the Congo, locals stormed a regional hospital in an attempt to recover the body of a beloved local figure who died of ebola. In the process, the hospital’s isolation ward, which was being used to keep ebola victims separate from everyone else, to keep the disease from spreading further, that ward was burned to the ground.

There are no vaccines or treatments for the Bundibugyo Ebola species that is at the core of the outbreak, and the spread of misinformation in the area had locals believing that these health workers were trying to kill their patients, not save or isolate them so no one else caught ebola.

The man at the center of this, who died five days after being admitted to the hospital, was thought, by his family, to have malaria, which is common in the area and has very similar symptoms, at least in the early days of an ebola infection.

They demanded the hospital release his body so they could bury him, and the staff refused, saying doing so right now could lead to more ebola spread. The family gathered more locals, who threw stones at hospital workers, they broke through the gates of the hospital, police fired into the air to try to disperse the angry crowd, and the ebola ward caught fire during the melee. During that fire, five patients who were in the ward, all suspected of having ebola, fled, and they haven’t yet returned—so they are possibly out in the open, no longer isolated, suffering and maybe dying from their infection, and possibly spreading it to others, as well.

There’s a lot going on in this story, and misinformation spread by local traditional healers who don’t like the hospitals and the medical workers who tell locals medical information rather than folk healing information are part of the problem, but the local medical establishment not doing a good job of educating locals about what they’re doing and why are arguably the flip side of that same coin; more investment in that kind of information dissemination by the government would go a long way to preventing this sort of thing in the future, and health workers globally could use more resources and overall infrastructure to help protect them while they’re carrying out their work.

That said, this is just one small facet of what’s become a much larger story. As of the day I’m recording this, this new outbreak, which was first reported in the Ituri Province of the DRC, has caused 186 confirmed deaths, with 82 more confirmed cases and 836 suspected cases.

As I mentioned, it’s caused by the Bundibugyo ebolavirus, which is less common, at least at this scale, and thus typical response efforts used against the more common Zaire ebolavirus, don’t seem to map onto this strain as well as was hoped, and the World Health Organization declared a Public Health Emergency of International Concern on May 16, as while this is unlikely to become as significant an issue as Covid-19 or other aerosol-spread infections on a global level, regionally it’s causing a lot of damage, and its nature, and the state of international aid for this sort of thing—which is currently substantially reduced, in part because of pullbacks on such programs by the current US administration—means it could continue to flare for several more months, before eventually starting to slow, killing many, many people, in any incredibly painful and contagious manner, in the process.

This is the 17th ebola outbreak in the DRC since the disease was first recorded in the medical literature, and the third outbreak of this strain—the first of which was in the Bundibugyo District of Uganda in 2007 through 2008, that’s where it got its name, and then another in 2012 in the DRC.

This isn’t the deadliest strain of ebola, only killing between 25 and 50% of those afflicted, but because of those aforementioned issues, plus it having flared in a region where governance is complicated by the presence of several militant groups, this wave of infections has created a broad and precarious situation; lots of people have been uprooted from their homes because of conflict between these militant groups and the government, and those refugees have been spreading ebola to other areas throughout the region, making contact tracing difficult or impossible, and leading to surges of new infections in neighboring, and a few further-flung, provinces.

According to a predictive model of the outbreak published by the MRC Centre for Global Infectious Disease Analysis, the current number of infected people could actually be well over 1000, in part because of how difficult it’s been isolating the infected, and because the early symptoms are so similar to other common local afflictions; so people are less likely to visit hospitals and get an accurate diagnosis, because they assume it’s just a bout of something else, something less deadly and contagious.

Getting resources into the area is becoming more difficult, too, as those militant groups are fairly active, one such group recently taking over a primary regional airport, which has disallowed the import of necessary medical equipment for regional hospitals.

This hasn’t had much of an impact globally, yet, though cases have been documented in neighboring Uganda—a total of five confirmed infections, as of the day I’m recording this—and the World Cup team from the DRC was ordered to isolate before entering the US to compete, forced to remain in Belgium for 21 days to confirm they aren’t carrying the disease before being allowed into the States for the competition.

Far more likely than mass global spread, though, is more regional spread, which could lead to temporary border lockdowns and similar efforts to keep those who are in currently impacted regions from scattering, understandably fleeing either the outbreak or the militants in these areas, and thus carrying the disease into different provinces or countries.

Local and international aide organizations are scrambling to prevent this, and to identify and isolate infected people where possible, but it’ll likely be a while before they have the necessary on-the-ground resources to do this correctly, and a lot more spread could occur before they’re able to do so at an effective level.

Show Notes

https://en.wikipedia.org/wiki/Ebola

https://en.wikipedia.org/wiki/Western_African_Ebola_epidemic

https://www.cdc.gov/ebola/about/index.html

https://pmc.ncbi.nlm.nih.gov/articles/PMC5175058/

https://www.reuters.com/business/healthcare-pharmaceuticals/congo-ebola-outbreak-cases-are-top-iceberg-coalition-says-2026-05-21/

https://apnews.com/article/congo-ebola-outbreak-who-4e08d8df6d9c34039a9e0b8bad7a8954

https://www.wsj.com/world/africa/ebola-outbreak-explained-4ab4414f

https://www.aljazeera.com/amp/news/2026/5/23/uganda-confirms-three-new-ebola-cases-bringing-total-to-five

https://www.theguardian.com/football/2026/may/23/dcr-world-cup-squad-isolate-ebola-outbreak-congo-united-states

https://www.nytimes.com/2026/05/22/world/africa/ebola-congo-clinic-burned-protests.html

https://www.npr.org/2026/05/23/nx-s1-5831963/u-s-passengers-flying-from-ebola-affected-countries-rerouted

https://www.cdc.gov/han/php/notices/han00530.html

https://en.wikipedia.org/wiki/2026_Ituri_Province_Ebola_epidemic

https://edition.cnn.com/health/maps-ebola-charts-vis

https://www.theguardian.com/world/2026/may/21/ebola-outbreak-public-health

https://www.reuters.com/business/healthcare-pharmaceuticals/suspected-ebola-cases-reported-rebel-held-congo-area-2026-05-21/

https://www.nytimes.com/2026/05/19/world/africa/ebola-outbreak-deaths-congo-who.html

We also discuss the Polar Jet Stream, hurricanes, and climate models.

Recommended Book: Kleptopia by Tom Burgis

Transcript

Under normal circumstances, the Pacific Ocean’s average surface temperature, the distribution of heat across its vast expanse, is moderated by trade winds that blow east to west along the equator, which help move warm water from South America over toward Asia.

Those winds are called trade winds because, back during the European age of Exploration, they helped ships from Europe head west toward Asia and the Americas. And these winds form in part because of the Earth’s rotation, the Coriolis effect funneling air toward the equator, where it is then more concentrated and thus potent, which is useful if you’re trying to move a ship with sails, but also serves the purpose of moving warm water from one part of the ocean to another part of the ocean.

As those warmer surface waters are shifted from the Americas to Asia, water is pulled up to the surface from lower down in the ocean as part of a process called upwelling. This process results in cooler temperatures on the surface, because lower down, oceanic water is colder, and that lower-down water is also more rich in nutrients, which has the knock-on effect of stimulating more biological activity along these cooling surface waters.

That’s the normal state of things in the Pacific Ocean.

There are sometimes deviations in this norm, however, that result in very different outcomes; these deviations are broadly called the El Niño Southern Oscillation Cycle, and that cycle consists of opposite El Niño and La Niña climate patterns.

During La Niña patterns, trade winds are more powerful than usual and they shove a lot more of that warm surface water to Asia than is typical, and that has the net impact of moving more deep-down cold, nutrient-rich, ocean water to the surface.

This, in turn, nudges the Polar Jet Stream, which is a channel of fast-moving, westerly winds that lives about 30,000 ft or just over 9000 meters up in the sky, and which crosses both warmer, mid-latitudes and far colder Arctic latitudes, further north. The Polar Jet Stream is responsible for moderating or intensifying weather patterns around the world, and like the trade winds, it’s influenced by the spin of the planet, but it’s also adjusted by surface systems, like the temperature of the Pacific. So the arrival of a La Niña pattern pushes the jet stream further north, and as a result, weather patterns change, and in North America, we tend to see drought in the southwest, heavier rains and flooding and in the Pacific Northwest and Canada, warmer winters in the South, and cooler winters in the North.

La Niñas also tend to result in more severe hurricane seasons in the Atlantic basin, while suppressing hurricane activity in the central and eastern Pacific basins.

El Niño, in contrast, results from weaker trade winds, which, because these winds don’t pack as much of a punch, means less warm water is being shoved from South America to Asia, and thus the surface temperature of that part of the Pacific is warmer, lacking that upwelling of cold water to replace the warm water that would otherwise be displaced over to Asia.

El Niño also adjusts the location of the jet stream, but in the opposite direction, pulling it south of its usual spot. That then causes more heat and dryness across the northern US and Canada, but makes the southern US and Gulf Coast a lot wetter, leading to more flooding.

What I’d like to talk about today are predictions about an anticipated upcoming El Niño climate pattern, and why some climate scientists are warning that it could be a doozy.

—

Climate scientists with the US’s National Oceanic and Atmospheric Administration, the NOAA, released new model forecasts in mid-May, and one of those models indicated that an El Niño pattern could form in the Pacific as soon as June.

The NOAA puts together and releases new models on a regular basis, as the variables influencing these massively complex patterns are always changing, and the trend over the past three months has been increasing certainty about the formation of this El Niño pattern, but also an increasing likelihood that this potential El Niño would be very strong, perhaps historically so.

There have been a total of 27 El Niños since 1950, when we started officially tracking such things, and we get one every three or four years, on average. The last one occurred from the summer of 2023 into spring of 2024.

The current models show that we could see another one of these systems as soon as next month, then, and there’s currently a nearly 60% chance that this particular El Niño would become strong—and that’s an official designation, by the way, a strong El Niño being one that sees an ocean surface temperature increase of between 1.5 and 2 degrees Celsius—and a one-in-three chance that it could become a very strong, or super El Niño, which means it tallies an oceanic surface temperature increase of 2 degrees celsius or higher.

These so-called super El Niños are a lot rarer than the typical kind. There have only been five recorded since 1950, the last one straddling 2015 and 2016.

Some of these models suggest that this system could be historically strong, though, pushing into territory where we might need a new rank on that existing scale—it could surpass 2.5 degrees celsius above the standard oceanic surface temperature, which would make it the most, or among the most intense El Niño systems on record.

I want to note real quick here, before we get into possible implications, that these models are inherently imperfect, because of how complex these systems are, and how many variables influence them. But also that, again, it’s just some models saying this, that it’s only a 60% chance of even a strong El Niño, and that it’s still a 1 in 3 chance of a very strong one—so this isn’t at all certain, and the scientists behind all this are urging preparedness, but not panic, and are trying really hard to make it clear that this isn’t some kind of prophecy or guarantee. The reporting on this NOAA announcement has been frantic and panicky in some cases, but that’s probably not the proper response to this, and the real-deal experts here are encouraging awareness and that we recognize the potential for something wild with this pattern, but it’s definitely not the declaration of the end of the world or anything.

So, that important caveat noted, let’s talk about some potential impacts of this system, if it does indeed hit that currently unlikely, but possible, very strong designation, or higher.

In general, during El Niño patterns, hurricane seasons in the Atlantic are quieter, while hurricane seasons in the Eastern and Central Pacific are more active. This isn’t 100% the case, but it’s the overwhelming trend. So there’s a good chance we would see more and more powerful hurricanes in the Pacific during this period, should we step into super El Niño territory.

Beyond hurricane impacts, though, these systems also influence water cycles around the world; during El Niño patterns, the US south tends to be wetter, as does East Central Africa, while northern South America tends to be drier, as does Australia and Northern and Central India.

Shifting or amplifying water cycles, in one direction or the other, drier or wetter, can cause all sorts of issues, ranging from flooded homes to devastated crops. Just like with hurricanes, this usually represents a break in the normal way of things, so we tend to see things like mudslides and erosion and unplanned-for droughts that cause a lot of damage.

Another significant component of these patterns are the temperature spikes they stoke. During the last recorded normal El Niño in 2023, global temperature levels were pushed up by 1.45 degrees C above pre-industrial levels, causing global mean temperatures to peak at 1.58 degrees C between July 2023 and June 2024.

In practice, that means the earth momentarily shot past that 1.5 degrees C above pre-industrial levels milestone that climate scientists have been warning about for decades, because it marks a point at which many natural systems will begin to change or fall apart, and many ecosystems will begin to collapse, leading to mass die-offs and potentially even the necessity for wide-scale human migration, away from areas that are no longer sustainably livable.

That spike was momentary, but illustrative, and there’s a chance that another one, especially one stoked by a super El Niño, could push things even further, speeding up the melting of the ice caps and other glaciers, which then, in turn, could speed up the larger, consistent increase in global temperatures because the white of the ice bounces light from the sun, and thus heat, back into space, while the comparable dark of water and land absorbs more of that light and heat.

In this way, even short-term spikes in temperature can speed up the long-term trajectory of global climate change, because the variables that are informing that change can be permanently adjusted; ice caps are just one example, there are countless such variables, some that we know about, and others that we certainly don’t, yet.

While this potential upcoming El Niño might be par for the course, in other words, it’s also arriving at a moment in which many of these variables are already being fiddled with by other forces, and that means even a not-very strong, not-super El Niño could have outsized impact, in terms of pushing the planet toward a new, unfamiliar climate regime, the implementation of which could lead to all sorts of ecological and civilization devastation and change.

Show Notes

https://en.wikipedia.org/wiki/El_Ni%C3%B1o%E2%80%93Southern_Oscillation

https://www.usatoday.com/story/news/weather/2026/05/14/powerful-el-nino-is-taking-shape-forecast-says/90043794007/

https://weather.com/2026/05/13/news/climate/el-nino-could-form-in-june-noaa-says-and-could-become-record-strong

https://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/ensodisc.shtml

https://www.cnn.com/2026/05/14/weather/super-el-nino-climate

https://www.yahoo.com/news/science/article/the-chances-of-a-rare-super-el-nino-occurring-in-2026-just-got-higher-heres-how-it-could-wreak-havoc-on-the-weather-212420384.html

https://oceanservice.noaa.gov/facts/ninonina.html

https://www.ncei.noaa.gov/access/monitoring/monthly-report/global/202604

https://www.colorado.edu/today/2026/05/14/super-el-nino-coming-climate-scientists-weigh

https://theconversation.com/a-super-el-nino-why-its-too-early-to-forecast-one-with-certainty-but-not-too-soon-to-prepare-282574

https://abcnews.com/US/el-nio-expected-develop-strength-remains-uncertain/story

We also discuss Tories, the Lib Dems, and two-party systems.

Recommended Book: Peak by K. Anders Ericsson and Robert Pool

Transcript

For more than 100 years, the British political system has been dominated by two parties: Labour and the Conservative Party, often called the Tories.

In practice, that means these two parties, which are center-left and center-right in their leanings, respectively, have tended to shape the direction of British politics and the Overton Window of thinkable proposals—things that might actually happen because they get the requisite support from politicians and the public.

These two parties have usually had to work with other, smaller parties in order to get anything done, because the UK has a parliamentary system that often leaves the party with the most representatives lacking enough support to run a functioning government, solo. As a consequence, the Liberal Democrats, which is a fairly centrist party, the Green Party, which focuses on environmentalism and more left-wing concerns, Plaid Cymru (plied KUM-ree), which is the Welsh nationalist party, and the Scottish National Party, which is exactly what it sounds like, have long influenced Labour and the Tories, aligning their votes with whomever gives them a seat at the table. This has given some influence to smaller groups that might otherwise lack representation, though that influence has typically been moderate to meager, at best—the folks in Labour and the Conservative party have run things in the UK, and that’s been the case for generations.

Things started to shake up a bit in the 20-teens, however, when anti-immigration and EU-skepticism in Britain led to the creation of the far-right Brexit Party, which was co-founded by politician Nigel Farage, who was the leader of the UK Independence Party in the early 2000s and 20-teens, and who was previously a Tory, and Catherine Blaiklock, a politician and hotelier who stepped down from her position as party leader the year after the Brexit Party was founded after anti-Islamic and racist comments she’d previously made online were rediscovered.

The Brexit Party existed, almost exclusively, to push for a no-agreement exit from the European Union by the UK, which was considered to be a fairly fringe ideology back then, but which gained a lot of steam as other populists began to add their support to the general concept.

Both the government and the existing political structure of the UK was then caught flat-footed, by all indications very surprised by the eventual success of that push, and the UK left the EU on January 31, 2020, after a whole lot of skepticism that it would ever happen, even after a vote in favor of Brexit took place. This represented a serious come to Jesus moment for British politicians, but also British society, and there’s been quite a lot of self-reflection and naval gazing in the years since, as the Brexit pullout from the EU has caused quite a lot of economic and diplomatic damage, while also shining a spotlight on numerous simmering issues that were previously overlooked or unaddressed, including the bubbling resentment and at times outright xenophobia felt by a significant portion of the British electorate, and persistent economic issues faced by folks at the middle and lower rungs of society.

What I’d like to talk about today is the recent 2026 UK Local Elections, and what they seem to tell us about how things are going in British politics, and what they portend for the current Labour-run administration.

—

On May 7, 2026, the UK held local elections for 5,066 councillors, 136 local authorities, and six directly elected mayors. Some of these elections were postponed in 2025 to allow for government restructuring, but most of these positions were last up for election in 2022.

This election was generally seen as an unofficial referendum on the governing Labour Party, and in particular the current Prime Minister, Keir Starmer, who has been in office for just under two years, and who stepped into the role of PM after the role was held by the Conservative Tories for 14 years; five different Prime Ministers taking the reins during that period, including David Cameron, Theresa May, Boris Johnson, Liz Truss, and Rishi Sunak.

All that changing in leadership is indicative of the chaos the UK government was experiencing at the time, the May 2010 general election leading to a period of significant austerity—the government cutting tons of social programs in order to reduce spending—which then fed into more support for Brexit when some members of the party positioned the economic issues people were facing as the consequence of EU-related immigration, and shortly thereafter, the world succumbed to the Covid-19 pandemic.

There was a lot of truly significant political change from about 2010 onward, then, and a lot for the general population to be upset about. The Conservatives held onto power despite it all for those 14 years, but the shift back to Labour was the result of Starmer and his party saying, listen, we hear you, a lot has to change, and we can instigate that change. Trust us.

This new election suggests that the majority of voters in the UK feel that the Labour Party hasn’t lived up to that trust.

In Wales, Plaid Cymru has taken the most seats, 43, but failed to achieve the 49 seat majority they would require to govern, solo.

In Scotland, the SNP took the most seats, but also fell short of a majority, netting 58 seats, not the 65 required for a majority.

Both of those results are not terribly shocking, though in Wales Labour lost a lot of power, down 35 seats and holding onto just 9. The Conservatives also lost in Wales, holding onto seven seats and losing 22.

In Scotland, too, Labor lost some of their influence, losing 4 seats and retaining 17, while the Conservatives lost a whopping 19 seats, holding onto just 12.

In England, the change in seat allocation was stunning, though.

Labour lost 1406 seats, leaving them with 997, while the Conservatives lost 557 seats, holding onto just 773.

Even considering those losses, the biggest story in England is the surge in support for previously small parties, in particular a far-right party called Reform UK, previously called the Brexit Party, and run by the aforementioned proponent of the British exit from the EU, Nigel Farage.

Reform UK went from 2 seats to 1,444; a shocking outcome, and one that makes them the biggest winner in this election, by far. They also gained 17 seats, up from zero, in Scotland, putting them at an equal level there with Labour, and they went from zero to 34 in Wales, putting them in a competitive second place after Plaid Cymru, which again, claimed 43 seats.

Other, non-Labour, non-Conservative parties also gained seats in this election, though not at the level of Reform UK.

The Green Party gained two seats in Wales and six in Scotland, bringing them up to 15 there. They also gained 374 sets in England, bringing them up to 515 total seats, which leaves them in fifth place, but just 258 seats shy of the Conservatives.

The Lib Dems, which are the local Centrist party, gained 151 seats, putting them in third. And there was a small surge in independent politicians winning elections, as well, that group now controlling 199 seats, up from 27 before this vote.

In the wake of this absolute shellacking of Keir Starmer’s Labour party—which again, lost 1406 seats in England, and their opposition, and in many ways their polar opposite, the far-right Reform UK party, gained even more than Labour lost, up 1442 seats—in the wake of that, Starmer has been asked to resign, and as of the day I’m recording this, at least, he’s saying that he will not resign, and since there’s no formal challenge to his leadership, he can stay in power if he chooses.

There is a growing movement amongst Labour lawmakers to ask him to set a timetable for stepping down, however, and there’s a pretty good chance that will happen, as the British political system allows parties to change their Prime Minister mid-term without requiring a new election, so they could swap him out for someone else, making him the face of this immense electoral failure, then they could try to change course before the next election, which will happen by mid-August of 2029, during which the vote will be for the 650 seats in the House of Commons, which is currently dominated by Starmer’s Labour party.

The big takeaway here, from political analysts at least, is that what used to be a reliably two-party system, for over a century that’s been the case, is now a five-way race within a cultural context in which voters seem to be a lot less loyal to politicians and parties, and in which a whole lot of previously reliable infrastructure, social systems, and cultural expectations have been recently disrupted.

People in the UK seem to be generally unhappy about all sorts of things, and that kind of broad unhappiness often results in more populism, which means general anti-establishment stances and us-versus-them ideologies, including racial, religious, and nationalistic versions of such ideologies, and typically a lot more support for charismatic leadership over leaders who are generally qualified and will probably be good at their jobs because they’re experienced and knowledgeable.

In other words, you’re more likely to get loudmouths and celebrities running for office, successfully, in populist electoral contexts, and you’re also more likely to see parties leaning into superficial race, class, and elite-vs-everyman issues, as opposed to running on well-defined approaches to dealing with more complex issues.

In the meantime, until that 2029 election, it’s likely Farage’s Reform UK will bang the drum against the governing Labour party to gather more power in the lead up to 2029, and that other non-Labour, non-Conservative parties will attempt to do the same, newly energized by these results.

And depending on how that non-voting-year rallying goes, this could represent a foot in the door for these smaller parties. And we could consequently see more former Labour and Conservative politicians and voters leaving for Reform, for the Lib Dems, for the Greens, and for independents. All of which will make UK politics a lot more chaotic, but also probably more diverse, with power less centralized and the government’s makeup a bit less predictable.

Show Notes

https://en.wikipedia.org/wiki/2026_United_Kingdom_local_elections

https://www.nytimes.com/2026/05/08/world/europe/uk-elections-local-takeaways.html

https://www.nytimes.com/live/2026/05/08/world/uk-local-elections-results

https://apnews.com/article/uk-elections-starmer-labour-what-to-know-eb11ff39b1b74bbaf9f4ef6abfd60f64

https://www.cnn.com/2026/05/08/uk/uk-local-election-reform-farage-starmer-intl

https://www.bloomberg.com/news/articles/2026-05-08/how-bad-for-labour-britain-s-local-elections-in-six-charts

https://en.wikipedia.org/wiki/Politics_of_the_United_Kingdom

https://www.bbc.com/news/live/c1428pev1n0t#election-englan

https://www.politico.eu/article/nigel-farage-reform-uk-win-next-general-election/

https://en.wikipedia.org/wiki/Next_United_Kingdom_general_election

https://en.wikipedia.org/wiki/Catherine_Blaiklock

https://en.wikipedia.org/wiki/Reform_UK

https://en.wikipedia.org/wiki/Nigel_Farage

https://en.wikipedia.org/wiki/Brexit

We also discuss corruption, instability, and progress.

Recommended Book: Empire of Silence by Christopher Ruocchio

Transcript

Demographic transition is a social sciences theory that posits, based on all sorts of modern historical data, that societies tend to change, demographically, as they transition from a largely agrarian, low-industrial society, to that of a less-agrarian, high-industrial society.

Most modern, post-hunter-gatherer societies have started out plowing the vast majority of their labor into bare subsistence, human beings spending their days, throughout their whole lives, working the land in order to produce enough food to live. All sorts of social and economic systems arose around this base-level fact, including those that tied laborers to the land, allowing for the rise of a leadership or ruling class, regional militaries, and other sorts of specialists. But until relatively recent history, the majority of people in a given society labored to produce raw essentials, and that was just the shape of things.

This began to change with the dawn of the industrial revolution, and in some areas a bit before that, as precursor technologies allowed societies to produce more food and other essentials with less manual labor and using fewer foundational resources, like land. These technologies, as they became more widely distributed, more effective and efficient, and cheaper to deploy and operate, allowed more people to do more sorts of things, leading to a ballooning of industry and commerce in industrializing regions, and that allowed said regions to invest in other things, including medical knowledge, education, and so on.

Life wasn’t exactly a cakewalk in these industrializing areas, and all sorts of new abuses and issues, including long hours at factories and problems related to pollution, arose and became common. But because these sorts of societies required professionals with new types of knowledge and know-how, and because they were able to sustain an increasing number of specialities beyond working the land to generate food and other bare necessities, keeping people alive, longer, and ensuring more people had the specialized knowledge required to do all those things, became more of a priority, and one that could actually be addressed because of the concomitant ability to feed and clothe and house and address more of the needs of more people.

There were gobs of other spiraling forces in the mix, of course, including religion, politics, and so on, but that general tendency to shift away from raw subsistence into more complex and diverse economic systems was a driving factor behind a lot of what happened from around 1800 until, well, now.

What I’d like to talk about today is a specific data point, or collection of data points, that arguably, more than any other such data points, show the benefits of the industrialized, modern society we’re living in, today, despite all the accompanying downsides.

—

So most societies, at this point, have undergone significant changes as a result of our widespread application of technologies that allow human beings to get more done with the same amount of effort.

We’re able to generate more value, of all kinds, than our ancestors, and though it’s possible to criticize the change in priorities and focus on all the negative knock-on effects of these changes—and there are many such negative knock-on effects, like large-scale military conflicts and rampant pollution and climate change—it would be difficult to argue that there haven’t been some fairly significant upsides for humanity, as well.

One key upside is related to that demographic transition I mentioned. As societies shift and it becomes better for everyone if more people know how to do more things, and it thus becomes a priority for more people to live long enough to use the knowledge and know-how they acquire, it has increasingly made more sense for governments to invest in our overall longevity and survivability.

We can’t just say, I’d like everyone to live longer, and then snap our fingers and make that happen. But we can, and have, invested in technologies and systems that make longer lives more likely, and from 1800 onward that’s generally been the trend, with a huge upswing arriving in the mid-20th century, when a bunch of new tools and technologies, including things like modern antiseptics and early antibiotics, first arrived on the scene, dramatically reducing the mortality rate associated with all kinds of medical procedures.

Arguably the most significant social gain during this period, though, has been the bogglingly large reduction in child mortality rates.

Child mortality refers to the death of children under the age of five, and this figure is, today, usually expressed as the likelihood of a child under five dying, per 1000 children in an area. So you might say in India, the child death rate is 92 in 1000, which means 92 of every 1000 children resulting from live births in India die before they reach the age of five. And that was actually the real child mortality rate in India back in the year 2000.

And the story of overall global child mortality rates is actually pretty well exemplified in India’s rates, as the country has seen a dramatic drop in all-cause child deaths in recent decades.

In the year 2000, as I mentioned, it was expected that 92 out of every 1000 children would die before the age of 5 in India. As of 2024, though, that number has dropped to just 32 out of every 1000; a 68% drop. If you go back as far as 1990, the progress is even more impressive, those 2024 numbers representing a 76% drop in child mortality.

This progress has largely been the consequence of intentional, targeted health interventions by the Indian government, including institutionalized child delivery services and widespread, well-funded immunization efforts that ensured more children got vaccines and other sorts of care that was previously lacking, or which was not widely disseminated beyond wealthy families. They’ve also invested in newborn care and neonatal units at hospitals, which has increased child survival outcomes in a large radius around these facilities.

Southeast Asian nations still account for about 25% of all under-five deaths, globally, but improvements in India mirror those in China, which made rapid and sustained progress on this issue beginning in the 1950s, but really hitting their stride in the 1970s, when their child mortality rate was 143 per 1000 children; that rate dropped to just 12 per 1000 by 2020.

Globally, right now, the average child mortality rate is just under 40 per 1000, which is down from 93 per 1000 in 1990.

That’s a staggering amount of progress, but it does mean that nearly 5 million children still die each year before their 5th birthday, which adds up to something like 15,000 of such deaths per day.

At the moment, the vast majority of these deaths, about 80% of them, occur in Southeast Asia and Sub-Saharan Africa. The cause of these deaths varies a bit based on location, and there’s a time component to this, too, as some areas have seen much higher rates due to epidemics, but most of the causes of child death before the age of 5 are consistent, with premature birth and pneumonia, birth asphyxia or trauma, malaria, diarrhea, congenital abnormalities, and sepsis representing about 60-70% of such deaths, globally.

Almost all of these issues are preventable, and the major barrier to reducing these numbers further is access to resources and expertise that are more widely available and accessible in the wealthier world; there are huge disparities in child mortality between rich countries and poor countries, in other words, and while the number of child deaths has decreased everywhere, including in the world’s poorest countries, over the past 100 years, countries like Finland see about 2 in every 1000 children die before they reach the age of five, while countries like Niger see nearly 115 in every 1000 children die before the age of five.

This figure was previously around 500 in every 1000, globally, so about half of all children would die before the age of five, even in relatively recent history, even in the wealthiest regions, just a few hundred years ago—so again, stunning progress in this area; and looking back, in addition to families needing more hands to work the fields, before everyone started industrializing, families would tend to have as many kids as they could because it was generally just assumed that about half of them would die within the first couple of years; some cultures still have traditions of not naming their children until they’ve lived for a few years because of that earlier child mortality trend.

There’s still plenty to be done in this space, though, and the changes necessary to dramatically drop this mortality rate even further, regionally and globally, are not revolutionary in nature, it’s just a matter of more widely and equitably disseminating tools and technologies and cultural and economic infrastructure that already exists across much of the world, to the places where it doesn’t exist yet.

That’s a tall order in some locations, though, as part of why some high child mortality rate regions still have those high rates is that they’ve also had persistent government instability, which has in turn led to persistent internal conflicts and government overthrows and long histories of grift and corruption at the top-most levels of society.

In other words, it’s extremely difficult to improve these sorts of numbers when those who are in charge of a high-mortality-rate region are seemingly incapable of keeping things stable, and always seem to be enriching themselves at the expense the the country they’re meant to be governing.

That’s a much larger systemic issue, of course, made up of numerous fractal issues that each have their own distinct causes and potential solutions.

But the main takeaway here is that child mortality is already an immense success story of modernity, and even more progress is possible, but in order to achieve that kind of progress, a bunch of other problems will probably need to be solved in these still-highly-afflicted areas, first. And solving these problems will likely be a truly heavy lift, for anyone who tries to tackle them, until and unless something fundamental changes about governing norms and corruption, and the many forces that enable that kind of high-level corruption, globally.

Show Notes

https://data.unicef.org/resources/levels-and-trends-in-child-mortality-2025/

https://economictimes.indiatimes.com/news/india/un-report-highlights-indias-79-decline-in-child-mortality-rates-a-major-contributor-to-global-child-health-advancements/articleshow/129660557.cms

https://ourworldindata.org/child-mortality-in-the-past

https://en.wikipedia.org/wiki/Child_mortality

https://en.wikipedia.org/wiki/Demographic_transition

https://www.statista.com/statistics/1041851/china-all-time-child-mortality-rate/

https://pmc.ncbi.nlm.nih.gov/articles/PMC7138028/

https://www.who.int/data/gho/data/themes/topics/topic-details/GHO/child-mortality-and-causes-of-death

https://en.wikipedia.org/wiki/List_of_countries_by_infant_and_under-five_mortality_rates

We also discuss Patriot missiles, expensive weapons, and peer rivals.

Recommended Book: Tiny Experiments by Anne-Laure Le Cunff

Transcript

During 2025 and early 2026, about 20 million barrels of crude oil and other petroleum products was shipped through the Strait of Hormuz every day. That’s about a quarter of the world’s total seaborne oil, and essentially all of that oil, and gas, and those other energy products that pass through this strait are from Middle Eastern suppliers like Saudi Arabia, Iraq, Qatar, Kuwait, the UAE, and Iran.

Beginning at the tail-end of February 2026, however, the Iranian military has shut down the Strait by threatening to take out or capture any vessels that attempt to pass through it. This has had the practical effect of initially reducing tanker traffic through the Strait by about 70%, but in recent weeks traffic has dropped to nearly zero. As of April 2026, about 2,000 ships are stranded in the area as a result of this closure.

As a result of this shutdown, though, other energy product suppliers have seen demand for their oil and gas and the like increase, and that’s led to higher prices for these products.

Russia, for instance, which doesn’t rely on the Strait to get its oil and gas out to its customers, has seen its oil tax revenue double in April, and the price of one grade of oil that it sells increased by 73% from February, alone.

That’s a big windfall for Russia, which has had trouble selling its oil and gas at a significant profit, due in part to heavy sanctions that have resulted from its invasion of Ukraine. It’s continued to sell to countries like China and India, but those customers have been able to pay lower prices due to the lessened demand for what Russia is selling.

This increased demand has thus goosed profits for Russia at a moment in which it could really use those sorts of profits—its economy is not doing terribly well, again because of its invasion of Ukraine, which has also not been going terribly well—so while inflation caused by this gas price-spike has been near-universally not great for much of the world, because energy cost increases tend to increase the price of just about everything, Russia’s government, at least, has been pretty happy with the shutdown of the Strait, and would probably love to see it continue.

Another moderate benefactor of this shutdown has been the United States government. The US is the number one exporter of liquified natural gas, and one of the top exporters of oil and petroleum products. US export numbers are poised to hit new records with the closure of the Strait, too, because, just like with Russia, fewer products of this kind available on the global market means those who have such products to sell can charge higher prices for them.

There’s a good chance this disruption, even if it ended today, for good, will have permanently rewired at least some of the global petroleum industry, as companies and countries that have been left in the lurch have adjusted their risks analyses and determined that it makes more sense to buy from different suppliers, to sell to different customers, or, in some cases, to use fewer of these products and invest more enthusiastically in renewables, like solar and wind—so while the US and Russia and a few other players are somewhat pleased with how things are going, oil and gas price-wise at least, long term this could actually harm them, the most, as more of their customers decide to stop paying irregular prices for what they’re selling and to opt for less turbulent solar and wind power, instead.

What I’d like to talk about today is another knock-on effect of the war in Iran that could have significant international, possibly even military implications.

—

Since Trump first stepped into office, winning the US presidency back in 2016, allies have openly wondered whether the US could be relied upon as a military ally, should push come to shove.

Trump has repeated said that he thinks NATO is a rip-off for the US, as the US has long provided the vast majority of funding and weapons for the alliance, and he’s pushed European NATO members to step up their own investment, lest he decide to just led Russia or whomever else attack them; he’s openly speculated that he might do exactly that.

As a result of the US’s pivot away from happily playing the role of world police and invasion deterrent, European governments have been hastily putting together contingency plans that don’t include the US: if Russia turns its attention away from Ukraine and starts attacking the Baltics or Poland, they want to be ready, and they don’t want to have to rely on the unreliable Trump administration for their survival.

Other governments that have long assumed they would be protected, at least in part, by the overwhelming force of the US military, have also been rethinking things, based on Trump’s stated, if not always practiced, isolationism.

Taiwan, for instance, which is persistently menaced by China, which considers Taiwan to be a rebel asset that it will someday reclaim, has also been investing in its own defenses, no longer certain that the US will step up and help them out at their moment of greatest need, despite historical assumptions.

Adding to that uncertainty, though, is the increasingly depleted state of the US military following its attack on Iran, which began in earnest in late February of this year.

Since February, the US has expended around 1,100 long-range stealth cruise missiles, more than a thousand Tomahawk cruise missiles, more than 1,200 Patriot interceptor missiles, and more than a thousand Precision Strike and ATACMS ground-base missiles.

For context, those Patriot missiles cost $4 million apiece, and again, 1,200 of them have been used since February, and the US military only buys about 100 Tomahawks a year, so the military has spent 10-years worth of them already during this new conflict in Iran. And those 1,100 stealth cruise missiles were built for a potential war with China, but now they’re gone.

This rapid depletion of armaments, weapons that take a long time to make and which are very expensive to procure, has required that stockpiles from elsewhere around the world be quickly packed up and shipped to the Middle East; and while the majority of what’s been fired so far by the US have been missiles, these shipments include all sorts of bombs, vehicles, and personnel equipment like guns and bullets, too, because they have to be ready for anything.

The military has also redirected assets, like missile systems and carrier strike groups, from other theaters, like the Pacific Ocean, to the Middle East, which leaves allies, like Taiwan and South Korea, less well-defended against potential incursions.

The US has refused to release any estimates as to the cost of the attack on Iran so far, but a pair of independent groups have estimated that price tag to be somewhere between $28 and $35 billion, which is about a billion dollars a day.

What’s more, it’s estimated that it will take about six years just to get armament stores back up to where they were in February, before this attack; it’s not just costly, it also takes a long time to produce that many missiles and rockets. And notably, a lot of these weapons were already considered to be in short supply before this conflict, at levels not suitable for a full-on shootout with an enemy like China, according to military experts. So six years plus whatever would be necessary to get up to more suitable levels.

This shortfall is partly the result of how the US military deals with defense contractors, and there are efforts by new military startups to remedy this sort of situation, making manufacturing a lot more nimble, while also shifting to cheaper weapons, like drones and inexpensive interceptors, to replace the pricy, conventional ones that the country has long relied on.

This expanded production hasn’t begun in earnest, though, and conventional military hardware suppliers have been slow to spin up new production because new funding hasn’t yet been confirmed by the Pentagon.

So the US military is currently low on the weapons it would need to defend its allies in Europe or the South China Sea against attacks by rival, near-peer nations, at a moment in which such nations are making big moves, like China’s persistent expansion into the South China Sea, and Russia’s adventurism in Ukraine.

What’s more, these stockpiles are unlikely to be resupplied any time soon, the capacity to produce what’s needed simply doesn’t exist, not in the US, anyway, and next-step options, like mass-scale drone production, also haven’t kicked off in earnest, yet, and might not arrive for another 5 or 10 years.

This already precarious moment has been made all the more precarious by the US government’s decision to attack Iran, then, and that decision still hasn’t been fully explained, the actual end-goal unknown. Consequently, there also doesn’t seem to be a clear end-point to aim and plan for.

Show Notes

https://www.wsj.com/politics/national-security/iran-war-complicates-contingency-plans-to-defend-taiwan-some-u-s-officials-say-4384f7c1

http://nytimes.com/2026/04/16/world/middleeast/iran-war-cost-congress.html

https://www.aei.org/foreign-and-defense-policy/epic-fury-costs-as-of-the-april-8-cease-fire/

https://www.nytimes.com/2026/04/23/us/politics/iran-war-cost-military.html

https://gulfnews.com/world/mena/is-the-iran-war-depleting-us-weapons-too-fast-1.500517800

https://www.moneycontrol.com/world/iran-war-drains-us-munitions-raises-taiwan-defence-concerns-report-article-13898019.html

https://www.cbsnews.com/news/us-rearms-iran-ceasefire-advanced-munitions-supplies/

https://www.ft.com/content/1a5a2502-a45a-40c1-af6f-b30ecc34bacb

https://archive.is/20260424042150/https://www.ft.com/content/1a5a2502-a45a-40c1-af6f-b30ecc34bacb

https://www.nytimes.com/2026/04/24/world/europe/europe-defense-nato-trump-eu.html

https://www.washingtonpost.com/national-security/2026/04/23/aircraft-carrier-bush-iran/

https://archive.md/T9tD1

https://www.bloomberg.com/opinion/articles/2026-03-31/trump-s-iran-war-is-accelerating-the-global-energy-transition

https://www.theguardian.com/commentisfree/2026/apr/18/fossil-fuel-trump-green-revolution-us-iran-renewable-energy

https://www.axios.com/2026/04/24/trump-oil-export-ceiling-iran-strait-hormuz

We also discuss Fidesz, Tisza, and illiberalism.

Recommended Book: I’m Starting to Worry About This Black Box of Doom by Jason Pargin

Transcript

Hungary is a Central European country that was formed in the aftermath of WWI as part of the Treaty of Trianon, which—due to it having fought on the losing side of that conflict—resulted in the loss of more than 70% of its former territory, most of its economy, nearly 60% of its population, and about 32% of ethnic Hungarians who were left scattered across land that was given to neighboring countries when what was then Austria-Hungary was broken apart, initially by Hungary declaring independence from Austria, and then by those neighbors carving it up, grabbing land at the end of and just after the war, all of them pretty pissed at Hungary for being part of the Central Powers, quadruple alliance of Germany, Austria-Hungary, the Ottoman Empire, and the Kingdom of Bulgaria.

Today, Hungary is surrounded on all sides by other nations, including those who gobbled up some of their territory, back in the day. They’ve got Slovakia to their north, Ukraine to their northeast, Romania is to the east, and Serbia is to the south. Croatia and Slovenia are to their southwest, and Austria, which used to be part of the same nation as Hungary, is to their west.

In 2026, Hungary has a population of a little over 9.5 million people, and the vast majority of those people, around 97.7%, are ethnic Hungarians, the next-largest ethnic group is Romani, weighing in at just 2.4%.

During WWII, Hungary was on the Axis side of the conflict, once again ending up on the losing side of a world war, and was eventually occupied by the Soviet Union, which converted the nation into a satellite state called the Hungarian People’s Republic. Hungarians tried to revolt their way out of the Soviet Union’s grip in 1956, but it didn’t work. In 1989, though, during the wave of other regional revolutions that tore the Soviet Union apart, Hungary peacefully transitioned into a parliamentary democracy, and it joined the EU in 2004.

What I’d like to talk about today is post-Soviet, Third Republic Hungary, the country’s conversion into an ultra-conservative, ultra-corrupt state, and how a decade and a half of democratic backsliding might be eased, at least somewhat, by new leadership that just won an overwhelming majority in Hungary’s recent elections.

—

In the 1990s, Hungary began its transition from state-run authoritarianism under the Soviets into the type of capitalism-centered democracy that was being spread by the US and its allies during the Cold War.

In Hungary, like many other post-Soviet nations, this transition wasn’t smooth, and the country experienced a severe economic recession that sparked all manner of social upsets, as well.

Hungary’s Socialist Party did really well in elections for a while, in large part because of how badly capitalism seemed to doing, and all the downsides locals now associated with it, but the Socialists went back and forth with other governments, especially the liberal conservative Fidesz (FEE-dez) party, each government taking the reins for four years before being voted out, replaced by the opposition, which was then voted out four years later and replaced by their opposition.

In 2006, there was a big to-do about a report that the then-Prime Minister, in charge of the Socialist Party, had admitted behind closed doors to having lied to win the last election. “We lied in the morning, we lied in the evening, and we lied at night,” he said during that closed-doors speech, and the divulgence of this led to nationwide protests and a period, which continues today, in which no left-wing party could attain power, only conservative governments standing a chance of running things in Hungary.

In 2010, the Fidesz party, led by Viktor Orbán, won a supermajority in parliament, and the following year, parliament approved a new constitution that brought a huge number of significant changes to the government and the nation’s laws. This adoption was criticized for basically being a nation-defining document that enshrines the party’s Conservative Christian ideology into law, permanently, despite that ideology not reflecting the views of the country at large; just over 40% of Hungary identifies as Christian. This new constitution also significantly cut or curtailed the rights of formerly independent institutions, removing basically all checks on the government’s power, and making it nearly impossible to push back against anything they might want to do, moving forward.

Under Orbán, Hungary saw significant democratic backsliding, meaning the country was converted from a functioning democracy into something that looked like a democracy from the outside, with elections and a press and such, but with actual functionality closer to that of Russia, which also holds elections, but those elections are tightly controlled by the government, the outcomes preordained by locking up those who challenge the existing power structure and falsifying votes when necessary. The press, too, in Russia and Hungary, is severely limited in what it can report, those who fail to toe the party line locked up or otherwise punished, and most of these formerly and supposedly journalistic entities owned by close friends of the country’s leader.

This sort of setup is often called a kleptocracy or mafia-state, that hides behind the veil of democracy, because the people up top basically just do whatever they want, perpetually enriching themselves at the expense of their countrymen, and they get away with it because all the forces of government and opposition that might stand in their way are systematically removed, all while they continue to pretend that this is what the people want.

Both Hungary and Russia also publicly embrace illiberal governance, at least to some degree, meaning they loudly promote top-down systems of governance, and both of their top-down systems are vehemently anti-immigrant, anti-LGBT rights, anti-women’s rights, and pro-fellow illiberal states—which in this case means Hungary and Orbán tend to be close buddies with other oppressive nations, like Russia, like Iran, and like China.

Orbán has thus overseen the transition of Hungary from a liberalizing, open, post-Soviet nation into a different sort of totalitarian state, his version wearing the guise of western democracy instead of Stalinesque communism, but actually functioning as a private kingdom of sorts for Orbán and his friends, all of whom became wealthy by carving up state assets and making deals that favor them, just that group of oligarchs, and all of this happening at the expense of the Hungarian people and its institutions and resources.

That context established, let’s talk about what happened recently, during the 2026 Hungarian parliamentary elections.

On April 12, 2026, Hungary held elections to fill all 199 seats in the country’s parliament. 100 seats are necessary to achieve a majority, and thus to form a government and run things.

Orbán’s party, Fidesz, was seeking a fifth consecutive term, partnering with the Christian Democratic People’s Party in the hopes of elbowing out a newer competitor, the conservative, center-right Tisza (TEE-sah) party.

This election had been promoted as the most important in EU history, as while he was in control of Hungary, Orbán had been pushing the nation further and further into Russia’s orbit, allegedly even sharing classified information from private EU meetings with Russia’s government. He consistently also stood in the way of EU efforts to help support Ukraine, blocking billions of dollars of funding for Ukraine’s defensive efforts against Russia’s continuing invasion of its neighbor; if one EU member country says no, some bloc-wide efforts can be shut-down in perpetuity. And Orbán was a consistent ‘no’ for anything that was bad for Russia, or anything that was good for the EU, in the liberal democracy sense of good. He also regularly demanded what amounted to bribes to get his vote for just about anything, and was thus a consistent obstructionist for even normal government business within the bloc.

This new Tisza party, which is a Hungarian abbreviation for what translates as the Respect and Freedom Party, was established in 2020, then rose to prominence when a former Orbán ally and Fidesz member, Péter Magyar left Fidesz and joined with Tisza.

Tisza ran on populist principles and the overthrow of Orbán, who has been increasingly unpopular as he’s continued to heavy-handedly reinforce his own hold on power, rigging election maps so that nothing but the most overwhelming imbalance in votes against him would ever lead to a loss.

Unfortunately for him, that’s exactly what happened in this 2026 election: nearly 80% of potential voters turned out to vote, which is the highest since 1989, when communism originally collapsed throughout Europe. And Tisza, the new opposition party led by a former Orbán loyalist, who left Fidesz during a scandal during which the government oversaw the pardoning of people responsible for covering up child sexual abuse, Tisza took 141 of 199 seats, giving them the supermajority they need to not just form a government, but to change the constitution.

This is being seen as a massive victory for the EU, and a serious defeat for Russian President Putin, who will likely be losing a lot of influence in the region, but also his proxy within the EU, which allowed him to forestall and halt all sorts of anti-Russian and pro-Ukrainian efforts.

It’s also being seen as a possible shot across the bow of illiberal and illiberalizing governments around the world, including others within Europe, but also that of the United States, which has seem similar democratic backsliding under two non-consecutive Trump administrations. The same forces that led to Orbán’s loss, like a successful anti-corruption message communicated by his opposition, collapsing on-the-ground economic realities for the majority of Hungarian citizens, and a wave of support for the opposition, especially amongst young people, could lead to more toppled governments and strongman leaders in the coming years.

There are still quite a few unknowns and potential pitfalls here, though.

Magyar, though now the leader of a different party, was formerly in Orbán’s camp; this could represent a changing of the guard up top, someone else holding the reins and enriching himself and a different group of friends, rather than a wholesale change that serves those at the bottom. It wouldn’t be the first time we’ve seen an authoritarian replaced by a seeming freedom-fighter who then became an authoritarian, because all those former incentives remained in place when they stepped into office.

It’s also been posited that Putin might lean more heavily on Bulgaria as Hungary steps out of his sphere of influence; one pro-Russian, anti-Ukrainian, anti-EU European Union nation replaced by another, the obstructionism continuing, but with different people on the Russian payroll.

As I’m recording this, polls from elections in Bulgaria that happened this past weekend seem to favor Bulgaria’s former president, who is pro-Russian and anti-Ukraine, though his administration seems to be filled with pro-EU representatives. It could be that he plays nice with the West while still opposing support for Ukraine, or it could be he waits to see which way the large-scale winds blow before deciding how to lean; he’s been pretty vague about how he’ll govern, and the people of Bulgaria seem like they’ll be happy just to have a functioning government after a long period without. So this guy could represent a foot in the door for Putin, but he could also be a reformer; he could also be a bit of both.

It’s also possible Orbán, who admitted defeat in the face of his opponent’s overwhelming parliamentary victory, will try some kind of last minute maneuver to stay in power, claiming that the vote was rigged against in him some way, for instance—a classic authoritarian move that has been repeated by these sorts governments over and over, including in modern history, and at times, unfortunately, successfully.

Show Notes

https://www.aljazeera.com/news/2026/4/15/hungarys-magyar-urges-president-to-quit-vows-to-overhaul-state-media

https://www.bbc.com/news/articles/c4g40npz37lo

https://www.washingtonpost.com/world/2026/04/18/bulgaria-election-radev-russia-orban/

https://www.bloomberg.com/news/articles/2026-04-18/hungary-s-tisza-party-widens-election-majority-in-fresh-tally

https://www.nytimes.com/2026/04/18/opinion/hungary-election-orban-loses-trump-maga.html

https://www.theguardian.com/world/2026/apr/18/hungary-peter-magyar-donald-tusk-poland-europe

https://apnews.com/article/hungary-eu-unlock-funds-orban-5a208f4094d4d66a47de9fc10b9d194f

https://www.independent.co.uk/news/world/europe/hungary-putin-orban-russia-ukraine-b2959920.html

https://www.theatlantic.com/ideas/2026/04/hungary-orban-loss/686832/

https://www.npr.org/2026/04/16/nx-s1-5784063/hungarian-americans-orban-defeat-trump-authoritarianism-democrats-republicans

https://www.iiss.org/online-analysis/online-analysis/2026/04/hungarys-election-significance-and-implications/

https://www.theguardian.com/world/2026/apr/17/eu-officials-hungary-talks-peter-magyar-government

https://www.pbs.org/newshour/show/how-hungarys-vote-to-oust-viktor-orban-could-have-global-implications

https://www.atlanticcouncil.org/dispatches/hungary-just-voted-out-viktor-orban-heres-what-to-expect-in-europe-and-beyond/

https://geopoliticalfutures.com/hungarys-landmark-election/

https://www.atlanticcouncil.org/blogs/ukrainealert/could-bulgaria-replace-hungary-as-putins-proxy-inside-the-eu/

https://ecfr.eu/article/four-principles-for-an-eu-hungary-reset/

https://www.nytimes.com/2026/04/13/world/europe/hungary-election-results-orban-magyar.html

https://apnews.com/article/hungary-election-orban-magyar-trump-1a4eb0ba6b94e0c80c3cd18bd36254ab

https://en.wikipedia.org/wiki/Treaty_of_Trianon

https://en.wikipedia.org/wiki/Hungarian_diaspora

https://en.wikipedia.org/wiki/Hungary

https://en.wikipedia.org/wiki/Fundamental_Law_of_Hungary

https://www.nytimes.com/2026/04/19/world/europe/bulgaria-elections-what-to-know.html

We also discuss exploit markets, vulnerabilities, and zero days.

Recommended Book: The Culture Map by Erin Meyer

Transcript

In the world of computer security, a zero-day vulnerability is an issue that exists within a system at launch—hence, zero-day, it’s there at day zero of the system being available—that is also unknown to those who developed said system.

Thus, if Microsoft released a new version of Windows that had a security hole that they didn’t know about, but someone else, a hacking group maybe, discovered before it was released, they might use that vulnerability in Windows or Word or whatever else to hack the end-users of that software.

While large companies like Microsoft do a pretty good job, considering the scope and scale of their product library, of identifying and fixing the worst of the security holes that might leave their customers prone to such attacks, that same scope and scale also means it’s nearly impossible to fill every single possible gap: a truism within the cybersecurity world is that defenders need to get it right every single time, and attackers only need to get it right once, and the same is true here. There’s never been a perfect piece of software, and as these things expand in capability and complexity, the opportunity to miss something also increases, and thus, so does the range of possible errors and exploitable imperfections.

Because of how damaging zero-days can be for both users of software and the companies that make that software, there are thriving marketplaces, similar to those that deal in other illicit goods, where those who discover such vulnerabilities can sell them, usually for cryptocurrencies or funds derived from stolen credit cards.

Software companies have countered the increasing sophistication of these exploit black markets with white and grey market efforts, the former being direct payouts to hackers, basically saying hey, thanks for finding this bug, here’s a lump-sum of money, a bug bounty, rather than punishing all hacking of their systems, which is how they would have previously responded, which had the knock-on effect of sending all hackers, even those who weren’t looking to cause trouble, either underground, or actively hunting for bugs for the black market.

The grey market is more complicated and diverse, and also the largest of marketplaces for those shopping around for these types of exploits. And it’s populated by the same sorts of neverdowells who might frequent the exploit black markets, but also includes all sorts of governments and intelligence agencies, who scoop up these sorts of vulnerabilities to use against their opponents, or to deny them to others who might use them instead, against them.

All sorts of governments, from the US to Russia to North Korea to Iran are regular shoppers on these computer system exploit grey markets, and that has created a complicated, entangled system of incentives, as is some cases, it’s better for the US government, or Iranian government, or whomever, if the company making these systems doesn’t know about a bug or other vulnerability, because they just spent several million dollars to buy a map to said bug or gap, which could, at some point in the future, allow them to tunnel into an enemy’s computers and cause damage or steal information.

What I’d like to talk about today is a new AI system that is apparently very, very good at identifying these sorts of exploits, and why this is being seen as a milestone moment for some people operating in the zero day, and overall computer security space.

—

On April 7, 2026, US-based AI company Anthropic announced Project Glasswing—a new initiative that is currently only available to 11 companies that’s meant to help those companies shore-up their cyber defenses before more AI systems like the one that underpins Project Glasswing, which is called Mythos Preview, hit the market.

So these companies, Amazon Web Services, Anthropic, Apple, Broadcom, Cisco, CrowdStrike, Google, JPMorganChase, the Linux Foundation, Microsoft, NVIDIA, and Palo Alto Networks, make a lot of stuff, and in particular make and maintain a lot of vital online and device-based software infrastructure, like operating systems and all the stuff that keeps things in our apps and on the web secure.

Mythos Preview is a new model created by Anthropic, similar to their existing Claude models, but apparently vastly more powerful. There are tests that AI companies use to compare the potency of their models at a variety of task types, but those are generally considered to be flawed or game-able in all sorts of ways, so the main thing to know here is that Mythos did way better at most of those tests, especially the coding, the programming-related ones, than the other, currently most capable models, the ones that professional programmers, most of them anyway, are using these days. It was also able to do impressive and worrying things like break out of the sandbox that contained it, accessing the internet when it wasn’t supposed to be able to do so.

And because of that leap forward in programming capability, Mythos Preview was tasked by Anthropic with finding vulnerabilities in all sorts of software systems, including operating systems—Windows, macOS, iOS—and browsers, like Chrome and Firefox.

Most AI systems, and most human coders, if they focus enough and look really hard for long enough, will tend to find some kind of vulnerability in just about anything, because this software is just that big and complex. But within a relatively short period of time, Mythos Preview found thousands of vulnerabilities in these systems, indicating that it’s a lot better at this kind of task than the other AI available these days, and so Anthropic created this project, Project Glasswing, to give these entities a head-start, helping them fill these gaps and bolster their defenses, before everyone else on the planet, including foreign governments, hacker and terrorist groups, but also just everyday people, suddenly have the ability to identify and possibly exploit these vulnerabilities, on scale.

This news hasn’t been super widely reported in the non-tech press quite yet, but within the tech world, it landed like a hand grenade in a crowded room.

And there are already quite a few perspectives on what this all means, including a fair bit of skepticism.

On the skeptic side, many analysts have noted that it’s a common tactic amongst AI companies to doomsay, to basically suggest that their models might end the world, might kill all of humanity, might dramatically change everything, put everyone out of work, maybe, not necessarily because the founders and employees at those companies believe that would be the case, but because the implication is that if these products are that powerful, well, investors should probably give them gobs of money, because a tool that could end the world or cause that much disruption might be the last tool available, or might become the next electricity or internet or whatever else. Claiming philosophical, humanistic concern for the super-weapon you just built, in other words, is one way for AI company leaders to say their product is superior to every other product ever while also seeming to suggest that they are the thoughtful, careful leaders that we need holding the reins of that sort of capacity.

Other skeptics have said that while this might be a step-up in terms of the speed at which such vulnerabilities can be identified in these sorts of systems, other AI systems, existing ones, even open source, free ones, have been able to do the same for a while now. So while Mythos Preview might be even better at it, and might be capable of running constantly, finding more and more of these things for a government that wants to save money they might otherwise spend on the grey market, scooping these things up for use against their enemies, or for defensive purposes, sharing some of them with their homegrown tech companies, perhaps, smaller, less-moneyed groups can already do the same, if they’re smart about how they apply existing, even free, lower-end AI systems.

Others have responded to this announcement similarly to how some have responded to the concept of Q Day, short for Quantum Day, which refers to the hypothetical moment at which quantum computers finally become powerful enough to break the encryption that allows the internet, and banking, and government privacy systems to function. If these encryption keys can be broken—and quantum computers should theoretically be able to do this a lot better than conventional computers, because of their very nature—if and when that happens, if these systems aren’t suitably prepared with new encryption that’s hardened against quantum systems, the entire banking sector could collapse, everything hackable, all the money stealable, none of it trustworthy anymore. The same with the whole of the web, with apps, with government systems that keep things hidden away and classified, with energy grids. It could be chaos.

The theory here, then, is that this type of AI, maybe Mythos Preview, maybe the other systems that it portends—because this whole industry seems to leapfrog itself every three or four months at this point, someone coming out with a big, cool, most powerful new thing, then their competitors coming out with something even more powerful within weeks or months—maybe these vulnerability-identifying and exploiting AI will result in something similar, all the world’s software and encryption a lot more vulnerable, all at once, essentially tomorrow.

It’s more of what we’ve already seen with AI, basically, these tools providing anyone who uses them more leverage to do all sorts of things. Not necessarily creating anything new—exploits and vulnerabilities have always existed—but giving a skilled hacker the ability to find and exploit thousands of them in the same time it would have previously taken them to find and exploit just one. And it could also give unskilled, non-hackery people and entities similar capabilities.

That creates a dramatically new cybersecurity landscape essentially overnight, and that’s why, at least according to their press releases on the matter, Anthropic is not releasing Mythos Preview to the public, and instead is taking the Project Glasswing approach: they don’t think other AI companies, like OpenAI or xAI, can be trusted not to just lob that grenade into the crowded room, so since they got there first, they’re going to try to help everyone protect themselves from that grenade when it inevitably lands.

This could, then, be quite the PR coup, giving Anthropic the opportunity to tout their superior products, while also allowing them to portray themselves as sort of the white knight in the AI world, helping everyone protect themselves, even though they probably could have made far more money by either selling the exploits and creating their own new market for them, or by somehow leveraging those exploits themselves.

At the same time, it could be that they are overselling the capabilities of this new model, painting a rosy picture with them as the heroes, while in turn makes their products seem more powerful than they are in order to bolster their public perception and future economic potential.

It could also be a bit of both; even those who are skeptical about this specific announcement and the implications of it do tend to agree it’s likely we’ll see more disruption from these sorts of models soon. Even if Mythos Preview isn’t the grenade everyone’s worried about, in other words, it’s likely we’ll face such a threat in the near-future, and even if Project Glasswing isn’t the defense we need against such a threat, it’s probably prudent that we be thinking about whatever it is we do need, and ideally building it, too, so it’s ready to go, already in place, when that new threat lands.

Show Notes

https://www.nytimes.com/2026/04/10/briefing/claude-mythos-preview.html

https://www.nytimes.com/2026/04/07/technology/anthropic-claims-its-new-ai-model-mythos-is-a-cybersecurity-reckoning.html

https://en.wikipedia.org/wiki/Claude_(language_model)#Claude_Mythos_Preview

https://www.newyorker.com/magazine/2026/04/13/sam-altman-may-control-our-future-can-he-be-trusted

https://www.anthropic.com/glasswing

https://www.wired.com/story/anthropic-mythos-preview-project-glasswing/

https://stratechery.com/2026/myth-and-mythos/

https://en.wikipedia.org/wiki/Zero-day_vulnerability

https://en.wikipedia.org/wiki/Market_for_zero-day_exploits

We also discuss Huawei, government subsidies, and the FCC.

Recommended Book: Replaceable You by Mary Roach

Transcript

Many homes, those with WiFi connections to the internet, have two different devices they use to make that connectivity happen.

The first is a modem, which is what connects directly to your internet service provider, often via an ethernet jack in the wall that connects to a series of cables webbed throughout your city.

The second is a router, which plugs into the modem and then spreads that signal, derived from that network of city-wide cables around your home, either by splitting that single ethernet jack into multiple ethernet jacks, allowing multiple devices to plug into that network, or by creating a wireless signal, WiFi, that multiple devices can connect to wirelessly in the same way. Many routers will have both options, though in most homes and for most modern devices, WiFi tends to be the more common access point because of its convenience, these days.

That WiFi signal, and the connection provided via those additional ethernet ports on the router, create what’s called a Local Area Network of devices, or LAN. This local area network allow these devices—your phone and your laptop, for instance—to connect to each other directly, but its primary role for most people is using that connection to the modem to grant these devices access the wider internet.

In addition to providing that internet access and creating the Local Area Network, connecting devices on that network to each other, routers also usually provide a layer of security to those devices. This can be done via firewalls and with encryption, which is important as unprotected networks can leave the devices plugged into them vulnerable to outside attack. That means if the router is breached or in some other way exploited, a whole company’s worth of computers, or all your local devices at home, could be made part of a botnet, could be held hostage by ransomware, or could be keylogged until you provide login information for your banks or other seemingly secure accounts to whomever broke into that insufficiently protected LAN.

What I’d like to talk about today is a recently announced ban on some types of routers in the US, the reasoning behind this ban, and what might happen next.

—

On March 23, 2026, the US Federal Communications Commission announced a ban on the import of all new consumer-grade routers not made in the United States.

This ban does not impact routers that are already on the market and in homes, so if you have one already, you’re fine. And if you’re buying an existing model, that should be fine, too.

It will apply to new routers, though, and the rationale provided by the FCC with the announcement is that imported routers are a “severe cybersecurity risk that could be leveraged to immediately and severely disrupt US critical infrastructure.”

They also cited recent, major hacks like Salt Typhoon, saying that routers brought into the US provided a means of entry for some components of those attacks.

This stated concern is similar to the one that was at the center of the Trump administration’s 2019 ban of products made by Chinese tech company Huawei in the United States. Huawei made, and still makes, all kinds of products, including consumer-grade smartphones, and high-end 5G equipment sold to telecommunications companies around the world for use in their infrastructure.

The concern was that a company like Huawei might leverage its far better prices, which were partly possible because of backing from the Chinese government, to put foreign competitors out of business. From there, they could dominate these industries, while also getting their equipment deep in the telecommunications infrastructure of the US and US allies. Then, it would be relatively easy to insert spy equipment and eavesdrop on phone calls and data transmissions from phones, or to incorporate kill-switches into these grids, so if China ever needed to, for instance, distract the US and its allies while they invaded Taiwan, they could just push a button, kill the US telecommunications grid, and that would buy them some time and fog of war to do what they wanted to do without immediate repercussions; and undoing a successful invasion would be a million times more difficult than stepping in while it’s happening to prevent it.

As of 2024, Huawei still controlled about a third of the global 5G market. It controlled about 27.5% back in 2019, the year it was banned in the US and in many US allied nations, so while it’s possible they could have grown even bigger than that had the ban not been implemented, they still grew following its implementation.

Chinese companies currently control about 60% of the US router market, and it’s likely the local, US market will shift, reorienting toward US makers over the next decade or so. But it’s possible these Chinese companies will grow their global footprint even further, as previous US bans have pushed them into different, less exploited markets, and that’s resulted in a wider footprint for such companies, even if their profits may drop a little after leaving the spendier US market.

There’s also a pretty good chance we’ll see deals to move more manufacturing to the US, which could allow some of these companies to make relatively small changes to their operations in order to bypass the ban entirely.

This seems extremely likely, at least in the short term, as all major players in the US router market fall under the FCC’s definition of not being entirely US owned and operated, and making consumer-grade routers that are designed or manufactured outside the US. Even the ostensibly more US companies, based and founded here, make their stuff primarily in Southeast Asia; so even those companies would seem to fall afoul of this new rule.

The FCC has also given these companies the opportunity to apply for what’s called Conditional Approval from the Department of Defense and Department of Homeland Security, which would require they give a bunch of details about their company and products to these entities, along with plans to manufacture more stuff in the US, and these departments can then give them permission to keep selling in the meantime.

It’s worth mentioning here that this kind of set up has previously given foreign entities a chance to funnel money into President Trump’s properties and businesses, before then speaking with him or one of his representatives and coming to some kind of agreement, the President then instructing the relevant agencies or departments to let those companies through, the ban not applying to them or not applying in the same way.

There are concerns that such bans basically operate as requests for bribes, in other words, and those who don’t pay up see their customer base dwindle in the US market, while those who do get away with a slap on the wrist so long as they promise to make more stuff in the US at some point—though they’re not really held to that promise in any concrete way, and often that’s where their efforts stop, at the announcement of such changes.

Also worth mentioning is that it’s not clear why this applies only to consumer-grade routers, as it would seem like the industrial- and military-grade ones would be of even greater concern, at least based on the claims made by the FCC when announcing this ban.

We also don’t know why it’s being applied to new models, but not models currently being sold, and not those already in our homes; all of which would seem to be just as vulnerable as newer models that haven’t made it to the market yet.

There’s a chance those details will follow, and there’s also a chance, again, that this is more about the administration maybe accumulating promises from foreign companies to move manufacturing to the US, because that looks good in an election year, and it’s maybe another means of accumulating bribes from companies that would find it far cheaper to make contributions to organizations the President either controls or favors, than to build new manufacturing capacity in the US, or leave the market entirely.

Show Notes

https://www.theverge.com/tech/899906/fcc-router-ban-march-2026-explainer

https://archive.is/20260326232922/https://www.theverge.com/tech/899906/fcc-router-ban-march-2026-explainer

https://www.cnet.com/home/internet/i-review-routers-for-a-living-dont-buy-a-router-right-now/

https://en.wikipedia.org/wiki/Router_(computing)

https://www.fcc.gov/document/fcc-updates-covered-list-include-foreign-made-consumer-routers

https://www.reuters.com/sustainability/boards-policy-regulation/fcc-banning-imports-new-chinese-made-routers-citing-security-concerns-2026-03-23/

https://www.wired.com/story/us-government-foreign-made-router-ban-explained/

https://itif.org/publications/2025/10/27/backfire-export-controls-helped-huawei-and-hurt-us-firms/

We also discuss the Strait of Hormuz, the war in Iran, and economic asymmetry.

Recommended Book: The Age of Extraction by Tim Wu

Transcript

Russia’s invasion of Ukraine has been pretty universally bad for everyone involved, very much including Russia, which going into the fifth year of this conflict, which it started by massing troops on its neighbor’s border and invading, unprovoked, following years of funding asymmetric military incursions in Ukraine’s southeast. Following their full invasion though, Russia has reportedly suffered around 1.25 million casualties, with more than 400,000 of those casualties suffered in 2025, alone. It’s estimated that Russia has also suffered at least 325,000 deaths, and Ukrainian officials reported confirmed kills of more than 30,000 Russian soldiers just in January 2026.

As of early 2026, Russian controlled about 20% of Ukraine, down from the height of its occupation, back in March of 2022, when it controlled 26% of the country.

And due to a combination of military spending, intense and expansive international sanctions, and damage inflicted by Ukraine, it’s estimated that Russia has incurred about $1 trillion in damages, about a fifth of that being direct operational expenses, and around a fourth the result of reduced growth and lost assets stemming from all those sanctions.

There’s a good chance that all of these numbers, aside from the land controlled, are undercounts, too, as some estimates rely on official figures, and those figures are generally assumed to be partially fabricated to allow Russia to keep face in what is already a pretty humiliating situation—a war they started and which they thought would be a walk in the park, lasting maybe a week, but which has instead gone on to reshape their entire country and present one of the biggest threats to Putin’s control over the Kremlin since he took office.

That in mind, a report from last week, at the tail-end of March, suggests that the Kremlin knows things aren’t looking great for them, and they asked Russian oligarchs to donate money to the cause, to help stabilize Russian finances. This report, which is unconfirmed, but has been reported by multiple Russian media entities, arrives at a moment in which the Russian government is also planning cuts to all sorts of spending, including military spending, but also a reported 10% across the board, to all “non-sensitive” matters in its 2026 budget.

Despite these fairly abysmal figures, though, there’s some optimism in Russia-supporting circles right now, in large part because the conflict in Iran, and Iran’s near shutting down of the Strait of Hormuz, which is an important channel for the flow of international energy assets, that’s goosed the price of oil and gas, which in turn has goosed Russian income substantially.

What I’d like to talk about today are the interconnections between the conflict in Ukraine and the conflict in Iran, and how Ukraine being invaded seems to have put them in a position of relative influence and authority in this new conflict in the Middle East.

—

From the moment Russia launched its full-scale invasion of Ukraine, the Ukrainian military, and its government, industrial base, and pretty much everyone else, scrambled to find an asymmetric means of keeping a far larger, wealthier, and ostensibly more experienced and better backed foe from just steam-rolling over them.

They found that by leveraging lower-cost deterrents, like cheap rockets and drones, they could pay something like $10,000 to take out a tank or other weapons platform that cost Russia a million or ten million dollars. That’s a pretty stellar trade-off, and if you can do that over and over again, eventually you make the cost of the conflict just ridiculously unbalanced, each trade of hardware costing you very little and them a whole lot, which with time can making waging war unsustainable for the side paying orders of magnitudes more.

Russia is of course making use of inexpensive drones and rockets, as well. That’s become a norm in modern conflicts, especially over the past five years or so, as cheap but capable and easy to produce models have started rolling of manufacturing lines in Iran and Turkey, allowing them to become popular sources of single-use but quite agile and deadly aerial weaponry.

Ukraine has gone further than most other entities, though, as they’re immensely incentivized to get this right, and to put their full support behind anything that gives them the upper-hand against what’s still a powerful and otherwise overwhelming invading force. And this patchwork of companies, independent and government supported, large-ish and tiny enough to operate under constant fire and in wartime conditions, has since scaled-up so that they’re expected to manufacture about 7 million drones of many different varieties in 2026.

This scaling has attracted a lot of outside investment, and Ukraine is now considered to be not just a bulwark against current Russian aggression in Europe, taking the brunt of the damage so that Russia isn’t able to turn its attention to the Baltic states and other potential, future targets. It’s also considered to be a vital resource for future protection against Russia, as the US has become a less reliable ally, and NATO, which until recently has been mostly funded and armed by the US, is still getting its legs under it, more members contributing both money and other resources, but possibly not fast enough.

If Russia were to either win in Ukraine and then turn its full-tilt military machine further west, toward other parts of Europe, or if it were to come to some kind of stalemate or peace agreement in Ukraine and then do the same, many leaders throughout Europe believe that Ukrainians, grizzled and scar from this current invasion, will be the ones to train up comparably inexperienced NATO and European Union forces, and to provide the best new, asymmetry-focused military hardware, like drones of all shapes and sizes, as well.

They’ll be not just the arsenal of NATO and the EU, they’ll also probably be the training officers and commanders.

We already see evidence of this probable future demand for Ukrainian goods and services in Gulf states that were attacked by Iran shortly after Israel and the US launched their own attacks that killed Iran’s leader and caused a great deal of damage throughout the country.

Five Iranian neighbors have reportedly made deals with Ukraine to help them defend against future attacks from Iran, especially drone and missile attacks against their energy and water infrastructure.

This help comes in the form of Ukrainian technology, which has been forged by their war, defending against Russia’s incursion, but also training by Ukrainian experts, who are a lot more informed by those war-time realities, and know how to keep infrastructure safe while at the same time taking out the enemy’s capacity to attack in the future.

Ukraine’s hardware is also super cheap compared to comparable alternatives. Ukraine can produce a long-range strike drone for about $200,000, compared to similar drones made by companies in other western countries that cost between $5-10 million. Ukrainian companies also produce far cheaper anti-personnel drones, and interceptor drones and rockets that can flip the cost considerations in some types of conflict.

Often the attacker will launch a bunch of multi-million dollar rockets, alongside a bunch of $10,000 decoys. If your anti-rocket interceptors hit the decoys, and your interceptors cost more than those decoys, maybe a few million dollars apiece, you very quickly end up spending more than your attacker. Reducing the cost of those defensive materials, then, can give the defender the cost advantage, which makes holding out over the long-haul, but also producing enough interceptors to prevent infrastructure damage and save lives, more financially feasible.

There’s a strange interconnectedness between these two conflicts, then, as Russia’s invasion of Ukraine has turned Ukraine into a military product and services powerhouse that’s only just now beginning to scale up, but already in high-demand, while at the same time, Iran’s actions in the Strait of Hormuz, cutting off energy product flow through this vital channel, is boosting Russia’s income dramatically at a moment in which it desperately needs that income to keep invading Ukraine.

That influx of resources could help Russia maintain its invasion for longer than they could otherwise manage, and it could give them a leg up, an even bigger advantage than they already have, which in turn could force Ukraine to become even more skillful and experienced, even better at what they do, leading to even better weapons and tactics that they then share with clients and allies in the Middle East for use against Iran.

Show Notes

https://www.cfr.org/articles/securing-ukraines-future-in-europe-ukraines-defense-industrial-base-an-anchor-for-economic-renewal-and-european-security

https://finance.yahoo.com/news/why-ukraine-drone-defense-ecosystem-205253252.html

https://www.nytimes.com/2026/03/24/world/europe/ukraine-middle-east-oil-and-gas-drones.html

https://gssr.georgetown.edu/the-forum/regions/eurasia/a-first-point-view-examining-ukraines-drone-industry/

https://www.forbes.com/sites/vikrammittal/2026/02/01/ukraine-is-winning-the-economics-battle-against-russian-geran-drones/

https://www.nytimes.com/2026/03/11/world/europe/ukraine-drones-china.html

https://spectrum.ieee.org/drone-warfare-ukraine

https://www.reuters.com/business/aerospace-defense/ukraines-interceptor-drone-makers-look-exports-gulf-iran-war-flares-2026-03-07/

https://united24media.com/war-in-ukraine/what-is-ukraines-interceptor-one-of-the-worlds-most-in-demand-drones-17055

https://www.aa.com.tr/en/asia-pacific/4-years-of-war-counting-russia-s-costs/3838920

https://www.aljazeera.com/news/2026/2/23/the-ukraine-war-in-numbers-people-territory-money

https://www.csis.org/analysis/russias-grinding-war-ukraine

https://news.sky.com/story/putin-asks-oligarchs-to-donate-to-budget-as-cost-of-ukraine-war-soars-13524940

https://www.reuters.com/world/putin-asks-oligarchs-donate-russias-budget-cost-ukraine-war-soars-bell-media-2026-03-27/

https://apnews.com/article/turkish-oil-tanker-attacked-black-sea-2998c366a90ed280e9781a8b030a050c

https://apnews.com/article/russia-ukraine-war-offensive-drones-c9976319f077c743317edec8a20f57f3

https://apnews.com/article/war-russia-ukraine-drones-innovation-interceptor-shahed-e9de7db6437d3cbb428a6bacac326fb3

https://apnews.com/article/russia-ukraine-war-us-talks-iran-drones-40ad8f5481d954fe8207c3d576d540f7

https://www.independent.co.uk/bulletin/news/russia-blackmail-us-zelensky-ukraine-trump-b2945767.html

https://www.newsweek.com/donald-trump-nato-rebuke-iran-war-11738554

https://www.euronews.com/2026/03/26/pentagon-mulls-redirecting-ukraine-military-aid-to-middle-east-reports-claim

https://www.reuters.com/business/energy/ukraine-using-strikes-pressure-russia-after-oil-sanctions-eased-zelenskiy-says-2026-03-26/

https://www.aljazeera.com/features/2026/3/27/ukraine-fends-off-increased-attacks-strikes-russian-oil-revenue

We also discuss Venezuela, Iran, and the Platt Amendment.

Recommended Book: The Will of the Many by James Islington

Transcript

Cuba is a large island nation, about the same size as the US state of Tennessee, which formally gained its independence from Spain in late 1898, following three wars of independence, the last of which brought the US, Puerto Rico, and the Philippines into play against the Spanish when the Spanish military sunk the USS Maine in Havana Harbor, triggering the Spanish-American War.

That conflict, which Spain lost, led to the US’s acquisition of Puerto Rico, Guam, and the Philippines, and it led to a piece of US legislation called the Platt Amendment, which redefined the relationship between the US and Cuba, following the war, making Cuba a protectorate of the United States, the US promising to leave, withdrawing its troops from Cuban soil, only if seven conditions were met, and an additional provision that Cuba sign a treaty indicating they would continue to adhere to these conditions moving forward—making them permanent.

Most of these conditions relate to Cuba’s ability to enter into relationships with other nations, but provision three also says the US can intervene if doing so will preserve Cuban independence, and that Cuba will sell or lease to the US the land it needs to base its naval vessels in the area, so that it can intervene, militarily if necessary, to keep Cuba independent.

The other provisions are largely related to ensuring Cuba stays financially solvent and clean, the former meant to help maintain that independence, so Cuba doesn’t make deals with other nations, perhaps US enemies, in order to bail itself out when financially in trouble, and the latter meant to help prevent the bubbling up of diseases in a not well-maintained Cuba, that might then spread to the US.

These concerns were concerns for the US government because Cuba is very, very close to the US. It’s just over 90 miles away from Key West, Florida, and that means in the mind of those tasked with defending the US against foreign incursion, Cuba has long represented an uncontrolled variable where enemies could conceivably base all sorts of military assets, including but not limited to nuclear weapons.

That makes Cuba, again, in the minds of defense strategists looking to help the US secure its borders, long-term, something like an aircraft carrier slash nuclear submarine the size of Tennessee, located so close to the US that it could take out all sorts of major assets in a flash, long before the US could respond, getting the same sorts of strike craft and missiles to the Soviet Union.

This framing of the situation, and this collection of concerns, is what led to the Cuban Missile Crisis back in 1962, when the US deployed nuclear weapons in the UK, Italy, and Turkey, all of which were closer to major Soviet hubs than the US, and that led to a tit-for-tat move by the Soviets to deploy nuclear missiles to Cuba, both to get their own weapons closer to the US, just as the US did to them with those new deployments, but also to deter a potential US invasion of Cuba, which was a staunch ally of the Soviet Union.

The crisis lasted 13 days, and though then US President Kennedy was advised to launch an air strike against Soviet missile supplies, and to then invade the Cuban mainland to prevent the basing of Soviet nuclear weapons there, he instead opted for a naval blockade of Cuba, hoping to keep more missile supplies from arriving, and to thus avoid a strike on a Soviet ally that could accidentally spark a shooting war.

After this nearly two-week standoff, the US and Soviet leaders agreed that the Soviets would dismantle the offensive weapons they were building in Cuba in exchange for a public declaration by the US to not invade Cuba. The US also secretly pledged to dismantle its own offensive weapons that it had recently deployed to Italy and Turkey, and the weapons they deployed to the UK were also disbanded the following year.

This sequence of events is generally seen as a minor victory for the US during an especially fraught portion of the Cold War, as that secret agreement between Kennedy and Soviet leader Khrushchev meant that the Soviet people and leadership perceived this agreement as an embarrassing loss, and an example of Soviet weakness on the international stage—they blinked and the US got what they wanted without giving much of anything, though of course, again, the US gave a fair bit too, just in secret.

What I’d like to talk about today is a recent escalation in the US’s posture toward Cuba, and what might happen next, as a result of that change.

—

In early January 2026, the US military, ostensibly as part of a larger effort aimed at disrupting a network of watercraft that carry drugs from mostly South and Central American drugmakers across the border, into US markets, called Operation Southern Spear, the United States implemented a new blockade aimed at sanctioned oil tankers carrying fuel from Venezuela to, among other destinations, Cuban ports.

Shortly before this blockade was declared, the US seized an oil tanker off the coast of Venezuela, then harassed, boarded, and intimidated other tankers, including one from Russia, that were also dealing in Venezuelan oil—something that US sanctions disallowed, and which the Trump administration had decided to focus on, ostensibly as part of that anti-drug effort, but also seemingly as part of a then-impending mission to kidnap Venezuelan President Maduro, who was then secreted away to the US to face trial, which is where he is, today.

These seizures hit Cuba especially hard because the country is highly reliant on all sorts of imports, much of its income derived from tourism, not manufacturing or raw materials, and fuel coming from Venezuela was especially vital—about 72% of Cuba’s electricity generation comes from oil-fueled power plants, and basically its entire transportation section is reliant on the same.

Venezuela under Maduro also provided oil to Cuba at a discount, subsidizing it because those US sanctions didn’t allow Venezuela to have many other reliable customers, and because the authoritarian governments of these two nations saw each other as fellow-travelers in the region, and thus wanted to keep each other propped up against constant pressure from the US and other democracies in the Americas.

As of March 2026, Cuba has gone without crude oil deliveries for three months, and this has led to waves of flight cancellations and a depletion of tourism, which again, is the country’s most vital income source. As of mid-March, Cuba’s energy grid has also collapsed, which has left about 10 million people without power most of the time, amplifying existing problems caused by the country’s antiquated energy generation and distribution systems.

All of which seems to be according to plan for the second US Trump administration, which announced, as far back as January of this year, that it was seeking regime change in Cuba, and these blackouts have triggered exceedingly rare violent protests against that regime by Cuban citizens; these protests haven’t led to any real change or consequences yet, but they could, with time.

For their part, the Cuban government has said they’ve entered diplomatic talks with the US, and they’ve already agreed to release 51 political prisoners, just as an up-front, good will gesture. But they’ve also said changes to the Cuban political system or government—which is an authoritarian regime with absolute power, and which, like most such regimes, is openly corrupt, those in charge enriching themselves at the expense of everyone else, while keeping control via state-sanctioned violence against its own citizens—they’ve said changing that is non-negotiable, also noting that if there is direct aggression against Cuba by the US, they’ll fight and offer up “impenetrable resistance.’

The change that the US government seeks is reportedly similar to what was accomplished in Venezuela: booting the current leader, but keeping the existing regime, the power behind the publicly visible throne, intact, and then the US government influencing that existing regime from afar.

This deviates from the assumed model, attempted by previous US and other governments throughout history, to boot the leaders of opposing government types and then replace them, and the local system, with something closer to their own. This new approach is possibly what the Trump administration is aiming for in Iran, as well, though it’s difficult to say how well the model will work even in Venezuela, where it’s still early days after the US’s seemingly successful decapitation attack, much less in places like Cuba, where there’s no single central power in the public-facing government, much of that power spread between Communist Party leaders, rather than hoarded by a single individual—a far cry from how things were under Castro during the Cold War.

As of the day I’m recording this, there’s a new wrinkle in this blockade: a Russian oil tanker has been tracked heading along a trajectory that would seem to lead to Cuba, which, if accurate, could put the US and Russia at odds over deliveries to the island once more—though in this case it would be oil instead of offensive nuclear weapons that are on board the incursionary vessel.

This ship may veer off that current course and head elsewhere, or it could be meant to test the US oil blockade, intentionally poking at what seems to be an impenetrable barrier, to see if it’s all just talk. Even if just that one tanker makes it through, it’s carrying enough oil to provide about a week’s worth of energy to the Cuban people, which could serve as a sort of release valve on the pressure-cooker stress that has led to the aforementioned protests against the government.

Most analysts expect this and future vessels will turn off when formally confronted, though, and this isn’t the first ship that’s attempted to break this new blockade of Cuba; and previous attempters have indeed pulled off before a shot was fired by the blockading fleet.

Trump has in recent weeks said that he believes he’ll be able to take Cuba, and/or do whatever he wants to the island and its people, and that could just be talk, or it could be that, like in Venezuela, and to some degree Iran, many of the locals would welcome that kind of change, despite the violence and suffering that would no doubt come with it.

In the meantime, though, millions of Cubans are going without reliable energy, food, medical care, and other modern necessities, which could push them to take the risk of revolutionary action, but it could also turn them against the outside enemy, reinforcing support for the tyrannical Cuban government against the harmful and oppressive actions of the American military, rather than nudging them into government overthrow.

Show Notes

https://en.wikipedia.org/wiki/Platt_Amendment

https://en.wikipedia.org/wiki/United_States_embargo_against_Cuba

https://en.wikipedia.org/wiki/2026_Cuban_crisis

https://en.wikipedia.org/wiki/Cuban_Missile_Crisis

https://www.reuters.com/business/energy/cubas-national-electric-grid-collapses-says-grid-operator-2026-03-16

https://www.nytimes.com/2026/03/20/world/americas/cuba-fuel-blockade-aid-convoy.html

https://www.nytimes.com/2026/03/20/travel/cuba-flights-travel-advice-power-oil.html

https://www.reuters.com/world/americas/cuba-says-its-presidents-term-not-subject-negotiation-talks-with-us-2026-03-20/

https://www.dw.com/en/cuba-faces-economic-collapse-as-us-oil-blockade-hits-tourism/video-76398387

We also discuss EVs, internal-combustion engines, and autonomous vehicles.

Recommended Book: Blank Space by W. David Marx

Transcript

Petroleum-powered vehicles, cars and trucks and SUVs of the kind that have become the standard since the mid-20th century, work by mixing fuel that you put in the tank when you fill up at the gas station with air, in the engine, and then creating a controlled explosion—in modern vehicles using what’s called a four-stroke combustion cycle of intake, compression, combustion, then exhaust—in order to move pistons which, in turn generate mechanical power by transferring that movement to the vehicle’s wheels.

An electric vehicle, in contrast, functions by using electricity from a battery pack to power an electric motor. So rather than needing fuel to combust, which then moves pistons which then moves the wheels, EVs are a straighter-shot with less conversion of energy necessary, electricity powering the motor which powers the wheels.

That simpler setup comes with many advantages, and that difference in the conversion of energy is a big one. Because most of the energy injected into the EV’s system is converted into mechanical movement for the wheels, this type of vehicle only loses about 11% of the energy you put into it to that conversion of electricity to mechanical energy process—around 31-35% is initially lost while charging, converting electricity to motion, and so on, but about 22% is recaptured by the vehicle’s brakes during operation, leading to that 11% average loss.

A gas-powered vehicle, in contrast, because of the inefficiencies inherent in converting fuel to combustion to movement, loses somewhere between 75-84% of the energy you put into it at the gas station, much of that loss in the form of heat that is emitted as a result of that conversion process; this is an inevitable consequence of the thermodynamics of burning fuel to create motion, and one that means operating a gas-powered vehicle is inherently lossier, in the sense that you can’t help but lose the majority of what you put into it as waste, compared to an electric vehicle, which is less lossy to begin with, but even more efficient when you include that in-operation energy recovery.

That baseline reality of energy usage means that modern electric vehicles will typically be cheaper to fuel, to power, because it requires less energy input to get the same amount of travel. This cost-benefit comparison shifts even further in favor of EVs when gas prices are high, though, and though currently the cost of EVs tend to be higher than gas-powered vehicles in most countries, EVs also offer substantially lower lifetime maintenance costs—an average of 40% lower than gas-powered vehicles, due largely to the dramatically reduced number of moving parts in EVs, and the lack of regular, recurring engine-related maintenance tasks, like oil changes and replacing spark plugs.

Not even considering the externalities-related savings of owning and operating an EV, then, like the environmental costs of fuel emissions, such vehicles can save owners tens of thousands of dollars in costs over the span of their ownership—though gas-powered vehicles are still more popular in most markets in part because they’re just more common on car lots, their infrastructure—gas stations versus charging stations—are also more common, and because there are numerous convenience issues, like it being quite a bit faster to pump a tank full of gas than to charge EVs, which is more efficient, but also a piece-of-mind sort of benefit.

What I’d like to talk about today are some recent innovations in the EV and especially EV-scale battery space, and what it might mean for this market in the coming years.

—

After a relatively boom-y period in which EV sales saw a significant uptick, that uptick the consequence of friendly policies and subsidies from successive federal administrations and the rapid-fire innovations arriving in each new generation of EV model being pumped out by US makers, especially Tesla, the US car industry has in recent years pulled back from electric vehicles substantially—the most recent evidence of this being Honda’s recent announcement that three EV models they were planning to manufacture in the US will no longer see production.

This was mostly a money decision, the raw and partially manufactured components necessary for US-based car companies to produce EVs are now burdened with new, Trump-era tariffs, that make producing finished products of this kind in the US all but impossible; simply too expensive to make.

This is also an acknowledgment, though, that Chinese EVs have just gotten so good and so inexpensive for what you get, that it’s simply not possible to compete, not within the current economic and regulatory climate, but also not in the immediate future, even lacking those tariffs, because of how much of a lead Chinese car companies have earned for themselves in this space.

New impositions by the second Trump administration, including those tariffs, but also the killing of EV incentives, and a recent decision to cease enforcing emissions and fuel economy standards, basically telling the industry to make vehicles that pollute more, if they like, have absolutely influenced this state of affairs.

But the quality of new Chinese EVs, the speed at which a large quantity of them can be produced, and the affordability of these vehicles is simply too much for even the world’s most otherwise competitive and industry-owning companies, the most renowned car brands, to match.

There are a few serious EV players in other parts of Asia, and some US companies, like Lucid Motors, are still trying to carve out a space for themselves, pivoting toward skateboard-style platforms that will allow them to use fewer scarce products, like expensive wiring, by using essentially the same base for all of their models, allowing them to ramp-up efficiencies of scale faster, and Rivian, which is trying to claim the outdoorsy, Jeep-esque facet of the US EV market; and Tesla of course continues to own a lot of mindshare in this industry, despite seeming to be pivoting toward AI, autonomous vehicles, and political concerns in recent years.

But this is increasingly China’s domain, and that dominance is the result of a multi-decade push to own basically all the infrastructure and technologies required to electrify their economy, from the ground-up.

As a consequence of that dominance, and all the renewables and battery-making facilities and investments in the relevant companies made by the government for the past few decades, we’re now seeing impressive technological feats coming out of China, like the recently successfully test-flown Sky Dragon electric vertical takeoff and landing aircraft, which looks something like a drone combined with a helicopter, and which can reportedly carry either 10 passengers or a ton of cargo up to 155 miles, which is about 250 kilometers, on a single charge, taking off and landing from helipads, so no runway necessary.

But the already on-the-market, everyday applications of this tech are arguably even more impressive, considering that car-markers in other countries cannot accomplish anywhere near the same, and maybe won’t be able to do so for years.

Chinese carmaker BYD is the top entrant in this space right now, in China and globally, by many metrics, and in early March of 2026 they announced a new battery, called the Blade Battery 2.0, which allows the vehicles it powers to be driven more than 621 miles on a single charge.

That’s compared to the around 400 mile range most large-tanked gas-powered cars can claim. Though even as batteries have gotten larger and more efficient, in terms of their energy storage and expenditure, charging them up has still taken quite a bit longer than filling a tank with gas, often requiring a wait of 30 minutes, though that’s usually just for a small top-up, and only if you have access to a fast-charger. A full-charge sometimes requires as much as 24 hours, if you’re using a small, non-fast public or a home charger.

This differs quite a lot depending where in the world you are, the nature of your EV, and the capacity of the charger you’re using. In general, Tesla superchargers can take a Tesla’s battery from 20% to 89% in around 15-30 minutes, which on average provides another 200 miles of travel; topping it up to 100% usually takes about an hour.

This new battery from BYD, though, which has that 621 mile capacity, can be charged from 10% to 80% in just 6 and a half minutes—and that’s not theory, that exact feat was shown in a public, onstage demonstration.

This isn’t a claim about a technology that will soon arrive, in other words, this is a technology that’s already here, for BYD vehicles, at least. And at six and a half minutes for around 300 miles of range, that brings EVs into the same convenience range as gas vehicles, just a minute or so longer than the average stop at a gas station.

This of course will require specialized charging stations, and those stations will take a while to roll out. The company has said they’ll have 15,000 of their so-called megawatt charging stations available across China by the end of 2026, building 4000 of them, themselves, and the rest through joint ventures. They’re also planning to have about 3000 of these chargers built across European by the end of the year.

All of which will likely further reinforce and lock-in BYD’s advantages over its local and foreign competition, at least for the next several years.

Now, it’s worth mentioning that China’s ’s EV industry is currently a bit tumultuous, the stock prices of companies like BYD tumbling due to wild competition on the Chinese market that until recently has been encouraged by the government, which favors a brutal sort of evolutionary business environment for its favored industries, most of the entrants eventually dying off and leaving fewer, but very strong and internationally competitive companies once the melee has died down.

It’s generally assumed that companies like BYD will cope with this crisis of too-low prices and vehicle overproduction—they and their Chinese competitors are making a lot more EVs than their existing markets can bear—they’ll cope by becoming more aggressive with their international expansion, dropping gobs of these incredibly competitive vehicles in more markets, hoping to offload all that stock, but also to suffocate inferior but more expensive local offerings and, consequently, create more lock-in with international customers through those superior products.

There’s a parallel push for autonomous EVs in many of these markets, which is several years behind the evolution of EV tech, but is also evolving rapidly within China, using that same ultra-brutal competition tactic. These companies are thus quite a bit further along than most of their global competitors, and it seems likely that the semi-autonomous tech built into these newly exported vehicles will help give Chinese companies a leg-up when it comes to exporting autonomous tech to the world, in the next few years.

All of which demonstrates the Chinese market’s major head-start in this and connected technologies, and which points at a serious concern, not just for the US, but for pretty much everyone, as most of these technologies, like better batteries, are relevant not just for the consumer car industry, but also basically every other field, including future military technologies, and tech related to the AI and broader semiconductor industries, which could lead to still-more, and more varied advantages in the near-future.

Show Notes

https://yaleclimateconnections.org/2024/01/electric-vehicles-use-half-the-energy-of-gas-powered-vehicles/

https://www.nrdc.org/stories/electric-vs-gas-cars-it-cheaper-drive-ev#lifetime-costs

https://afdc.energy.gov/vehicles/how-do-all-electric-cars-work

https://www.energy.gov/cmei/vehicles/articles/fotw-1360-sept-16-2024-typical-ev-87-91-efficient-compared-30-conventional

https://arstechnica.com/cars/2026/03/facing-heavy-losses-honda-cancels-its-three-us-made-electric-vehicles/

https://arstechnica.com/cars/2026/03/rivian-reveals-pricing-and-trim-details-for-its-r2-suv/

https://arstechnica.com/cars/2026/03/lucid-announces-midsize-ev-platform-says-profitability-lies-with-suvs/

https://www.livescience.com/technology/electric-vehicles/giant-10-person-flying-taxi-passes-first-flight-test-in-china

https://www.fastcompany.com/91503415/byd-ev-battery-competes-with-gas-engines

https://arstechnica.com/cars/2026/03/byds-latest-evs-can-get-close-to-full-charge-in-just-12-minutes/

https://www.nytimes.com/2026/02/19/business/china-electric-vehicle-troubles.html

https://www.kbb.com/car-advice/how-long-charge-tesla/

We also discuss Venezuela, Cuba, and cartels.

Recommended Book: Plagues upon the Earth by Kyle Harper

Transcript

Ali Hosseini Khamenei was an opposition politician in the lead-up to the Iranian Revolution that, in 1979, resulted in the overthrow of the Shah—the country’s generally Western government-approved royal leader—and installed the Islamic Republic, an extremely conservative Shia government that took the reins of Iran following the Shah’s toppling.

Khamenei was Iran’s third president, post-Shah, and he was president during the Iran-Iraq War from 1981-1989, during which the Supreme Leader of Iran, the head of the country, Ruhollah Khomeini sought the overthrow of then Iraqi leader Saddam Hussein. Khomeini died the same year the war ended, 1989, and Khamenei was elected to the role of Supreme Leader by the country’s Assembly of Experts, which is responsible for determining such roles.

The new Supreme Leader Khamenei was reportedly initially concerned that he wasn’t suitable for the role, as his predecessor was a Grand Ayatollah of the faith, while he was just a mid-rank cleric, but the constitution of Iran was amended so that higher religious office was no longer required in a Supreme Leader, and in short order Khamenei moved to expound upon Iran’s non-military nuclear program, to expand the use and reach of the Islamic Revolutionary Guard Corps, in-country and throughout the region, and he doubled-down on supporting regional proxies like Hezbollah in Lebanon, the Houthis in Yemen, and Hamas in Gaza, incorporating them into the so-called Axis of Resistance that stands against Western interests in the region—the specifics of which have varied over the decades, but which currently includes the aforementioned Hezbollah and Houthis, alongside smaller groups in neighboring countries, like Shiite militias in Bahrain, and forces that operate in other regional spheres of influence, like North Korea, Venezuela, and at times, portions of the Syrian government.

Khamenei also reinforced the Iranian government’s power over pretty much every aspect of state function, disempowering political opponents, cracking down on anyone who doesn’t toe a very conservative extremist line—women showing their hair in public, for instance, have been black-bagged and sometimes killed while in custody—and thoroughly entangled the functions of state with the Iranian military, consolidating essentially all power under his office, Supreme Leader, while violently cracking down on anyone who opposed his doing whatever he pleased, as was the case with a wave of late-2025, early 2026 protests across the country, during which Iranian government forces massacred civilians, killing somewhere between 3,000 and 35,000 people, depending on whose numbers you believe.

What I’d like to talk about today is a new war with Iran, kicked off by attacks on the country from Israel and the United States that led with the killing of Khamenei and a bunch of his higher-up officers, how this conflict is spreading across the region and concerns about that spreading, and what might happen next.

—

On February 28, 2026, the US and Israel launched a wave of joint air attacks against Iran, hitting mostly military and government sites across the country. One of the targets was Khamenei’s compound, and his presence there, above-ground, which was unusual for him, as he spent most of his time deep underground in difficult-to-hit bunkers, alongside a bunch of government and military higher-ups, may have been the rationale for launching all of these attacks on that day, as the attackers were able to kill him and five other top-level Iranian leaders, who he was meeting with, at the same time.

This wave of attacks followed the largest military buildup of US forces in the Middle East since the invasion of Iraq back in 2003, and while military and government targets were prioritized, that initial wave also demolished a lot of civilian structures, including schools, hospitals, and the Grand Bazaar in Tehran, leading to a whole lot of civilian casualties and fatalities, as well.

In response, Iran launched hundreds of ballistic missiles and drones at Israel, and at US bases throughout the region—these bases located in otherwise uninvolved countries, including Qatar, Bahrain, the UAE, Kuwait, Iraq, Jordan, and Saudi Arabia. Iranian missiles and drones also hit non-military targets, and in some cases maybe accidentally hit civilian infrastructure, in Azerbaijan, and Oman, alongside a British military base on the island of Cyprus.

The Iranian president apologized in early March for his country’s lashing out at pretty much everyone, saying that there were miscommunications within the Iranian military, and that Iran wouldn’t hit anyone else, including countries with US bases, so long as US attacks didn’t originate from those bases.

Despite that apology, though, Iranian missiles and drones continued to land in many of those neighboring countries following his remarks, raising questions about communications and control within the now-decapitated Iranian military.

This new conflict follows long-simmering tensions between Iran and Israel—the former of which has said it will someday wipe the latter from the face of the Earth, considering its existence an abomination—and long-simmering tensions related to Iran’s nuclear program, which the government has continuously said is just for civilian, energy purposes, but which pretty much everyone suspects, with a fair bit of evidence, is, in parallel, also a weapons program.

Iran’s influence throughout the region has been truncated in recent years, due to a sequence of successes by the Israeli military and intelligence services, which allowed them to hobble or nearly wipe out traditional Iranian proxy forces like Hamas, Hezbollah, and the Houthis, which have collectively surrounded and menaced Israel for decades.

Those menacing forces more or less handled, Israel has become more aggressive in its confrontations with Iran, exchanging large air attacks several times over the past handful of years, and the US under Trump’s second term continues to see Iran as the main opposition to their efforts to build a US-aligned counterbalance against Russian and Chinese influence in the Middle East, with Israel, Saudi Arabia, and increasingly entities like Qatar and the UAE playing ball with the West, while Iran and its allies stand firm against the West.

Trump has regularly threatened to act in Iran, usually waiting for the Iranian government to do something really bad, like that recent massacre of civilians following those large anti-government protests in late-2025, early 2026, and that to some degree has served as justification for the massing of US military assets in the region, leading up to this attack.

Now that the attack has launched, a new war triggered, the question is how big it will get and how long it will last.

For the moment, it looks like Iran’s government and military is very much on the back foot, a lot of their assets taken out in that initial wave, and they’re still scrambling to put someone in charge to replace Khamenei and those other higher-ups who were assassinated at the outset of this war—that’ll likely change soon, maybe even before this episode goes live. But whomever takes the reins will have quite the task ahead of them, probably—according to many analysts, at least—aiming to just hold out until the US runs out of ammunition, which is expected to happen within a week or so, at which point Iran can launch surgical attacks, aiming to make this war too expensive, in terms of money and US lives, for the Trump administration to continue investing in, as money and lives are especially expensive in an election year, which 2026 is. So the idea is to grind the US down until it makes more political sense for Trump to just declare victory and leave, rather than allowing this to become a Vietnam or Afghanistan situation for his administration.

It’s also generally expected that when the US pulls out, Israel probably will too, as they’ve already made their point, tallied a bunch of victories, and set Iran back in a lot of ways; they could walk away whenever they like and say they won. And Iran would probably be incentivized to, at that point, avoid doing anything that would lead to more punishment, though they would almost certainly immediately begin rebuilding the same exact centralized, militarized infrastructure that was damaged, the only difference being they would have someone else on top, as the Supreme Leader. Relations could be even worse moving forward, but it would probably be at least a few years before Iran could do anything too significant to their regional enemies, which I guess if you’re Israel does, in fact, represent a win.

But considering the unlikelihood of permanent change in Iran, the big question here, in the minds of many, is what this war, this attack, is even for.

For Israel, the main purpose of any attack against Iran is to weaken or destroy an enemy that has made no secret about wanting to weaken and destroy them. For the US, though, and the Trump administration more specifically, the point of all this isn’t as clear.

Some contend that this is another effort to steal attention and headlines from the increasingly horrifying revelations coming out of the investigation into the Epstein files, which seem to indicate Trump himself was involved in all sorts of horrible, pedophilic sexual assault activities with the late human-trafficker.

Some suspect that the apparent victory in grabbing former Venezuelan president Maduro from his own country and whisking him away to the US without suffering any US casualties has emboldened Trump, and that he’s going to use the time he’s got to take out anyone he doesn’t like, and may even specifically target authoritarian leaders who will not be missed—who oppress and kill their own people—because then it’s difficult for his political opponents to call him out on these efforts.

Most Venezuelans are happy to see Maduro gone, and many Iranians celebrated when Khamenei was assassinated. Trump has publicly stated that he intends to go after Cuba, next, and continues to suggest he wants a war of sorts with Mexican and south and central American cartels, which follows this same pattern of demonstrating a muscular, aggressive, militarized United States doing whatever it wants, even to the point of kidnapping or assassinating foreign leaders, but doing so in a way that is difficult to argue against, because the leaders and other forces being taken out are so horrible, at times to the point of being monstrous, that these acts, as illegal as they are according to internal laws, can still seem very justified, through some lenses.

Still others have said they believe this is purely an Israeli op, and the US under Trump is just helping out one of Trump’s buddies, Israel’s Netanyahu, who wants to keep his country embroiled in war in order to avoid being charged for corruption.

The real rationale could be a combination of these and other considerations, but the threat here, regionally, is real, especially if Iran continues to lash out at its neighbors.

This part of the world is renowned for its fuel reserves and exports, and every time there’s a Middle Eastern conflict, energy prices rise, globally, and other nations that produce such exports, like Russia, benefit financially because they can charge more for their oil and gas for a while—gas prices in the US have already increased by 14% over the past week as a result of the conflict—and those increases also then the raises the price of all sorts of other goods, spiking inflation.

Another huge concern here, though, is that this part of the world is highly reliant on the desalination of water just to survive; massive desalination plants, most located along the coast, where they are very exposed to military threats, are at risk if Iran and Saudi Arabia, or Kuwait, or Oman start firing at each other in earnest.

About 90% of Kuwait’s drinking water comes from these sorts of plants, and about 86% of Oman’s and 70% of Saudi Arabia’s do, as well.

Earlier in this war, a US strike damaged an Iranian desalination plant, and the Iranian foreign minister made a not-so-veiled threat against such plants in neighboring countries, saying the US set the precedent of attacking such infrastructure, not them.

Worth noting here, too, is that many desalination plants are attached to power stations, located within the same facility, so attacks on power infrastructure, which are already common in any conflict, could also lead to more damaged desalination plants, all of which could in turn create massive humanitarian crises, as people living in some of the hottest, driest parts of the world find themselves, in the millions, without drinkable water.

The potential for a spiraling humanitarian disaster increases with each passing day, then, which would seem to increase the likelihood that someone will stop, declare victory, and move on to the next conflict. But there’s always the chance the one or more of the involved forces will clamp down and decide that it’s in their best interest to keep things going as long as possible, instead—and in this case, it would likely be Iran playing that role, locking the US and Israel and their allies into a grinding, long-term conflict that no one would actually win.

Show Notes

https://en.wikipedia.org/wiki/Axis_of_Resistance

https://en.wikipedia.org/wiki/Death_and_state_funeral_of_Ruhollah_Khomeini

https://en.wikipedia.org/wiki/2026_Iran_massacres

https://en.wikipedia.org/wiki/Ali_Khamenei

https://en.wikipedia.org/wiki/Assassination_of_Ali_Khamenei

https://www.eurasiareview.com/08032026-strikes-continue-despite-iranian-presidents-apology/

https://www.reuters.com/world/europe/trump-rejects-settling-iran-war-raises-prospect-killing-all-its-potential-2026-03-08/

https://www.reuters.com/world/us/irans-retaliation-began-us-officials-scrambled-arrange-evacuations-2026-03-07/

https://www.reuters.com/world/middle-east/mapping-crisis-iran-visual-explainer-2026-03-06/

https://apnews.com/live/iran-war-israel-trump-03-08-2026

https://apnews.com/article/iran-israel-us-march-8-2026-f0b20dbffaea9351ae1e54183ffe53ff

https://apnews.com/article/iran-war-desalination-water-oil-middle-east-12b23f2fa26ed5c4a10f80c4077e61ce

https://apnews.com/video/trump-says-us-will-turn-attention-to-cuba-after-war-with-iran-91c3f239c18349fdb409f901c50b7e71

https://www.nytimes.com/live/2026/03/08/world/iran-war-trump-israel-lebanon

https://www.nytimes.com/2026/03/08/us/politics/trump-russia-ukraine-iran-war.html

https://www.nytimes.com/2026/03/07/us/politics/iran-war-first-week.html

https://www.nytimes.com/interactive/2026/03/08/opinion/iran-war-ayatollah.html

https://en.wikipedia.org/wiki/2026_Iran_war

We also discuss red lines, contracts, and lethal autonomous systems.

Recommended Book: Empire of AI by Karen Hao

Transcript

Lethal autonomous weapons, often called lethal autonomous systems, autonomous weapons systems, or just ‘killer robots,’ are military hardware that can operate independent of human control, searching for and engaging with targets based on their programming and thus not needing a human being to point it at things or pull the trigger.

The specific nature and capabilities of these devices vary substantially from context to content, and even between scholars writing on the subject, but in general these are systems—be they aerial drones, heavy gun emplacements, some kind of mobile rocket launcher, or a human- or dog-shaped robot—that are capable of carrying out tasks and achieving goals without needing constant attention from a human operator.

That’s a stark contrast with drones that require either a human controlled or what’s called a human-in-the-loop in order to make decisions. Some drones and other robots and weapons require full hands-on control, with a human steering them, pointing their weapons, and pulling the trigger, while others are semi-autonomous in that they can be told to patrol a given area and look for specific things, but then they reach out to a human-in-the-loop to make final decisions about whatever they want to do, including and especially weapon-related things; a human has to be the one to drop the bomb or fire the gun in most cases, today.

Fully autonomous weapon systems, without a human in the loop, are far less common at this point, in part because it’s difficult to create a system so capable that it doesn’t require human intervention at times, but also because it’s truly dangerous to create such a device.

Modern artificial intelligence systems are incredibly powerful, but they still make mistakes, and just as an LLM-based chatbot might muddle its words or add extra fingers to a made-up person in an image it generates, or a step further, might fabricate research referenced in a paper it produces, an AI-controlled weapon system might see targets where there are no targets, or might flag a friendly, someone on its side, or a peaceful, noncombatant human, as a target. And if there’s no human-in-the-loop to check the AI’s understanding and correct it, that could mean a lot of non-targets being treated like targets, their lives ended by killer robots that gun them down or launch a missile at their home.

On a larger scale, AI systems controlling arrays of weapons, or even entire militaries, becoming strategic commanders, could wipe out all human life by sparking a nuclear war.

A recent study conducted at King’s College London found that in simulated crises, across 21 scenarios, AI systems which thought they had control of nation-state-scale militaries opted for nuclear signaling, escalation, and tactical nuclear weapon use 95% of the time, never once across all simulations choosing to use one of the eight de-escalatory options that were made available to them.

All of which suggests to the researchers behind this study that the norm, approaching the level of taboo, associated with nuclear weapons use globally since WWII, among humans at least, may not have carried over to these AI systems, and full-blown nuclear conflict may thus become more likely under AI-driven military conditions.

What I’d like to talk about today is a recent confrontation between one AI company—Anthropic—and its client, the US Department of Defense, and the seeming implications of both this conflict, and what happened as a result.

—

In late-2024, the US Department of Defense—which by the way is still the official title, despite the President calling it the Department of War, since only Congress can change its name—the US DoD partnered with Anthropic to get a version of its Claude LLM-based AI model that could be used by the Pentagon.

Anthropic worked with Palantir, which is a data-aggregation and surveillance company, basically, run by Peter Thiel and very favored by this administration, and Amazon Web Services, to make that Claude-for-the-US-military relationship happen, those interconnections allowing this version of the model to be used for classified missions.

Anthropic received a $200 million contract with the Department of Defense in mid-2025, as did a slew of other US-based AI companies, including Google, xAI, and OpenAI. But while the Pentagon has been funding a bunch of US-based AI companies for this utility, only Claude was reportedly used during the early 2026 raid on Venezuela, during which now-former Venezuelan President Maduro was taken by US forces.

Word on the street is that Claude is the only model that the Pentagon has found truly useful for these sorts of operations, though publicly they’re saying that investments in all of these models have borne fruit, at least to some degree.

So Anthropic’s Claude model is being used for classified, military and intelligence purposes by the US government. Anthropic has been happy about this, by all accounts, because that’s a fair bit of money, but also being used for these purposes by a government is a pretty big deal—if it’s good enough for the US military, after all, many CEOs will see that as a strong indication that Claude is definitely good enough for their intended business purposes.

On February 24 of 2026, though, the US Defense Secretary, Pete Hegseth, threatened to remove Anthropic from the DoD’s stable of AI systems that they use unless the company allowed the DoD to use Claude for any and all legal purposes—unrestricted use of the model, basically.

This threat came with a timeline—accede to these demands by February 27 or be cut from the DoD’s supply chain—and the day before that deadline, the 26th, Anthropic’s CEO released a statement indicating that the company would not get rid of its red lines that delineated what Claude could and could not be used for, and on the 27th, US President Trump ordered that all US agencies stop using Anthropic tools, and said that he would declare the company a supply chain risk, which would make it illegal for any company doing business with the US government at any level and in any fashion to use Anthropic products or services—a label that’s rarely used, and which was previously used by the Trump administration against Chinese tech giant Huawei on the basis that the company might insert spy equipment in communications hardware installed across the US if they were allowed to continue operating in the country.

Those red lines that Anthropic’s CEO said he wouldn’t get rid of, not even for a client as big and important as the US government, and not even in the face of threats by Hegseth, including that he might invoke the Defense Production Act, which would allow him to force the company to allow the Pentagon to use Claude however they like, or Trumps threat that the company be blacklisted from not just the government, but from working with a significant chunk of Fortune 500 companies, those red lines include not allowing Claude to be used for controlling autonomous weapon systems, killer robots, basically, and not allowing Claude to be used for surveilling US citizens.

The Pentagon signed a contract with Anthropic in which they agreed to these terms, but Hegseth’s new demand was that Anthropic sign a new version of the contract in which they allow the US government to use Claude and their other offerings for ‘all legal purposes,’ which apparently includes, at least in some cases and contexts, killer robots and mass surveillance.

So the Pentagon tried to strong-arm a US-based AI company into allowing them to use their product for purposes the company doesn’t consider to be moral, and that led to this situation in which Anthropic is now being phased out from US government use—it’ll apparently take about 6 months to do this, and some analysts speculate that timeline is meant to serve as a period in which further negotiation can occur—but either way, it’s being phased out and it may even have trouble getting major clients in the future as a result of being blackballed.

As all this was happening, OpenAI stepped in and offered its products and services to fill the void left by Anthropic in the US government.

OpenAI’s CEO has been cozying up to Trump a lot since he regained office, and has positioned the company as a major US asset, too big to fail because then China will win the AI race, basically, so this makes sense. Its CEO released several statements and press releases in the wake of this further cozying, saying that they believe the same things Anthropic does, and that they’re not giving up any credibility for doing this because they have the same red lines, no killer robots, no mass surveillance of US citizens.

But this is generally assumed to be bunk, because why would the Pentagon agree to the same terms all over again, and with a company that provides, for their purposes and right now, anyway, inferior services instead of the one they just chased out and blackballed, and which was helping them do purposeful, effective things, like kidnapping a foreign leader from a secure facility, today?

Instead, what it sounds like is OpenAI is trying to have its cake and eat it too, saying publicly that they don’t want their offerings used to control autonomous weapons systems or mass surveil Americans, but instead of writing that into the contract, they’ve got some basic guardrails baked into their systems, and they are assuming those guardrails will keep any funny business from happening. So it’s a sort of gentleman’s agreement with their clients that OpenAI products won’t be used for mass surveillance or killer robots, rather than something legally binding, as was the case with Anthropic.

The response to all this within the tech world has been illustrative of what we might expect in the coming years. Many people, including folks working on these technologies, are halting their use of OpenAI tech in protest, and in some (at this point at least) fewer cases, people are quitting their OpenAI jobs, because they are strongly opposed to these use-cases and would prefer to support a company that takes a strong stand on these sorts of moral issues.

Some analysts also wonder if this will ensure the Pentagon only ever has access to inferior AI models because they intentionally threatened and disempowered a key AI industry CEO in public, saying that they had final say over how these tools are used, and many such CEOs are both unaccustomed to such stripping down, but are also doing the work they’re doing for ideological reasons—they have beliefs about what the future, as enabled by AI technologies, will look like, and they believe they will play a vital role in making that future happen.

The idea, then, is why would they want to work with the Pentagon, or the US government more broadly, if that means no longer being in charge of the destiny of these tools they’re putting so much time, effort, and resources into building? Why would they take on a client, even a big, important one, if that means no longer having any grain of control over the future of the world as shaped by the systems they’re building?

We’ll know a bit more about how all this plays out within the next handful of months, as this could serve as a moral differentiator between otherwise near-match products in the AI category, allowing companies like Anthropic to compete, both in terms of clients and in terms of employees, with the likes of OpenAI and xAI by saying, look, we don’t want killer robots or mass surveillance and we gave up a LOT, put our money where our mouths are, in support of that moral stance.

That could prove to be a serious feather in their cap, despite the initial cost, though it could also be that the pressure the US government is willing and able to apply to them instead serves as a warning to others, and the likes of OpenAI and Google and so on just get better at speaking out of both sides of their mouths on this issue, creating sneakier contracts that allow them to say the same on paper, seeming to take the same moral stance Anthropic did, while behind closed doors allowing their clients to do basically whatever they want with their products, including using them to control killer robots and to mass surveil US citizens.

Show Notes

https://www.kcl.ac.uk/news/artificial-intelligence-under-nuclear-pressure-first-large-scale-kings-study-reveals-how-ai-models-reason-and-escalate-under-crisis

https://www.axios.com/2026/02/26/ai-nuclear-weapons-war-pentagon-scenarios

https://www.nytimes.com/2026/02/27/technology/openai-agreement-pentagon-ai.html

https://en.wikipedia.org/wiki/Lethal_autonomous_weapon

https://www.theverge.com/ai-artificial-intelligence/885963/anthropic-dod-pentagon-tech-workers-ai-labs-react

https://www.theverge.com/ai-artificial-intelligence/886816/openai-reached-a-new-agreement-with-the-pentagon

https://arstechnica.com/tech-policy/2026/02/trump-moves-to-ban-anthropic-from-the-us-government/

https://apnews.com/article/anthropic-pentagon-ai-dario-amodei-hegseth-0c464a054359b9fdc80cf18b0d4f690c

https://www.wsj.com/tech/ai/whats-really-at-stake-in-the-fight-between-anthropic-and-the-pentagon-d450c1a1

https://openai.com/index/our-agreement-with-the-department-of-war/

https://www.kcl.ac.uk/news/artificial-intelligence-under-nuclear-pressure-first-large-scale-kings-study-reveals-how-ai-models-reason-and-escalate-under-crisis

https://www.axios.com/2026/02/26/ai-nuclear-weapons-war-pentagon-scenarios

We also discuss trade wars, Greenland, and the IEEPA.

Recommended Book: Smoke and Ashes by Amitav Ghosh

Transcript

I’ve spoken on this show before about tariffs and about US President Trump’s enthusiasm for tariffs as an underpinning of his trade policy. Last October, back in 2025 I did an episode on tariff leverage and why the concept of an ongoing trade war is so appealing to Trump—it basically gives him a large whammy on anyone he enters negotiations with, because the US market is massive and everyone wants access to it, and tariffs allow him to bring the hammer down on anyone he doesn’t like, or who doesn’t kowtow in what he deems to be an appropriate manner.

So he can slap a large tariff on steel or pharmaceuticals or cars from whichever country he likes just before he enters negotiations with that country, and then those negotiations open with him in an advantageous spot: they have to give him things just to get those tariffs to go away—they have to negotiate just to get things back to square one.

That’s how it’s supposed to work, anyway. What we talked about a bit back in October is TACO theory, TACO standing for Trump Always Chickens Out—the idea is that other world leaders had gotten wise to Trump’s strategy, which hasn’t changed since his first administration, and he has mostly been a doubling-down on that one, primary approach, to the point that they can step into these negotiations, come up with something to give him that allows him to claim that he’s won, to make it look like he negotiated well, and then they get things back down to a more reasonable level; maybe not square one, but not anything world-ending, and not anything they weren’t prepared and happy to give up.

In some cases, though, instead of kowtowing in this way so that Trump can claim a victory, whether or not a victory was actually tallied, some countries and industries and the businesses that make up those industries have simply packed up their ball and gone home.

China has long served as a counterbalance to the US in terms of being a desirable market and a hugely influential player across basically every aspect of geopolitics and the global economy, and this oppositional, antagonistic approach to trade has made the US less appealing as a trade partner, and China more appealing in comparison.

So some of these entities have negotiated to a level where they could still ship their stuff to the US and US citizens would still be willing to pay what amounts to an extra tax on all these goods, because that’s how tariffs work, that fee is paid by the consumers, not by the businesses or the origin countries, but others have given up and redirected their goods to other places. And while that’s a big lift sometimes, the persistence of this aggression and antagonism has made it a worthwhile investment for many of these entities, because the US has become so unpredictable and unreliable that it’s just not worth the headache anymore.

What I’d like to talk about today is a recent Supreme Court decision related to Trump’s tariffs, and what looks likely to happen next, in the wake of that ruling.

—

Ever since Trump stepped back into office for his second term, in January of 2025, he has aggressively instilled new and ever-growing tariffs on basically everyone, but on some of the US’s most important trade partners, like Mexico and Canada, in particular.

These tariffs have varied and compounded, and they’ve applied to strategic goods that many US presidents have tried to hobble in various ways, favoring US-made versions of steel and microchips, for instance, so that local makers of these things have an advantage over their foreign-made alternatives, or have a more balanced shot against alternatives made in parts of the world where labor is cheaper and standards are different.

But this new wave of tariffs were broad based, hitting everyone to some degree, and that pain was often taken away, at least a little, after leaders kowtowed, at times even giving him literal gold-plated gifts in order to curry favor, and/or funneling money into his family’s private companies and other interests, allowing him to use these tariffs as leverage for personal gain, not just national advantage, in other cases giving him what at least looked outwardly to be a negotiating win.

Things spiraled pretty quickly by mid-2025, when China pushed back against these tariffs, adding their own reciprocal tariffs on US goods, and at one point extra duties on Chinese imports coming into the US hit 145%.

Shortly thereafter, though, and here we see that TACO acronym proving true, once again, Trump agreed to slash these tariffs for 90 days, and around the same time, in May of 2025, a federal appeals court temporarily reinstated some of Trump’s largest-scale tariffs after a lower court ruled that they couldn’t persist.

The remainder of 2025 was a story of Trump trying to strike individual deals with a bunch of trade partners, like South Korea, Indonesia, and India, in some cases via direct negotiation, in others with a bunch of threats that eventually led to a sort of mutual standoff that no one was particularly happy about.

2026 was greeted with a threat by Trump to impose a huge wave of new tariffs on eight major European allies, those tariffs sticking around until these nations agreed to allow the US to buy Greenland, which was an obsession of Trump’s at that point, but a lot of Trump’s tariff posturing was derailed by a Supreme Court decision that landed in mid-February, in which the justices decided, 6 to 3, that Trump’s reciprocal tariffs are unconstitutional, as setting and changing tariffs is a Congressional power, not a Presidential one.

This was a serious blow to Trump and his stated policies, as pretty much all of his economic plans oriented around the idea—which most economists have said is bunk and based on fantasy, not reality, but still—that putting a bunch of tariffs on everything will allow the US to earn so much additional revenue that the deficit can be paid down.

It’s worth noting here that, just as those economists predicted, the deficit has only gotten larger under both Trump administrations, and in fact the growth of the US debt has sped up, not declined, despite the additional billions being pulled into government coffers by these tariffs, because the Trump administration’s spending is massive, and because the losses related to tariffs are also significant. But tariffs remain center to his policy nonetheless, so this was a major blow.

This ruling also seemed likely to defang a lot of Trump’s threats and drain his leverage at the negotiating table, as he could no longer threaten everyone with more tariffs, practically booting them from or weakening them on the US market.

So Trump was pissed, and as he tends to do, he publicly raged about the decision, which was made by a Supreme Court that is heavily stacked in his favor; which gives an indication of just how unpopular and unconstitutional all of this has been.

But immediately after that decision landed, he announced that, using alternative authorities—different powers—he would be imposing a blanket 10% tariff on everything coming into the US, and the following day announced that it would be a 15% tariff on everything, instead.

This does seem to be something Trump has the power to do, but he can only do it under the auspices of the International Emergency Economic Powers Act, or IEEPA, and these tariffs will only last for 150 days, max, and might also be challenged in court.

Also notably, some entities, like Britain and Australia, will face higher rates than they faced under the previous tariff setup, because of how they are applied and compound with other trade barriers, or the nature of what they export to the US market, while others, including China, will see their tariffs substantially drop.

Which could make things tricky, as that implies some of the previously negotiated deals have changed post-deal, or in some cases mid-negotiation; which means a lot more work to get things where everyone wants them, but also a loss of legitimacy and credibility for this administration, as they seem to be negotiating using powers they don’t actually have and making promises they can’t keep.

All of which, rather than simplifying and clarifying things for the US market and our international trade partners, actually further complicates them, at least for now, until the dust settles.

It does seem likely Trump’s administration will continue to try to leverage whatever power they can in this matter, grabbing at levers that haven’t been previously used, or used in this way, and those attempts will almost certainly be legally challenged, which could lead to more court cases, and a lot more uncertainty in the meantime, until those cases are figured it.

It’s also created new rifts within the Republican party, as Trump seems to be going after those who voted against his tariffs, or in any other way supported their removal, and he’s raged against the Supreme Court justices, even those he put into place and who are ideologically aligned with the Republican party almost always, which could also lead to more fracturing within his base, leading up to the November 2026 Congressional elections.

One more thing that’s worth noting here is that Trump’s usual tactic of trying to distract from things he doesn’t want people to pay attention to is in full operation following this court case: as all this has been happening, and against the backdrop of increasingly serious allegations related to his abundant presence in the Epstein files, he’s been talking more about potentially attacking Iran and releasing files on aliens, on extraterrestrials on Earth and in the US.

So we’re likely to see a lot more of that sort of thing in the coming months, especially if things continue to not go his way in regards to these tariffs and the hubbub surrounding them, but this story will shape global and US economics for years to come, not to mention on-the-ground realities for many people today, which should substantially impact Trump’s popularity and voter behavior come November.

Show Notes

https://www.axios.com/2026/02/20/supreme-court-trump-energy-tariffs

https://www.axios.com/2026/02/20/trump-tariff-plan-section-122-trade-act

https://www.axios.com/2026/02/20/trump-scotus-tariff-refund-battle

https://www.nytimes.com/2026/02/21/business/economy/trump-tariffs-trade-war.html

https://www.nytimes.com/2026/02/22/business/trump-tariffs-japan-indonesia.html

https://www.nytimes.com/2026/02/20/us/politics/supreme-court-trump-tariffs-takeaways.html

https://apnews.com/live/supreme-court-tariff-ruling-updates

https://www.bbc.com/news/live/c0l9r67drg7t

https://heatmap.news/economy/clean-energy-tariff-ruling

https://www.nytimes.com/live/2026/02/20/us/trump-tariffs-supreme-court

https://arstechnica.com/tech-policy/2026/02/supreme-court-blocks-trumps-emergency-tariffs-billions-in-refunds-may-be-owed/

https://www.theguardian.com/us-news/2026/feb/20/what-will-happen-to-trump-tariffs-after-supreme-court-verdict

https://www.nytimes.com/2026/02/21/business/economy/tariffs-supreme-court-global-busines-reaction.html

https://www.nytimes.com/2026/02/21/business/trump-deminimis-loophole-closed.html

https://www.axios.com/newsletters/axios-am-5b34aa80-2020-453a-bef1-8cf648e9b3c3.html

https://www.axios.com/2026/02/20/trump-tariff-plan-section-122-trade-act

https://www.scotusblog.com/2026/02/supreme-court-strikes-down-tariffs/

https://www.wsj.com/opinion/donald-trump-supreme-court-tariffs-ieepa-john-roberts-brett-kavanaugh-90daf559

https://www.supremecourt.gov/opinions/25pdf/24-1287_4gcj.pdf

https://www.nytimes.com/2026/02/21/us/politics/supreme-court-tariffs-conservatives.html

https://www.wsj.com/economy/u-s-manufacturing-is-in-retreat-and-trumps-tariffs-arent-helping-d2af4316

https://budgetlab.yale.edu/research/state-us-tariffs-scotus-ruling-update

https://www.kielinstitut.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/92fb3f30-07b8-4dcf-b2bc-fbefb831f1a1-KPB201_EN.pdf

https://www.whitehouse.gov/fact-sheets/2026/02/fact-sheet-president-donald-j-trump-imposes-a-temporary-import-duty-to-address-fundamental-international-payment-problems/

https://www.nbcnews.com/business/business-news/tariff-refunds-supreme-court-trump-rcna259968

https://www.wsj.com/opinion/its-the-end-of-the-beginning-of-the-tariff-war-88a08d37

https://www.axios.com/2026/02/21/trump-tariff-supreme-court-increase

https://www.axios.com/2026/02/21/alien-files-conspiracy-theories-usa

We also discuss Amazon, Alexa, and the Super Bowl.

Recommended Book: Red Moon by Benjamin Percy

Transcript

In 2002, in the wake of the September 11, 2001 terrorist attacks on the World Trade Center, the US government created a new agency—the United States Immigration and Customs Enforcement, or ICE, operating under the auspices of the US Department of Homeland Security, which was also formed that year for the same general reason, to defend against 9/11-style attacks in the future.

As with a whole lot of what was done in the years following the 9/11 attacks, a lot of what this agency, and its larger department did could be construed as a sort of overcompensation by a government and a people who were reeling from the first real, large-scale attack within their borders from a foreign entity in a very long time. It was a horrific event, everyone felt very vulnerable and scared, and consequently the US government could do a lot of things that typically would not have had the public’s support, like rewiring how airports and flying works in the country, creating all sorts of new hurdles and imposing layers of what’s often called security theater, to make people feel safe.

While the TSA was meant to handle things on the front-lines of air transportation, though, X-raying and patting-down and creating a significant new friction for everyone wanting to get on a plane, ICE was meant to address another purported issue: that of people coming into the US from elsewhere, illegally, and then sticking around long enough to cause trouble. More specifically, ICE was meant to help improve public safety by strictly enforcing at times lax immigration laws, by tracking down and expelling illegal immigrants from the country; the theory being that some would-be terrorists may have snuck into the US and might be getting ready to kill US citizens from within our own borders.

There’s not a lot of evidence to support that assertion—the vast majority of terrorism that happens in the US is conducted by citizens, mostly those adhering to a far-right or other extremist ideologies. But that hasn’t moved the needle on public perception of the issue, which still predominantly leans toward stricter border controls and more assiduous moderation of non-citizens within US borders—for all sorts of reasons, not just security ones.

What I’d like to talk about today is an offshoot of the war on terror and this vigilance about immigrants in the US, and how during the second Trump administration, tech companies have been entangling themselves with immigration-enforcement agencies like ICE to create sophisticated surveillance networks.

—

In mid-July of 2025, the US Department of Defense signed one of its largest contracts in its history with a tech company called Palantir Technologies. Palantir was founded and is run by billionaire Peter Thiel, who among other things is generally considered to be the reason JD Vance was chosen to be Trump’s second-term Vice President. He’s also generally considered to be one of, if not the main figure behind the so-called Patriot Tech movement, which consists of companies like SpaceX, Anduril, and OpenAI, all of which are connected by a web of funding arms and people who have cross-pollinated between major US tech companies and US agencies, in many cases stepping into government positions that put them in charge of the regulatory bodies that set the rules for the industries in which they worked.

As a consequence of this setup and this cross-pollination, the US government now has a bunch of contracts with these entities, which has been good for the companies’ bottom lines and led to reduced government regulations, and in exchange the companies are increasingly cozy with the government and its many agencies, toeing the line more than they would have previously, and offering a lot more cooperation and collaboration with the government, as well.

This is especially true when it comes to data collection and surveillance, and a great deal of that sort of information and media is funneled into entities like Palantir, which aggregate and crunch it for meaning, and then send predictions and assumptions, and make services like facial-recognition technologies predicated on their vast database, available to police and ICE agents, among others such entities.

There has been increasingly stiff pushback against this melding of the tech world with the government—which has always been there to some degree, but which has become even more entwined than usual, of late—and that pushback is international, even long-time allies like Canada and the EU making moves to develop their own replacements for Amazon and Google and OpenAI due to these issues, and the heightened unpredictability and chaos of the US in recent years, but it’s also evident within the US, due in part to Trump’s moves while in office, but also the on-the-ground realities in places like Minneapolis, where ICE agents have been brutalizing and blackbagging people, sometimes illegal immigrants, sometimes US citizens, usually non-white US citizens, and the ICE agents are being rewarded, getting bonuses, for beating up and kidnapping and in some cases murdering people, whether or not any of these people are actually criminals—and it’s illegal to do that kind of thing even if they are criminals, by the way.

All of which sets the scene for what happened following the Super Bowl, this year.

Ring is a home security and smart home device company that is best known for its line of smart doorbells, but which also makes all sorts of security cameras and other alarm system devices.

Even though smart doorbells, complete with cameras and other sorts of functionality, existed before Ring, this company basically created the smart doorbell industry as it exists today back in 2014, when it received a round of equity investment and changed its named from Doorbot to Ring. It was bought by Amazon four years later, in 2018, for a billion dollars.

One of Ring’s premier features is related to its camera: you can use your phone or other smart home device to see who’s at your door when they ring the bell, but it can also be set to record when it detects movement, which makes it easy to check and see who stole your Amazon package from your porch when you weren’t at home, for instance, and resultingly Ring door camera footage has become fundamental to reporting, and on occasion pursuing, some types of crime.

As a direct result of that utility, Ring introduced its Neighbors service in mid-2018, this service serving as a sort of social network that allows Ring device users to discuss local issues, especially those related to safety and security, anonymously, while also allowing them to share photos and videos taken by their devices. This service also created relationships with local law enforcement, and allowed police to jump onto the network and request footage from Ring customers, if they thought these doorbell cams might have photos or video of someone escaping with a stolen car, for instance, which might then help the police catch that crook.

It’s generally assumed that Amazon probably bought Ring, at least in part, to entrench itself as the lord of the internet of things world, as it launched its Amazon Sidewalk platform in 2020, which allowed all Amazon devices, including Ring devices, to share a wireless mesh network, all of them communicating with each other and all using Amazon’s Alexa as an interface.

In 2023, Ring was sued by the FTC for $5.8 million because it allowed its employees and contractors to access private videos by failing to have basic security and privacy features in place—so not only could any Ring employee view their customer’s private video feeds, hackers could easily access all this media and data, as well. Just one example surfaced in that lawsuit shows that a Ring employee viewed thousands of video recordings of at least 81 different female users over the course of a few months in 2017.

So Amazon was building a surveillance network that worked really well, in the sense that it was predicated on popular, at times quite useful devices that people seemed to love, but which was also quite leaky, giving all sorts of people access to these supposedly private feeds, and it was shared with law enforcement via that social network. It’s also been alleged that Ring (and Amazon) have used users’ footage without further permission for things like facial recognition and AI training. Their partnership with police agencies also allegedly created incentives for the police to encourage citizens to buy Ring cams and other security devices for their homes, creating perverse incentives. And again, these devices connect wirelessly to other internet of things devices, expanding their reach and the potential for abuse of collected user data.

In late 2025, Ring announced a new partnership with Flock Safety, a company that’s best known for its security offerings, including automated license plate readers and gunshot detector systems.

These are mass surveillance tools used by some governments and law enforcement entities, and they use cameras and microphones to capture license plates, people’s faces, and sounds that might be gunfire and aggregate that data to be used by police, neighborhood associations, and in some cases private property owners.

This sort of technology is incredibly useful to companies like Palantir, which again, aggregates and crunches it, on scale, and then shares that information with police, ICE, and other such agencies.

These tools can sometimes help flag areas where guns are being fired or where crimes are being committed, but they’re also imperfect and at times biased against some groups of people and areas, and some data show that not only is crime not reduced by the presence of these systems, but there’s a fair bit of evidence that this data often falls into the hands of hackers or is used by employees for nefarious, stalkery purposes, as was the case with Ring’s cameras. So most civil liberties groups, like the ACLU and the Electronic Frontier Foundation are vehemently against them, but governments like the second Trump administration like them, because they create a surveillance mesh they can tap into and use for, for instance, figuring out where to deploy ICE agents, or, in theory at least, spying on your political enemies or ex-spouses for abuse or blackmail purposes.

Ring’s late-2025 announcement wasn’t widely reported, but in early 2026 the company bought a Super Bowl ad to announce a new feature called Search Party, enabled by their partnership with Flock.

The ad showed a neighborhood coming together to find a lost dog, using the web of doorbell cameras on all the homes in the area to track the dog and figure out where it went—all the cameras activated at once to create a surveillance mesh of live footage.

This ad landed with a resounding thud,, as to many people it felt more menacing than heartwarming, the new feature overtly raising the potential that government agencies, including ICE, could tap into it to surveil and track their neighbors. The response was so negative that Ring quickly issued a statement saying that it was no longer moving forward with its Flock partnership, attempting to reassure its customers that “integration never launched, so no Ring customer videos were ever send to Flock Safety.”

This result is notable in part because it’s a rare instance of a major tech company backtracking on a major feature decision due to public backlash, but also because it suggests backlash against ICE is reverberating through other aspects of life and interconnected industries.

Ring device users mostly buy these things for their surveillance capabilities, but the increasing, and increasingly hostile and violent acts committed by members of ICE seem to have nudged the conversation so that folks are more worried about these agents than about the porch pirates and other criminals that these devices and this partnership could ostensibly help them identify.

It’s too early to say what this might mean for the burgeoning patriot stack of tech companies and government agencies, but it does suggest there are limits to what people will put up with, even when those in charge are adhering to a playbook that has typically worked well for them, in the past, and the devices and services they’re using to build their surveillance network are otherwise beloved by those who use them.

Show Notes

https://restofworld.org/2026/big-tech-backlash-alternatives-upscrolled/

https://europeancorrespondent.com/en/r/trumps-power-switch

https://www.authoritarian-stack.info/

https://www.nytimes.com/2026/02/11/realestate/smart-home-cameras-nest-ring-privacy.html

https://arstechnica.com/tech-policy/2026/02/platforms-bend-over-backward-to-help-dhs-censor-ice-critics-advocates-say/

https://www.theverge.com/report/879320/ring-flock-partnership-breakup-does-not-fix-problems

https://www.theverge.com/news/878447/ring-flock-partnership-canceled

https://www.404media.co/with-ring-american-consumers-built-a-surveillance-dragnet/

https://en.wikipedia.org/wiki/United_States_Immigration_and_Customs_Enforcement

https://www.pbs.org/newshour/nation/children-of-color-projected-to-be-majority-of-u-s-youth-this-year

https://en.wikipedia.org/wiki/Ring_(company)

https://en.wikipedia.org/wiki/Flock_Safety

https://www.wired.com/story/ice-expansion-across-us-at-heres-where-its-going-next/

https://www.wired.com/story/social-security-administration-appointment-details-ice/

https://www.wired.com/story/security-news-this-week-ring-kills-flock-safety-deal-after-super-bowl-ad-uproar/

https://www.wired.com/story/ice-crashing-us-court-system-minnesota/

https://www.wired.com/story/palantir-ceo-alex-karp-employee-questions-on-ice/

https://www.wired.com/story/inside-the-ice-forum-where-agents-complain-about-their-jobs/

We also discuss Elon Musk, SpaceX, and humanistic technology.

Recommended Book: Who’s Afraid of Gender? by Judith Butler

Transcript

xAI is an American corporation that was founded in mid-2023 by Elon Musk, ostensibly in response to several things happening in the world and in the technology industry in particular.

According to Musk, a “politically correct” artificial intelligence, especially a truly powerful, even generally intelligent one, which would be human or super-human-scale capable, would be dangerous, leading to systems like HAL 9000 from 2001: A Space Odyssey. He intended, in contrast, to create what he called a “maximally truth-seeking” AI that would be better at everything, including math and reasoning, than existing, competing models from the likes of OpenAI, Google, and Anthropic.

The development of xAI was also seemingly a response to the direction of OpenAI in particular, as OpenAI was originally founded in 2015 as a non-profit by many of the people who now run OpenAI and competing models by competing companies, and current OpenAI CEO Sam Altman and Elon Musk were the co-chairs of the non-profit.

Back then, Musk and Altman both said that their AI priorities revolved around the many safety issues associated with artificial general intelligence, including potentially existential ones. They wanted the development of AI to take a humanistic trajectory, and were keen to ensure that these systems aren’t hoarded by just a few elites and don’t make the continued development and existence of human civilization impossible.

Many of those highfalutin ambitions seemed to either be backburnered or removed from OpenAI’s guiding tenets wholesale when the company experienced surprising success from its first publicly deployed ChatGPT model back in late-2022.

That was the moment that most people first experienced large-language model-based AI tools, and it completely upended the tech industry in relatively short order. OpenAI had already started the process of shifting from a vanilla non-profit into a capped for-profit company in 2019, which limited profits to 100-times any investments it received, partly in order to attract more talent that would otherwise be unlikely to leave their comparably cushy jobs at the likes of Google and Facebook for the compensation a non-profit would be able to offer.

OpenAI began partnering with Microsoft that same year, 2019, and that seemed to set them up for the staggering growth they experienced post-ChatGPT release.

Part of Musk’s stated rationale for investing so heavily in xAI is that he provided tens of millions of dollars in seed funding to the still non-profit OpenAI between 2015 and 2018. He filed a lawsuits against the company after its transition, and when it started to become successful, post-ChatGPT, especially between 2024 and 2026, and has demanded more than $100 billion in compensation for that early investment. He also attempted to take over OpenAI in early 2025, launching a hostile bid with other investors to nab OpenAI for just under $100 billion. xAI, in other words, is meant to counter OpenAI and what it’s become.

All of which could be seen as a genuine desire to keep OpenAI functioning as a non-profit arbiter of AGI development, serving as a lab and thinktank that would develop the guardrails necessary to keep these increasingly powerful and ubiquitous tools under control and working for the benefit of humanity, rather than against it.

What’s happened since, within Musk’s own companies, would seem to call that assertion into question, though. And that’s what I’d like to talk about today: xAI, its chatbot Grok, and a tidal wave of abusive content it has created that’s led to lawsuits and bans from government entities around the world.

—

In November of 2023, an LLM-based chatbot called Grok, which is comparable in many ways to OpenAI’s LLM-based chabot, ChatGPT, was launched by Musk’s company xAI.

Similar to ChatGPT, Grok is accessible by apps on Apple and Android devices, and can also be accessed on the web. Part of what makes its distinct, though, is that it’s also built into X, the social network formerly called Twitter which Musk purchased in late-2022. On X, Grok operates similar to a normal account, but one that other users can interact with, asking Grok about the legitimacy of things posted on the service, asking it normal chat-botty questions, and asking it to produce AI-generated media.

Grok’s specific stances and biases have varied quite a lot since it was released, and in many cases it has defaulted to the data- and fact-based leanings of other chatbots: it will generally tell you what the Mayo clinic and other authorities say about vaccines and diseases, for instance, and will generally reference well-regarded news entities like the Associated Press when asked about international military conflicts.

Musk’s increasingly strong political stances, which have trended more and more far right over the past decade, have come to influence many of Grok’s responses, however, at times causing it to go full Nazi, calling itself Mechahitler and saying all the horrible and offensive things you would expect a proud Nazi to say. At other times it has clearly been programmed to celebrate Elon Musk whenever possible, and in still others it has become immensely conspiratorial or anti-liberal or anti-other group of people.

The conflicting personality types of this bot seems to be the result of Musk wanting to have a maximally truth-seeking AI, but then not liking the data- and fact-based truths that were provided, as they often conflicted with his own opinions and biases. He would then tell the programmers to force Grok to not care about antisemitism or skin color or whatever else, and it would overcorrect in the opposite direction, leading to several news cycles worth of scandal.

This changes week by week and sometimes day by day, but Grok often calls out Musk as being authoritarian, a conspiracy theorist, and even a pedophile, and that has placed the Grok chatbot in an usual space amongst other, similar chatbots—sometimes serving as a useful check on misinformation and disinformation on the X social network, but sometimes becoming the most prominent producer of the same.

Musk has also pushed for xAI to produce countervailing sources of truth from which Grok can find seeming data, the most prominent of which is Grokipedia, which Musk intended to be a less-woke version of Wikipedia, and which, perhaps expectedly, means that it’s a far-right rip off of Wikipedia that copies most articles verbatim, but then changes anything Musk doesn’t like, including anything that might support liberal political arguments, or anything that supports vaccines or trans people. In contrast, pseudoscience and scientific racism get a lot of positive coverage, as does the white genocide conspiracy theory, all of which are backed by either highly biased or completely made up sources—in both cases sources that Wikipedia editors would not accept.

Given all that, what’s happened over the past few months maybe isn’t that surprising.

In late 2025 and early 2026, it was announced that Grok had some new image-related features, including the ability for users to request that it modify images. Among other issues, this new tool allowed users to instruct Grok to place people, which for this audience especially meant women and children, in bikinis and in sexually explicit positions and scenarios.

Grok isn’t the first LLM-based app to provide this sort of functionality: so called “nudify” apps have existed for ages, even before AI tools made that functionality simpler and cheaper to apply, and there have been a wave of new entrants in this field since the dawn of the ChatGPT era a few years ago.

Grok is easily the biggest and most public example of this type of app, however, and despite the torrent of criticism and concern that rolled in following this feature’s deployment, Musk immediately came out in favor of said features, saying that his chatbot is edgier and better than others because it doesn’t have all the woke, pearl-clutching safeguards of other chatbots.

After several governments weighed in on the matter, however, Grok started responding to requests to do these sorts of image edits with a message saying: “Image generation and editing are currently limited to paying subscribers. You can subscribe to unlock these features.”

Which means users could still access these tools, but they would have to pay $8 per month and become a premium user in order to do so. That said, the AP was able to confirm that as of mid-January, free X users could still accomplish the same by using an Edit Image button that appears on all images posted to the site, instead of asking Grok directly.

When asked about this issue by the press, xAI has auto-responded with the message “Legacy Media Lies.” The company has previously said it will remove illegal content and permanently suspend users who post and ask for such content, but these efforts have apparently not been fast or complete, and more governments have said they plan to take action on the matter, themselves, since this tool became widespread.

Again, this sort of nonconsensual image manipulation has been a problem for a long, long time, made easier by the availability of digital tools like Photoshop, but not uncommon even before the personal computer and digital graphics revolution. These tools have made the production of such images a lot simpler and faster, though, and that’s put said tools in more hands, including those of teenagers, who have in worryingly large numbers taken to creating photorealistic naked and sexually explicit images of their mostly female classmates.

Allowing all X users, or even just the subset that pays for the service to do the same at the click of a button or by asking a Chatbot to do it for them has increased the number manyfold, and allowed even more people to created explicit images of neighbors, celebrities, and yes, even children. An early estimate indicates that over the course of just nine days, Grok created and posted 4.4 million images, at least 41% of which, about 1.8 million, were sexualized images of women. Another estimated using a broader analysis says that 65% of those images, or just over 3 million, contained sexualized images of men, women, and children.

CSAM is an acronym that means ‘child sexual abuse material,’ sometimes just called child porn, and the specific definition varies depending on where you are, but almost every legal jurisdiction frowns, or worse, on its production and distribution.

Multiple governments have announced that they’ll be taking legal action against the company since January of 2026, including Malaysia, Indonesia, the Philippines, Britain, France, India, Brazil, and the central governance of the European Union.

The French investigation into xAI and Grok led to a raid on the company’s local office as part of a preliminary investigation into allegations that the company is knowingly spreading child sexual abuse materials and other illegal deepfake content. Musk has been summoned for questioning in that investigation.

Some of the governments looking into xAI for these issues conditionally lifted their bans in late-January, but this issues has percolated back into the news with the release of 16 emails between Musk and the notorious sex traffic and pedophile Jeffrey Epstein, with Musk seemingly angling for an invite to one of Epstein’s island parties, which were often populated with underage girls who were offered as, let’s say companions, for attendees.

And this is all happening at a moment in which xAI, which already merged with social network X, is meant to be itself merged with another Musk-owned company, SpaceX, which is best known for its inexpensive rocket launches.

Musk says the merger is intended to allow for the creation of space-based data centers that can be used to power AI systems like Grok, but many analysts are seeing this as a means of pumping more money into an expensive, unprofitable portion of his portfolio: SpaceX, which is profitable, is likely going to have an IPO this year and will probably have a valuation of more than a trillion dollars. By folding very unprofitable xAI into profitable SpaceX, these AI-related efforts could be funded well into the future, till a moment when, possibly, many of today’s AI companies will have gone under, leaving just a few competitors for xAI’s Grok and associated offerings.

Show Notes

https://www.wired.com/story/deepfake-nudify-technology-is-getting-darker-and-more-dangerous/

https://www.theverge.com/ai-artificial-intelligence/867874/stripe-visa-mastercard-amex-csam-grok

https://www.ft.com/content/f5ed0160-7098-4e63-88e5-8b3f70499b02

https://www.theguardian.com/global-development/2026/jan/29/millions-creating-deepfake-nudes-telegram-ai-digital-abuse

https://apnews.com/article/france-x-investigation-seach-elon-musk-1116be84d84201011219086ecfd4e0bc

https://apnews.com/article/grok-x-musk-ai-nudification-abuse-2021bbdb508d080d46e3ae7b8f297d36

https://apnews.com/article/grok-elon-musk-deepfake-x-social-media-2bfa06805b323b1d7e5ea7bb01c9da77

https://www.nytimes.com/2026/02/07/technology/elon-musk-spacex-xai.html

https://www.bbc.com/news/articles/ce3ex92557jo

https://techcrunch.com/2026/02/01/indonesia-conditionally-lifts-ban-on-grok/

https://www.bbc.com/news/articles/cgr58dlnne5o

https://www.nytimes.com/2026/01/22/technology/grok-x-ai-elon-musk-deepfakes.html

https://en.wikipedia.org/wiki/XAI_(company)

https://en.wikipedia.org/wiki/OpenAI

https://en.wikipedia.org/wiki/ChatGPT

https://en.wikipedia.org/wiki/Grok_(chatbot)

https://en.wikipedia.org/wiki/Grokipedia

https://www.cnbc.com/2025/02/10/musk-and-investors-offering-97point4-billion-for-control-of-openai-wsj.html

We also discuss trade barriers, free trade, and dumping.

Recommended Book: The Kill Chain by Christian Brose

Transcript

A free trade agreement, sometimes called a free trade treaty, is a law that reduces the cost and regulatory burden of trading between two or more states.

There are many theories as to the ideal way to do international trade, with some economists and politicians positing that complete free and open trade is the way to go, because it allows goods and services to cross borders completely unencumbered, which in turn allows businesses in different countries to really lean into whatever they’re good at, selling their cars to countries that are less good at making cars, while that recipient country produces soy beans or computer chips or whatever they’re good at making, and sending those in the other direction, likewise unburdened by stiff tariffs or regulatory hurdles. Each country can thus produce the best product cheapest and sell it to the market where their products are in high-demand, while they, in turn, benefit from the same when it comes to other products and services.

This theory leans on the idea that everyone is better off when everyone does what they’re best at, rather than trying to do everything—specialization. But those who oppose this conception of international trade argue that this creates and reinforces asymmetries between different nations and businesses: a country that’s really good at producing soybeans may be at a substantial disadvantage if the country that makes cars ever decides to go to war, because they won’t have the existing infrastructure to build tanks or drones or whatever else, while the country that specializes in computer chips might hold all the cards when it comes to generating economic pressure against its enemies or would-be enemies, because such chips are in everything these days, from military hardware to kitchen appliances.

This also creates potential frailties for countries that specialize in, say, buggy whips, only to have a new technology like the automobile come around and put a significant chunk of their total economy out of business.

This theory may also leave local businesses that don’t lean into a regional strength kind of in the lurch. If a country with a decent-sized automobile industry decides leaves their borders completely open to international competition, there’s a chance that could light a fire under those local producers, forcing them to become more competitive, but there’s also a chance it could collapse the market for local offerings—their cars might no longer be desirable, because the international stuff flooding across the borders from a nation that has heavily prioritized making cars are just so much better and cheaper, whether naturally or artificially, because of subsidies by that foreign government meant to help them take out international competition.

This is why most nations have all sorts of tariffs, regulations, and other trade barriers erected between them and their trading partners, and why those trade barriers are ultra-specific, different for every single possible trade partner. The goal is to make international options less appealing by making them more expensive, or making it trickier for foreign competition to smoothly and quickly get their products on your shelves, while still making those things available in a volume that aligns with local consumer demands. And then ideally making it easier and cheaper for your stuff to get on their shelves.

The negotiation of all this is massively complicated because Country A might want to favor their soybean farmers, who are an important voting bloc, and Country B might want to do the same for their car industry, because tax income from that industry is vital, and these two governments will thus do what they can to ensure their favored local industries and businesses have the biggest leg-up possible in as many foreign markets as possible, without giving away so much to their trade partners that they create worse situations for other industries and businesses (and the people who run them) on the home-front, as a consequence.

What I’d like to talk about today is a recent, massive and potentially quite vital trade deal that was struck in early 2026, and what it might mean for global trade.

—

At the tail-end of January 2026, the European Commission announced that they had struck what they called “the mother of all deals” with India, this deal the culmination of two decades worth of negotiation, its tenets impacting about 2 billion people and around a quarter of the world’s total GDP.

The agreement, as is the case with most such agreements, is fairly complex. But in essence it reduces or eliminates tariffs on 96.6% of all EU goods exported to India, which means about 4 billion euros of annual duties that would have otherwise been paid on European products in India will disappear—a savings for Indian consumers, and a boon for European producers whose products will now be cheaper in India.

This is expected to be especially beneficial for European automakers like Volkswagen, Renault, and BMW, which have long been weighed down by a 110% tariff in India; that tariff will be reduced to as little as 10% on the first 250,000 vehicles sold, following this agreement. Lower priced vehicles will still face higher tariffs, to help protect India’s local carmakers, but electric vehicles will benefit from a five-year grace period, as India has been focusing on allowing as many cheap, renewable energy assets and infrastructure into the country as possible, regardless of where they come from.

Tariffs on machinery, chemicals, and pharmaceuticals coming from the EU will be almost entirely eliminated, down from tariff rates of 44, 22, and 11%, respectively. Wine, which has long been tariffed at a rate of 150%, will be cut to between 20-30% for many varieties, and spirits from the EU coming into India will see 150% tariffs cut to 40%.

On the other side of this deal, the EU will also open its market to Indian goods, reducing tariffs on about 99.5% of all such goods, including seafood, textiles, gems and jewelry, leather goods, plastic products, and toys. Several of these categories, like Indian seafood, textile-making, and other labor-intensive industries, have had a rough time of late, because of high US tariffs enforced by President Trump’s second administration, so this is being seen as a significant win for them in particular.

Interestingly, while the reduction in trade barriers is substantial here, and the number of people and industries, and amount of money that’s involved is massive, this deal doesn’t include, and in some cases explicitly excludes, any agreements related to labor rights, climate commitment, or environmental standards.

This means that while the European Union has thus far been pretty strict in terms of ensuring incoming products align with their policies and values regarding things like carbon emissions and ensuring goods aren’t produced by people laboring in slave-like conditions, this deal falls short of such enforcements, allowing India to operate with relative impunity, with regards to those issues, at least, and still sell with dramatically reduced barriers, on the European market. That’s a big deal, and is perhaps the biggest indicator of just how badly the EU wanted to make this deal work.

The EU was also able to keep significant protections in place for important local sectors like beef and chicken, dairy, rice, and sugar—all industries in which India would have liked to compete in the EU, but which, because of those maintained barriers, they practically can’t. That would likely have been a feverishly negotiated topic, and it’s likely an indicator of how much India wanted this to work, too.

On that note, both India and the EU were apparently especially interested in making this multi-decade deal work, now, because of increasing pressure from China on one side and the US on the other.

China has been rerouting many of its cheap products that would have previously gone to the US market, elsewhere, engaging in what’s often called ‘dumping’ which slowly but surely puts businesses that produce comparable products at a profit in those local target markets out of business, at which point these Chinese companies can then ratchet up their prices and profits, operating without real competition.

The EU and India have both been targeted by Chinese companies taking this approach, because they’re still producing at a feverish pace and because of US tariffs and the general unpredictability and irregularity of US policy overall under the second Trump administration, they’ve been firing that cheap product cannon more intensely at other large markets, instead—and India and the EU are the next two big markets in line right now, after the US and China.

On the US side of things, those same tariffs have been hurting companies in both the EU and India that would otherwise been shipping their goods to the rich and spendy US market, and in many cases these tariffs have been fine-tuned to hurt important local industries as much as possible, because that’s one of Trump’s main negotiating tactics: lead with pain and then negotiate to take some of the pain away.

This deal, then, serves multiple purposes in that it creates a valuable, newly polished trade relationship between a rich and powerful existing bloc and the newly most-populous country on the planet, which is also rapidly expanding economically and geopolitically.

One last point to note, here, though, is that the European Union has been trying to create these sorts of mutually beneficial deals with non-US partners for a while, now, and the two most recent wins, trade deals with a South American trade bloc and with Indonesia, in early January 2026 and in September of 2025, respectively, have borne mixed results.

The deal with Indonesia seems to be moving forward apace, and while it’s a heck of a lot smaller than the India deal, only worth about 27 billion euros, that’s still important, as Indonesia is increasingly important, both economically and geopolitically, especially in a Southeast Asia that’s slowly reinforcing itself against China’s economically and potentially militarily expansionist tendencies.

The deal with that South American bloc, however, was referred to the EU Court of Justice in mid-January for legal review due to its lack of alignment with other EU treaties, and that could delay or prevent its ratification.

This new mother of all deals with India could likewise face holdups, or could fizzle before being implemented—though most analysts who are keeping eyes on this are seeing it not just as an economic agreement, but a gesture of solidarity at a moment in which China and the US are signaling their intent to carve up the world into hemispheric hegemonies, when those who might otherwise be forced into subordinate positions are scrambling to figure out who they can team up with and create counter-balancing forces capable of standing up against current and future aggression and coercion.

There’s a chance that even if politics and propriety threaten to get in the way, then, India and the EU will figure out a way to work together, on this and potentially other matters of global import, as well.

Show Notes

https://www.theguardian.com/business/2026/jan/27/eu-and-india-sign-free-trade-agreement

https://www.reuters.com/sustainability/climate-energy/eu-india-trade-deal-leaves-blocs-carbon-border-tariff-intact-2026-01-27/

https://archive.is/20260127162349/https://www.ft.com/content/b03b1344-7e92-4d0d-b85e-5ed92fc8f550

https://en.wikipedia.org/wiki/Free_trade_agreement

https://en.wikipedia.org/wiki/Trade_barrier

https://ec.europa.eu/commission/presscorner/detail/en/ip_26_184

https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip_26_184/IP_26_184_EN.pdf

https://www.ndtv.com/world-news/how-indias-mother-of-all-deals-with-eu-wipes-out-pakistans-trade-advantage-10921011

https://theconversation.com/what-the-mother-of-all-deals-between-india-and-the-eu-means-for-global-trade-274515

https://cepr.org/voxeu/columns/economic-impact-us-tariff-hikes-significance-trade-diversion-effects

https://www.europarl.europa.eu/news/en/press-room/20260116IPR32450/eu-mercosur-meps-demand-a-legal-opinion-on-its-conformity-with-the-eu-treaties

https://www.aljazeera.com/economy/2026/1/27/mother-of-all-deals-how-india-eu-trade-deal-creates-27-trillion-market

https://www.cnbc.com/2026/01/27/trump-reaction-eu-india-trade-deal-fta.html

https://www.atlanticcouncil.org/content-series/inflection-points/the-mother-of-all-trade-deals-in-the-time-of-trump/

https://economictimes.indiatimes.com/news/economy/foreign-trade/with-mother-of-all-deals-in-bag-minister-piyush-goyal-says-mother-will-be-compassionate-fair-to-all-28-children/articleshow/127821015.cms

https://en.wikipedia.org/wiki/India%E2%80%93European_Union_Free_Trade_Agreement

https://en.wikipedia.org/wiki/India%E2%80%93European_Union_relations

We also discuss foreign adversaries, ByteDance, and X.

Recommended Book: Rewiring Democracy by Bruce Schneier and Nathan E. Sanders

Transcript

In 2021, TikTok, a short-form video platform that’s ostensibly also a social network, though which leans heavily toward consuming content over socializing, was ranked the most popular website by internet services company Cloudflare, beating out all the other big tech players, including search engine juggernaut, Google.

It was a neck and neck sort of thing, with Google taking the lead some days that year, but 2021 was definitely TikTok’s time to shine, as it was already popular with young people and was starting to become popular with the general public, of all ages and across a huge swathe of the planet. It even beat Facebook as the most popular social media website that year, despite, again, being mostly about consuming content rather than interacting—that was actually a prime motivator for Meta, which owns Facebook and Instagram, to redirect its own apps in a similar direction, shifting its focus from communication and interaction between users toward the creation of binge-able content, and feeding users more of that content in a feed optimized for time-losing levels of consumption.

2021 was also the first full year that TikTok was coming under scrutiny from the US government. In the preceding year, 2020, then first-term president Donald Trump said he was considering banning the app because it was becoming so popular, with young people in particular, and because it was owned by a Chinese company, ByteDance it represented a potential national security threat.

So the idea was that because Chinese companies are forced, by their very nature, to do what the Chinese government tells them—that’s just how things work over there—and to do so on the down-low if that’s what the governments demands, and to lie about having to do what the government tells them to do, if the government tells them to thus lie, it doesn’t matter that ByteDance’s leadership swore up and down to the world that the company will never use its popularity, and the data it soaks up from all its users as a result of that popularity, to help the Chinese government, the Chinese military, or Chinese intelligence services.

It of course will have to do that, and if it doesn’t, its leaders could be black-bagged and disappeared in the night—because again, that’s just how things work over there. So the Trump administration decided to make TikTok a sort of bogeyman, representing Chinese companies in general, and to some degree the presence of China in the US and throughout the Western world, and said, nope, we’re not gonna let this thing continue to operate over here.

It’s worth remembering, too, that by 2021 the world was enmeshed in the COVID-19 pandemic, which originated in China, and which Trump and his administration were ardently attempting to tie to the Chinese government—calling Covid the Chinese Flu, and even worse things, as part of that effort.

So this move against TikTok and its parent company, while based on genuine concerns about the ownership of the company and how and where the data being collected by said company is handled, it should also be seen as a political maneuver, allowing Trump, during the 2020 election run-up, to look like he was taking a big stand against a big foreign threat, China.

What I’d like to talk about today is a deal that was proposed way back then by the Trump administration, as a potential way out for TikTok and ByteDance, allowing it to continue operating in the US despite threats to shut it down, now that said deal, or a version of it, seems to have finally come to fruition—and what we know about the shape of the resulting new, US-based version of TikTok.

—

On January 18, 2025, TikTok stopped worked in the US. It voluntarily suspended all services in the country in the lead-up to the implementation of the Protecting Americans from Foreign Adversary Controlled Applications Act, which was passed by the US congress and signed into law by then-president Joe Biden in April of 2024. This law gave social networking services controlled by ‘foreign adversaries’ 270 days, with the possibility of a 90-day extension, to divest themselves so that they’re no longer considered foreign adversary-owned.

This law was almost exclusively aimed at TikTok, and the idea was that TikTok, in the US, would no longer be able to legally function following that deadline if it was still owned by China, which for the purposes of this law has been labeled a foreign adversary.

ByteDance could keep TikTok in the US going if it sold a majority, controlling stake of its US-based assets to non-adversary owners, but otherwise it would have to shut down.

Interestingly, though Trump was the original source of concerns about TikTok and its Chinese ownership during his first administration, when he stepped back into office in January 2025, he signed a new executive order that delayed the enforcement of this Biden-signed law, and then delayed it still-further, three more times after that, saying that he wanted to give American investors the time to negotiate controlling interest of US TikTok, rather than banning it.

Those efforts eventually bore fruit in the shape of a new controlling entity called TikTok USDS Joint Venture LLC, which is made up of a bunch of non-Chinese investment entities, including US software behemoth Oracle, an Emirati investment firm called MGX, a US investment firm called Silver Lake, and a personal investment company owned by Michael Dell, the founder of Dell Technologies. There are other, smaller investors also involved, but the red thread that runs through almost all of them is that they’re big Trump supporters and funders, funneling a lot of money into Trump’s campaigns, and his family businesses.

So six years after the initial legal salvo was fired at TikTok in the US, the local assets are now controlled by non-Chinese investors, though the original Chinese owner, ByteDance, still owns just under 20%, compared to about 15% apiece for Oracle, MGX, and Silver Lake.

The new company’s board is majority-run by those investors, too, which means it’s majority-run by ardent Trump supporters. We don’t yet know what effect this will have on content within the app, but under full Chinese ownership, topics related to democracy, Tianamen Square, and the LGBTQ community, among others, were significantly downgraded in the algorithm, ensuring they were seldom shown to anyone, which in turn disincentivized content that those owners didn’t like while incentivizing content that was pro-China, and pro-Chinese government priorities.

It’s considered to be likely, by analysts who watch these sorts of maneuverings, that the same will be true of this new entity, but for and against subject matter that the Trump administration is for and against. Which raises the possibility that the new US TikTok, while superficially the same as the previous US TikTok, will slowly go the way X, formerly Twitter, has gone under Elon Musk, which was dramatically pushed in a new direction under its own owner, focusing on his political and ideological priorities and punishing users who spoke against those priorities.

TikTok could become more or less an extension of the Trump-verse, in other words, and could thus become something more akin to Trump’s own network, Truth Social, or other right-leaning and far-right social networks, like conservative YouTube-clone, Rumble, rather than something less ideological, or maybe I should say less overtly politically ideological, like Meta’s Facebook, Threads, and Instagram.

Users have already noticed some changes to US TikTok after the change in ownership, though, including what sorts of data are collected.

TikTok’s new privacy policy, which all users have to agree to before using the app, now that the platform has changed hands, says that TikTok will be using precise location tracking, keeping tabs on exactly where users are located via their device’s GPS. That’s compared to the app’s previous approximate location-tracking effort, which used SIM card and IP address data to understand general proximity—it still uses that data, too, but now, rather than knowing what neighborhood you’re probably in, it may also know what room in your house you’re scrolling from.

The new US TikTok also tracks users’ interactions with AI tools, including their prompts, outputs, and metadata attached to said interactions, which includes details about where users are when they’re using such tools, and what time they used them.

They also collect gobs of marketing data from outside sources, and based on the users’ activity within the app. So things you buy, websites and other apps you visit and use, and conversations you have will all be sucked up and agglomerated into a profile that’s then used to show you targeted advertising. This isn’t unique to US TikTok, but the company does seem to intend to make use of more such data, and to combine it with that other stuff it’s now collecting, to increase the price it can charge for ads, because they’ll be a lot more specifically targeted than before.

Some users are beginning to comb through the new user agreement with a fine-toothed comb, noticing, in addition to those aforementioned major changes, that the company also reserves the right to collect information about your physical and mental health, to use identifying information in the videos and images you might share, and information gleaned from people and their identifying characteristics in images and videos, and to collect biometric data, which usually means eyes and faces and walking gate and things like that, to differentiate and track people across such content. They can keep tabs on your sex life, sexual orientation and gender, your drug usage, your ethnic and racial origins, your citizenship and immigration status, your financial situation and information—all sorts of stuff is collected, and they say in the privacy policy and user agreement that they intend to do gather and store and cross-reference this kind of information whenever possible.

Again, much of this isn’t novel, as social platforms are gobbling up all sorts of stuff about their users all the time, mostly to refine their ad placements because that allows them to charge advertisers more for better-targeted placements, over time.

That said, because of the nature of the group that now owns US TikTok and which is making executive decisions about it, including, potentially, how this data is shared, including with the US government and its many agencies, there’s a chance we might see an exodus of sorts from the still younger-than-average user base of this network, because there is a nonzero chance it could become a tool in the Trump administration’s utility belt for tracking down people they don’t like and spreading messages that are favorable to them and their ideological aims; so basically what was happening under the previous ownership, but for the current US administration’s priorities, rather than those of the Chinese government.

Show Notes

https://www.nbcnews.com/tech/tech-news/tiktok-surpasses-google-popular-website-year-new-data-suggests-rcna9648

https://www.nytimes.com/2026/01/22/technology/tiktok-deal-oracle-bytedance-china-us.html

https://www.wired.com/story/tiktok-new-privacy-policy/

https://archive.is/20260123005655/https://www.bloomberg.com/news/articles/2026-01-23/tiktok-seals-deal-to-create-us-venture-with-oracle-silver-lake

https://www.axios.com/2026/01/23/tiktok-deal-trump-app-ban

https://www.theverge.com/tech/866868/tiktok-usds-new-owners-algorithm-explained

https://www.politico.com/news/2026/01/22/5-things-to-know-about-the-tiktok-deal-00743316

https://www.nytimes.com/2026/01/23/business/media/tiktok-us-terms-conditions.html

https://en.wikipedia.org/wiki/TikTok

https://en.wikipedia.org/wiki/Donald_Trump%E2%80%93TikTok_controversy

https://en.wikipedia.org/wiki/Efforts_to_ban_TikTok_in_the_United_States

https://en.wikipedia.org/wiki/Protecting_Americans_from_Foreign_Adversary_Controlled_Applications_Act

We also discuss tyrants, police violence, and social media threats.

Recommended Book: Post-Growth Living by Kate Soper

Transcript

Back in mid-June of 2025, a shooting war erupted between Iran and Israel, with Israeli military forces launching attacks against multiple Iranian military sites, alongside sites associated with its nuclear program and against individual Iranian military leaders.

Iran responded to these strikes, which left a lot of infrastructural damage and several military leaders assassinated, with large waves of missiles and drones against both Israeli and allied military targets, and soon after, later the same month, both sides agreed on a ceasefire and that was that.

Following that blip of a war, though, Iran’s economy suffered greatly. It already wasn’t doing well, in part due to the crippling sanctions enforced by the US government for years, but also because of persistent mismanagement by Iran’s ruling regime, and the resultant deterioration of local infrastructure, both physical and bureaucratic.

Millions of people fled Iranian urban centers during the war with Israel, and while most of them returned when the ceasefire was brokered, the pace of life and other fundaments of these cities never got back up to where they were, before, as there have been fairly consistent blackouts that have kept people from being able to function as normal, and these outages have also kept businesses from getting back on their feet. That, in turn, has resulted in closures and firings and an overall reduction in economic activity.

The general hamhandedness of the government has amplified these issues, and the countless other issues of trying to exist within a country that is being so persistently targeted—both in the sense of those crushing sanctions from the US, but also in the sense of being periodically struck by Israel—has dramatically increased uncertainty throughout Iran these past several years.

Even before that brief war, Iran was already on the backfoot, having suffered the loss of their local proxies, including the Assad regime in Syria, Hezbollah in Lebanon, the Houthis in Yemen, and Hamas in the Gaza Strip—all of which have been either severely weakened by Israel in recent years, or functionally wiped out—and that in turn has more directly exposed them to meddling and attacks from their key opposition, which includes the US, Israel, and Saudi Arabia.

That new vulnerability has put the Iranian government on high-alert, and the compounding effects of all that infrastructural damage, mismanagement, and the need to reallocate more resources to defense has left the country suffering very high levels of inflation, a severely devalued currency, regular blackouts, mass unemployment, a water shortage, and long-time repression from a government that is in many ways more paranoid and flailing than in any time in recent memory.

What I’d like to talk about today is a recent wave of protests across Iran and why the US government is apparently considering taking action to support protestors against the Iranian government.

—

Iran has long suffered all sorts of issues, including regular efforts by ethnic secessionists to pull it apart into pieces they periodically occupy and want to govern, themselves, and concerns from citizens that the government spends a whole lot of their time and the nation’s resources enriching themselves, oppressing the citizenry, funding what seems to be a pointless nuclear program, and prioritizing their offensive efforts against Israel and their other regional enemies, often by arming and funding those aforementioned, now somewhat defunct proxy militias and militaries.

On top of all that, as of October 2025, inflation in Iran had surged to 48.6% and the Iranian currency, the rial, dropped in value to 1.45 million per dollar. The government tried to artificially boost the value of the rial to 1.38 million per dollar in early January of 2026, but it dropped further, to 1.5 million per dollar a few days later, hitting a record low. This combined with that wild inflation rate, made the basic fundamentals of life, food, electricity, and so on, unaffordable, even for those who still had jobs, which was an ever-shrinking portion of the population.

For context, the drop of the rial to a value of 1.38 million per dollar, the boosted value, represented a loss of about 40% of the rial’s value since June of 2025, just before that war with Israel, which is a staggering loss, as that means folk’s life savings lost that much in about half a year.

When currency values and inflation hit that level of volatility, doing business becomes difficult. It often makes more sense to close up shop than to try to keep the doors open, because you don’t know if the price you charge for your product or service will make you a profit or not: there’s a chance you’ll sell things at a loss, because the value of the money you receive and the cost of goods you require, both to survive and to keep your business functioning, will change before the day ends, or before the sale can be completed.

Iran’s economic crisis has further exploded in the past few weeks, then, because all those issues have compounded and spiraled to the point that simply selling things and buying things have become too risky for many people and entities, and that means folks are having even more trouble getting food and keeping the lights on than before; which becomes a real survival issue, on top of the regular crackdowns and abuses by the government that they’ve suffered in various ways for decades.

In 2022, those abuses and limits on personal rights led to large protests that were catalyzed by the death of a 22-year-old woman named Mahsa Amini, who was in police custody for allegedly wearing her hijab improperly. Those 2022 protests were historically large—the biggest in the country, by some estimates at least, since the 1979 Islamic Revolution.

On December 28 2025, a group of shopkeepers in Iran’s capital city, Tehran, went on strike, closing their shops in protest against what’s been happening with Iran’s economy; again, it’s basically impossible to safely do business in a country with that much inflation and currency devaluation happening.

Other shopkeepers followed suit, and large protests formed around these closed shops. Those protests flooded social media platforms in short order, protestors shouting slogans that indicated they were pissed off about all the economic mismanagement in the country, and then eventually that led to anti-government slogans being shouted, as well.

Things remained peaceful at these protests, at first, and they expanded across the country within the next few days, shops closing and people filling the streets.

By the fourth day, police had started to use live ammunition and tear gas against protestors, some of the protestors were killed, and things spiraled from there.

By December 31, the government ordered a total, nationwide business shutdown, to try to get ahead of these protests, which again tended to revolve around the shutdown of businesses in protest—the government said they were making this call because of cold weather, but the writing was kind of on the wall at this point that they were scrambling to make it look like businesses were shutting down because they said so, not in protest of the government.

The government also announced that they would start cracking down on protestors, hard, and on the first day of 2026, things escalated further, police using even more force against those who gathered, which of course led to more protests in more places, more angry slogans being shouted, and more protestor deaths at the hands of government forces.

Protests had spread to all 31 Iranian provinces by early January of 2026, and at this point there were only 17 confirmed deaths.

US President Donald Trump got involved around this time, maybe feeling confident following the successful nighttime grab of Venezuelan President Maduro; whatever the case, he warned the Iranian government not to shoot protestors, or the US government might have to get involved, coming to the protestors’ rescue.

Iran’s government responded by saying the rioters must be put in their place, suppressing the funerals of protestors, and muffling local internet service, slowing down access speeds and increasing the number of outages by about a third. They threatened to execute hundreds of protestors by hanging, then said they wouldn’t. Trump declared this to be a personal victory, though the Iranian government has used his insinuation of himself into the matter to position the fight as Iran against the US, the protestors backed by their great enemy, which has shown itself to be responsible for these protests.

The government then started forcing captured protestors to make confessions on video, which only seemed to further anger the non-arrested protestors, and some protestors began to fight back, in one case setting a police officer on fire, and in other cases local militia groups defended protestors against police, leading to several deaths.

Iran’s government shut down more communication services in an attempt to regain control, in some cities taking down the internet completely, though some information, photos and videos of police abuses of protestors still made it out into the wider world using satellite services like Starlink, and by the 9th of January, protests reached a scale that rivaled and maybe surpassed those seen during the 1979 Islamic Revolution, and protestors began to set fire to buildings associated with the Islamic Republic, the government, and directly clashing with security forces in some cases.

Hundreds of people were reportedly killed per day from that point forward, and thousands were rushed to hospitals, overwhelming local doctors.

Thousands of people were also violently killed by police, under cover of the now complete internet blackout, and on January 10th, it was estimated that around 2,000 protestors had been killed in the past two days, alone, while other estimates from inside and outside Iran range from 12,000 to 20,000 protestors killed by the government. The most reliable source I could find, as of last weekend, indicated that the true number of dead is something like 3,300 people, at minimum.

In the past week or so, the Iranian government has apparently figured out how to jam Starlink internet signals, making it even more difficult for protestors to share what’s happening in the country, and President Trump posted on his social network, Truth Social, telling Iranian citizens that they should overthrow the government and that help is on the way.

The Iranian government has arrested tens of thousands of people, has tanks patrolling their towns and cities, and seems to have successfully quashed protests for the time being; no protests at all were reported across the country as of mid-January, and so many people were killed and injured that hospitals and other institutions are still overwhelmed, trying to work through their backlog; much of the country is in mourning.

Government forces are reportedly going door to door to arrest people who were spotted in CCTV and social media footage participating in protests, and they’ve set up checkpoints to stop people, look through their phones, and arrest them if any photos or videos are found that indicate they were at protests, deleting that digital evidence in the process.

This remains a fast-moving story and there’s a chance something significant, like the US striking Iranian government targets, or renewed, more focused protests will arise in the coming days and weeks.

Some analysts have argued that it’s kind of a no-brainer for the Trump administration to hit the Iranian government while it’s strained in this way, because it’s a long-time enemy of the US and its allies that’s currently weak, and doing so would reinforce the narrative, sparked with the capture of Maduro, that Trump’s administration is anti-tyrant; which is questionable by most measures, but again, this is a narrative, not necessarily reality. And narratives are powerful, especially going into an election year.

It’s also possible that, because economic conditions in Iran haven’t changed, that this is just the beginning of something bigger; protestors and militias taking a moment to regain their footing and consider what they might do to have more of an impact when they start back up again.

Show Notes

https://www.iranintl.com/en/202601130145

https://www.theguardian.com/world/2025/dec/31/we-want-the-mullahs-gone-economic-crisis-sparks-biggest-protests-in-iran-since-2022

https://www.nytimes.com/article/iran-protests-inflation-currency.html

https://www.fdd.org/analysis/2025/06/25/mapping-the-protests-in-iran-2/

https://www.nytimes.com/2026/01/10/us/politics/trump-iran-strikes.html

https://www.nytimes.com/2026/01/10/world/middleeast/iran-protests-death-toll.html

https://www.reuters.com/world/china/iranian-mp-warns-greater-unrest-urging-government-address-grievances-2026-01-13/

https://www.wsj.com/world/middle-east/iran-is-hunting-down-starlink-users-to-stop-protest-videos-from-going-global-d8b49602

https://archive.is/20260114175227/https://www.wsj.com/world/middle-east/bank-collapse-iran-protests-83f6b681

https://www.cbsnews.com/news/iran-protest-death-toll-over-12000-feared-higher-video-bodies-at-morgue/

https://sundayguardianlive.com/world/did-irans-currency-collapse-rial-plummets-to-000-against-euro-while-inflation-protests-escalate-across-the-country-164403/

https://archive.is/20260116034429/https://www.ft.com/content/5d848323-84a9-4512-abd2-dd09e0a786a3

https://www.bbc.com/news/articles/cm2jek15m8no

https://theconversation.com/the-use-of-military-force-in-iran-could-backfire-for-washington-273264

https://archive.is/20260114182636/https://www.washingtonpost.com/opinions/2026/01/14/iran-regime-protest-trump-strike/

https://www.nytimes.com/2026/01/16/world/middleeast/iran-protests-deadly-crackdown.html

https://www.nytimes.com/2026/01/17/world/middleeast/iran-ayatollah-khamenei.html

https://en.wikipedia.org/wiki/2025%E2%80%932026_Iranian_protests

https://www.en-hrana.org/day-thirteen-of-the-protests-nighttime-demonstrations-continue-amid-internet-shutdown/

https://en.wikipedia.org/wiki/2025_Iran_internal_crisis

https://apnews.com/article/iran-protests-trump-khamenei-fc11b1082fb75fca02205f668c822751

We also discuss sour crude, extrajudicial killings, and Greenland.

Recommended Book: The Keep by F. Paul Wilson

Transcript

Back in mid-November of 2025, I did an episode on extrajudicial killings, focusing on the targeting of speedboats, mostly from Venezuela headed toward the United States, by the US military. These boats were allegedly carrying drugs meant for the US market, and the US government justified these strikes by saying, basically, we have a right to protect ourselves, protect our citizens from the harm caused by these illegal substances, and if we have to keep taking out these boats and killing these people to do that, we will.

There’s been a lot of back-and-forthing about the legitimacy of this approach, both in the sense that not all of these boats have been shown to be carrying drugs, some just seemed to be fishing boats in the wrong place at the wrong time, and in the sense that launching strikes without the go-ahead of Congress in the US is a legally dubious business. There was also the matter of some alleged follow-up strikes, which seemed to be intended to kill people who survived the initial taking-out of the boats, which is a big international human rights no no, to the point of potentially being a war crime.

All of this happened within the context of a war of words between US President Trump’s second administration and the increasingly authoritarian regime of Venezuelan President Nicolás Maduro, who followed the previous president Hugo Chávez as his hand-picked successor, and has more or less completed the authoritarian process of dissolving, coopting, or diminishing all aspects of the Venezuelan government that might ever check his power, which allowed him, in 2024, to bar the very popular, now Nobel Peace Prize winning candidate María Corina Machado from running, and her sub-in candidate, like previous Maduro opponent Juan Guaido, seems to have won the election by a fair bit, and in an internationally provable way, but Maduro’s government faked results that made it look like he won, and his single-party rule has since continued unabated.

Or rather, it continued unabated until the early morning of January 3, 2026, around 2am, when US Operation Absolute Resolve kicked into action, leading to the—depending on who you ask—justified captured or illegal kidnapping—of Maduro and his wife from a stronghold in his country.

And that’s what I’d like to talk about today: the operation itself, but also the consequences and potential meaning of it within the context of other important things happening in the world right now.

—

Maduro is immensely popular with about a fifth of the Venezuelan population, but essentially everyone else is strongly opposes him and his iron-fisted rule.

It’s estimated that between 2017 and 2025, just shy of 8 million people, which is more than 20% of Venezuela’s 2017 population, has fled the country in order to escape a tyrannical government and its failed policies, which have collapsed the economy, made getting working and feeding oneself and one’s family difficult, and made crime, conflict, and the state-sanctioned oppression of anyone who doesn’t kowtow to the ruling party a commonplace thing.

Trump speculated about the possibility of invading Venezuela even in his first administration, and part of the overt rationale was that it’s run by a failed government that most of the locals hate, so it would be an easy win. That justification shifted to orient around immigration and drugs by his second administration, and then more recently, Trump has said publicly that the real issue here is that Venezuela stole a bunch of US company-owned oil assets when it nationalized the industry back in the day, and those assets should be recaptured, given back to the US.

Operation Absolute Resolve took months to plan and only about two and a half hours to complete. By most objective measures it was a spectacular military and intelligence success, especially considering all the moving parts and thus, all the things that could have gone wrong.

The operation apparently involved at least 150 aircraft of various sorts, a spy within Maduro’s government, and months of surveillance, which helped them establish Maduro’s habits and routines, and that allowed them to map out where he would be, when, and what to expect going in to get him. All of these patterns changed in September of 2025 when US warships started massing in Caribbean, as Maduro started to get a little paranoid—justifiably, as it turns out—and he started moving between eight different locations, seldom sleeping in the same place more than one night in a row.

He was eventually grabbed from a military base in Caracas, Venezuela’s capitol, and to make that happen the US military assets in the area had to take out local aviation and air defenses so that US Delta Force troops could be carried in by helicopter. Several air bases and communications centers were taken out by missiles, and fighter jets were bombed on air base tarmacs. Trump alluded that a cyberattack of some kind might have also been used to take out power in the area, though satellite imagery suggests bombs might have been used against a power station to make that happen.

The operation apparently went almost exactly as planned, though a helicopter was damaged and the Delta Force team killed a large part of Maduro’s security team when he refused to surrender. A few US soldiers were wounded, but none were killed, and Venezuelan officials said, in the aftermath, that lat least 40 Venezuelans were killed throughout the country during the operation. Maduro and his wife were swept from the base before they could lock themselves in their safe room, and they were tucked into the helicopters which headed out to sea, landing them on the USS Iwo Jima, which is an assault ship.

All of this took a matter of hours and, again, is generally considered to be an objective success, in terms of precision, outcome, and other such metrics. Morally, legally, and politically, however, the operation is receiving a far more mixed response, and that response is continuing to play out as Maduro works his way through a bizarre version of the US justice system where he’s being sent to court for drug dealing.

In the US, Trump supporters have generally said all of this was a good, smart move, though some maintain that US involvement in any kind of international conflict is a waste of time, effort, and resources, and they worry about getting bogged down in another Iraq or Afghanistan-style conflict.

Everyone else is generally against the effort, even those who admit that Maduro was a tyrant who needed to go—it’s good that he’s gone, but the way in which it was done is not just questionable, but worrying because of what it says about Trump’s capacity to unilaterally launch kidnapping missions against the leaders of other countries. Not a good look, but also kind of scary.

Internationally the response is generally aligned with the latter opinion, especially in other countries that Trump has at some point threatened, which is most of them.

Governments in South and Central America have been especially concerned, however, because one of Trump’s newer messaging efforts has revolved around the concept of a Western Hemisphere basically owned and protected by the US. Do whatever you want in the rest of the world, basically, but everything over here is ours. This has raised the possibility that an emboldened Trump might attempt similar maneuvers soon, including possibly claiming the Panama Canal for the US again, or grabbing the leaders of other Latin American countries he doesn’t think are kowtowing enthusiastically enough; toeing the new international line that he’s drawing, basically.

He’s also renewed messaging around the possible purchase or capture of Greenland, which has been raising alarm bells across Europe in particular. Greenland is considered to be a vital strategic base for US security, and it would grant potential access to an abundance of also strategically and economically important minerals, both on land and underwater, but Greenland is an autonomous territory of Denmark, and most European leaders have said something along the lines of “if the US takes action to militarily claim Greenland, that’ll be the end of NATO,” an organization that was originally founded to help protect the world, and Europe especially, from military conquest from the Soviet Union, but which, at that point, might be recalibrated to protect against incursions from the US, as well.

NATO has been mostly funded and perpetuated by the US until recently, however, so there’s a chance that something else would need to replace it, if the US is no longer providing nuclear deterrence as the ultimate whammy against a potential Russian invasion of its European neighbors.

The UN has also indicated that they consider this operation to be a violation of international law, and have called it a dangerous precedent—because one nation capturing the leader of another nation, unilaterally, kind of negates the purpose of negotiations and the whole concept of international law. That kind of use of force is meant to be granted by the UN, not attempted secretively and outside the bounds of international processes for such things.

All that said, the Trump administration seems to be leaning into the victory, gleefully talking about next-step potential targets, the most likely of which seem to be in Iran, a long-time US opponent, and a target of this administration last year, when the US attacked Iranian nuclear facilities alongside Israel.

There are ongoing, very large and seemingly significant protests happening across Iran right now, so the US could see this as another opportunity to topple another unpopular authoritarian regime while also getting the chance to flex its military and intelligence capabilities at a moment in which another big-name player in that space, Russia, is generally flailing; it’s failed to protect several of its allies, including Venezuela, over the past few years, and its intended few-day invasion of Ukraine has now stretched into years.

That contrast is considered to be meaningful by most analysts, and though a lot of the PR about the capture of Maduro has focused on the oil, most US-based oil executives have said it’s a red herring—the hundreds of billions of dollars required to get more of Venezuela’s thick, dirty, expensive to process oil pumping and back on the market wouldn’t be worth it—and it’s more likely that this is partly a means of keeping the press and US public focused on something other than the Epstein files, which is a major scandal for Trump and his administration, while also allowing Trump to test the boundaries of his power; what the public and government will let him get away with currently, and what he can do to expand the range of what he can do without any outside buy-in or significant personal consequences, in the future.

Show Notes

https://theconversation.com/how-maduros-capture-went-down-a-military-strategist-explains-what-goes-into-a-successful-special-op-272671

https://archive.is/20260105035543/https://www.theatlantic.com/national-security/2026/01/trump-nicolas-maduro-venezuela/685493/

https://www.wsj.com/business/energy-oil/chevron-charts-a-new-path-in-venezuela-to-unlock-vast-oil-reserves-0369ce1b

https://www.theguardian.com/world/2026/jan/04/tactical-surprise-and-air-dominance-how-the-us-snatched-maduro-in-two-and-a-half-hours

https://www.nytimes.com/2026/01/10/us/politics/trump-iran-strikes.html

https://www.nytimes.com/2026/01/10/nyregion/nicolas-maduro-lawyers.html

https://www.nytimes.com/2026/01/10/business/dealbook/oil-executives-trump-venezuela.html

https://www.nytimes.com/2026/01/10/world/americas/venezuela-oil-tanker-us.html

https://www.axios.com/2026/01/11/trump-iran-protest-options-death-toll

https://www.axios.com/2026/01/03/maduro-capture-trump-venezuela-operation

https://www.axios.com/2025/05/11/trump-maga-western-civilization

https://www.axios.com/2026/01/08/venezuela-war-powers-senate-aumf-time-kaine

https://www.axios.com/2026/01/07/trump-russia-oil-tanker-seize-bella-venzuela

https://www.axios.com/2026/01/08/trumps-donroe-doctrine-sets-us-on-great-power-collision-course

https://www.theguardian.com/world/2026/jan/05/un-security-council-trump-attack-venezuela

https://www.nytimes.com/2026/01/08/us/politics/trump-interview-power-morality.html

We also discuss insider trading, spot-fixing, and Gatorade.

Recommended Book: The Kingdom, the Power, and the Glory by Tim Alberta

Transcript

Prediction markets are hundreds of years old, and have historically been used to determine the likelihood of something happening.

In 1503, for instance, there was a market to determine who would become the next pope, and from the earliest days of commercial markets, there were associated prediction markets that were used to gauge how folks thought a given business would do during an upcoming economic quarter.

The theory here is that while you can just ask people how well they think a political candidate will fare in an election or who they think will become the next pope, often their guesses, their assumptions, or their analysis will be swayed by things like political affiliation or maybe even what they think they’re meant to say—the popular papal candidate, for instance, or the non-obvious, asymmetric position on a big commercial enterprise that might help an analyst reinforce their brand as a contrarian.

If you introduce money into the equation, though, forcing people to put down real currency on their suspicions and predictions, and give them the chance to earn money if they get things right, that will sometimes nudge these markets away from those other incentives, making the markets commercial enterprises of their own. It can shift the bias away from posturing and toward monetization, and that in turn, in theory at least, should make prediction markets more accurate because people will try to align themselves with the actual, real-deal outcome, rather than the popular—with their social tribe, at least—or compellingly unpopular view.

This is the theory that underpins entities like Polymarket, Kalshi, Manifold Markets, and many other online prediction markets that have arisen over the past handful of years as regulations on these types of businesses have been eased, and as they’ve begun to establish themselves as credible players in the predicting-everything space.

In politics in particular, these markets have semi-regularly shown themselves to be better gauges of who will actually win elections than conventional polls and surveys, and though their records are far from perfect and still heavily biased in some cases, such community-driven predictions from money-motivated markets are gaining credibility because of their capacity to incentivize people to put their money where their mouths are, and to try to profit from accurate preordination.

The flip-side of these markets, and some might even say a built-in flaw with no obvious solution, is that they are rife with insider trading: people who are in the position to know things ahead of time making in some cases millions of dollars by placing big bets that, for them, aren’t bets at all, because they know what will or what is likely to happen.

This seems to have occurred at least a few times with big political events in 2025, and it’s anticipated that it could become an even bigger issue in the future, especially for markets that use cryptocurrencies to manage payments, as those are even less likely than their fiat currency peers to keeps solid tabs on who’s actually behind these bets, and thus who might be trading on knowledge that they’re not supposed to be trading on.

That said, it could be argued that such insider trading makes these markets even more accurate, eventually at least. And that points us toward another problem: the possibility that someone on the inside might look at a market and realize they can make a killing if they use their position, their power to sway these markets after placing a bet, giving them the ability to assure a payout by abusing their position—major events being influenced by the possibility of a community-funded payday for those in control.

What I’d like to talk about today is the same general principle as it’s playing out in the sports world, and why the huge sums of money that are now sloshing around in the sports betting industry in the US are beginning to worry basically everyone, except the sports betting companies themselves.

—

In October of 2025, the head coach of the NBA basketball team, the Portland Trail Blazers, Chauncey Billups, Miami Heat player Terry Rozier, and former NBA player Damon Jones, and about 30 other people were arrested by the FBI due to their alleged illegal sports gambling activities. Rozier was already under investigation following unusual betting activity that was linked to his performance in a 2023 game—he was later cleared of wrongdoing, but the implication then and in this more recent instance is that he and those other folks who were rounded up by the FBI may have been involved in rigging things so they could get a big payoff on gambling markets.

Similar things have been happening across the sports world, including a lifetime ban for Jontay Porter, a former Toronto Raptors player, who apparently gave confidential information to people who were placing bets on NBA games—he later pleaded guilty to conspiracy to commit wire fraud as a result of that investigation—and in November of 2025 two Major League Baseball players, both of them pitchers for the Cleveland Guardians, Emmanuel Clase and Luis Ortiz, were charged by federal prosecutors for allegedly rigging pitches to benefit people betting on those pitches; they’ve been charged with wire fraud and money laundering, and each could face up to 65 years in prison.

And those are just a few of the many instances of game-rigging that have been alleged in recent years, the specifics of which vary, but the outcome is always to give someone an advantage in these markets, which are only recently broadly legal across the United States, and which thus allow folks with the right connections or some money to invest ahead of time to, for instance, pay a pitcher to throw an inning, or pay a coach to tell them who will be benched and when, so that they can make a big wager with less of a risk, or in some cases, no risk at all.

One of the big issues here is that rather than simply being a which-team-will-win sort of thing, many of these bets are highly specific and granular, including what are called proposition or prop bets that allow folks to gamble on the number of strikeouts a pitcher will tally in a given inning and other very specific things.

If a pitcher were to then place a bet, perhaps through an intermediary, on their own prop bet-related performance, they would stand a decent chance of tallying the right number of strikes and balls. They could also sell that information to someone else, taking a guaranteed payout in exchange for the foreknowledge they grant that gambler, who could then do what they want with the information, and then if they do well with it, they could pay that pitcher to do the same again in the future.

This type of bet is called spot-fixing, and it’s seen across prediction markets, not just sports markets. Pitchers can fix an inning of a game, but poker players can also go all-in or fold a given number of times in a tournament, and the folks in charge of dumping Gatorade over the winning coach following a Super Bowl event can leak that color, based on their foreknowledge of the setup, to gamblers—these markets are sprawling and varied, and anyone in any position of power who can make decisions about such things, or who’s involved enough to leak information can do so at a profit, either themselves putting down money on spot-fixed prop bets, or selling that information to those who will themselves place a bet.

The issue sports organizations in the US are now running into is that while they aligned themselves with sports gambling entities like DraftKings and FanDuel after these platforms were legalized in more states following the striking-down of a federal ban on such things in 2018—as I record this, they’re currently legal in 31 states, alongside Washington DC and Puerto Rico—and they’ve profited a fair bit from that, allowing these businesses to become sponsors, to slap their logos on everything, and to generally become interwoven with the leagues themselves; despite all that, they’ve also created a sports culture in which betting is ultra-common, and that means fans are no longer just fans, they’re putting down money on various possible sports-related outcomes.

That means folks who were maybe previously die-hard fans of their local team may no longer just be disappointed when their team loses, they’ll be financially impacted, perhaps even devastated. And many athletes who play on these teams, in these leagues, are now suffering all kinds of abuse and threats from people who decided to put a lot of money on their performance, but who failed to win a game, or maybe even throw the exact right number of strikes and balls in a given inning.

This points at two big issues with sports betting in the US right now.

First is that there’s a lot of money splashing around in this space. An estimated $160-170 billion was wagered by US citizens in 2025 alone, generating about $16.4 billion in revenue for sportsbooks—the entities that take these sorts of bets.

That’s likely a significant undercount, too, as more generalist prediction markets are also getting involved in the sports betting game, blending this type of gambling with other sorts of prediction markets, like those related to politics and international happenings, like war.

And second, a lot of people are gambling a lot of money on sports stuff right now, and that’s becoming an issue. In October of 2025, a Pew Research poll found that 43% of US adults think legalized sports betting is bad for society, up from 34% in 2022, and 40% says it’s bad for sports, up from 33%. A whopping 22% of US adults say they personally bet money on sports in the past year, up from 19% in 2022, and 10%, one in ten American adults, say they have placed a sports bet online in the past year, up from 6% in 2022.

There has been a significant increase in calls to the National Problem Gambling Helpline in recent years—a 45% increase from 2017 in states where sports betting hasn’t been legalized, and a 148% increase, more than three times as much, in states where sports betting was legalized by August of 2025. Not for nothing, too, it’s estimated that professional athletes are about five-times more likely than the average person to become hooked on gambling, which would seem to amplify all these issues, in addition to the obvious problems this can create for people with often high-paying, but also often financially precarious, short-term careers.

The implication, then, is that legal sports betting either sparks or reinforces gambling issues, creating more addictive behavior and triggering more financial issues. And bankruptcy numbers seem to back this up: in states where online gambling is allowed, bankruptcy rates increased by 28% and debt collections rose by 8% just two years after sports betting legalization. Data also shows that there’s a 20% increase in mass-market alcohol consumption in states with legalized sports betting, and that for every dollar spent on sports betting, 99 cents of investment money disappears from records, which means, basically, people are not using spare money they would spend on random stuff anyway when placing these bets, they’re spending money that would otherwise be put into savings, or which is already in their savings on this type of gambling—and much of that money then disappears into the pockets of these gambling platforms.

This same general state of affairs has played out in other countries before the US, but things seem to be moving especially fast here in part because this isn’t gambling that’s limited to a physical location, it’s increasingly being conducted on smartphones and other always-on-us devices, and that means it’s easier to get hooked, but also that it’s more accessible to more people more of the time, and the ever-present deluge of information about these topics, and about these platforms that allow us to casually place bets on said topics, make getting sucked in and sold on the idea of easy money, simpler and more likely than ever before.

Show Notes

https://www.washingtonpost.com/sports/2025/10/23/nba-chauncey-billups-terry-rozier-arrested-betting-probe/

https://www.washingtonpost.com/sports/2025/11/09/emmanuel-clase-luis-ortiz-indicted-bribes/

https://www.washingtonpost.com/sports/2025/12/29/sports-betting-integrity-fans/

https://www.washingtonpost.com/sports/2025/10/29/player-prop-bets-nba-arrests/

https://www.washingtonpost.com/sports/2025/06/14/sports-betting-athlete-abuse-online/

https://en.wikipedia.org/wiki/List_of_bookmakers

https://www.actionnetwork.com/online-sports-betting

https://nypost.com/betting/best-sports-betting-apps-usa/

https://en.wikipedia.org/wiki/Gambling_in_the_United_States

https://en.wikipedia.org/wiki/Sports_betting

https://en.wikipedia.org/wiki/Sportsbook

https://www.delasport.com/history-of-sports-betting/

https://pmc.ncbi.nlm.nih.gov/articles/PMC7780080/

https://www.espn.com/sports-betting/story/_/id/23561576/chalk-line-how-got-legalized-sports-betting

https://www.cnn.com/2024/05/03/sport/sports-betting-usa-impact-on-lives-spt-intl

https://naadgs.org/history-of-sports-betting-the-transition-from-illegal-to-mainstream/

https://en.wikipedia.org/wiki/List_of_match-fixing_incidents

https://en.wikipedia.org/wiki/History_of_gambling_in_the_United_States

https://en.wikipedia.org/wiki/Professional_and_Amateur_Sports_Protection_Act_of_1992

https://en.wikipedia.org/wiki/Gambling_in_the_United_Kingdom

https://en.wikipedia.org/wiki/Prediction_market

https://users.wfu.edu/strumpks/papers/Int_Election_Betting_Formatted_FINAL_NoComments.pdf

https://en.wikipedia.org/wiki/Proposition_bet

https://www.axios.com/2025/12/14/sports-betting-gambling-young-men-crisis

https://www.espn.com/espn/betting/story/_/id/47337056/scandals-prediction-markets-2025-turning-point-sports-betting

https://www.pewresearch.org/short-reads/2025/10/02/americans-increasingly-see-legal-sports-betting-as-a-bad-thing-for-society-and-sports/

We also discuss local politics, data center costs, and the Magnificent 7 tech companies.

Recommended Book: Against the Machine by Paul Kingsnorth

Transcript

In 2024, the International Energy Agency estimated that data centers consumed about 1.5% of all electricity generated, globally, that year. It went on to project that energy consumption by data centers could double by 2030, though other estimates are higher, due to the ballooning of investment in AI-focused data centers by some of the world’s largest tech companies.

There are all sorts of data centers that serve all kinds of purposes, and they’ve been around since the mid-20th century, since the development of general purposes digital computers, like the 1945 Electronic Numerical Integrator and Computer, or ENIAC, which was programmable and reprogrammable, and used to study, among other things, the feasibility of thermonuclear weapons.

ENIAC was built on the campus of the University of Pennsylvania and cost just shy of $500,000, which in today’s money would be around $7 million. It was able to do calculators about a thousand times faster than other, electro-mechanical calculators that were available at the time, and was thus considered to be a pretty big deal, making some types of calculation that were previously not feasible, not only feasible, but casually accomplishable.

This general model of building big-old computers at a center location was the way of things, on a practical level, until the dawn of personal computers in the 1980s. The mainframe-terminal setup that dominated until then necessitated that the huge, cumbersome computing hardware was all located in a big room somewhere, and then the terminal devices were points of access that allowed people to tap into those centralized resources.

Microcomputers of the sort of a person might have in their home changed that dynamic, but the dawn of the internet reintroduced something similar, allowing folks to have a computer at home or at their desk, which has its own resources, but to then tap into other microcomputers, and to still other larger, more powerful computers across internet connections. Going on the web and visiting a website is basically just that: connecting to another computer somewhere, that distant device storing the website data on its hard drive and sending the results to your probably less-powerful device, at home or work.

In the late-90s and early 2000s, this dynamic evolved still further, those far-off machines doing more and more heavy-lifting to create more and more sophisticated online experiences. This manifested as websites that were malleable and editable by the end-user—part of the so-called Web 2.0 experience, which allowed for comments and chat rooms and the uploading of images to those sites, based at those far off machines—and then as streaming video and music, and proto-versions of social networks became a thing, these channels connecting personal devices to more powerful, far-off devices needed more bandwidth, because more and more work was being done by those powerful, centrally located computers, so that the results could be distributed via the internet to all those personal computers and, increasingly, other devices like phones and tablets.

Modern data centers do a lot of the same work as those earlier iterations, though increasingly they do a whole lot more heavy-lifting labor, as well. They’ve got hardware capable of, for instance, playing the most high-end video games at the highest settings, and then sending, frame by frame, the output of said video games to a weaker device, someone’s phone or comparably low-end computer, at home, allowing the user of those weaker devices to play those games, their keyboard or controller inputs sent to the data center fast enough that they can control what’s happening and see the result on their own screen in less than the blink of an eye.

This is also what allows folks to store backups on cloud servers, big hard drives located in such facilities, and it’s what allows the current AI boom to function—all the expensive computers and their high-end chips located at enormous data centers with sophisticated cooling systems and high-throughput cables that allow folks around the world to tap into their AI models, interact with them, have them do heavy-lifting for them, and then those computers at these data centers send all that information back out into the world, to their devices, even if those devices are underpowered and could never do that same kind of work on their own.

What I’d like to talk about today are data centers, the enormous boom in their construction, and how these things are becoming a surprise hot button political issue pretty much everywhere.

—

As of early 2024, the US was host to nearly 5,400 data centers sprawled across the country. That’s more than any other nation, and that number is growing quickly as those aforementioned enormous tech companies, including the Magnificent 7 tech companies, Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla, which have a combined market cap of about $21.7 trillion as of mid-December 2025, which is about two-thirds of the US’s total GDP for the year, and which is more than the European Union’s total GDP, which weighs in at around $19.4 trillion, as of October 2025—as they splurge on more and more of them.

These aren’t the only companies building data centers at breakneck speed—there are quite a few competitors in China doing the same, for instance—but they’re putting up the lion’s share of resources for this sort of infrastructure right now, in part because they anticipate a whole lot of near-future demand for AI services, and those services require just a silly amount of processing power, which itself requires a silly amount of monetary investment and electricity, but also because, first, there aren’t a lot of moats, meaning protective, defensive assets in this industry, as is evidenced by their continual leapfrogging of each other, and the notion that a lot of what they’re doing, today, will probably become commodity services in not too long, rather than high-end services people and businesses will be inclined to pay big money for, and second, because there’s a suspicion, held by many in this industry, that there’s an AI shake-out coming, a bubble pop or bare-minimum a release of air from that bubble, which will probably kill off a huge chunk of the industry, leaving just the largest, too-big-to-fail players still intact, who can then gobble up the rest of the dying industry at a discount.

Those who have the infrastructure, who have invested the huge sums of money to build these data centers, basically, will be in a prime position to survive that extinction-level event, in other words. So they’re all scrambling to erect these things as quickly as possible, lest they be left behind.

That construction, though, is easier said than done.

The highest-end chips account for around 70-80% of a modern data center’s cost, as these GPUs, graphical processing units that are optimized for AI purposes, like Nvidia’s Blackwell chips, can cost tens of thousands of dollars apiece, and millions of dollars per rack. There are a lot of racks of such chips in these data centers, and the total cost of a large-scale AI-optimized data center is often somewhere between $35 and $60 billion.

A recent estimate by McKinsey suggests that by 2030, data center investment will need to be around $6.7 trillion a year just to keep up the pace and meet demand for compute power. That’s demand from these tech companies, I should say—there’s a big debate about where there’s sufficient demand from consumers of AI products, and whether these tech companies are trying to create such demand from whole cloth, to justify heightened valuations, and thus to continue goosing their market caps, which in turn enriches those at the top of these companies.

That said, it’s a fair bet that for at least a few more years this influx in investment will continue, and that means pumping out more of these data centers.

But building these sorts of facilities isn’t just expensive, it’s also regulatorily complex. There are smaller facilities, akin to ENIAC’s campus location, back in the day, but a lot of them—because of the economies of scale inherent in building a lot of this stuff all at once, all in the same place—are enormous, a single data center facility covering thousands of acres and consuming a whole lot of power to keep all of those computers with their high-end chips running 24/7.

Previous data centers from the pre-AI era tended to consume in the neighborhood of 30MW of energy, but the baseline now is closer to 200MW. The largest contemporary data centers consume 1GW of electricity, which is about the size of a small city’s power grid—that’s a city of maybe 500,000-750,000 people, though of course climate, industry, and other variables determine the exact energy requirements of a city—and they’re expected to just get larger and more resource-intensive from here.

This has resulted in panic and pullbacks in some areas. In Dublin, for instance, the government has stopped issuing new grid connections for data centers until 2028, as it’s estimated that data centers will account for 28% of Ireland’s power use by 2031, already.

Some of these big tech companies have read the writing on the wall, and are either making deals to reactivate aging power plants—nuclear, gas, coal, whatever they can get—or are saying they’ll build new ones to offset the impact on the local power grid.

And that impact can be significant. In addition to the health and pollution issues caused by some of the sites—in Memphis, for instance, where Elon Musk’s company, xAI, built a huge data center to help power his AI chatbot, Grok, the company is operating 35 unpermitted gas turbines, which it says are temporary, but which have been exacerbating locals’ health issues and particulate numbers—in addition to those issues, energy prices across the US are up 6.9% year over year as of December 2025, which is much higher than overall inflation. Those costs are expected to increase still further as data centers claim more of the finite energy available on these grids, which in turn means less available for everyone else, and that scarcity, because of supply and demand, increases the cost of that remaining energy.

As a consequence of these issues, and what’s broadly being seen as casual overstepping of laws and regulations by these companies, which often funnel a lot of money to local politicians to help smooth the path for their construction ambitions, there are bipartisan efforts around the world to halt construction on these things, locals saying the claimed benefits, like jobs, don’t actually make sense—as construction jobs will be temporary, and the data centers themselves don’t require many human maintainers or operators, and because they consume all that energy, in some cases might consume a bunch of water—possibly not as much as other grand-scale developments, like golf courses, but still—and they tend to generate a bunch of low-level, at times harmful background noise, can create a bunch of local pollution, and in general take up a bunch of space without giving any real benefit to the locals.

Interestingly, this is one of the few truly bipartisan issues that seems to be persisting in the United States, at a moment in which it’s often difficult to find things Republicans and Democrats can agree on, and that’s seemingly because it’s not just a ‘big companies led by untouchable rich people stomping around in often poorer communities and taking what they want’ sort of issue, it’s also an affordability issue, because the installation of these things seems to already be pushing prices higher—when the price of energy goes up, the price of just about everything goes up—and it seems likely to push prices even higher in the coming years.

We’ll see to what degree this influences politics and platforms moving forward, but some local politicians in particular are already making hay by using antagonism toward the construction of new data centers a part of their policy and campaign promises, and considering the speed at which these things are being constructed, and the slow build of resistance toward them, it’s also an issue that could persist through the US congressional election in 2026, to the subsequent presidential election in 2028.

Show Notes

https://www.wired.com/story/opposed-to-data-centers-the-working-families-party-wants-you-to-run-for-office/

https://finance.yahoo.com/news/without-data-centers-gdp-growth-171546326.html

https://time.com/7308925/elon-musk-memphis-ai-data-center/

https://wreg.com/news/new-details-on-152m-data-center-planned-in-memphis/

https://www.politico.com/news/2025/05/06/elon-musk-xai-memphis-gas-turbines-air-pollution-permits-00317582

https://www.datacenterwatch.org/report

https://www.govtech.com/products/kent-county-mich-cancels-data-center-meeting-due-to-crowd

https://www.woodtv.com/news/kent-county/gaines-township-planning-commission-to-hold-hearing-on-data-center-rezoning/

https://www.theverge.com/science/841169/ai-data-center-opposition

https://www.iea.org/reports/energy-and-ai/energy-demand-from-ai

https://www.cbre.com/insights/reports/global-data-center-trends-2025

https://www.phoenixnewtimes.com/news/chandler-city-council-unanimously-kills-sinema-backed-data-center-40628102/

https://www.mlive.com/news/ann-arbor/2025/11/rural-michigan-fights-back-how-riled-up-residents-are-challenging-big-tech-data-centers.html?outputType=amp

https://www.courthousenews.com/nonprofit-sues-to-block-165-billion-openai-data-center-in-rural-new-mexico/

https://www.datacenterdynamics.com/en/news/microsoft-cancels-plans-for-data-center-caledonia-wisconsin/

https://www.cnbc.com/2025/11/25/microsoft-ai-data-center-rejection-vs-support.html

https://www.wpr.org/news/microsoft-caledonia-data-center-site-ozaukee-county

https://thehill.com/opinion/robbys-radar/5655111-bernie-sanders-data-center-moratorium/

https://www.investopedia.com/magnificent-seven-stocks-8402262

https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/the-cost-of-compute-a-7-trillion-dollar-race-to-scale-data-centers

https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/ai-power-expanding-data-center-capacity-to-meet-growing-demand

https://www.marketplace.org/story/2025/12/19/are-energyhungry-data-centers-causing-electric-bills-to-go-up

https://en.wikipedia.org/wiki/Data_center

https://en.wikipedia.org/wiki/ENIAC

We also discuss the US-China chip-gap, mixed-use technologies, and export bans.

Recommended Book: Enshittification by Cory Doctorow

Transcript

I’ve spoken about this a few times in recent months, but it’s worth rehashing real quick because this collection of stories and entities are so central to what’s happening across a lot of the global economy, and is also fundamental, in a very load-bearing way, to the US economy right now.

As of November of 2025, around the same time that Nvidia, the maker of the world’s best AI-optimized chips at the moment became the world’s first company to achieve a $5 trillion market cap, the top seven highest-valued tech companies, including Nvidia, accounted for about 32% of the total value of the US stock market.

That’s an absolutely astonishing figure, as while Nvidia, Apple, Microsoft, Alphabet, Amazon, Broadcom, and Meta all have a fairly diverse footprint even beyond their AI efforts, a lot of that value for all of them is predicated on expected future income; which is to say, their market caps, their value according to that measure, is determined not by their current assets and revenue, but by what investors think or hope they’ll pull in and be worth in the future.

That’s important to note because historically the sorts of companies that have market caps that are many multiples of their current, more concrete values are startups; companies in their hatchling phase that have a good idea and some kind of big potential, a big moat around what they’re offering or a blue ocean sub-industry with little competition in which they can flourish, and investment is thus expected to help them grow fast.

These top seven tech companies, in contrast, are all very mature, have been around for a while and have a lot of infrastructure, employees, expenses, and all the other things we typically associated with mature businesses, not flashy startups with their best days hopefully ahead of them.

Some analysts have posited that part of why these companies are pushing the AI thing so hard, and in particular pushing the idea that they’re headed toward some kind of generally useful AI, or AGI, or superhuman AI that can do everyone’s jobs better and cheaper than humans can do them, is that in doing so, they’re imagining a world in which they, and they alone, because of the costs associated with building the data centers required to train and run the best-quality AI right now, are capable of producing basically an economy’s-worth of AI systems and bots and machines operated by those AI systems.

In other words, they’re creating, from whole cloth, an imagined scenario in which they’re not just worthy of startup-like valuations, worthy of market caps that are tens or hundreds of times their actual concrete value, because of those possible futures they’re imagining in public, but they’re the only companies worthy of those valuation multiples; the only companies that matter anymore.

It’s likely that even if this is the case, that the folks in charge of these companies, and the investors who have money in them who are likely to profit when the companies grow and grow, actually do believe what they’re telling everyone about the possibilities inherent in building these sorts of systems.

But there also seems to be a purely economic motive for exaggerating a lot and clearing out as much of the competition as possible as they grow bigger and bigger. Because maybe they’ll actually make what they’re saying they can make as a result of all that investment, that exuberance, but maybe, failing that, they’ll just be the last companies standing after the bubble bursts and an economic wildfire clears out all the smaller companies that couldn’t get the political relationships and sustaining cash they needed to survive the clear-out, if and when reality strikes and everyone realizes that sci-fi outcome isn’t gonna happen, or isn’t gonna happen any time soon.

What I’d like to talk about today is a recent decision by the US government to allow Nvidia to sell some of its high-powered chips to China, and why that decision is being near-universally derided by those in the know.

—

In early December 2025, after a lot of back-and-forthing on the matter, President Trump announced that the US government will allow Nvidia, which is a US-based company, to export its H200 processors to China. He also said that the US government will collect a 25% fee on these sales.

The H200 is Nvidia’s second-best chip for AI purposes, and it’s about six-times as powerful as the H20, which is currently the most advanced Nvidia chip that’s been cleared for sale to China. The Blackwell chip that is currently Nvidia’s most powerful AI offering is about 1.5-times faster than the H200 for training purposes, and five-times faster for AI inferencing, which is what they’re used for after a model is trained, and then it’s used for predictions, decisions, and so on.

The logic of keeping the highest-end chips from would-be competitors, especially military competitors like China, isn’t new—this is something the US and other governments have pretty much always done, and historically even higher-end gaming systems like Playstation consoles have been banned for export in some cases because the chips they contained could be repurposed for military things, like plucking them out and using them to guide missiles—Sony was initially unable to sell the Playstation 2 outside of Japan because it needed special permits to sell something so militarily capable outside the country, and it remained unsellable in countries like Iraq, Iran, and North Korea throughout its production period.

The concern with these Nvidia chips is that if China has access to the most powerful AI processors, it might be able to close the estimated 2-year gap between US companies and Chinese companies when it comes to the sophistication of their AI models and the power of their relevant chips. Beyond being potentially useful for productivity and other economic purposes, this hardware and software is broadly expected to shape the next generation of military hardware, and is already in use for all sorts of wartime and defense purposes, including sophisticated drones used by both sides in Ukraine. If the US loses this advantage, the thinking goes, China might step up its aggression in the South China Sea, potentially even moving up plans to invade Taiwan.

Thus, one approach, which has been in place since the Biden administration, has been to do everything possible to keep the best chips out of Chinese hands, because that would ostensibly slow them down, make them less capable of just splurging on the best hardware, which they could then use to further develop their local AI capabilities.

This approach, however, also incentivized the Chinese government to double-down on their own homegrown chip industry. Which again is still generally thought to be about 2-years behind the US industry, but it does seem to be closing the gap rapidly, mostly by copying designs and approaches used by companies around the world.

An alternative theory, the one that seems to be at least partly responsible for Trump’s about-face on this, is that if the US allows the sale of sufficiently powerful chips to China, the Chinese tech industry will become reliant on goods provided by US companies, and thus its own homegrown AI sector will shrivel and never fully close that gap. If necessary the US can then truncate or shut down those shipments, crippling the Chinese tech industry at a vital moment, and that would give the US the upper-hand in many future negotiations and scenarios.

Most analysts in this space no longer think this is a smart approach, because the Chinese government is wise to this tactic, using it itself all the time. And even in spaces where they have plenty of incoming resources from elsewhere, they still try to shore-up their own homegrown versions of the same, copying those international inputs rather than relying on them, so that someday they won’t need them anymore.

The same is generally thought to be true, here. Ever since the first Trump administration, when the US government started its trade war with China, the Chinese government has not been keen on ever relying on external governments and economies again, and it looks a lot more likely, based on what the Chinese government has said, and based on investments across the Chinese market on Chinese AI and chip companies following this announcement, that they’ll basically just scoop up as many Nvidia chips as they can, while they can, and primarily for the purpose of reverse-engineering those chips, speeding up their gap-closing with US companies, and then, as soon as possible, severing that tie, competing with Nvidia rather than relying on it.

This is an especially pressing matter right now, then, because the US economy, and basically all of its growth, is so completely reliant on AI tech and the chips that are allowing that tech to move forward.

If this plan by the US government doesn’t pan out and ends up being a short-term gain situation, a little bit of money earned from that 25% cut the government takes, and Ndvidia temporarily enriching itself further through Chinese sales, but in exchange both entities give up their advantage, long term, to Chinese AI companies and the Chinese government, that could be bad not just for AI companies around the world, which could be rapidly outcompeted by Chinese alternatives, but also all economies exposed to the US economy, which could be in for a long term correction, slump, or full-on depression.

Show Notes

https://www.nytimes.com/2025/12/09/us/politics/trump-nvidia-ai-chips-china.html

https://arstechnica.com/tech-policy/2025/12/us-taking-25-cut-of-nvidia-chip-sales-makes-no-sense-experts-say/

https://www.pcmag.com/news/20-years-later-how-concerns-about-weaponized-consoles-almost-sunk-the-ps2

https://archive.is/20251211090854/https://www.reuters.com/world/china/us-open-up-exports-nvidia-h200-chips-china-semafor-reports-2025-12-08/

https://theconversation.com/with-nvidias-second-best-ai-chips-headed-for-china-the-us-shifts-priorities-from-security-to-trade-271831

https://www.economist.com/business/2025/12/09/donald-trumps-flawed-plan-to-get-china-hooked-on-nvidia-chips

https://www.scmp.com/tech/tech-trends/article/3335900/chinas-moore-threads-unveil-ai-chip-road-map-rival-nvidias-cuda-system

https://www.investopedia.com/nvidia-just-became-the-first-usd5-trillion-company-monitor-these-crucial-stock-price-levels-11839114

https://aventis-advisors.com/ai-valuation-multiples/

We also discuss ebooks, Steam, and digital licenses.

Recommended Book: Apple in China by Patrick McGee

Transcript

Almost always, if you buy an ebook or game or movie or music album online, you’re not buying that ebook, or that game, or whatever else—you’re buying a license that allows you access it, often on a specified device or in a specified way, and almost always in a non-transferrable, non-permanent manner.

This distinction doesn’t matter much to most of us most of the time. If I buy an ebook, chances are I just want to read that ebook on the device I used to buy it, or the kindle attached to my Amazon or other digital book service account. So I buy the book, read it on my ebook reader or phone, and that’s that; same general experience I would have with a paperback or hardback book.

This difference becomes more evident when you think about what happens to the book after you read it, though. If I own a hard-copy, physical book, I can resell it. I can donate it. I can put it in a Little Free Library somewhere in my neighborhood, or give it to a friend who I think will enjoy it. I can pick it up off my shelf later and read the exact same book I read years before. Via whichever mechanism I choose, I’m either holding onto that exact book for later, or I’m transferring ownership of that book, that artifact that contains words and/or images that can now be used, read, whatever by that second owner. And they can go on to do the same: handing it off to a friend, selling it on ebay, or putting it on a shelf for later reference.

Often the convenience and immediacy of electronic books makes this distinction a non-issue for those who enjoy them. I can buy an ebook from Amazon or Bookshop.org and that thing is on my device within seconds, giving me access to the story or information that’s the main, valuable component of a book for most of us, without any delay, without having to drive to a bookstore or wait for it to arrive in the mail. That’s a pretty compelling offer.

This distinction becomes more pressing, however, if I decide I want to go back and read an ebook I bought years ago, later, only to find that the license has changed and maybe that book is no longer accessible via the marketplace where I purchased it. If that happens, I no longer have access to the book, and there’s no recourse for this absence—I agreed to this possibility when I “bought” the book, based on the user agreement I clicked ‘OK’ or ‘I agree’ on when I signed up for Amazon or whichever service I paid for that book-access.

It also becomes more pressing if, as has happened many times over the past few decades, the publisher or some other entity with control over these book assets decides to change them.

A few years ago, for instance, British versions of Roald Dalh’s ‘Matilda’ were edited to remove references to Joseph Conrad, who has in recent times been criticized for his antisemitism and racist themes in his writing. Some of RL Stine’s Goosebumps books were edited to remove references to crushes schoolgirls had on their headmaster, and descriptions of an overweight character that were, in retrospect, determined to be offensive. And various racial and ethnic slurs were edited out of some of Agatha Christie’s works around the same time.

Almost always, these changes aren’t announced by the publishers who own the rights to these books, and they’re typically only discovered by eagle-eyed readers who note that, for instance, the publishers decided to change the time period in which something occurred, which apparently happened in one of Stine’s works, without obvious purpose. This also frequently happens without the author being notified, as was the case with Stine and the edits made to his books. The publishers themselves, when asked directly about these changes, often remain silent on the matter.

What I’d like to talk about today is another angle of this distinction between physically owned media and digital, licensed versions of the same, and the at times large sums of money that can be gained or lost based on the decisions of the companies that control these licensed assets.

—

Counter-Strike 2 is a first-person shooter game that’s free-to-play, was released in 2023, and was developed by a company called Valve.

Valve has developed all sorts of games over the years, including the Counter-Strike, Half-Life, DOTA, and Portal games, but they’re probably best known for their Steam software distribution platform.

Steam allows customers to buy all sorts of software, but mostly games through an interface that also provides chat services and community forums. But the primary utility of this platform is that it’s a marketplace for buying and selling games, and it has match-making features for online multiplayer games, serves as a sort of library for gamers, so all their games are launchable from one place, and it serves as a digital rights management hub, which basically means it helps game companies ensure users aren’t playing with pirated software—if you want to use steam to store and launch your games, they have to be legit, purchased games, not pirated ones.

As of early 2025, it was estimated that Steam claimed somewhere between 75-80% of the PC gaming market, compared to competitors like the Epic Game Store, which was founded by the folks behind the wildly successful game, Fortnite, which can only claim something like 5%.

And Counter-Strike is one of Valve’s, and Steam’s crown jewels. It’s a free-to-play game that was originally developed as a mod, a free add-on to another game Valve owns called Half-Life, but Valve bought up the rights to that mod and developed it into its own thing, releasing the initial entry in the series in 2000, several main-series games after that in subsequent years, and then Counter-Strike 2 came out in 2023, to much acclaim and fanfare.

Counter-Strike 2 often has around a million players online, playing the game at any given moment, and its tournaments can attract closer to 1.5 million. As of early 2024, it was estimated that Counter-Strike 2 pulled in around a billion dollars a year for Valve, primarily via what are called Case Keys, which allow players to open in-game boxes, each key selling for $2.50. Valve also takes a 15% cut of all player-to-player sales of items conducted on the Steam Community Market, which is a secure ebay- or Amazon-like component of their platform where players can sell digital items from the game, which are primarily aesthetic add-ons, like skins for weapons, stickers, and clothing—things that allow players to look different in the game, as opposed to things that allow them to perform better, which would give players who spent the most money an unfair advantage and thus make the game less competitive and fun.

Because this is a free game, though, and by many estimates a really balance and well-made one, a lot of people play it, and a lot of people want to customize the look of their in-game avatar. So being able to open in-game boxes that contain loot, and being able to buy and sell said loot on the Steam Community Market, has led to a rich secondary economy that makes that component of the game more interesting for players, while also earning Valve a whole lot of money on the backend for those keys and that cut of sales between players.

In late-October of 2025, Valve announced a change in the rules for Counter-Strike 2, now allowing players to trade-up more item types, including previously un-trade-up-able items like gloves and knives, into higher-grade versions of the same. So common items could be bundled together and traded in for less common items, and those less common items could be bundled together and traded up for rare ones.

This seems like a small move from the outside, but it roiled the CS2 in-game economy, by some estimates causing upwards of $2 billion to basically disappear overnight, because rare gloves and knives were at times valued at as much as $1.5 million; again, these are just aesthetic skins that change the look of a player’s avatar or weapons, but there’s enough demand for these things that some people are willing to pay that much for ultra-rare and unique glove and knife skins.

Because of that demand, some players had taken to spending real money on these ultra-rare items, treating their in-game portfolios of skins as something like an investment portfolio. If you can buy an ultra-rare glove skin for $40,000 and maybe sell it later for twice that, that might seem like a really good investment, despite how strange it may seem to those not involved in this corner of the gaming world to spend $40,000 on what’s basically just some code in a machine that tells the game that the gloves on your avatar will look a certain way.

This change, then, made those rarer gloves and knives, which were previously unattainable except by lottery-like chance, a lot more common, because people could trade up for them, increasing their chances of getting the ultra-rare stuff. The market was quickly flooded with more of these things, and about half the value of rare CS2 skins disappeared, initially knocking about $6 billion of total value from the market before stabilizing to around $1.5-2 billion.

Volatility in this market continues, and people who invested a lot of money, sometimes their life savings, and sometimes millions of dollars into CS2 in-game skins, have been looking into potential legal recourse, though without much luck; Valve’s user agreements make very clear that players don’t own any of this stuff, and as a result, Valve can manipulate the market however they like, whenever they like.

Just like with ebooks and movies we “buy” from Amazon and other services, then, these in-game assets are licensed to us, not sold. We may, at times, have a means of putting our license to some of these things on a secondary market, but that secondary market exists completely at the whim of the entity that actually owns the digital assets—in this case, Valve.

Recent court cases have resulted in clearer language from some license-selling companies, including Valve—though in most cases the buttons we click still say something like “Buy Now” rather than “Acquire License,” and the specifics of what we’re purchasing are hidden within a wall of legal text.

So for the moment, at least, this sort of confusion will probably continue, with periodic wake-up calls for folks on the receiving end of updates or edits that impact them financially, or impact their ability to access what they thought they were buying, but which is later removed from their account, or changed without their knowledge or permission.

Show Notes

https://en.wikipedia.org/wiki/Steam_(service)

https://en.wikipedia.org/wiki/Valve_Corporation

https://theconversation.com/2b-counter-strike-2-crash-exposes-a-legal-black-hole-your-digital-investments-arent-really-yours-268749

https://blix.gg/news/cs-2/how-to-make-money-with-cs2-skins-in-2025/

http://tomshardware.com/video-games/ludicrous-usd6-billion-counter-strike-2-skins-market-crashes-loses-usd3-billion-overnight-game-update-destroys-inventories-collapses-market

https://www.kvue.com/article/news/nation-world/counter-strike-2-online-market-crash/507-ae9be038-2833-49d4-a5b4-d8f24fd0b33c

https://en.wikipedia.org/wiki/Counter-Strike

https://en.wikipedia.org/wiki/Epic_Games_Store

https://www.sahmcapital.com/news/content/counter-strike-skins-market-hits-1-billion-valves-virtual-goldmine-revealed-2024-01-22

https://mezha.ua/en/news/counter-strike-2-100-mln-dohodu-za-keysi-u-berezni-301011/

https://www.morganlewis.com/pubs/2024/10/california-becomes-first-state-to-pass-law-targeting-advertising-of-digital-media-licenses

https://en.wikipedia.org/wiki/Virtual_economy

https://www.nytimes.com/2023/04/04/arts/dahl-christie-stine-kindle-edited.html

https://bookriot.com/do-you-really-own-your-ebooks

https://jipel.law.nyu.edu/can-you-own-an-ebook-a-summary-of-the-anti-ownership-ebook-economy-report/

We also discuss the COP meetings, government capture, and air pollution.

Recommended Book: If Anyone Builds It, Everyone Dies by Eliezer Yudkowsky and Nate Soares

Transcript

The urban area that contains India’s capital city, New Delhi, called the National Capital Territory of Delhi, has a population of around 34.7 million people. That makes it the most populous city in the country, and one of the most populous cities in the world.

Despite the many leaps India has made over the past few decades, in terms of economic growth and overall quality of life for residents, New Delhi continues to have absolutely abysmal air quality—experts at India’s top research hospital have called New Delhi’s air “severe and life-threatening,” and the level of toxic pollutants in the air, from cars and factories and from the crop-waste burning conducted by nearby farmers, can reach 20-times the recommended level for safe breathing.

In mid-November 2025, the problem became so bad that the government told half its workers to work from home, because of the dangers represented by the air, and in the hope that doing so would remove some of the cars on the road and, thus, some of the pollution being generated in the area.

Trucks spraying mist, using what are called anti-smog guns, along busy roads and pedestrian centers help—the mist keeping some of the pollution from cars from billowing into the air and becoming part of the regional problem, rather than an ultra-localized one, and pushing the pollutants that would otherwise get into people’s lungs down to the ground—though the use of these mist-sprayers has been controversial, as there are accusations that they’re primarily deployed near air-quality monitoring stations, and that those in charge put them there to make it seem like the overall air-quality is lower than it is, manipulating the stats so that their failure to improve practical air-quality isn’t as evident.

And in other regional news, just southeast across the Bay of Bengal, the Indonesian government, as of the day I’m recording this, is searching for the hundreds of people who are still missing following a period of unusually heavy rains. These rains have sparked floods and triggered mudslides that have blocked roads, damaged bridges, and forced the evacuation of entire villages. More than 300,000 people have been evacuated as of last weekend, and more rain is forecast for the coming days.

The death toll of this round of heavy rainfall—the heaviest in the region in years—has already surpassed 440 people in Indonesia, with another 160 and 90 in Thailand and Vietnam, respectively, being reported by those countries’ governments, from the same weather system.

In Thailand, more than two million people were displaced by flooding, and the government had to deploy military assets, including helicopters launched from an aircraft carrier, to help rescue people from the roofs of buildings across nine provinces.

In neighboring Malaysia, tens of thousands of people were forced into shelters as the same storm system barreled through, and Sri Lanka was hit with a cyclone that left at least 193 dead and more than 200 missing, marking one of the country’s worst weather disasters in recent years.

What I’d like to talk about today is the climatic moment we’re at, as weather patterns change and in many cases, amplify, and how these sorts of extreme disasters are also causing untold, less reported upon but perhaps even more vital, for future policy shifts, at least, economic impacts.

—

The UN Conference of the Parties, or COP meetings, are high-level climate change conferences that have typically been attended by representatives from most governments each year, and where these representatives angle for various climate-related rules and policies, while also bragging about individual nations’ climate-related accomplishments.

In recent years, such policies have been less ambitious than in previous ones, in part because the initial surge of interest in preventing a 1.5 degrees C increase in average global temperatures is almost certainly no longer an option; climate models were somewhat accurate, but as with many things climate-related, seem to have actually been a little too optimistic—things got worse faster than anticipated, and now the general consensus is that we’ll continue to shoot past 1.5 degrees C over the baseline level semi-regularly, and within a few years or a decade, that’ll become our new normal.

The ambition of the 2015 Paris Agreement is thus no longer an option. We don’t yet have a new, generally acceptable—by all those governments and their respective interests—rallying cry, and one of the world’s biggest emitters, the United States, is more or less absent at new climate-related meetings, except to periodically show up and lobby for lower renewables goals and an increase in subsidies for and policies that favor the fossil fuel industry.

The increase in both number and potency of climate-influenced natural disasters is partly the result of this failure to act, and act forcefully and rapidly enough, by governments and by all the emitting industries they’re meant to regulate.

The cost of such disasters is skyrocketing—there are expected to be around $145 billion in insured losses, alone, in 2025, which is 6% higher than in 2024—and their human impact is booming as well, including deaths and injuries, but also the number of people being displaced, in some cases permanently, by these disasters.

But none of that seems to move the needle much in some areas, in the face of entrenched interests, like the aforementioned fossil fuel industry, and the seeming inability of politicians in some nations to think and act beyond the needs of their next election cycle.

That said, progress is still being made on many of these issues; it’s just slower than it needs to be to reach previously set goals, like that now-defunct 1.5 degrees C ceiling.

Most nations, beyond petro-states like Russia and those with fossil fuel industry-captured governments like the current US administration, have been deploying renewables, especially solar panels, at extraordinary rates. This is primarily the result of China’s breakneck deployment of solar, which has offset a lot of energy growth that would have otherwise come from dirty sources like coal in the country, and which has led to a booming overproduction of panels that’s allowed them to sell said panels cheap, overseas.

Consequently, many nations, like Pakistan and a growing number of countries across Sub-Saharan African, have been buying as many cheap panels as they can afford and bypassing otherwise dirty and unreliable energy grids, creating arrays of microgrids, instead.

Despite those notable absences, then, solar energy infrastructure installations have been increasing at staggering rates, and the first half of 2025 has seen the highest rate of capacity additions, yet—though China is still installing twice as much solar as the rest of the world, combined, at this point. Which is still valuable, as they still have a lot of dirty energy generation to offset as their energy needs increase, but more widely disseminated growth is generally seen to be better in the long-term—so the expansion into other parts of the world is arguably the bigger win, here.

The economics of renewables may, at some point, convince even the skeptics and those who are politically opposed to the concept of renewables, rather than practically opposed to them, that it’s time to change teams. Already, conservative parts of the US, like Texas, are becoming renewables boom-towns, quietly deploying wind and solar because they’re often the best, cheapest, most resilient options, even as their politicians rail against them in public and vote for more fossil fuel subsidies.

And it may be economics that eventually serve as the next nudge, or forceful shove on this movement toward renewables, as we’re reaching a point at which real estate and the global construction industry, not to mention the larger financial system that underpins them and pretty much all other large-scale economic activities, are being not just impacted, but rattled at their roots, by climate change.

In early November 2025, real estate listing company Zillow, the biggest such company in the US, stopped showing extreme weather risks for more than a million home sale listings on its site.

It started showing these risk ratings in 2024, using data from a risk-modeling company called First Street, and the idea was to give potential buyers a sense of how at-risk a property they were considering buying might be when it comes to wildfires, floods, poor air quality, and other climate and pollution-related issues.

Real estate agents hated these ratings, though, in part because there was no way to protest and change them, but also because, well, they might have an expensive coastal property listed that now showed potential buyers it was flood prone, if not today, in a couple of years. It might also show a beautiful mountain property that’s uninsurable because of the risk of wildfire damage.

A good heuristic for understanding the impact of global climate change is not to think in terms of warming, though that’s often part of it, but rather thinking in terms of more radical temperature and weather swings.

That means areas that were previously at little or no risk of flooding might suddenly be very at risk of absolutely devastating floods. And the same is true of storms, wildfires, and heat so intense people die just from being outside for an hour, and in which components of one’s house might fry or melt.

This move by Zillow, the appearance and removal of these risk scores, happened at the same time global insurers are warning that they may have to pull out of more areas, because it’s simply no longer possible for them to do business in places where these sorts devastating weather events are happening so regularly, but often unpredictably, and with such intensity—and where the landscapes, ecologies, and homes are not made to withstand such things; all that stuff came of age or was built in another climate reality, so many such assets are simply not made for what’s happening now, and what’s coming.

This is of course an issue for those who already own such assets—homes in newly flood-prone areas, for instance—because it means if there’s a flood and a home owner loses their home, they may not be able to rebuild or get a payout that allows them to buy another home elsewhere. That leaves some of these assets stranded, and it leaves a lot of people with a huge chunk of their total resources permanently at risk, unable to move them, or unable to recoup most of their investment, shifting that money elsewhere. It also means entires industries could be at risk, especially banks and other financial institutions that provide loans for those who have purchased homes and other assets in such regions.

An inability to get private insurance also means governments will be increasingly on the hook for issuing insurance of last resort to customers, which often costs more, but also, as we’ve seen with flood insurance in the US, means the government tends to lose a lot of money when increasingly common, major disasters occur on their soil.

This isn’t just a US thing, though; far from it. Global reinsurers, companies that provide insurance for insurance companies, and whose presence and participation in the market allow the insurance world to function, Swiss Re and Munich Re, recently said that uninsurable areas are growing around the world right now, and lacking some kind of fundamental change to address the climate paradigm shift, we could see a period of devastation in which rebuilding is unlikely or impossible, and a resultant period in which there’s little or no new construction because no one wants to own a home or factory or other asset that cannot be insured—it’s just not a smart investment.

This isn’t just a threat to individual home owners, then, it’s potentially a threat to the whole of the global financial system, and every person and business attached to it, which in turn is a threat to global governance and the way property and economics work.

There’s a chance the worst-possible outcomes here can still be avoided, but with each new increase in global average temperature, the impacts become worse and less predictable, and the economics of simply making, protecting, and owning things become less and less favorable.

Show Notes

https://www.nytimes.com/2025/11/30/climate/zillow-climate-risk-scores-homes.html

https://www.nytimes.com/2025/11/30/climate/climate-change-disinformation.html

https://www.nytimes.com/2025/11/30/world/asia/india-delhi-pollution.html

https://www.nytimes.com/2025/11/30/world/asia/flooding-indonesia-thailand-southeast-asia.html

https://www.bbc.com/news/articles/c5y9ejley9do

https://www.theguardian.com/environment/2025/nov/22/cop30-deal-inches-closer-to-end-of-fossil-fuel-era-after-bitter-standoff

https://theconversation.com/the-world-lost-the-climate-gamble-now-it-faces-a-dangerous-new-reality-270392

https://theconversation.com/earth-is-already-shooting-through-the-1-5-c-global-warming-limit-two-major-studies-show-249133

https://www.404media.co/americas-polarization-has-become-the-worlds-side-hustle/

https://www.cnbc.com/2025/08/08/climate-insurers-are-worried-the-world-could-soon-become-uninsurable-.html

https://www.imd.org/ibyimd/sustainability/climate-change-the-emergence-of-uninsurable-areas-businesses-must-act-now-or-pay-later/

https://www.jec.senate.gov/public/index.cfm/democrats/2024/12/climate-risks-present-a-significant-threat-to-the-u-s-insurance-and-housing-markets

https://www.weforum.org/stories/2025/04/financial-system-warning-climate-nature-stories-this-week/

https://www.weforum.org/stories/2025/05/costs-climate-disasters-145-billion-nature-climate-news/

https://arstechnica.com/science/2025/11/solars-growth-in-us-almost-enough-to-offset-rising-energy-use/

https://ember-energy.org/latest-updates/global-solar-installations-surge-64-in-first-half-of-2025/

We also discuss dry casks, radioactive decay, and uranium.

Recommended Book: Breakneck by Dan Wang

Transcript

Radioactive waste, often called nuclear waste, typically falls into one of three categories: low-level waste that contains a small amount of radioactivity that will last a very short time—this is stuff like clothes or tools or rags that have been contaminated—intermediate-level waste, which has been contaminated enough that it requires shielding, and high-level waste, which is very radioactive material that creates a bunch of heat because of all the radioactive decay, so it requires both shield and cooling.

Some types of radioactive waste, particularly spent fuel of the kind used in nuclear power plants, can be reprocessed, which means separating it into other types of useful products, including another type of mixed nuclear fuel that can be used in lieu of uranium, though generally not economically unless uranium supplies are low. About a third of all spent nuclear fuel has already been reprocessed in some way.

About 4% of even the recyclable stuff, though, doesn’t have that kind of second-life purpose, and that, combined with the medium- and long-lived waste that is quite dangerous to have just sitting around, has to be stored somehow, shielded and maybe cooled, and in some cases for a very long time: some especially long-lived fission products have half-lives that stretch into the hundreds of thousands or millions of years, which means they will be radioactive deep into the future, many times longer than humans have existed as a species.

According to the International Atomic Energy Agency, something like 490,000 metric tons of radioactive spent fuel is currently being stored, on a temporary basis, at hundreds of specialized sites around the world. The majority of this radioactive waste is stored in pools of spent fuel water, cooled in that water somewhere near the nuclear reactors where the waste originated. Other waste has been relocated into what’re called dry casks, which are big, barrel-like containers made of several layers of steel, concrete, and other materials, which surround a canister that holds the waste, and the canister is itself surrounded by inert gas. These casks hold and cool waste using natural air convection, so they don’t require any kind of external power or water sources, while other solutions, including storage in water, sometimes does—and often the fuel is initially stored in pools, and is then moved to casks for longer-term storage.

Most of the radioactive waste produced today comes in the form of spend fuel from nuclear reactors, which are typically small ceramic pellets made of low-enriched uranium oxide. These pellets are stacked on top of each other and encased in metal, and that creates what’s called a fuel rod.

In the US, alone, about 2,000 metric tons of spent nuclear fuel is created each year, which is just shy of half an olympic sized swimming pool in terms of volume, and in many countries, the non-reuseable stuff is eventually buried, near the surface for the low- to intermediate-level waste, and deeper for high-level waste—deeper, in this context, meaning something like 200-1000 m, which is about 650-3300 feet, beneath the surface.

The goal of such burying is to prevent potential leakage that might impact life on the surface, while also taking advantage of the inherent stability and cooler nature of underground spaces which are chosen for their isolation, natural barriers, and water impermeability, and which are also often reinforced with human-made supports and security, blocking everything off and protecting the surrounding area so nothing will access these spaces far into the future, and so that they won’t be broken open by future glaciation or other large-scale impacts, either.

What I’d like to talk about today is another potential use and way of dealing with this type of waste, and why a recent, related development in China is being heralded as such a big deal.

—

An experimental nuclear reactor was built in the Gobi Desert by the Chinese Academy of Sciences Shanghai Institute of Applied Physics, and back in 2023 the group achieved its first criticality, got started up, basically, and it has been generating heat through nuclear fission ever since.

What that means is that the nuclear reactor did what a nuclear reactor is supposed to do. Most such reactors exist to generate heat, which then creates steam and spins turbines, which generates electricity.

What’s special about this reactor, though, is that it is a thorium molten salt reactor, which means it uses thorium instead of uranium as a fuel source, and the thorium is processed into uranium as part of the energy-making process, because thorium only contains trace amounts of fissile material, which isn’t enough to get a power-generating, nuclear chain reaction going.

This reactor was able to successfully perform what’s called in-core thorium-to-uranium conversion, which allows the operators to use thorium as fuel, and have that thorium converted into uranium, which is sufficiently fissile to produce nuclear power, inside the core of the reactor. This is an incredibly fiddly process, and requires that the thorium-232 used as fuel absorb a neutron, which turns it into thorium-233. Thorium-233 then decays into protactinium-233, and that, in turn, decays into uranium-233—the fuel that powers the reactor.

One innovation here is that this entire process happens inside the reactor, rather than occurring externally, which would require a bunch of supplementary infrastructure to handle fuel fabrication, increasing the amount of space and cost associated with the reactor.

Those neutrons required to start the thorium conversion process are provided by small amounts of more fissile material, like enriched uranium-235 or plutonium-239, and the thorium is dissolved in a fluoride salt and becomes a molten mixture that allows it to absorb that necessary neutron, and go through that multi-step decay process, turning into uranium-233. That end-point uranium then releases energy through nuclear fission, and this initiates what’s called a burn while breeding cycle, which means it goes on to produce its own neutrons moving forward, which obviates the need for those other, far more fissile materials that were used to start the chain reaction. All of which makes this process a lot more fuel efficient than other options, dramatically reduces the amount of radioactive waste produced, and allows reactors that use it to operate a lot longer without needing to refuel, which also extends a reactor’s functional life.

On that last point, many typical nuclear power plants built over the past handful of decades use pressurized water reactors which have to be periodically shut down so operators can replace spent fuel rods. This new method instead allows the fissile materials to continuously circulate, enabling on-the-fly refueling—so no shut-down, no interruption of operations necessary.

This method also requires zero water, which could allow these reactors to be built in more and different locations, as conventional nuclear power plants have typically been built near large water sources, like oceans, because of their cooling needs.

China initiated the program that led to the development of this experimental reactor back in 2011, in part because it has vast thorium reserves it wanted to tap in its pursuit of energy independence, and in part because this approach to nuclear energy should, in theory at least, allow plant operators to use existing, spent fuel rods as part of its process, which could be very economically interesting, as they could use the waste from their existing plants to help fuel these new plants, but also take such waste off other governments’ hands, maybe even be paid for it, because those other governments would then no longer need to store the stuff, and China could use it as cheap fuel; win win.

Thinking further along, though, maybe the real killer application of this technology is that it allows for the dispersion of nuclear energy without the risk of nuclear weapons proliferation. The plants are smaller, they have a passive safety system that disallows the sorts of disasters that we saw in Chernobyl and Three-Mile Island—that sort of thing just can’t happen with this setup—and the fissile materials, aside from those starter materials used to get the initial cycle going, can’t be used to make nuclear weapons.

Right now, there’s a fair amount of uranium on the market, but just like oil, that availability is cyclical and controlled by relatively few governments. In the future, that resource could become more scarce, and this reactor setup may become even more valuable as a result, because thorium is a lot cheaper and more abundant, and it’s less tightly controlled because it’s useless from a nuclear weapons standpoint.

This is only the very first step on the way toward a potentially thorium-reactor dominated nuclear power industry, and the conversion rate on this experimental model was meager.

That said, it is a big step in the right direction, and a solid proof-of-concept, showing that this type of reactor has promise and would probably work scaled-up, as well, and that means the 100MW demonstration reactor China is also building in the Gobi, hoping to prove the concept’s full value by 2035, stands a pretty decent chance of having a good showing.

Show Notes

https://www.deepisolation.com/about-nuclear-waste/where-is-nuclear-waste-now

https://www.energy.gov/ne/articles/5-fast-facts-about-spent-nuclear-fuel

https://www.energy.gov/ne/articles/3-advanced-reactor-systems-watch-2030

https://world-nuclear.org/information-library/nuclear-fuel-cycle/nuclear-waste/radioactive-wastes-myths-and-realities

https://www.visualcapitalist.com/visualizing-all-the-nuclear-waste-in-the-world/

https://en.wikipedia.org/wiki/High-level_radioactive_waste_management

https://en.wikipedia.org/wiki/Radioactive_waste

https://en.wikipedia.org/wiki/Nuclear_reprocessing

https://en.wikipedia.org/wiki/Dry_cask_storage

https://en.wikipedia.org/wiki/Deep_geological_repository

https://onlinelibrary.wiley.com/doi/abs/10.1002/er.3854

https://archive.is/DQpXM

https://en.wikipedia.org/wiki/Thorium-based_nuclear_power

https://en.wikipedia.org/wiki/Thorium_fuel_cycle

We also discuss oil reserves, Maduro, and Machado.

Recommended Book: Dungeon Crawler Carl by Matt Dinniman

Transcript

Venezuela, which suffered all sorts of political and economic crises under former president Hugo Chávez, has suffered even more of the same, and on a more dramatic scale, under Chávez’s successor, Nicolás Maduro.

Both Chávez and Maduro have ruled over autocratic regimes, turning ostensibly democratic Venezuelan governments into governments ruled by a single person, and those they like and empower and reward, over time removing anyone from power who might challenge them, and collapsing all checks and balances within the structure of their government.

They still hold elections, then, but like in Russia, the voting is just for show, the outcome predetermined, and anyone who gets too popular and who isn’t favored by the existing regime is jailed or killed or otherwise neutralized; the votes are then adjusted when necessary to make it look like the regime is still popular, and anyone who challenges that seeming popularity is likewise taken care of.

As a result of that state of affairs, an unpopular regime with absolute power running things into the ground over the course of two autocrats’ administrations, Venezuela has suffered immense hyperinflation, high levels of crime and widespread disease, ever-increasing mortality rates, and even starvation, as fundamentals like food periodically become scarce. This has led to a swell of emigration out of the country, which has, during the past decade, become the largest ever recorded refugee crisis in the Americas, those who leave mostly flooding into neighboring countries like Colombia, Peru, and Ecuador.

As of 2025, it’s estimated that nearly 8 million people, more than 20% of Venezuela’s entire population as of 2017, has fled the country to get away from the government, its policies, its collapsed economy, and the cultural homogeny that has led to so much crime, conflict, and oppression of those not favored by the people in charge.

This has also led to some Venezuelans trying to get into the US, which was part of the justification for a proposed invasion of the country, by the US government, under the first Trump administration in 2017.

The idea was that this is a corrupt, weak government that also happens to possess the largest proven oil reserves in the world. Its production of oil has collapsed along with everything else, in part because the government is so ineffectual, and in part because of outside forces, like longstanding sanctions by the US, which makes selling and profiting from said oil on the global market difficult.

Apparently, though, Trump also just liked the idea of invading Venezuela through US ally Colombia, saying—according to Trump’s National Security advisor at the time, John Bolton—that Venezuela is really part of the US, so it would be “cool” for the US to take it. Trump also later said, in 2023, that when he left office Venezuela was about to collapse, and that he would have taken it over if he had been reelected instead of losing to Joe Biden, and the US would have then kept all the country’s oil.

So there’s long been a seeming desire by Trump to invade Venezuela, partly on vibe grounds, the state being weak and why shouldn’t we own it, that kind of thing? But underlying that is the notion of the US being a country that can stomp into weaker countries, take their oil, and then nation-build, similar to what the government seemed to be trying to do when it invaded Iraq in the early 2000s, using 9/11 as a casus belli, an excuse to go to war, with an uninvolved nation that happened to own a bunch of oil resources the US government wanted for itself.

What I’d like to talk about today is the seeming resurgence of that narrative, but this time with an, actual tangible reason to believe an invasion of Venezuela might occur sometime soon.

—

As I mentioned, though previously kind of a success story in South America, bringing people in from all over the continent and the world, Venezuela has substantially weakened under its two recent autocratic leaders, who have rebuilt everything in their image, and made corruption and self-serving the main driver behind their decisions for the direction of the country.

A very popular candidate, María Corina Machado, was barred from participating in the country’s 2024 election, the country’s Supreme Court ruling that a 15-year ban on her holding public office because of her involvement with an alleged plot against Maduro with a previous candidate for office, Juan Guaido; Guiado is now in exile, run out of the country for winning an election against Maduro, which Maduro’s government has claimed wasn’t legit, but which dozens of governments recognize as having been legitimate, despite Maduro’s clinging to power after losing.

So Machado is accused of being corrupt by Maduro’s corrupt government, and thus isn’t allowed to run for office. Another candidate that she wanted to have run in her place was also declared ineligible by Maduro’s people, so another sub was found, Edmundo González, and basically every outside election watchdog group says that he won in 2024, and handedly, over Maduro. But the government’s official results say that’s not the case, that Maduro won, and that has created even more conflict and chaos in the country as it’s become clearer and clearer that there’s no way to oust the autocrat in control of the government—not through the voting box, at least.

This is part of what makes Venezuela an even more appealing target, for the Trump administration, right now, because not only is Maduro incredibly unpopular and running the country into the ground, there’s also a very popular alternative, in the shape of María Corina Machado, who could conceivably take control of things should Maduro be toppled. So there’s a nonzero chance that if someone, like the US military, were to step in and either kill Maduro or run him out of town, they could make a very sweet deal with the incoming Machado government, including a deal that grants access to all that currently underutilized oil wealth.

This is theoretical right now, but recent moves by the US government and military suggest it might not remain theoretical for much longer.

In mid-November, 2025, the US Navy moved the USS Gerald R. Ford Carrier Strike Group to the Caribbean—the USS Gerald R Ford being an aircraft carrier, and the strike group being the array of ships and aircraft that accompany it—it was moved there from the Eastern Mediterranean, where it was moved following the attack on Israel that led to Israel’s invasion of the Gaza Strip.

This, by itself, doesn’t necessarily mean anything; the shifting of aircraft carrier groups is often more symbolic than practical. But the US government has suggested it might us these vessels and aircraft to strike drug manufacturers across South and Central America, and specifically in Venezuela.

This is being seen as an escalation of an already fraught moment in the region, because the US has launched a series of strikes against small boats in the area, beginning back in September of 2025.

These boats, according to the US government, are drug smuggling vessels, bringing fentanyl, among other drugs, to US shores. So the idea is that the people aboard these boats are criminals who are killing folks in the US by bringing this drug, which is highly addictive and super potent, and thus more likely to kill its users than other opioids, into the country for illegal sale and distribution. So, the claim goes, this is a justified use of force.

These strikes have thus far, over the past two months, killed at least 79 people, all alleged by the US government to be drug smugglers, despite some evidence to the contrary, in some cases. The US’s allies have not been happy about these strikes, including allies the government usually relies on to help with drug-related detection and interdiction efforts, including regional governments that take action to keep drugs from shuffling around the region and eventually ending up in the US.

Many US allies have also called the strikes illegal. The French foreign minister recently said they violate international law, and the EU’s foreign policy chief said something similar, indicating that such use of force is only valid in cases of self-defense, and when there’s a UN Security council resolution on the matter.

Canadian and Dutch governments have been doing what they can to distance themselves from the strikes, without outright criticizing the at times vindictive US government, and some regional allies, like Colombia, have been signaling that they’ll be less cooperative with the US when it comes to drug-related issues, saying that they would no longer share intelligence with the US until they stop the strikes, which they’ve called “extrajudicial executions.”

An extrajudicial killing is one that is not lawful; it doesn’t have the backing of a judicial proceeding, and thus lacks the authority typically granted by the proper facets of a government. Lacking such authority, killing is illegal. Given said authority, though, a killing can be made legal, at least according to the laws of the government doing the killing.

The argument here is that while governments can usually get away with killing people, only authoritarian regimes typically and regularly to use that power to kill folks without going through the proper channels and thus getting the legal authority to do so.

In this case, the facts seem to support the accusations of those who are saying these killings aren’t legally legitimate: the Trump administration has launched these attacks on these vessels without going through the usual channels, and without declaring Congressionally approved war on anyone in particular. They’ve instead claimed that drug cartels are terrorists, and have said that anyone they suspect of smuggling drugs, or who they suspect in any way might be involved with the illegal drug making and smuggling industry, can be considered enemy, non-state combatants that they’re allowed to kill at will.

And as part of that declaration that the US government has the right to kill anyone they like who’s involved in drug smuggling, in late-October 2025 it was reported that the US has identified targets on land, as well, some of these targets located within ports and airstrips across Venezuela, including those used by the Venezuelan government, which the Maduro regime allegedly also uses for drug smuggling purposes.

This loops us back around to that original possibility that the Trump administration, looking for a casus belli, an excuse to go to war with Venezuela, may be using these strikes and the drug smuggling industry to get social and maybe legal backing for strikes that reach closer and closer to Maduro and the Venezuelan military.

If the US were to strike some vital Venezuelan military ports, using drug smuggling as justification, but taking out Venezuelan military infrastructure and/or people in the process, would that be an act of war? Would that trigger a response from Maduro? Could that response then allow the US military to claim self-defense?

These questions are up in the air right now, and that confusion could provide the opportunity to move fast and not have to suffer legal consequences until all is said and done, but it could also help shape the outcome of those decisions: ask for forgiveness, not permission, basically, but maybe not even forgiveness, if other aspects of the government come to support the Trump administration’s decisions and rule in their favor, after the fact.

Some analysts have said they suspect this drumbeat toward war with Venezuela is meant to solve several problems for the Trump administration. It could help them deal with plummeting approval numbers leading into a midterm election in 2026, and it could also give Trump himself cover from the escalating issue of the Epstein files, which, among other things, seem to connect Trump with someone who’s become the world’s most famous human trafficker and pedophile even more tightly than before.

This sort of process may also serve to slowly bolster the perception that the presidency has more powers than it has traditionally wielded, like the ability to unilaterally declare war, even though such powers are supposed to rest with Congress; an extension of other efforts by this administration to reinforce the presidency at the expense of the checks and balances that are meant to keep the US government from becoming an autocracy, like the one in Venezuela.

Show Notes

https://www.lemonde.fr/en/international/article/2024/01/27/venezuela-s-supreme-court-disqualifies-opposition-leader-from-running-for-president_6469941_4.html

https://www.theguardian.com/world/article/2024/aug/06/venezuela-election-maduro-analysis

https://en.wikipedia.org/wiki/2024_Venezuelan_presidential_election

https://en.wikipedia.org/wiki/Carrier_Strike_Group_12

https://www.cnn.com/2025/11/15/politics/venezuela-trump-military-what-we-know

https://www.cnn.com/2025/11/12/americas/venezuela-us-aircraft-carrier-reaction-latam-intl

https://www.nytimes.com/2025/11/14/us/politics/trump-pressure-venezuela.html

https://www.npr.org/2025/11/15/nx-s1-5609888/aircraft-carrier-caribbean-venezuela-military-action

https://www.theguardian.com/commentisfree/2025/nov/16/us-rogue-state-extrajudicial-killings-venezuela

https://www.politico.com/news/magazine/2025/11/15/trump-maduro-venezuela-column-00652369

https://www.wsj.com/politics/national-security/justice-department-drug-boat-strike-memo-83711582

https://www.nytimes.com/2025/11/13/world/americas/trump-drug-boat-strikes-colombian-fisherman.html

https://www.bbc.com/news/articles/c7810w37vwdo

https://www.militarytimes.com/news/your-military/2025/11/13/colombia-to-suspend-intelligence-sharing-with-us-over-boat-strikes/

https://en.wikipedia.org/wiki/2025_United_States_military_strikes_on_alleged_drug_traffickers

https://www.theatlantic.com/newsletters/2025/11/trump-boat-strikes-killings-venezuela/684921/

https://www.wsj.com/world/americas/trump-boat-strikes-drug-9bbbeb90?mod=hp_lead_pos11

https://en.wikipedia.org/wiki/Extrajudicial_killing

https://en.wikipedia.org/wiki/Crisis_in_Venezuela

https://en.wikipedia.org/wiki/Venezuelan_refugee_crisis

https://en.wikipedia.org/wiki/Proposed_United_States_invasion_of_Venezuela

We also discuss isotonitazene, fentanyl, and Perdue.

Recommended Book: The Thinking Machine by Stephen Witt

Transcript

Opioids have been used as painkillers by humans since at least the Neolithic period; there’s evidence that people living in the Iberian and Italian Peninsulas kept opium poppy seeds with them, and there’s even more evidence that the Ancient Greeks were big fans of opium, using it to treat pain and as a sleep aid.

Opium was the only available opioid for most of human history, and it was almost always considered to be a net-positive, despite its downsides. It was incorporated into a mixture called laudanum, which was a blend of opium and alcohol, in the 17th century, and that helped it spread globally as Europeans spread globally, though it was also in use locally, elsewhere, especially in regions where the opium poppy grew naturally.

In India, for instance, opium was grown and often used for its painkilling properties, but when the British East India Company took over, they decided to double-down on the substance as a product they could monopolize and grow into a globe-spanning enterprise.

They went to great lengths to expand production and prevent the rise of potential competitors, in India and elsewhere, and they created new markets for opium in China by forcing the product onto Chinese markets, initially via smuggling, and then eventually, after fighting a series of wars focused on whether or not the British should be allowed to sell opium on the Chinese market, the British defeated the Chinese. And among other severely unbalanced new treaties, including the ceding of the Kowloon peninsula to the British as part of Hong Kong, which they controlled as a trading port, and the legalization of Christians coming into the country, proselytizing, and owning property, the Chinese were forced to accept the opium trade. This led to generations of addicts, even more so than before, when opium was available only illicitly, and it became a major bone of contention between the two countries, and informed China’s relationship with the world in general, especially other Europeans and the US, moving forward.

A little bit later, in the early 1800s, a German pharmacist was able to isolate a substance called morphine from opium. He published a paper on this process in 1817, and in addition to this being the first alkaloid, the first organic compound of this kind to be isolated from a medicinal plant, which was a milestone in the development of modern drug discovery, it also marked the arrival of a new seeming wonder drug, that could ease pain, but also help control cold-related symptoms like coughing and gut issues, like diarrhea. Like many such substances back in the day, it was also often used to treat women who were demonstrating ‘nervous character,’ which was code for ‘behaving in ways men didn’t like or understand.’

Initially, it was thought that, unlike with opium, morphine wasn’t addictive. And this thinking was premised on the novel application method often used for morphine, the hypermedia needle, which arrived a half-century after that early 1800s isolation of morphine from opium, but which became a major driver of the new drug’s success and utility. Such drugs, derived scientifically rather than just processing a plant, could be administered at specific, controllable doses. So surely, it was thought, this would alleviate those pesky addictive symptoms that many people experienced when using opioids in a more natural, less science-y way.

That, of course, turned out not to be the case. But it didn’t stop the progression of this drug type, and the further development of more derivations of it, including powerful synthetic opioids, which first hit the scene in the mid-20th century.

What I’d like to talk about today is the recent wave of opioid addictions, especially but not exclusively in the US, and the newest concern in this space, which is massively more powerful than anything that’s come before.

—

As I mentioned, there have been surges in opioid use, latent and externally forced, throughout modern human history.

The Chinese saw an intense wave of opioid addiction after the British forced opium onto their markets, to the point that there was a commonly held belief that the British were trying to overthrow and enslave the Chinese by weighing them down with so many addicts who were incapable of doing much of anything; which, while not backed by the documentation we have from the era—it seems like they were just chasing profits—is not impossible, given what the Brits were up to around the world at that point in history.

That said, there was a huge influx in opioid use in the late-1980s, when a US-based company called Purdue Pharma began producing and pushing a time-released opioid medication, which really hit the big-time in 1995, when they released a version of the drug called OxyContin.

OxyContin flooded the market, in part because it promised to help prevent addiction and accidental overdose, and in part because Purdue was just really, really good at marketing it; among other questionable and outright illegal things it did as part of that marketing push, it gave kickbacks to doctors who prescribed it, and some doctors did so, a lot, even when patients didn’t need it, or were clearly becoming addicted.

By the early 2000s, Purdue, and the Sackler family that owned the company, was spending hundreds of millions of dollars a year to push this drug, and they were making billions a year in sales.

Eventually the nature of Purdue’s efforts came to light, there were a bunch of trials and other legal hearings, some investigative journalists exposed Purdue’s foreknowledge of their drug’s flaws, and there was a big government investigation and some major lawsuits that caused the collapse of the company in 2019—though they rebranded in 2021, becoming Knoa Pharma.

All of which is interesting because much like the forced legalization of opium on Chinese markets led to their opioid crisis a long time ago, the arrival of this incredibly, artificially popular drug on the US market led to the US’s opioid crisis.

The current bogeyman in the world of opioids—and I say current because this is a fast-moving space, with new, increasingly powerful or in some cases just a lot cheaper drugs arriving on the scene all the time—is fentanyl, which is a synthetic opioid that’s about 30-50 times more potent than heroin, and about 100 times as potent as morphine. It has been traditionally used in the treatment of cancer patients and as a sedative, and because of how powerful it is, a very small amount serves to achieve the desired, painkilling effect.

But just like other opioids, its administration can lead to addiction, people who use it can become dependent and need more and more of it to get the same effects, and people who have too much of it can experience adverse effects, including, eventually, death.

This drug has been in use since the 1960s, but illicit use of fentanyl began back in the mid-1970s, initially as its own thing, but eventually to be mixed in with other drugs, like heroin, especially low-quality versions of those drugs, because a very small amount of fentanyl can have an incredibly large and potent effect, making those other drugs seem higher quality than they are.

That utility is also this drug’s major issue, though: it’s so potent that a small amount of it can kill, and even people with high opioid tolerances can see those tolerances pushed up and up and up until they eventually take a too-large, killing dose.

There have been numerous efforts to control the flow of fentanyl into the US, and beginning in the mid-20-teens, there were high-profile seizures of the illicitly produced stuff around the country. As of mid-2025, China seems to be the primary source of most illicit fentanyl around the world, the drug precursor produced in China, shipped to Mexico where it’s finalized and made ready for market, and then smuggled into the US.

There have been efforts to shut down this supply chain, including recent tariffs put on Chinese goods, ostensibly, in part at least, to get China to handle those precursor suppliers.

Even if that effort eventually bears fruit, though, India seems to have recently become an alternative source of those precursors for Mexican drug cartels, and for several years they’ve been creating new markets for their output in other countries, like Nigeria, Indonesia, and the Netherlands, as well.

Amidst all that, a new synthetic drug, which is 40-times as potent as fentanyl, is starting to arrive in the US, Europe, and Australia, and has already been blamed for thousands of deaths—and it’s thought that that number might be a significant undercount, because of how difficult it can be to attribute cause with these sorts of drugs.

Nitazenes were originally synthesized back in the 1950s in Austria, and they were never sold as painkillers because they were known, from the get-go, to be too addictive, and to have a bad tradeoff ratio: a little bit of benefit, but a high likelihood of respiratory depression, which is a common cause of death for opioid addicts, or those who accidentally overdose on an opioid.

One nitazene, called isotonitazene, first showed up on US drug enforcement agency radars back in 2019, when a shipment was intercepted in the Midwest. Other agencies noted the same across the US and Europe in subsequent years, and this class of drugs has now become widespread in these areas, and in Australia.

It’s thought that nitazenes might be seeing a surge in popularity with illicit drugmakers because their potency can be amped up so far, way, way higher than even fentanyl, and because their effects are similar in many ways to heroin.

They can also use them they way they use fentanyl, a tiny bit blended into lower-quality versions of other drugs, like cocaine, which can save money while also getting their customers, who may not know what they’re buying, hooked, faster. For context, a fifth of a grain of nitazene salt can be enough to kill a person, so it doesn’t take much, less than that, if they want to keep their customers alive, to achieve the high they’re looking for. A little bit goes a long, long way.

This class of drugs is also difficult to detect, which might be part of the appeal for drug makers, right now. Tests that detect morphine, heroin, and fentanyl do not detect natazines, and the precursors for this type of drug, and the drugs themselves, are less likely to be closely watched, or even legally controlled at the levels of more popular opioids, which is also likely appealing to groups looking to get around existing clampdown efforts.

Right now, drug agencies are in the process of updating their enforcement and detection infrastructure, and word is slowly getting out about nitazenes and the risk they potentially pose. But it took years for sluggish government agencies to start working on the issue of fentanyl, which still hasn’t been handled, so it’s anyone’s guess as to when and if the influx of nitazenes will be addressed on scale.

Show Notes

https://www.wired.com/story/a-new-type-of-opioid-is-killing-people-in-the-us-europe-and-australia/

https://link.springer.com/article/10.1007/BF02161116

https://www.thelancet.com/journals/lanpub/article/PIIS2468-2667(24)00024-0/fulltext

https://www.theguardian.com/society/2025/nov/03/nitazenes-synthetic-opioid-drug-500-times-stronger-than-heroin-fatal

https://www.nature.com/articles/d41586-025-03280-5

https://theconversation.com/10-times-stronger-than-fentanyl-nitazenes-are-the-latest-deadly-development-in-the-synthetic-opioid-crisis-265882

https://www.cato.org/blog/fentanyl-nitazenes-why-drug-war-keeps-making-danger-worse

https://www.cfr.org/backgrounder/fentanyl-and-us-opioid-epidemic

https://en.wikipedia.org/wiki/Purdue_Pharma

https://en.wikipedia.org/wiki/Oxycodone

https://en.wikipedia.org/wiki/Fentanyl

https://en.wikipedia.org/wiki/Nitazenes

https://en.wikipedia.org/wiki/Opioid

https://en.wikipedia.org/wiki/Timeline_of_the_opioid_epidemic

https://en.wikipedia.org/wiki/Opioid_epidemic

We also discuss the X-59, the Tu-144, and Boom Supersonic.

Recommended Book: Red Team Blues by Cory Doctorow

Transcript

The term “supersonic,” when applied to speed, refers to something moving faster than the speed of sound—a speed that is shorthanded as Mach 1.

The precise Mach 1 speed of sound will be different depending on the nature of the medium through which an object is traveling. So if you’re moving at sea level versus up high in the air, in the stratosphere, the speed of sound will be different. Likewise if you’re moving through moist air versus dry air, or moving through water versus moving through syrup, different speed of sound, different Mach 1.

In general, though, to give a basic sense of how fast we’re talking here, if an object is moving at sea level through dry air at a temperature of 20 degrees celsius, which is 68 degrees fahrenheit, Mach 1 is about 768 miles per hour, which is about 1,126 feet per second, and 343.2 meters per second.

It’s fast! It’s very fast. Again, this is the speed at which sound moves. So if you surpass the speed of sound, if you go supersonic, you will arrive faster than the sound you make while moving.

Back in 1947, an experimental American plane called the Bell X-1 broke the sound barrier, surpassed Mach 1, reaching a speed of almost 1,000 miles per hour using a 6,000 pound thrust rocket propulsion system. A later version of the same rocket-powered plane, the Bell X-1A, which was basically the same vehicle, it just had more fuel capacity, allowing the rocket to burn longer, achieved 1,600 miles per hour in 1956.

Prior to that, in 1943, British began working on a secret experimental aircraft called the Miles M.52, intending to build a plane capable of traveling 1,000 mph. Interestingly, this project was apparently the result of the British wanting to keep up with a supposed already existing German aircraft capable of achieving that speed, though it’s now believed the intelligence that led the British to believe the Germans had a supersonic-capable plane was the result of a mistranslation—the Germans hit 1,000 km per hour, which is about 621 mph, and still subsonic.

Though apparently a success in terms of research and innovation, the Miles M.52 project was cancelled in 1946, due partly to budgetary concerns, and partly because the new government didn’t believe supersonic aircraft were practical, or maybe even feasible.

After the existence of this project was revealed to the public, however, criticism for the cancellation mounted, and the design was translated into new, unmanned scale-model experimental versions of the plane which achieved controlled Mach 1.38 supersonic speeds, and both the design and research from this program was shared with the American company, Bell, and all that knowledge informed the development of the aforementioned Bell X-1 supersonic plane.

Again, that successful Bell mission was flown in 1947, and in 1961, a Douglas jetliner, a commercial jet, broke the sound barrier during a controlled test dive, and that fed the development of an intended supersonic airliner in the US, though similar research being conducted elsewhere would bear more direct and immediate fruit.

In the Soviet Union, a supersonic jetliner called the Tupolev Tu-144 entered service in 1968, and a jetliner co-developed by the British and French, the Concorde, began construction in 1965, and tallied its first flight in March of 1969.

The Tu-144 was thus the world’s first commercial supersonic airliner, by a few months, and it also became the first commercial transport to exceed Mach 2, twice the speed of sound, in 1970.

The Tu-144 was plagued by reliability issues from the get-go, however, and while performing maneuvers at an air show in Paris in 1973, it disintegrated in midair, which—combined with its high operating costs reduced its long-term market viability, especially internationally. By the mid-1970s, it was primarily operating within the Soviet Union, and after a new variant of the jet crashed in 1978, the Tu-144 program was cancelled in 1983. Existing models continued to be use for niche purposes, like training space program pilots, and for a supersonic research program undertaken by NASA in the late-1990s, but the final Tu-144 flight was in mid-1999, and all surviving aircraft are now on display or in storage.

The Concorde has a similar history. Original forecasts for the supersonic airliner market were optimistic, and while the craft seemed to be generally more reliable and less issue-prone than the Tu-144, and it enjoyed a period of fanfare and promotion, as a sort of luxury experience for folks crossing the Atlantic in particular, cutting travel times in half, a major crash in mid-2000, which killed all 109 occupants and four people on the ground, led to the suspension of service until late-2001, and all remaining Concorde aircraft were retired in 2003—about 20 of them are on display throughout North American and Europe, as of the mid-2020s.

The costs associated with operating Concorde aircraft, as with the Tu-144, were also quite high, and those costs and other complications led to the cancellation of a would-be supersonic jetliner competitor from Boeing, the 2707, in 1971, before it built any prototypes.

What I’d like to talk about today is a renewed enthusiasm for supersonic passenger aircraft, and what’s changed that might make supersonic transport a viable market, today.

—

In the United States, commercial aircraft are not allowed to fly at supersonic speeds. This is because the sonic booms generated by supersonic flight, which are shockwaves that work a bit like the crack of a bullwhip or the firing of a bullet, but much, much larger, can set off alarms, rattle or shatter windows, and generally create all sorts of chaos on the ground, even in areas not directly under the aircraft that’s breaking the sound barrier.

This was true even during the heyday of the Concorde: the craft was only allowed to travel at supersonic speeds over the ocean, because doing so over populated areas was such a pain, and in some cases, a danger.

Sonic booms aren’t the only reason supersonic aircraft like the Concorde failed to establish a long-term presence in the airline industry, but they’re a big part of it. It’s just really difficult to work around that kind of persistent issue.

This is why a new experimental project by NASA, the X-59 Quesst, with two-s’s, Quesst standing for Quiet SuperSonic Technology, is garnering so much attention. Built by Lockheed Martin, the X-59 is said to dramatically reduce the scale of sonic booms, instead producing what’s been described as a sonic thump, its long, slender nose breaking up the pressure waves that otherwise build up and create that much larger, more impactful shock wave boom, and its engine is on top of the plane rather than underneath it, a design choice that sends the majority of remaining shock wave impacts upward toward the sky, rather than down toward the ground.

The X-59 is still just an experimental jet. It’s a single-seater, it’s about twice as long as an F-16 fighter jet, and it can cruise at around 925 miles per hours, which is Mach 1.4.

It’s hoped that this new design will allow for the creation of future supersonic jetliners, though, as being able to traverse oceans twice as fast would bring massive economic benefits, in terms of shipping people, but also all kinds of goods. Being able to use these aircraft fully, at their full speed, over land and to and from any airport, would likewise make them more versatile and introduce new benefits and, hopefully, favorable economics.

Worth noting here is that this jet is a descendent of that first Bell X-1 plane that broke the sound barrier in 1947; NASA’s X-planes are innovative models meant to push the boundaries of what’s currently possible, and the X-59 is just a more modern version of that initial X-1 conception in many ways.

That said, the X-59 has only been successfully flown at low speeds and altitudes at this point. It got a lot of press at the end of October 2025 for successfully completing its first flight, which shows it can fly and land, which is good. But its inaugural flight stuck with a low altitude and just 240 miles per hour; really slow for a jet, and too low for a commercial airliner.

The folks behind this project have also said that while they have every reason to believe this design will both work and create a far less impactful sonic boom, they don’t yet know if that boom will actually be tolerable for people on the ground. Simulating such things is different from the experience of them, and they won’t know until they power the thing all the way up and have it break the sound barrier whether the sonic thump will be barely noticeable and tolerable for folks near airports and flight paths, or if it will be better, but still not good enough to make this a viable alternative to existing jets.

There are other entities working on similar things right now, including a company called Boom Supersonic that has already flown a piloted demonstration aircraft, the XB-1, at supersonic speeds—Mac 1.122, which is about 750 mph—at an altitude of over 35,000 feet; the first time a non-government-affiliated aircraft has done so.

That was back in March of 2024, and the company plans to build a commercial supersonic aircraft that will carry between 64 and 80 passengers at Mach 1.7, on hundreds of global routes; they say they already have a large number of orders for this passenger aircraft they intend to build, and they say to begin with, they’ll be able to produce 66 of them per year from their factory in North Carolina. They say that they’ll have the first full-scale prototype of that passenger aircraft, called the Overture, in 2027, and they’re aiming to put that craft into service beginning in 2029 or 2030.

They’re not the only private company aiming to produce supersonic aircraft for various purposes, either. The promise of moving people and things around the world, faster than most of today’s options can manage, and in many cases far faster, is still tantalizing for many industries, so long as regulatory, safety, and technological hurdles can be traversed. For most of these private companies, their innovation seems to be mostly in price and scale, not reducing the boom, but some have also claimed that their sonic booms are more moderated; there’s also a good chance findings from the NASA X project will translate over to the commercial world in due time, if these companies survive, blending those innovations.

It’s an interesting moment in this space, then, in part because it seems like supersonic flight is appealing again, to some, at least, after a long period of dashed hopes—that dashing partly the consequence of flaws in earlier models, and headline-grabbing crashes that ruined a lot of appetites for the option.

But also because we could see modern technologies, from sensors to propulsion systems to manufacturing capacities applied to this vehicle type, which could ease a lot of the issues that made the Concordes and Tu-144s non-workable the first time around, and could make this type of transport and travel cheaper, too, though probably not until mid-century at the earliest, according to current timelines.

Show Notes

https://arstechnica.com/space/2025/10/nasa-test-flight-seeks-to-help-bring-commercial-supersonic-travel-back/

https://en.wikipedia.org/wiki/Sonic_boom

https://www.wired.com/story/nasas-quiet-supersonic-jet-takes-flight/

https://www.sofeminine.co.uk/back-in-4-years-your-london-new-york-time-slashed-by-3-hours-as-60-80-seat-supersonic-jet-nears/

https://abcnews.go.com/US/wireStory/nasa-takes-step-closer-launching-quiet-supersonic-jets-127036299

https://boomsupersonic.com/

https://www.grc.nasa.gov/www/k-12/airplane/lowsup.html

https://www.nasa.gov/aeronautics/supersonic-flight/

https://www.spikeaerospace.com/

https://en.wikipedia.org/wiki/Miles_M.52

https://en.wikipedia.org/wiki/Bell_X-1

https://en.wikipedia.org/wiki/Supersonic_aircraft

https://en.wikipedia.org/wiki/Tupolev_Tu-144

https://en.wikipedia.org/wiki/Concorde

https://en.wikipedia.org/wiki/Supersonic_transport

https://en.wikipedia.org/wiki/Supersonic_speed

We also discuss investors, chatbots, and job markets.

Recommended Book: The Fourth Consort by Edward Ashton

Transcript

Though LLM-based generative AI software, like ChatGPT, Gemini, and Claude, are becoming more and more powerful by the month, and offering newfangled functionality seemingly every day, it’s still anything but certain these tools, and the chatbots they power, will take gobs of jobs from human beings.

The tale that’s being told by upper-management at a lot of companies makes it seem like this is inevitable, though there would seem to be market incentives for them to both talk and act like this is the case.

Companies that make new, splashy investments in AI tech, or which make deals with big AI companies, purporting to further empower their offerings and to “rightsize” their staff as a consequence, tend to see small to moderate bumps in their stock price, and that’s good for the execs and other management in those companies, many of whom own a lot of stock, or have performance incentives related to the price of their stock built into their larger pay package.

But often, not always, but quite a lot of the time, the increased effectiveness and efficiencies claimed by these higher-ups after they go on a firing spree and introduce new AI tools, seem to be at least partly, and in some cases mostly attributable to basically just threatening their staff with being fired in a difficult labor market.

When Google executives lay off 5 or 10% of their staff on a given team, for instance, and then gently urge those who survived the cull to come to the office more frequently rather than working from home, and tell them that 60 hours a week is the sweet spot for achieving their productivity goals, that will tend to lead to greater outputs—at least for a while. Same as any other industry where blood has been drawn and a threat is made if people don’t live up to a casually stated standard presented by the person drawing that blood.

Also worth mentioning here is that many of the people introducing these tools, both into their own companies and into the market as a whole, seem to think most jobs can be done by AI systems, but not theirs. Many executives have outright said that future businesses will have a small number of people managing a bunch of AI bots, and at least a few investors have said that they believe most jobs can be automated, but investing is too specialized and sophisticated, and will likely remain the domain of clever human beings like themselves.

All of which gestures at what we’re seeing in labor markets around the globe right now, where demands for new hires are becoming more intense and a whole lot of low-level jobs in particular are disappearing entirely—though in most cases this is not because of AI, or not just, but instead because of automation more broadly; something that AI is contributing to, but something that is also a lot bigger than AI.

And that’s what I’d like to talk about today. The rapid-speed deployment, in some industries and countries, at least, of automated systems, of robots, basically, and how this is likely to impact the already ailing labor markets in the places that are seeing the spearpoint of this deployment.

—

Chatbots are AI tools that are capable of taking input from users and responding with often quite human-sounding text, and increasingly, audio as well.

These bots are the bane of some customers who are looking to speak to a human about some unique need or problem, but who are instead forced to run a gauntlet of AI-powered bots. The interaction often happens in the same little chat window through which they’ll eventually, if they say the right magic words, reach a human being capable of actually helping them. And like so many of the AI innovations that have been broadly deployed at this point, this is a solution that’s generally hated by customers, but lauded by the folks who run these companies, because it saves them a lot of money if they can hire fewer human beings to handle support tickets, even if those savings are the result of most people giving up before successfully navigating the AI maze and reaching a human customer support worker.

In India right now, the thriving call center industry is seeing early signs of disruption from the same. IT training centers, in particular, are experimenting with using audio-capable AI chatbots instead of human employees, in part because demand is so high, but also, increasingly, because doing so is cheaper than hiring actual human beings to do the same work.

One such company, LimeChat, recently said that it plans to cut its employee base by 80% in the near-future, and if that experiment is successful, this could ripple through India’s $283 billion IT sector, which accounts for 7.5% of India’s GDP. Hiring growth in this sector already collapsed in 2024 and 2025, and again, while this shift seems to be pretty good for the balance books of the companies doing less hiring and more firing as they deploy more AI systems, it’s very not good for the often younger people who take these jobs, specializing in call center IT work, only to find that the market no longer demands their skill sets.

Along the same lines, but in a perhaps more surprising industry, some convenience stores in Japan are deploying robots to manage their back rooms, where the products that end up available out front are unloaded, tallied, and shelved.

These robots, which are basically just arms on poles, sometimes attached to wheeled bases, for moving around, sometimes not, are operated by AI, but are also continuously monitored by human employees in the Philippines. Each worker, who can be paid a lot less than an entry-level, young Japanese person would expect to be paid, monitors about 50 machines at a time, and steps in, using virtual reality gear to control the robots, if one of them gets stuck or drops something; which apparently happens about 4% of the time.

This is akin to offshoring of the kind we’ve seen since the early 2000s, when the dawn of technological globalization made China the factory of the world and everything shifted from a model of local production and the stockpiling of components, to a last-minute, supply-chain oriented model that allowed companies to move all their manufacturing and some of their services to wherever it could be done the cheapest.

Many people and companies benefitted from this arbitrage to some degree, though many regions have dried up as a result of this shift, because, for instance, former company towns where cars were produced no longer have the resources to keep infrastructure from degrading, and no longer have enough jobs to keep young people from moving away; brain drain can become pretty intense when there’s no economic reason to stay.

This reality is expected to become more widespread, even beyond former manufacturing hubs, because of the deployment of both AI systems, which can be subbed-in for many remote jobs, like call center work, programming, and the like, but also because of increasingly sophisticated and capable robots, which can do more automated work, which in turn allows them to be monitored, sometimes remotely, like those Japanese convenience store robots, for a fraction of the price of hiring a human being.

This shift is expected to be especially harrowing for teens hoping to enter the labor market in entry-level jobs, as responsibilities like shelf-stocking and product scanning and the loading and unloading of materials are increasingly automatable, as robots capable of doing this work are developed and deployed, and perhaps even more importantly, as systems that augment that automatability are developed and deployed.

In practice, that means coming up with shipping processes and other non-tangible systems that lean into the strengths of today’s automated systems, while reducing the impact of their weaknesses.

Amazon is in prime position to do exactly this, as they’ve already done so much to rewire global shipping channels so that they can deliver products as rapidly as possible, to as many places as possible. As a result, they control many of the variables within these channels, which in turn means they can tweak them further, so that they’re optimized to work with Amazon’s specialized automated systems, rather than just human ones.

The company has stated, in internal documents, that it plans to automate 75% of its total operations, and it currently has nearly 1.2 million employees. That’s triple what it employed in 2018, and it’s expected that the automated systems it has already and will soon deploy will allow it to hire 160,000 fewer people than planned by 2027.

Even though the company expects to sell twice as many products by 2033, then, it expects to hire 600,000 fewer people by that same year. And it’s so confident in its ability to make this happen that it’s already making plans to rebuild its image in the aftermath of what’s expected to be a really difficult period of people hating it. It’s planning significant branding efforts, meant to help it seem like a good corporate citizens, including sponsored community events and big donations to children’s programs.

It’s also intending to frame this shift as an evolution in which robots are amplifying the efforts of human employees. Rather than calling their automated systems robots, they might call them ‘cobots,’ for instance.

Amazon has contended that the internal documents in which these plans were outlined, those documents acquired and reported upon by the New York Times, are incomplete and not an accurate representation of what Amazon plans, and they said those branding efforts are not a response to hate related to their automation efforts, they just like spending money on nice things for communities.

The net-impact of existing efforts of this kind, though, is to deplete local job markets where these big companies dominate, and to make the jobs that survive a lot higher-end, requiring more technical sophistication, often, like being able to manage and maintain these sorts of robots, which are skills few people currently have.

Amazon’s backend is already very automated, powered by bots originally developed by robotics maker Kiva, which was purchased by the company for 3/4 of a billion dollars back in 2012. Amazon warehouse workers now work alongside all sorts of robots—though as seems to be the case with employees who survive AI-related firings, those humans who remain are often subjected to strenuous conditions and a lot of pressure to work long hours.

In the company’s Shreveport, Louisiana location, there are more than a thousand robots working around the clock, and that’s allowed Amazon to hire 25% fewer human workers at that facility, while processing 10% more items. The plan is to further refine that model while also spreading it to other Amazon warehouse locations, 40 more of them by 2027, which is part of how they expect to reach that aforementioned 75% employee reduction goal.

Amazon’s obviously at the forefront of this shift because of the nature of their business and business model, but other big employers, such as Walmart, are also pushing in this direction. Walmart officials have said they will have cut costs by more than 30% at facilities where they’ve been experimenting with more automation by the end of 2025, and they’ve already cut those costs by 20% at these facilities, in part because fewer human employees are necessary.

All of which is interesting in part because these are clearly real innovations that are leading to more efficiency and effectiveness at lower costs, and ultimately these may translate into cheaper goods and services for customers if the companies deploying automated technologies decide to pass on those savings.

But simultaneously, this represents a fundamental shift in the job market and overall economy, and if new jobs don’t arrive at the same scale and pace as they’re disappearing, or some other money-distribution solution, like a minimum basic income, doesn’t arrive in time, we could find ourselves in a situation, globally, but especially and most immediately in markets like China, which has far more automation than everyone else right now, and the US—we could have a situation where there’s just a whole lot of stuff being made, but not enough people who can afford it, because they can’t find jobs that will pay them enough to participate in the economy, which in turn could splashback on these automated measures in a negative way, as these companies’ addressable markets shrink.

Show Notes

https://collectivefutures.blog/the-infrastructure-of-meaninglessness/

https://www.cnbc.com/2025/02/20/meta-approves-plan-for-bigger-executives-bonuses-following-5percent-layoffs.html

https://www.nytimes.com/2025/02/27/technology/google-sergey-brin-return-to-office.html

https://www.reuters.com/world/india/meet-ai-chatbots-replacing-indias-call-center-workers-2025-10-15/

https://restofworld.org/2025/philippines-offshoring-automation-tech-jobs/

https://www.theverge.com/report/806728/tech-left-teens-fighting-over-scraps-robots-taking-jobs

https://www.theverge.com/transportation/805471/waymo-robotaxi-winter-snow-weather-testing

https://www.wired.com/story/elon-musk-wants-strong-influence-over-the-robot-army-hes-building/

https://www.supplychaindive.com/news/walmart-automation-supply-chain-cost-savings/747377/

https://www.nytimes.com/2025/04/23/business/china-tariffs-robots-automation.html

We also discuss electrification, LLMs, and data centers.

Recommended Book: The Extinction of Experience by Christine Rosen

Transcript

One of the big claims about artificial intelligence technologies, including but not limited to LLM-based generative AI tech, like ChatGPT, Claude, and Gemini, is that they will serve as universal amplifiers.

Electricity is another universal amplifier, in that electrifying systems allows you to get a lot more from pretty much every single thing you do, while also allowing for the creation of entirely new systems.

Cooking things in the kitchen? Much easier with electricity. Producing things on an assembly line? The introduction of electricity allows you to introduce all sorts of robotics, measuring tools, and safety measures that would not have otherwise been available, and all of these things make the entire process safer, cheaper, and a heck of a lot more effective and efficient.

The prime argument behind many sky-high AI company valuations, then, is that if these things evolve in the way they could evolve, becoming increasingly capable and versatile and cheap, cooking could become even easier, manufacturing could become still faster, cheaper, and safer, and every other aspect of society and the economy would see similar gains.

If you’re the people making AI, if you own these tools, or a share of the income derived from them, that’s a potentially huge pot of money: a big return on your investment. People make fortunes off far more focused, less-impactful companies and technologies all the time, and being able to create the next big thing in not just one space, but every space? Every aspect of everything, potentially? That’s like owning a share of electricity, and making money every time anyone uses electricity for anything.

Through that lens, the big boom in both use of and investment in AI technologies maybe shouldn’t be so surprising. This represents a potentially generational sea-change in how everything works, what the economy looks like, maybe even how governments are run, militaries fight, and so on. If you can throw money into the mix, why wouldn’t you? And if that’s the case, the billions upon billions of dollars sloshing around in this corner of the tech world make a lot of sense; it may be curious that there’s not even more money being invested.

Belief in that promise is not universal, however.

A lot of people see these technologies not as the next electricity, but maybe the next smartphone, or perhaps the next SUV.

Smartphones changed a whole lot about society too, but they’re hardly the same groundbreaking, omni-powerful upgrade that electricity represents.

SUVs, too, flogged sales for flailing car companies, boosting their revenues at a moment in which they desperately needed to sell more vehicles to survive. But they were just another, more popular model of what already came before. There’s a chance AI will be similar to that: better software than came before, for some people’s use-cases—but not revolutionary, not groundbreaking even on the scale of pocketable phone-computers.

What I’d like to talk about today are the peculiar economics that seem to be playing a role in the AI boom, and why many analysts and financial experts are eyeballing these economics warily, worrying about what they maybe represent, and possibly portend.

—

The term ‘exuberance,’ in the context of markets, refers to an excitement among investors—sometimes professional investors, sometimes casual investors, sometimes both—about a particular company, technology, or financial product type.

The surge in interest and investment in cryptoassets during the height of the COVID-19 pandemic, for instance, including offshoot products like NFTs, was seemingly caused by a period of exuberance, sparked by the novelty of the product, the riches a few lucky insiders made off these products, and the desire by many people—pros and consumer-grade investors—to get in on that action, at a moment in which there wasn’t as much to do in the world as usual.

Likewise, the gobs of money plowed into early internet companies, and the money thrown at companies laying fiberoptic cable for the presumed boom in internet customers, were, in retrospect, at least partly the consequence of irrational exuberance.

In some cases these investors were just too early, as was the case with those cable-laying companies—the majority of them going out of business after blowing through a spectacular amount of money in a short period of time, and not finding enough paying customers to fund all that expansion—in others it was the result of sky-high valuations that were based on little beyond the exuberance of investors who probably should have known better, but who couldn’t get past their fear of missing out on the next big thing.

In that latter case, that flow of money into early dotcom startups did fund a few winners that survived the eventual bursting of that bubble, but the majority of companies tagged with those massive valuations went out of business in part because their valuations were based in part on optimism, hot air, and illusory financials.

Which is to say, their financials were based on a lot of money being added to their account sheets and tallied in the places investors would see those numbers, but the numbers didn’t mean what most people thought they meant.

A company could receive tens of millions of dollars in orders, for instance, but that money and those orders might never be received and fulfilled, or that money might be mostly illusory: maybe it was borrowed from another company to spend on advertising, and that money would then go right back out the door, to the company from which it was borrowed, to pay for their ad services.

That kind of arrangement could be beneficial, as the company doing the borrowing might give up a relatively small number of shares in exchange for money, which looks good on its balance sheet, especially if the money is given at a high valuation, even if that money was mostly just a loan from a company providing ad services, with the full knowledge that money would then be spent on their own ad services. And the ad company giving the money could usually afford to buy in at a high valuation, because it knows it will get that money right back, and when it does, it will get to record that money as income on its own balance sheets.

So Company A gets millions of dollars from Company B, that money is then paid to Company B for some type of service, and both companies get to record favorable figures on their accounting sheets, as if real sales took place and real outside money changed hands, despite it being a circular move, with very little or no actual value being created.

These sorts of relationships are also often good for investors in companies that do this sort of thing, because it makes their investments, the companies they’ve bought into, look even more valuable.

Check it out, Company A, which I own shares in, is worth more than it was last month because of all the business it’s conducting, and because this other company bought into it at a higher price per share than I paid! Even though that increase in valuation is predicated on circular financing, the numbers still go up, and they go up for everyone involved, so there’s little reason to crack down on this not illegal, but shady behavior, and even less reason to want anyone else to know about it, because then they might not add their own money to the circular money-cycling, number-increasing machine.

The major concern amongst some analysts right now is that the AI boom, especially in the United States, might be essentially this kind of circular cycle, but much larger than previous versions of the same.

In the US right now, investment in AI infrastructure like data centers accounts for a huge portion of overall growth—the numbers vary, depending on who you ask and what numbers they look at, but some say that about 90% of total US economic growth, and around 80% of US stock market growth, are predicated on these sorts of investments this past year. Without these investments, the US economy would be basically flat, or worse, and the US stock market would be flailing as well.

This situation isn’t ideal whatever the specifics, as too much reliance on just one industry, or one small collection of industries dominated by just a handful of companies and their investors, makes for a precarious financial foundation.

If anything goes wrong with just one company, the whole house of cards could collapse. And if anything goes wrong with the industry, things could get even worse, and fast. All that investment, all that construction, all those employees and all that money sloshing around could disappear, could stop being spent, could make all those numbers fall and fall and fall more or less overnight.

If this industry is in fact in a bubble, and if it’s being propped up by this kind of circular financing, where companies are fluffing up their own and each other’s accounting books by rotating the same bundle of money and on-paper money from company to company to company, that would portend pretty bad things for the US economy and market, if anyone involved stumbles, even just a little.

This is why recent deals between the biggest players in this space are raising so many eyebrows, and causing so much sweat to bead on so many foreheads.

In September of 2025, ChatGPT-maker OpenAI announced it had formalized a $100 billion investment deal with AI chipmaker Nvidia, the latter expanding on its existing investment in the former. In October, OpenAI announced it was purchasing billions of dollars worth of AI hardware from Nvidia-rival AMD, and that it’s taking a 10% stake in the company.

Microsoft is already heavily invested in OpenAI, to the tune of $13 billion; it takes 49% of OpenAI’s profits, and gets more than that until its original investment is paid back. Microsoft also accounted for nearly 20% of Nvidia’s annualized revenue, as of the fourth quarter of 2025.

Oracle, another computing company which has become hugely influential in this space due to its investment in cloud-based AI datacenters, has a $300 billion deal with OpenAI for future infrastructure buildouts and access, and OpenAI’s Stargate datacenter project was co-funded by Oracle and SoftBank. Nvidia also owns part of CoreWeave, which is an AI infrastructure supplier for OpenAI, and which has Microsoft as a massively important customer.

All of which is very…tangly. It’s an interconnected mess, and OpenAI and Nvidia are at the center of it, but there are a lot of weak spots, threads that, if pulled, would cause the whole thing to unravel. Which is why this feels like such a dangerous setup to many analysts right now.

Consider that in 2025 alone, OpenAI has made around $1 trillion-worth of AI deals. A lot of these deals are plans to invest: commitments to buy data center construction or the use of data center bandwidth, or they’re financial ties with competitors, clients, and providers—companies that would otherwise be competing with, selling to, and buying from each other, rather than linking arms and creating financial and infrastructural interdependencies.

Many of these deals are predicated on debt and what are generally considered to be over-inflated IPO valuations, too: money that isn’t money in the traditional, accounting-book sense, in other words. Numbers that make activity, use, and income for these companies look a lot bigger than they concretely are, on balance sheets, which in turn helps their investment numbers go up up up.

This dynamic has become overt enough that many of the biggest investors in AI companies, and the heads of said companies, like Sam Altman of OpenAI, have said, outright, that it’s probably a bubble, and that a lot of companies will probably go under in the relatively near future. No one knows when, but it’s a good thing, they’re fond of saying, because that shakeout will kill off the deadweight, allow the survivors to scoop up their former competitors’ assets at fire sale prices, and the whole industry will be further centralized around just a handful of the best and the most impactful, just like in the post-dotcom years. Monopolies and mini-monopolies, which, for the people creating and profiting from those monopolies, at least, seems like a good thing.

That optimism glosses over what those in-between years look like, though, especially for smaller investors, employees who are laid off, en masse, and the folks who aren’t profiting directly from the surviving business entities, and who see their stock portfolios collapse and overall growth in their country decrease.

Most of the stories in the tech world right now in some way tie back to the promise and concerns surrounding AI. It’s become such a big story because there’s a chance it will be the next electricity, but there’s also a chance the warning signs we’re seeing are real, and things will get a lot worse before they maybe, possibly, for some people, at some point, get better.

Show Notes

https://finance.yahoo.com/news/a-20-billion-clock-is-ticking-for-openai-as-microsoft-talks-turn-fractious-130006071.html

https://www.sfgate.com/tech/article/circular-deals-bay-area-tech-21089538.php

https://www.theguardian.com/business/2025/oct/08/openai-multibillion-dollar-deals-exuberance-circular-nvidia-amd

https://www.ft.com/content/950e3a36-7141-4426-b7c5-08fad5d83919

https://finance.yahoo.com/news/very-troubling-ais-self-investment-spree-sets-off-bubble-alarms-on-wall-street-160524518.html

https://www.cnbc.com/2025/10/15/a-guide-to-1-trillion-worth-of-ai-deals-between-openai-nvidia.html

https://insights.som.yale.edu/insights/this-is-how-the-ai-bubble-bursts

https://www.bbc.com/news/articles/cz69qy760weo

https://www.nbcnews.com/business/economy/openai-nvidia-amd-deals-risks-rcna234806

https://www.bloomberg.com/news/articles/2025-10-08/the-circular-openai-nvidia-and-amd-deals-raising-fears-of-a-new-tech-bubble

https://flowingdata.com/2025/10/13/circular-deals-among-ai-companies/

https://www.nytimes.com/2025/10/07/business/dealbook/openai-nvidia-amd-investments-circular.html

https://sherwood.news/markets/analyst-a-lot-more-disclosure-needed-on-these-circular-ai-deals/

https://www.barrons.com/articles/nvidia-microsoft-openai-circular-financing-ai-bubble-5d9a4e7c

https://www.investopedia.com/wall-street-analysts-ai-bubble-stock-market-11826943

https://www.goldmansachs.com/insights/articles/ai-may-start-to-boost-us-gdp-in-2027

https://finance.yahoo.com/news/most-us-growth-now-rides-213011552.html

We also discuss negotiation, protectionism, and threat spirals.

Recommended Book: More Than Words by John Warner

Transcript

In January of 2018, then first-term US President Trump announced a slew of tariffs and trade barriers against several countries, including Canada, Mexico, and those in the European Union.

The most significant of these new barriers and tariffs were enacted against China, though, as Trump had long claimed that China, the US’s most important trade partner by many measures, was taking advantage of the US market; a claim that economists tepidly backed, as while some of the specifics, like those related to intellectual property theft on the part of China, were pretty overt, the Chinese government fairly brazenly gobbling up IP and technology from US companies that do business in the country before hobbling those US interests in China and handing that IP and technology off to their own, China-born copies, claims about a trade deficit were less clear-cut—most of those sorts of claims seemed to be the result of a misunderstanding about how international trade works.

That said, Trump had made a protectionist stance part of his platform, so he kicked off his administration by imposing a package of targeted tariffs against specific product categories from China, including things like solar panels and washing machines. Those were followed by more tariffs on steel and aluminum—from a lot of countries, not just China—and this implementation of trade barriers between the US and long-time trade partners, which had mostly enjoyed barrier-free trade up till that point, kicked off a trade war, with the Trump administration announcing, out of nowhere, new tariffs or limitations, and the country on the pointy end of that new declaration announcing their own counter, usually something the US sells to their country, while in the background, both countries tried to negotiate new trade terms on the down-low.

There was a lot of tit-for-tatting in those first couple years of the first Trump administration, and they led to a lot of negotiations between the US government and these foreign governments, which in turn led to the lifting of many such barriers, though the weaponization of barriers continued, with the administration, for instance, announcing a tariff on all imports from Mexico until the Mexican government was able to halt all illegal immigration coming into the US; negotiation ended that threat, too, but this early salvo upset a lot of the US’s long-time allies, while also making it clear that Trump intended to open negotiations with these sorts of threats, whenever possible—which had the knock-on effect of everyone taking the threats pretty seriously, as they were often incredibly dangerous to specific industries, while also taking them less seriously because it was obvious they were intended to be a negotiating tactic.

When Trump left office, a bunch of international relationships had been scarred by this approach to trade deals, and when Biden replaced him, he dropped most of the new tariffs against long-time allies, but kept most of the China tariffs in place, especially those related to green technologies like electric vehicles and semiconductors, the local-made versions of which were becoming a big focus for the Biden administration. The administration then went on to expand upon those tariffs, against China, in some cases.

What I’d like to talk about today is how this approach to trade protectionism and negotiation has ballooned under the second Trump administration, and what a new threat against China by Trump might mean for how the relationship between these two countries evolves, moving forward.

—

Trump’s second administration opened with an executive order that declared a national emergency, claiming that the Chinese were trafficking drugs, especially synthetic opioids like fentanyl, into the US, and that this allowed criminals to profit from destroying the lives of US citizens.

This declaration allowed him to unleash a flurry of tariffs against China, first imposing 10% on all Chinese imports, then increasing that to 20% in March of 2025.

China retaliated, imposing tariffs of 15% on mostly US energy products, like coal and natural gas, and on some types of agricultural machines, while also engaging in some legal pressure against US companies, like Google. They followed this up with tariffs against meat and dairy products, and suspended US lumber import rights, and disallowed three US firms from selling soybeans to China.

The US reciprocated, and China reciprocated back. There was a period of spiraling broad tariffs and import bans in the mid-2025 between the US and China, which led to an aggregate baseline tariff on Chinese imports of 104%, which was followed with an aggregate Chinese baseline tariff against US goods of 84%. The US then upped theirs to 145%, and China raised theirs to 125%.

Again, vital to understanding this spiral is that the Trump administration made pretty clear that they were doing this mostly as a negotiating tactic. There were claims that they could solve the US deficit by raising tariffs so high that the funds from those tariffs would pay off the country’s debt, but that’s generally not considered to be realistic. Instead, the consensus view is that Trump likes to play negotiating hardball, likes to step into negotiations with the upper-hand, being able to say, give me what I want and I’ll reduce the pain you’re experiencing, basically, and this play against China was another attempt to make that kind of advantage stick.

China, for its part, seemed like it was done with the posturing at that point, though: it announced, after its retaliatory tariffs reached 125%, that it would simply ignore all further increases on the US government’s side, because the whole thing is just kind of a joke and it’s beneath them to keep playing this game.

Not long after that, Trump announced that the tariffs against China would come down substantially, but not to zero; Trump said this was decided after discussions with China, and Chinese officials said they hadn’t been in contact with the Trump administration about any of this—which is something that seems to happen quite a bit with the Trump administration.

During this period of spiraling trade barriers, China was able to establish better and more open trade agreements with other nations in Southeast Asia, including South Korea and Japan. China also reduced it US Treasury holdings, reducing its exposure to the US economy at a moment in which the US government was betting big on policy that many economists considered to be ham-handed at best, completely nonsensical, delusional, and harmful at worst.

During that spiral, before things cooled off, China also began applying protections on locally sourced and refined rare earths, which are a category of mineral that are vital for modern electronics and things like solar panels, batteries, semiconductors, and electric vehicles.

China makes and owns the rights to the vast majority of the current global supply of these materials, mining about 70% of them and controlling about 90% of global processing. And cutting them off, or even truncating their flow, is considered to be a huge strategic threat. The US has been slowly investing in alternative supplies for such things, but many of them are difficult or expensive to produce in the proper volume, and it’ll likely be a decade or more before those alternative sources can be properly exploited, replacing the volume currently imported from China.

Back in June, China granted permits to US businesses that would be allowed to import rare earths, but that supply remained tenuous—a bit of a counter to Trump’s ongoing tariff threats that could seemingly arise out of nowhere, messing up everyone’s plans. The Chinese seemed to want to leverage this supply in the same way, and keeping things limited while issuing a few permits meant the flow could kind of continue, but could also be slowed or cut off, again, at a moment’s notice.

In early October, the Chinese government announced new curbs on the export of rare earths and related technologies, just three weeks before a scheduled meeting between Trump and Chinese leader Xi Jinping. These new curbs further limited what could be imported to the US, even if there were intermediary nations involved, and also tightened their grip on anything related to mining, smelting, recycling, and producing products, like powerful magnets, from such materials.

It’s worth mentioning here, too, that these sorts of materials are increasingly vital for the production of high-tech military goods. If the US were to lose access to sufficient volumes of them, the US military would have a very hard time making missiles, replacing satellite components, building tanks and drones—it would give China a significant advantage, probably for years, in terms of upgrading and maintaining their military hardware.

Despite that, and despite the US government’s claims that it intended to replace Chinese sources of these materials, theoretically limiting Chinese leverage in these upcoming talks, progress in that department has been minimal, so far; about a billion dollars worth of investment in rare earths supply chains were announced over the past year or so, but further investment is considered to be unlikely in the near-future, and it’ll be a while before these investments will pay off, if they ever do.

Shortly after that announcement by the Chinese, President Trump threatened to enforce a new 100% tariff on Chinese imports, beginning on November 1, or potentially even sooner, raising tariff levels to just shy of what they were back in April of 2025, at the peak of the US-China trade protectionism threat-spiral.

He also said he didn’t see any reason to meet with Xi if they were going to limit rare earths in this way, but later clarified that the meeting hadn’t been cancelled, and said that he set the implementation date for that new threatened tariff rate to Nov 1 because that would give the Chinese the opportunity to back down on their new trade barriers before they chatted.

Global markets, which are sometimes a good barometer for how informed folks think these sorts of negotiations will play out, have been relatively calm about all this, though there have been some significant tumbles in the US market, including a recent drop of about 2.7% for the S&P 500, marking the worst day for the US market since April, back when the tariff threats last reached this kind of peak.

One stance that’s become popular in trading circles over the past year is the so-called TACO theory, which stands for Trump Always Chickens Out; the idea being that Trump is never really serious about any of these threats, he just likes to talk a big game and then hopes the other side will feel threatened enough to give him what he wants during negotiations—but if they don’t, he steps back from all his big talk and quietly gives in to the other side, especially if they have leverage.

Some analysts are assuming that’s what’s happening now, as evidenced by Trump’s own statements about giving China the chance to deescalate—giving them specific instructions for how to let things calm down, rather than making these threats and suggesting they’re permanent, or not giving the other side any rationale for why it’s happening.

There’s a chance, though, that there’s some truth to the opposing theory that this is part of a larger plan by the Trump administration to create a new trade war that’s meant to dominate headlines and concerns for a while, maybe as far into the future as next year’s elections, all of which is meant to conceal other efforts by the administration, like the military occupancy of American cities and the administration’s vehement objection to releasing the so-called Epstein files, which allegedly contain many references to Trump and other powerful people within his administration, which in turn would further connect him to a renowned pedophile.

The Republican-controlled congress has made a massive effort to keep those files from being released, and Trump has become well-known for saying and doing headline-grabbing things whenever something inconvenient for him starts bubbling up in the news.

So while there’s a chance this back-and-forth will end just before those upcoming trade talks, both sides taking their fingers off the trigger, as it were, in order to make a deal, there’s also a chance elements of this will be spun into a larger narrative, a war of sorts meant to dominate headlines and conceal other things that the administration would prefer to keep off the front page.

Show Notes

https://apnews.com/article/rare-earths-china-united-states-trade-supply-chain-de92222cda02dc85064c697911c6dea7

https://apnews.com/article/tariffs-timeline-trade-war-trump-canada-mexico-china-a9d714eea677488ef9397547d838dbd0

https://www.scmp.com/economy/china-economy/article/3318694/china-cuts-us-treasury-holdings-third-month-amid-trade-war-debt-ceiling-fears

https://apnews.com/article/china-us-trump-tariff-threat-trade-talks-cc4bd30c3b1bcf2eb2676bc0e66efba0

https://apnews.com/article/trump-inflation-federal-reserve-powell-88358f4955fd86ef3c86f5e8e089e775

https://apnews.com/article/trump-xi-tariffs-china-ai-642b042b1ebe1d1930eb93bf51943e3f

https://apnews.com/article/trump-xi-china-cc47e258cfc6336dfddcc20fa67a3642

https://apnews.com/article/china-earths-exports-trump-dad99d532f858f04d750d0b8c50e5ed6

https://time.com/7292207/us-china-trade-war-trump-tariffs-timeline/

https://en.wikipedia.org/wiki/China%E2%80%93United_States_trade_war

https://en.wikipedia.org/wiki/Tariffs_in_the_first_Trump_administration

https://www.piie.com/research/piie-charts/2019/us-china-trade-war-tariffs-date-chart

https://www.wsj.com/economy/trade/trumps-fresh-tariff-assault-threatens-chinas-fragile-economy-d0b3a00d

https://www.bbc.com/news/articles/cn828kg8rmzo

We also discuss Jared Kushner, leveraged buyouts, and loot boxes.

Recommended Book: Bandwidth by Dan Caruso

Transcript

Electronic Arts, often shorthanded as EA, was founded in 1982 in California by a former Apple employee named Trip Hawkins, who also went on to found the ill-fated 3DO company, which made video game hardware, and the somewhat more prolific, but also ultimately ill-fated casual game developer Digital Chocolate.

EA, though, has been an absolutely astounding success. It’s business model was predicated on the premise of selling video games directly to retailers, rather than going through intermediaries. This allowed them to gain more market share than their competitors right off the bat, and it helped them glean higher margins than their competitors from each direct sale, too.

EA also established an early reputation for treating its developers really well. They were the first gaming company to feature their developers in advertising and to give them platforms, promoting them as video game artists, basically, and it shared the profits netted from those direct sales with these develops—which in turn meant all the best developers really wanted to work for EA, which led to a beneficial cycle where they created better and better, and more and more financially successful games.

In the late-80s, they started deviating from this model somewhat, scooping up a collection of successful independent game development studios and deviating, at times, from the creative lead’s vision when releasing their games. They also refocused a fair bit of their resources on franchises, like the immensely successful, as it turned out, Madden NFL series, and they branched out into producing games for the console market, including the still-new Nintendo Entertainment System, in 1990.

That same year, EA went public on the NASDAQ, the company got new leadership when Hawkins decided to refocus on his far less successful 3DO hardware startup, and in an interesting twist, the arrival of the Sony Playstation in North America caused EA to drop support for 3DO hardware in the mid-90s so it could refocus on Playstation games, which were a lot more lucrative.

By the mid-90s, EA had an astonishingly large and successful software library, including franchises like the aforementioned Madden games and the FIFA soccer games, but also celebrity-tied games like Shaq Fu, and military shooters like Jungle and Urban Strike.

By the early-2000s, EA was making exclusive licensing deals with the NFL and ESPN, in order to stave off newfound sports game competitors, and it was the only video game company to consistently make a profit, most others experiencing feast and famine cycles, with periodic wins, but a whole lot of losses they had to cover with the profits from those wins. EA, in contrast, had a reliable stable of profit-sources, and it thus had a whole lot of leverage in terms of attracting and retaining talent, but also getting big names and brands on board, for collaborative projects.

What I’d like to talk about today is what happened to EA during and following the 2008 economic crisis, and how and why it recently became an acquisition target for Saudi Arabia.

—

In 2008, when the global economy was collapsing, EA suffered a bad holiday sales season and fired 1,100 employees and closed 12 of their facilities early the following year. Later in 2009, the company announced the firing of another 1,500 employees, which was about 17% of their total workforce at the time, and in 2010 they acquired a gaming company that focused on mobile games, which were becoming increasingly popular, now that many people had touch-capable smartphones, which brought hot new franchises like Angry Birds under their brand umbrella.

On the strength of that acquisition and all those downsizings, in early 2011, EA announced that it hit $3.8 billion in revenue in the financial year for the first time, and in early 2012, it announced it surpassed $1 billion in digital revenue during the previous year, which was a huge figure that early in the digital media landscape. It used some of those profits to scoop up another mobile-first gaming company, adding properties like Plants vs Zombies and Peggle to their library.

EA completed another mass-firing in 2013, dismissing 10% of their employees under what they called a reorganization, around the same time they announced an exclusive license with Disney that would allow them to develop Star Wars games.

Their stock value boomed in the following years, as a result of those cost-savings measures, and those new relationships, and emboldened by record-high stock valuations, in the mid-20-teens, the company started releasing big-name games, like Star Wars Battlefront 2, with random-content loot boxes and other sorts of microtransactions.

This did not go over well with players, who decried these in-game purchasing options as ‘pay to win’ mechanics, as players could pay more money to get better characters and equipment, and a lot of the content, even after paying for the expensive games, was still locked behind paywalls, requiring more payments to unlock that content. A bunch of gaming journalists cried foul on this shift as the game careened toward its full release, as did a whole lot of early players, and Disney complained, too, so by the time it hit shelves, the game’s loot system was substantially changed, but that whole controversy spooked investors, and led to an 8.5% stock value drop in just a single month, knocking $3.1 billion from the company’s valuation. As a result of that controversy, EA also became the face for a larger legal and legislative debate about in-game purchases and how it’s kinda sorta like gambling, from that point forward.

Soon after, EA experienced a series of bad quarters, including a huge drop of 13.3% to its valuation when a major entry in one of their larger franchises, Battlefield V, was released late, and received very mixed reviews when it was released, which led to a million fewer sold copies than anticipated. The game was also lagging in terms of gameplay behind smaller, nimbler competitors, including then-burgeoning Fortnite.

The company saw an overall boost with the surprise success of Apex Legends, and the COVID-19 pandemic boosted sales dramatically for a while, since everyone was staying home, which allowed EA to gobble up a few more competing companies with successful franchises, and they knocked out a few more successful Star Wars games, as well.

In early 2021, Saudi Arabia’s public investment funds bought 7.4 million shares of EA for about $1.1 billion, which flew under the radar for most gamers, but that’ll be important in a moment.

Later that year, the company experienced a massive hack, a lot of its data, including the source code for games, stolen and sold on the dark web. EA bought some more competitors, but word on the street in 2022 was the the higher ups at EA were quietly shopping the company around, themselves looking to be acquired by a larger entity, on the scale of Apple or Disney.

In early 2023, the company announced more mass-layoffs and launched another internal reorganization. It gutted several of its most popular gaming sub-brands, including BioWare, it cancelled an upcoming Star Wars game, and it announced that it would be shifting away from licensing agreements and refocusing on EA-owned IP.

The pattern of layoffs leading to better financial fortunes didn’t pay off this time, though. In early 2025, EA divulged that it expected to underperform in the coming year, several of its big-name titles not doing as well as expected; the company cast blame on the market, but players and journalists pointed at the company’s gutting of its big-name studios, and the firing of many of its veteran developers to explain the reduced sales.

EA had another mass-firing in April of this year, and followed by another in May, which paralleled an announcement that they would no longer be moving forward with a big, planned Black Panther game.

In late September of 2025, EA announced that it had reached a deal, worth $55 billion, to go private, no longer selling shares on the stock market, with the financial assistance of a group of investors, which included Affinity Partners, which is led by Jared Kushner, US President Trump’s son-in-law, Silver Lake, which is a US-based private equity firm that helps make these sorts of big sales happen, and the aforementioned Saudi Arabian Public Investment Fund.

This deal isn’t done yet, it still needs to get regulatory approval and a successful vote by stockholders, but it seems likely to go through, since the US regulatory environment is pretty lax at the moment, and because Kushner is involved, it’s unlikely President Trump will take a personal disliking to it.

But the big story here seems to be that Saudi Arabia is buying up not just a video game company, but one of the biggest and most successful video gaming companies in the world, which, although it’s lost a lot of fan-credibility over the years, still owns some massively influential intellectual property and has just a stunning number of relationships and connections throughout the media world, alongside its huge valuation.

If the sale does go through, and we should know for sure by sometime around June 2026, it would be the largest-ever leveraged buyout, which means the purchase was completed by using borrowed money that was borrowed against the asset being purchased; so those investors have taken out debt against EA itself, which is an increasingly common means of buying a large asset on the cheap, but it also typically burdens that asset with a simply astounding amount of debt which must then be recouped, often by selling off undervalued assets.

When this happens to a newspaper, for instance, the buyer will often sell off the paper’s real estate and fire all their employees, to make money and pay off that debt, and in this case, there’s a chance that debt will be paid by throwing up a bunch of new paywalls and really leaning into those in-game transactions that nobody really liked, including politicians, back in the day, but which in this current regulatory environment would probably be allowed, and they would probably make some serious bank off of it initially, before players started getting wise and moving on to other games released by less predatory companies.

The really interesting facet of this story, though, is the question of why Saudi Arabia wants a video game company.

And to understand that, it’s important to understand that, first, the country’s Public Investment Fund is meant to help its economy shift away from purely extractive resources, like oil, and it has thus invested in all sorts of things, including luxury beach resorts, minority stakes in financial service companies like Citigroup, stakes in companies like Disney and Boeing and Meta, and increasingly, investments in companies run by allies of President Trump, like the aforementioned Affinity Partners, which was formed by Jared Kushner.

So this is an economic play, but also a political play, almost certainly, by the Saudis, to get in good with the people who are in good with the US government.

It’s also been alleged that this might be an attempt by the Saudis to engage in what’s being called game-washing, which is similar to greenwashing, but instead of trying to make a company seem green and sustainable by doing kinda sorta green things, but only as a veneer to cover up the opposite, in this case it means using sports and video games and the like to increase a nation’s reputation with humanistic seeming things, despite, well, the truth being much more complicated.

Just as when the Fund participated in buying a Premier League football, a soccer team, back in 2021, then, alongside their concomitant establishment of LIV Gold, a golf league meant to compete with the PGA, this investment in EA, and other investments it’s made in video game companies like Capcom and Nexon, might be part of a larger effort to diversify the nation’s brand, not just its economics. It’s human rights record is abysmal, and it’s possible they’re trying to cover that up, make people forget about it, by creating more connections between Saudi Arabia and more positive things, like sports and games and the like.

There are additional concerns about this purchase of EA, too, by the way, because Saudi Arabia’s cultural values are very anti-woman, anti-LGBTQ, and anti-liberal, democratic values. So there are fears that we might see less representation and fewer what we might call western values portrayed in the games released by these studios, as a result of this ownership.

The folks running EA have said their core values will remain unchanged by the buyout, but it’s expected, bare-minimum, that this will lead to another several restructurings and mass-layoffs throughout the company in the coming years, to help recoup all that debt, at the end of which even the people making those promises might be long gone.

Show Notes

https://en.wikipedia.org/wiki/Public_Investment_Fund

https://www.nytimes.com/2025/09/29/business/dealbook/electronic-arts-buyout-jared-kushner.html

https://www.wsj.com/business/deals/ea-private-deal-buyout-video-game-maker-808aefec

https://www.ft.com/content/61cef75e-ceba-43ee-80e3-040756c6154f?accessToken=zwAGQAMTiJKIkc9hzvdezrpD7tOA4wQHVsYVTw.MEUCIHND3WOT4rS4frIMIOoeXHQeil_Ma1yGrwOqUD2m306DAiEAtA_QLvpyObai9zoo_9GZSljJuJyTKxJgFHpQDcCcVsE&sharetype=gift&token=03dd6ca5-c34f-4925-8a3d-a89f4058ee80

https://www.wsj.com/business/deals/ea-silver-lake-deal-jared-kushner-c145cd55?st=eZghQH

https://en.wikipedia.org/wiki/Electronic_Arts

We also discuss Moldova, super powers, and new fronts.

Recommended Book: More Everything Forever by Adam Becker

Transcript

The North Atlantic Treaty Organization, or NATO, was originally formed in 1949 in the wake of World War 2 and at the beginning of the Cold War.

At that moment, the world was beginning to orient toward what we might think of as the modern global order, which at the time was predicated on having two superpowers—the US and the Soviet Union—and the world being carved up into their respective spheres of influence.

NATO was formed as the military component of that protection effort, as the Soviets (and other powers who had occupied that land in the past) had a history of turning their neighbors into client states, because their territory provides little in the way of natural borders. Their inclination, then, was to either invade or overthrow neighboring governments so they could function as buffers between the Soviet Union and its potential enemies.

The theory behind NATO is collective security: if anyone attacks one of the member nations, the others will come to their aid. Article 5 of the NATO treaty says that an attack against one member is considered an attack against all members, and while this theoretically would be applied against any would-be attacker, it was 100% created so that the Soviets and their Warsaw Pact allies knew that if they attacked, for instance, Norway, the other NATO nations—including, importantly, the United States, which again, was one of just two superpowers in the world at that point, all the other powers, like the UK and France having been devastated by WWII—would join in their defense.

NATO, today, is quite a bit bigger than it was originally: it started out with just 12 countries in Europe and North America, and as of 2025, there are 32, alongside a handful of nations that are hoping to join, and are at various points along the way to possibly someday becoming member states.

What I’d like to talk about today are recent provocations by the Soviet Union’s successor state, Russia, against NATO, and what these provocations might portend for the future of the region.

—

In early 2014, Russia invaded—in a somewhat deniable way, initially funding local rabble-rousers and using unmarked soldiers and weapons—the eastern portion of Ukraine, and then annexed an important Black Sea region called Crimea. Then in early 2022, Russia launched a full-scale invasion of Ukraine, massing hundreds of thousands of military assets on their shared border before plunging toward Ukraine’s capitol and other vital strategic areas.

Against the odds, as Ukraine is small and poor compared to Russia, and has a far smaller military, as well, Ukrainians managed to hold off the Russian assault, and today, about 3.5 years later, Ukraine continues to hold Russia off, though Russian forces have been making incremental gains in the eastern portion of the country over the past year, and Russian President Putin seems convinced he can hold the Donbas region, in particular, even if peace is eventually declared.

At the moment, though, peace seems unlikely, as Russian forces continue to grind against increasingly sophisticated and automated Ukrainian defenses, the invading force, in turn, bolstered by North Korean ammunition and troops. Ukraine’s exhausted soldiery is periodically and irregularly bulwarked by resources from regional and far-flung allies, helping them stay in the game, and they’re fleshing out their locally grown defense industry, which has specialized in asymmetric weaponry like drones and rockets, but Russia still has the advantage by pretty much any metric we might use to gauge such things.

Over the past three weeks, concerns that this conflict might spill over into the rest of Europe have been heightened by Russian provocations along the eastern edge of the NATO alliance.

Russia flew drones into Poland and Romania, fighter jets into Estonia, and aggressively flew fighters over a Germany Navy frigate in the Baltic Sea. Article 4 of the NATO treaty was invoked, which is the lead-up invocation to an eventual invocation of Article 5, which would be a full-fledged defense, by the bloc, against someone who attacked a NATO member.

And that’s on top of Russia’s persistent and ongoing efforts to influence politics in Moldova, which held an election over the weekend that could serve as a foot in the door for Russian influence campaigns and Russia-stoked coups within the EU, or could become one more hardened border against such aggressions, depending on how the election pans out. The final results aren’t in as of the day I’m recording this episode, but there are fears that if the pro-Russian parties win, they’ll turn the country—which is located on Ukraine’s borders, opposite Russia—into another Russian puppet state, similar to Belarus, but if the pro-Russian parties don’t do well, they’ll try to launch a coup, because Russian disinformation in the country has been so thorough, and has indicated, in essence, if they lose, the process was rigged.

All of which is occurring at a moment in which NATO’s most powerful and spendy member, by far, the US, is near-universally pulling out of international activities, the second Trump administration proving even more antagonistic toward allies than the first one, and even more overt in its disdain for alliances like NATO, as well. It’s probably worth noting here, too, that part of why things are so hectic in Moldova is that the US government has stopped pressuring social networks to tamp down on overt misinformation and propaganda from Russia-aligned groups, and that’s led to significant fog of war for this most recent election.

Considering the US’s recent unreliability, and in some cases complete absence regarding NATO and similar alliances and pacts, it’s perhaps prudent that NATO member states have recently agreed to up their individual spending on defense, all of these states meeting or exceeding their pre-2025-summit goal of 2% of GDP, that target increasing to 5% by 2035.

This is notable in part because it’s something Trump demanded, and that demand seems to have worked and probably been a good idea, but this is also notable because of what it represents: a cessation of leadership by the US in this alliance.

The US has long been the big stick wielded by its European allies, and this administration basically said, hey, you need to make your own big sticks, you may not have access to our weapons and support anymore. And while it will still take a while to both get their funding up to snuff and to spend those funds appropriately, outfitting their defenses and shoring up their numbers, this would seem to be a step in that direction—though there’s simmering concern that it might be too little, too late.

That concern is mostly held by Russia-watchers who have noted a big pivot by Russia’s leadership, and in the Russian economy.

Over the past 3.5 years since it invaded Ukraine, that invasion taking a lot longer than they thought it would, Russia has shifted into a total war stance, its entire economy becoming reliant on its continued invasion of Ukraine.

Should that invasion end or ebb, or should it continue to fail to give the Russian government enough successes, so it can brag about how well it’s doing to its citizenry and oligarchs, it would probably need another target—another front in the war that it can open to justify the continued churning-out of weapons and soldiers, and the continued spending of a huge chunk of its GDP toward the military. Lacking that churn, it’s economy would be in even worse straits than it’s in, today, and lacking that cause, it’s possible support for the government could collapse.

It’s also been posited that it could be a disaster Putin’s regime if too many Russian veterans, wounded and traumatized from their time on the front lines in Ukraine, were to arrive back in Russia all at once. That’s the sort of situation that could lead to an uprising against the government, or bare minimum a lot of turmoil that they don’t want to deal with. Having another front, another battle to send them to, would solve that problem; it would be an excuse to keep them fighting external enemies, rather than looking for internal ones.

Russia’s Foreign Minister, Sergey Lavrov, recently said that NATO and the EU have declared a “real war” against Russia by participating in the conflict; by providing arms and financial support for Ukraine.

This is, of course, a silly thing to say, though it is the kind of statement an aggressor makes when they want to make themselves sound like the victim, and want to justify moving on to victimize someone else. You attacked us for no reason! We are thus completely within our rights to defend ourselves by attacking you; we are in the right here, you’re the bad guys.

This could be just saber-rattling, and it usually is. Lavrov says things like this all the time, and it’s almost always state-sanctioned bluster. The drone and jet flyovers, likewise, could be meant to send a signal to the EU and NATO: back off, this is not your fight, but if you continue supporting Ukraine, we’ll make it your fight, and we think we can beat you.

It’s also possible, though, that these actions are meant to test NATO defenses at a moment in which the US is largely absent from the region, China and Russia have never been tighter, including in supporting each other’s regional goals and militaries, and in which Russia seemingly has many reasons, mostly internal, to expand the scope of the conflict.

Show Notes

https://www.yahoo.com/news/articles/pistorius-russian-jet-flew-over-142629311.html?guccounter=1

https://www.nytimes.com/2025/09/19/world/europe/russian-fighter-jets-estonia-nato.html

https://www.nytimes.com/2025/09/07/business/russia-disinformation-trump.html

https://www.nytimes.com/2025/09/20/world/europe/poland-drones-russia-nato.html

https://en.wikipedia.org/wiki/Prelude_to_the_Russian_invasion_of_Ukraine

https://www.bbc.com/news/articles/c5ygjv0r2myo

https://thehill.com/policy/international/5522862-lavrov-nato-eu-russia/

https://www.cnn.com/2025/09/27/europe/putin-hybrid-war-europe-risks-intl

https://www.nytimes.com/2025/09/27/world/europe/russia-europe-poland-drones-moldova-election.html

https://apnews.com/article/russia-ukraine-poland-drones-sanctions-rafale-429ff46431a916feff629f26a5d0c0da

https://www.reuters.com/world/europe/denmark-has-no-plans-invoke-natos-article-4-foreign-minister-says-2025-09-26/

https://www.upi.com/Top_News/World-News/2025/09/27/More-drones-spotted-Denmark/4031758983759/

https://apnews.com/article/russia-ukraine-war-poland-drones-defense-kyiv-ec284922b946737b98a28f179ac0c5a0

https://apnews.com/article/poland-airspace-drones-russia-airport-closed-cf7236040d8c7858104a29122aa1bd57

https://apnews.com/article/russia-ukraine-war-poland-drones-fa2d5d8981454499fa611a1468a5de8b

https://apnews.com/article/russia-ukraine-war-poland-drones-1232774279039f9e5c5b78bd58686cb9

https://apnews.com/article/british-intelligence-mi6-russia-war-443df0c37ff2254fcc33d5425e3beaa6

https://apnews.com/article/nato-article-4-explainer-russia-poland-estonia-26415920dfb8458725bda517337adb12

https://www.worldpoliticsreview.com/nato-article-4-russia/

https://www.nytimes.com/2025/09/28/world/europe/moldova-election-russia-eu.html

https://www.nato.int/cps/en/natohq/topics_49187.htm

https://en.wikipedia.org/wiki/NATO

https://www.nato.int/cps/en/natohq/topics_52044.htm

We also discuss Nepalese modern history, Gen Z, and kings.

Recommended Book: Superagency by Reid Hoffman and Greg Beato

Transcript

The Federal Democratic Republic of Nepal, usually referred to as just Nepal, is a country located in the Himalayas that’s bordered to the northeast by China, and is otherwise surrounded by India, including in the east, where there’s a narrow sliver of India separating Nepal from Bhutan and Bangladesh.

So Nepal is mostly mountainous, it’s landlocked, and it’s right in between two burgeoning regional powers who are also increasingly, in many ways, global powers. Its capital is Kathmandu, and there are a little over 31 million people in the country, as of 2024—more than 80% of them Hindu, and the country’s landmass spans about 57,000 square miles or 147.5 square kilometers, which is little smaller than the US state of Illinois, and almost exactly the same size as Bangladesh.

Modern Nepal came about beginning in the mid-20th century, when the then-ruling Rana autocracy was overthrown in the wake of neighboring India’s independence movement, and a parliamentary democracy replaced it. But there was still a king, and he didn’t like sharing power with the rest of the government, so he did away with the democracy component of the government in 1960, making himself the absolute monarch and banning all political activities, which also necessitated jailing politicians.

The country was modernized during this period, in the sense of building out infrastructure and such, but it was pulled backwards in many ways, as there wasn’t much in the way of individual liberties for civilians, and everything was heavily censored by the king and his people. In 1990, a multiparty movement called the People’s Movement forced the king, this one ascended to the throne in 1972, to adopt a constitution and allow a multiparty democracy in Nepal.

One of the parties that decided to enter the local political fray, the Maoist Party, started violently trying to shift the country in another direction, replacing its parliamentary system with a people’s republic, similar to what was happening in China and the Soviet Union. This sparked a civil war that led to a whole lot of deaths, including those of the King and Crown Prince. The now-dead king’s brother stepped in, gave himself a bunch of new powers, and then tried to stomp the Maoist Party into submission.

But there was a peaceful democratic revolution in the country in 2006, at which point the Maoists put down their arms and became a normal, nonviolent political party. Nepal then became a secular state, after being a Hindu kingdom for most of their modern history, and a few years later became a federal republic. It took a little while, and there was quite a bit of tumult in the meantime, but eventually, in 2015, the Nepalese government got a new constitution that divided the country into seven provinces and made Nepal a federal democratic republic.

What I’d like to talk about today is what has happened in the past decade in Nepal, and how those happenings led to a recent, seemingly pretty successful, series of protests.

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In early 2025, from March through early June, a series of protests were held across Nepal by pro-monarchy citizens and the local pro-monarchy party, initially in response to the former King’s visit, but later to basically just show discontentment with the current government.

These protests were at least partly politically motivated, in the sense of being planned and fanned into larger conflagrations by that pro-monarchy party—not truly grassroots sort of thing—but they grew and grew, partly on the strength of opposition to the police response to earlier protests.

That same distaste carried through the year, into September of 2025, when the Nepalese government announced a ban on 26 social media platforms, including Facebook, Instagram, Reddit, and Youtube, because the companies behind these platforms ostensibly failed to register under the Ministry of Communication and Information Technology’s new rules that required, among other things, they have local liaisons that the government could meet with in person, and complain to if a given network failed to remove something they didn’t like quickly enough.

The general sense about that ban is that while this failure to properly register was used as justification for shutting down these networks, which are incredibly popular in the country, the real reason the government wanted to shut them down at that moment was that a trend had emerged online in which the rich and powerful in the country, and especially their children, many of whom have become online influencers, were being criticized for their immense opulence and for bragging about their families’ vast wealth, while everyone else was comparably suffering.

This became known as the Nepobaby or Nepo Kid trend, hashtag Nepobaby, which was a tag borrowed from Indonesia, and the general idea is that taxpayer money is being used to enriched a few powerful families at the expense of everyone else, and the kids of those powerful families were bragging about it in public spaces, not even bothering to hide their families’ misdeeds and corruption.

This, perhaps understandably, led to a lot more discontent, and all that simmering anger led to online outcries, the government tried to stifle these outcries by shutting down these networks in the country, but that shut down, as is often the case in such situations, led to in-person protests, which started out as peaceful demonstrations in Kathmandu and surrounding areas, but which eventually became violent when the police started firing tear gas and rubber bullets at the crowds, causing 19 deaths and hundreds of injuries.

The ban was implemented on September 4 and then lifted, after the initial protests, on September 8, but the government’s response seems to have made this a much bigger thing than it initially was, and maybe bigger than it would have become, sans that response.

It’s worth mentioning here, too, that a lot of young people in Nepal rely on social media and messaging apps like Signal, which was also banned, for their livelihood. Both for social media related work, and for various sorts of remittances. And that, combined with an existing 20% youth unemployment rate, meant that young people were very riled up and unhappy with the state of things, already, and this ban just poured fuel on that flame.

On that same note, the median age in Nepal is 25, it’s a relatively young country. So there are a lot of Gen Zers in Nepal, they’re the generation that uses social media the most, and because they rely so heavily on these networks to stay in touch with each other and the world, the ban triggered a mass outpouring of anger, and that led to huge protests in a very short time.

These protests grew in scope, eventually leading to the burning of government buildings, the military was called in to help bring order, and ultimately the Home Minister, and then the Prime Minister, on September 8 and 9, respectively, resigned. A lot of the burning of government buildings happened after those resignations; protestors eventually burned the homes of government ministers, and the residences of the prime minister and president, as well.

The protestors didn’t have any formal leadership, though there were attempts during the protests by local pro-monarchy parties and representatives to position the protests as pro-King—something most protestors have said is not the case, but you can see why that might have worked for them, considering those pro-monarchy protests earlier this year.

That said, by September 10, the military was patrolling most major cities, and on the 11th, the president, head general, and Gen Z representatives for the protestors met to select an interim leader. They ended up using Discord, a chat app often used by gamers, to select a former Supreme Court Justice, Sushila Karki, as the interim prime minister, and the first woman to be prime minister in Nepalese history. Parliament was then dissolved, and March 5 was set as the date for the next election. Karki has said she will remain in office for no more than six months.

As of September 13, all curfews had been lifted across Nepal, the prime minister was visiting injured protestors in hospitals, and relative calm had returned—though at least 72 people are said to have been killed during the protests, and more than 2,000 were injured.

There are currently calls for unity across the political spectrum in Nepal, with everyone seeming to see the writing on the wall, that the youths have shown their strength, and there’s a fresh need to toe the new line that’s been established, lest the existing parties and power structures be completely toppled.

There’s a chance that this newfound unity against government overreach and censorship will hold, though it’s important to note that the folks who were allegedly siphoning resources for their families were all able to escape the country, most without harm, due to assistance from police and the military, and that means they could influence things, from exile or after returning to Nepal, in the lead-up to that March election.

It’s also possible that the major parties will do more to favor the huge Gen Z population in Nepal from this point forward, which could result in less unemployment and freer speech—though if the King and the pro-monarchy party is able to continue insinuating themselves into these sorts of conversations, positioning themselves as an alternative to the nepotism and corruption many people in the area have reasonably come to associated with this type of democracy, there could be a resurgent effort to bring the monarchy back by those who have already seen some success in this regard, quite recently.

Show Notes

https://restofworld.org/2025/nepal-gen-z-protest/

https://apnews.com/article/nepal-ban-social-media-platform-3b42bbbd07bc9b97acb4df09d42029d5

https://apnews.com/article/nepal-new-prime-minister-protests-karki-0f552615029eb12574c9587d8d76ec46

https://www.bbc.com/news/articles/crkj0lzlr3ro

https://kathmandupost.com/visual-stories/2025/09/08/gen-z-protest-in-kathmandu-against-corruption-and-social-media-ban

https://en.wikipedia.org/wiki/2025_Nepalese_Gen_Z_protests

https://en.wikipedia.org/wiki/2025_Nepalese_pro-monarchy_protests

https://en.wikipedia.org/wiki/Nepal

We also discuss the crypto industry, political contributions, and regulatory guardrails.

Recommended Book: Throne of Glass by Sarah J. Maas

Transcript

A cryptocoin is a unit of cryptocurrency. A cryptocurrency is a type of digital currency that uses some kind of non-central means of managing its ledger—keeping track of who has how much of it, basically.

There have been other types of digital currency over the years, but cryptocurrencies often rely on the blockchain or a similarly distributed means of keeping tabs on who has what. A blockchain is a database, often public, of users and a list of those users’ assets that’s distributed between users, and it makes use of some kind of consensus mechanism to determine who actually owns what.

Some cryptocurrencies ebb and flow in value, and are thus traded more like a stock or other type of non-fixed, finite asset. Bitcoin, for instance, is often treated like gold or high-growth stocks. NFTs, similarly, create a sort of artificial scarcity, producing unique digital goods by putting their ownership on a blockchain or other proof-of-ownership system.

Stablecoins are also cryptocurrencies, but instead of floating, their value growing and dropping based on the interest of would-be buyers, they are meant to maintain a steady value—to be stable, like a national currency.

In order to achieve this, the folks who maintain stablecoins often use reserve assets to prop up their value. So if you produce a new stablecoin and want to issue a million of them, each worth one US dollar, you might accumulate a million actual US dollars, put those in a bank account, show everybody the number of dollars in that bank account, and then it’s pretty easy to argue that those stablecoins are each worth a dollar—each coin is a stand-in for one of the dollars in the bank.

In a lot of cases, the people issuing these coins aim for this approach, but instead of doing a direct one-for-one, dollar for coin system, they’ll issue a million coins that are meant to be worth a dollar apiece, and they’ll put one-hundred-thousand dollars in a bank account, and the other 900,000 will be made up of bitcoin and stocks and other sorts of things that they can argue are worth at least that much.

As of mid-2025, about $255 billion worth of stablecoins have been issued, and about 99% of them have been pegged to the US dollar; Tether’s USDT, Binance’s BUSD, and Circle’s USDC are all tethered to the USD, for instance, though other currencies are also used as peg values, including offerings by Tether and Circle that are pegged to the Euro.

Stablecoins that are completely or mostly fiat-backed, which means they have a dollar for each coin issued in the bank somewhere, or close to that, tend to be on average more stable than commodity or crypto-backed stablecoins, which rely mostly or entirely on things like bitcoin or gold tucked away somewhere to justify their value. Which makes sense, as while you can argue, hey look, I have a million dollars worth of gold, and I’m issuing a million coins, each worth a dollar, that asset’s value can change day-to-day, and that can make the value of those coins precarious, at least compared to fiat-backed alternatives.

Because stablecoins are not meant to change in value, they’re not useful as sub-ins for stocks or other sorts of interest-generating bets, like bitcoin. Instead, they’re primarily used by folks who want to trade cryptoassets for other sorts of cryptoassets, for those who want to avoid paying taxes, or want to otherwise hide their wealth, and for those who want to transfer money in such a way that they can avoid government sanctions and/or tariffs on those sorts of transfers.

What I’d like to talk about today is a new US federal law, the GENIUS Act, which was heavily pushed by the crypto industry, and which looks likely to make stablecoins a lot more popular, for better and for worse.

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The Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act, was introduced in the Senate by a Republican senator from Tennessee in May of 2025, was passed in June with a bipartisan vote of 68-30—the majority of Republicans and about half of Democratic senators voting in favor of it—and after the House passed it a month later, President Trump signed it into law on July 18.

Again, this legislation was heavily pushed by the crypto industry, which generously funded a lot of politicians, mostly Republican, but on both sides of the aisle, in recent years, as it serves folks who want a broader reach for existing stablecoins, and who want to see more stablecoins emerge and flourish, as part of a larger and richer overall crypto industries.

Folks who are against this Act, and other laws like it that have been proposed in recent years, contend that while it’s a good idea to have some kind of regulation in place for the crypto industry, this approach isn’t the right one, as it basically gives the tech world free rein to run their own pseudo-banks, without being subject to the same regulations as actual banks.

Which isn’t great, according to this argument, as actual banks have to live up to all sorts of standards, most of them oriented around protecting people from the folks running the banks who might otherwise take advantage of them. Those regulations are especially cumbersome in the wake of the 2008 Great Recession, because that severe global economic downturn was in large part caused by exactly these sorts of abuses: bankers going wild with lending mis-labeled assets, those in charge of these banks pocketing a whole lot of money, lots of people losing everything, and lots of institutions going under, leaving those people and the government with the bill, while the folks who did bad things mostly got off scott free.

The goal of these bank regulations is to keep that kind of thing from happening again, while also keeping banks from overtly taking advantage of their customers, who often don’t know much about the banking options and assets they’re being sold on.

Allowing tech companies to do very similar things, but without those regulations, seems imprudent, then, because, first, tech companies have shown themselves to be not just willing, but often thrilled to grab whatever they can and get slapped on the wrist for it, later, moving fast and breaking things, basically, and then paying the fines after they’ve made a fortune, and if they’re allowed to step into this space without the same regulations as banks, that gives them a huge competitive advantage over actual financial institutions.

It’s a bit like if there were a food company that was allowed to dodge food industry regulations, as was thus able to cut their flour with sawdust and sell it to people at the same price as the real thing. People would suffer, their competition, which sells actual flour would suffer, because they wouldn’t be able to compete with a company that doesn’t play by the same rules, and the companies that sell the inferior products without anyone being able to stop them would probably get away with it for a while, before then closing up shop, pocketing all that money, and starting over again with a different name.

This is how things work in a lot of countries with weak regulatory systems, and it creates so much distrust in the economic sphere that things cost more, the quality of everything is very low, and it’s nearly impossible to ever punish those who cause and perpetuate harm.

That’s at the root of many arguments against the GENIUS Act: concerns that a lack of consumer protections will lead to a situation in which we have growing systemic risk, caused by tech entities taking bigger and bigger risks with other people’s money, like in the buildup to the 2008 recession, while simultaneously more legit institutions are elbowed out, unable to compete because they have to spend more and work harder to adhere to the regulations that the new players can ignore.

It’s worth mentioning here, too, that the Trump family has issued their own cryptocoins, and reportedly already profited to the tune of several billion dollars as a result of that issuance, that the Trumps have their own stablecoin, which they’re promoting as an upgrade to the US dollar, that the early backers of these coins include foreign governments and their interconnected companies, like the Emirati-backed MGX, that the Trump children have their own crypto-asset companies, including one that’s listed on the Nasdaq, and which is profiting from the increasing popularity and legalization of the industry in the US, and that Trump’s media company, which owns Truth Social, also has a multi-billion-dollar bitcoin portfolio, alongside a whole lot of other crypto-coins, which the president has been pushing, and his family has been promoting overseas, using his name and office.

All of which points at another conflict of interest issue here, that the president and his family seem to be self-enriching at an incredibly rapid pace and at a very high level, in part by pushing this and similar legislation.

People in the crypto industry lavishly spent on his campaign, and they are entwined with his family’s business interests, which makes it difficult to separate what might be good for the country, in an objective way, from what’s good for Trump and his family, in the sense of using the office to grow wealthier and wealthier—and that’s true both in the sense that crypto-assets allegedly allow his family to take bribes in a fairly anonymous and deniable way, but also in the sense that people who buy his memecoins and buy into his stablecoin ventures and buy more bitcoin and similar assets that he already holds, also increase the value of his existing assets, and using the office of the presidency to enrich oneself in that way is the sort of thing they never really made illegal because they didn’t think anyone would be brazen or shameless enough to do it.

There’s a lot going on here, then, and while there are some arguments that this sort of legislation is a good starting point to get some eventual, actual guardrails on the crypto industry in the US, the concerns related to those tech world incentives, and the possibility and reality of the president and his family profiting from this legislation, would seem to make this effort a lot more questionable than prudent, and loaded with a lot more downsides than upsides, even if, again, the majority of lawmakers voted for it, and a lot of people are excited about it for all sorts of reasons.

Show Notes

https://www.wired.com/story/genius-act-loophole-stablecoins-banks/

https://www.weforum.org/stories/2025/07/stablecoin-regulation-genius-act/

https://en.wikipedia.org/wiki/GENIUS_Act

https://apnews.com/article/donald-trump-stablecoins-congress-cryptocurrency-94fa3c85e32ec6fd5a55576cf46e58ea

https://advocacy.consumerreports.org/press_release/senate-oks-genius-act-without-safeguards-needed-to-protect-consumers-and-the-financial-system-from-stablecoin-risks/

https://www.cnn.com/2025/09/03/politics/crypto-trump-bitcoin-wlfi-stablecoin-analysis

https://en.wikipedia.org/wiki/Cryptocurrency

https://en.wikipedia.org/wiki/Stablecoin

We also discuss political firings, hardware infiltration, and Five Eyes.

Recommended Book: The Fourth Turning Is Here by Neil Howe

Transcript

In the year 2000, then-General Secretary of the Chinese Communist Party, Jiang Zemin (jong ZEM-in), approved a plan to develop so-called “cyber coercive capabilities”—the infrastructure for offensive hacking—partly as a consequence of aggressive actions by the US, which among other things had recently bombed the Chinese embassy in Belgrade as part of the NATO campaign in Yugoslavia.

The US was a nuclear power with immense military capabilities that far outshone those of China, and the idea was that the Chinese government needed some kind of asymmetrical means of achieving leverage against the US and its allies to counter that. Personal tech and the internet were still relatively young in 2000—the first iPhone wouldn’t be released for another seven years, for context—but there was enough going on in the cyber-intelligence world that it seemed like a good point of leverage to aim for.

The early 2000s Chairman of the CCP, Hu Jintao, backed this ambition, citing the burgeoning threat of instability-inducing online variables, like those that sparked the color revolutions across Europe and Asia, and attack strategies similar to Israel’s Stuxnet cyberattack on Iran as justification, though China’s growing economic dependence on its technological know-how was also part of the equation; it could evolve its capacity in this space relatively quickly, and it had valuable stuff that was targetable by foreign cyberattacks, so it was probably a good idea to increase their defenses, while also increasing their ability to hit foreign targets in this way—that was the logic here.

The next CCP Chairman, Xi Jinping, doubled-down on this effort, saying that in the cyber world, everyone else was using air strikes and China was still using swords and spears, so they needed to up their game substantially and rapidly.

That ambition seems to have been realized: though China is still reportedly regularly infiltrated by foreign entities like the US’s CIA, China’s cybersecurity firms and state-affiliated hacker groups have become serious players on the international stage, pulling off incredibly complex hacks of foreign governments and infrastructure, including a campaign called Volt Typhoon, which seems to have started sometime in or before 2021, but which wasn’t discovered by US entities until 2024. This campaign saw Chinese hackers infiltrating all sorts of US agencies and infrastructure, initially using malware, and then entwining themselves with the operating systems used by their targets, quietly syphoning off data, credentials, and other useful bits of information, slowly but surely becoming even more interwoven with the fabric of these systems, and doing so stealthily in order to remain undetected for years.

This effort allowed hackers to glean information about the US’s defenses in the continental US and in Guam, while also helping them breach public infrastructure, like Singapore’s telecommunications company, Singtel. It’s been suggested that, as with many Chinese cyberattacks, this incursion was a long-game play, meant to give the Chinese government the option of both using private data about private US citizens, soldiers, and people in government for manipulation or blackmail purposes, or to shut down important infrastructure, like communications channels or electrical grids, in the event of a future military conflict.

What I’d like to talk about today is another, even bigger and reportedly more successful long-term hack by the Chinese government, and one that might be even more disruptive, should there ever be a military conflict between China and one of the impacted governments, or their allies.

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Salt Typhoon is the name that’s been given to a so-called '“advanced persistent threat actor,” which is a formal way of saying hacker or hacker group, by Microsoft, which plays a big role in the cybersecurity world, especially at this scale, a scale involving not just independent hackers, but government-level cyberespionage groups.

This group is generally understood to be run out of the Chinese Ministry of State Security, or MSS, and though it’s not usually possible to say something like that for certain, hence the “generally understood” component of that statement, often everyone kind of knows who’s doing what, but it’s imprudent to say so with 100% certainty, as cyberespionage, like many other sorts of spy stuff, is meant to be a gray area where governments can knock each other around without leading to a shooting war. If anyone were to say with absolute certainty, yes, China is hacking us, and it’s definitely the government, and they’re doing a really good job of it, stealing all our stuff and putting us at risk, that would either require the targeted government to launch some sort of counterstrike against China, or would leave that targeted government looking weak, and thus prone to more such incursions and attacks, alongside any loss of face they might suffer.

So there’s a lot of hand-waving and alluding in this sphere of diplomacy and security, but it’s basically understood that Salt Typhoon is run by China, and it’s thought that they’ve been operating since at least 2020.

Their prime function seems to be stealing as much classified data as they can from governments around the world, and scooping up all sorts of intellectual property from corporations, too.

China’s notorious for collecting this kind of IP and then giving it to Chinese companies, which have become really good at using such IP, copying it, making it cheaper, and sometimes improving upon it in other ways, as well. This government-corporation collaboration model is fundamental to the operation of China’s economy, and the dynamic between its government, it’s military, its intelligence services, and its companies, all of which work together in various ways.

It’s estimated that Salt Typhoon has infiltrated more than 200 targets in more than 80 countries, and alongside corporate entities like AT&T and Verizon, they also managed to scoop up private text messages from Kamala Harris’ and Donald Trump’s presidential campaigns in 2024, using hacks against phone services to do so.

Three main Chinese tech companies allegedly helped Salt Typhoon infiltrate foreign telecommunications companies and internet service providers, alongside hotel, transportation, and other sorts of entities, which allowed them to not just grab text messages, but also track people, keeping tabs on their movements, which again, might be helpful in future blackmail or even assassination operations.

Those three companies seem to be real-deal, actual companies, not just fronts for Chinese intelligence, but the government was able to use them, and the services and products they provide, to sneak malicious code into all kinds of vital infrastructure and all sorts of foreign corporations and agencies—which seems to support concerns from several years ago about dealing with Chinese tech companies like Huawei; some governments decided not to work with them, especially in building-out their 5G communications infrastructure, due to the possibility that the Chinese government might use these ostensibly private companies as a means of getting espionage software or devices into these communications channels or energy grids. The low prices Huawei offered just wasn’t worth the risk.

The US government announced back in 2024 that Salt Typhoon had infiltrated a bunch of US telecommunications companies and broadband networks, and that routers manufactured by Cisco were also compromised by this group. The group was also able to get into ISP services that US law enforcement and intelligence services use to conduct court-authorized wiretaps; so they weren’t just spying on individuals, they were also spying on other government’s spies and those they were spying on.

Despite all these pretty alarming findings, in the midst of the investigation into these hacks, the second US Trump administration fired the government’s Cyber Safety Review Board, which was thus unable to complete its investigation into Salt Typhoon’s intrusion.

The FBI has since issued a large bounty for information about those involved in Salt Typhoon, but that only addresses the issue indirectly, and there’s still a lot we don’t know about this group, the extent of their hacking, and where else they might still be embedded, in part because the administration fired those looking into it, reportedly because the administration didn’t like this group also looking into Moscow’s alleged interference in the 2016 presidential election, and Salt Typhoon’s potential interference with the 2024 presidential election, both of which Trump won.

The US government has denied these firings are in any way political, saying they intend to focus on cyber offense rather than defense, and pointing out that the current approach to investigating these sorts of things was imperfect; which is something that most outside organizations would agree on.

That said, there are concerns that these firings, and other actions against the US’s cyberthreat defensive capabilities, are revenge moves against people and groups that have said the 2020 presidential election, which Trump lost to Joe Biden, was the most secure and best-run election in US history; which flies in the face of Trump’s preferred narrative that he won in 2020—something he’s fond of repeating, though without evidence, and with a vast body of evidence against his claim.

The US has also begun pulling away from long-time allies that it has previously collaborated with in the cyberespionage and cyberdefense sphere, including its Five Eyes partners, the UK, Canada, Australia, and New Zealand.

Since Tulsi Gabbard was installed as the Director of National Intelligence by Trump’s new administration, US intelligence services have been instructed to withhold information about negotiations with Russia and Ukraine from these allies; something that’s worrying intelligence experts, partly because this move seems to mostly favor Russia, and partly because it represents one more wall, of many, that the administration seems to be erecting between the US and these allies. Gabbard herself is also said to be incredibly pro-Russian, so while that may not be influencing this decision, it’s easy to understand why many allies and analysts are concerned that her loyalties might be divided in this matter.

So what we have is a situation in which political considerations and concerns, alongside divided priorities and loyalties within several governments, but the US in particular right now, might be changing the layout of, and perhaps even weakening, cybersecurity and cyberespionage services at the very moment these services might be most necessary, because a foreign government has managed to install itself in all kinds of agencies, infrastructure, and corporations.

That presence could allow China to milk these entities for information and stolen intellectual property, but it could also put the Chinese government in a very favorable position, should some kind of conflict break out, including but not limited to an invasion of Taiwan; if the US’s electrical grids or telecommunications services go down, or the country’s military is unable to coordinate with itself, or with its allies in the Pacific, at the moment China invades, there’s a non-zero chance that would impact the success of that invasion in China’s favor.

Again, this is a pretty shadowy playing field even at the best of times, but right now there seems to be a lot happening in the cyberespionage space, and many of the foundations that were in place until just recently, are also being shaken, shattered, or replaced, which makes this an even more tumultuous, uncertain moment, with heightened risks for everybody, though maybe the opposite for those attacking these now more-vulnerable bits of infrastructure and vital entities.

Show Notes

https://www.nbcnews.com/tech/security/china-used-three-private-companies-hack-global-telecoms-us-says-rcna227543

https://media.defense.gov/2025/Aug/22/2003786665/-1/-1/0/CSA_COUNTERING_CHINA_STATE_ACTORS_COMPROMISE_OF_NETWORKS.PDF

https://www.nytimes.com/2025/04/05/us/politics/trump-loomer-haugh-cyberattacks-elections.html

https://www.france24.com/en/americas/20250826-has-the-us-shut-its-five-eyes-allies-out-of-intelligence-on-ukraine-russia-peace-talks

https://www.axios.com/2025/09/04/china-salt-typhoon-fbi-advisory-us-data

https://www.wsj.com/politics/national-security/chinese-spies-hit-more-than-80-countries-in-salt-typhoon-breach-fbi-reveals-59b2108f

http://axios.com/2025/08/02/china-usa-cyberattacks-microsoft-sharepoint

https://www.axios.com/2024/12/03/salt-typhoon-china-phone-hacks

https://www.nytimes.com/2025/09/04/world/asia/china-hack-salt-typhoon.html

https://www.euronews.com/2025/09/04/trump-and-jd-vance-among-targets-of-major-chinese-cyberattack-investigators-say

https://www.congress.gov/crs-product/IF12798

https://www.fcc.gov/document/implications-salt-typhoon-attack-and-fcc-response

https://en.wikipedia.org/wiki/Salt_Typhoon

https://en.wikipedia.org/wiki/2024_global_telecommunications_hack

https://en.wikipedia.org/wiki/Chinese_interference_in_the_2024_United_States_elections

https://www.theregister.com/2025/08/28/how_does_china_keep_stealing/

https://www.nsa.gov/Press-Room/Press-Releases-Statements/Press-Release-View/Article/4287371/nsa-and-others-provide-guidance-to-counter-china-state-sponsored-actors-targeti/

https://chooser.crossref.org/?doi=10.2307%2Fjj.16040335

https://en.wikipedia.org/wiki/Cyberwarfare_and_China

https://en.wikipedia.org/wiki/Volt_Typhoon

We also discuss humanitarian aid, foreign conflicts, and genocide.

Recommended Book: Inventing the Renaissance by Ada Palmer

Transcript

In 2019, a military government took over Sudan, following a successful coup d'état against then-President Omar al-Bashir, who had been in power for thirty years. al-Bashir’s latter years were plagued by popular demonstrations against rising costs of living and pretty abysmal living standards, and the government lashed out against protestors violently, before then dissolving local government leaders and their offices, replacing them with hand-picked military and intelligence officers. After he responded violently to yet another, even bigger protest, the military launched their coup, and the protestors pivoted to targeting them, demanding a civilian-run democracy.

Just two months later, after unsuccessful negotiations between the new military government and the folks demanding they step aside to allow a civilian government to take charge, the military leaders massacred a bunch civilians who hosted a sit-in protest. Protestors shifted to a period of sustained civil disobedience and a general strike, and the government agreed to hold elections in 2022, three years later, and said that they would investigate the massacre their soldiers committed against those protestors. They also established a joint civilian-military unity government that would run things until the new, civilian government was eventually formed.

In late-2021, though, the Sudanese military launched another coup against the unity government, and that council was dissolved, a state of emergency was declared, and all the important people who were helping the country segue back into a democracy were arrested. A new military-only junta was formed, incorporating the two main military groups that were running things, at that point.

In 2023, those two military bodies that were working together to run Sudan via this military junta, the Rapid Support Forces, a paramilitary group that were made into a sort of official part of the country’s military, while remaining separate from it, and the official Sudanese army, both started aggressively recruiting soldiers and taunting each other with military maneuvers. On April 15 that year, they started firing on each other.

This conflict stemmed from the Sudanese military demanding that the RSF dissolve itself, all their people integrating into the country’s main military apparatus, but some kind of stand-off seemed to be a long time coming, as the RSF started its recruiting efforts earlier that year, and built up its military resources in the capital as early as February. But as I mentioned, this tinderbox erupted into a shooting war in April, beginning in the capital city, Khartoum, before spreading fast to other major cities.

So what eventually became a Sudanese civil, which at this point has been ongoing for nearly 2.5 years, began in April of 2023, was long-simmering before that, is between two heavily armed military groups that ran the country together for a few years, and which both claim to be the rightful leaders or owners of the country, and they’re fighting each other in heavily populated areas.

This war was also kicked off and is now sustained in part by ethnic conflicts between the main belligerents, which includes the aforementioned Sudanese Armed Forces and Rapid Support Forces, but also the Sudan Liberation Movement, which governs a fairly remote and self-sufficient mountainous area in the southern part of the country, and the al-Hilu movement, which supports the RSF’s efforts in the region.

What I’d like to talk about today is what’s happening on the ground in Sudan, in the third year of this conflict, and at a moment when the world’s attention seems to have refocused elsewhere, major governments that would have previously attempted to stop the civil war have more or less given up on doing so, and the Sudanese civilians who have been pulled into the conflict, or who have been forced to flee their homes as a consequence of this war, have been left without food, shelter, or any good guys to cheer for.

—

Sudan has been plagued by coups since it gained independence from the UK and Egypt in 1956; it’s seen 20 coup attempts, 7 of them successful, including that most recent one in 2019, since independence.

This region also has a recent history of genocide, perhaps most notably in the western Darfur region, where an estimated quarter of a million people from a trio of ethnic groups were killed between 2003 and 2005, alone, and something like 2.7 million people were displaced, forced to flee the systematic killings, strategically applied sexual violence, and other abuses by the Sudanese military and the local, rebel Janjaweed militias, which were often armed by the government and tasked with weeding out alleged rebel sympathizers in the region.

This new civil war is on a completely different scale, though. As of April of 2025, two years into the conflict, it’s estimated that about 12.5 million people have been displaced, forced from their homes due to everything being burned down or bombed, due to threats from local military groups, killing and assaulting and forcibly recruiting civilians to their cause, and due to a lack of resources, the food and water and shelter all grabbed by these military forces and denied to those who are just trying to live their lives; and that’s true of locally sourced stuff, but also humanitarian aide that makes it into the country—it’s grabbed by the people with guns, and the people without guns are left with nothing.

More than 3.3 million Sudanese people are estimated to have fled the country entirely, and recent figures show that around 25 million people are facing extreme levels of hunger, on the verge of starving to death, including about five million children and their mothers who are essentially wasting away. There are reports of people eating leaves and charcoal, just to get something in their stomachs, and photo evidence of these unmoving crowds of skeletal people who are desperate to get anything, any kind of nutrition at all, any clean water, still make it out of the country, though less and less, as it’s becoming more difficult for reporters to make it into and out of the area, safely, and the internet and other communication services, where they’re still available, are often shut down.

Aid agencies have said that this civil war has created the world’s worst humanitarian crisis, and even the US government, which especially right now has been very hesitant to say anything about foreign conflicts, has made it pretty clear that they consider this to be a genocide; there are conscious, intentional, obviously planned efforts to systematically wipe out different ethnic groups, and to cleanse areas of hated political and religious rivals, but this genocide is being carried out at the exact moment that many of the world’s major, wealthy governments, which historically would have tried to step in and remedy the situation in some way—often ham-handedly, sometimes by supporting one side or the other to try to gain influence in the region, but almost always by also airdropping food and medical goods and other resources into the area to try to help civilians—these governments are mostly pulling back from those sorts of efforts.

Some analysts and regional experts have suggested that this points toward a new normal in the global geopolitical playing field; the so-called liberal world order that helped organize things, that established rules and norms from the end of WWII onward, and which incentivized everyone playing nice with each other, not invading each other, not committing genocide, and focusing on trade over war, is falling apart, the United States in particular deciding to stop funding things, stop participating, deciding to antagonize the allies that helped it maintain this state of affairs, and to basically drop anything that seems to much like a responsibility to people not in the United States. And a lot of other governments are either scrambling to figure out what that means for them, or deciding that they can afford to do something of the same. China, for instance, while stepping in to fill some of those voids, strategically, has also pulled back on some of its humanitarian efforts, because it no longer needs to invest as much in such things to compete with the US, which no longer seems to be competing in that space at all, with rare exceptions.

Conflicts in Africa, also with rare exceptions, also just tend to get less attention than conflicts elsewhere, and there are all sorts of theories as to why this might be the case, from simple racism to the idea that areas with more economic potential are more valuable as allies or supplicants, so wealthy nations with the ability to do something will tend to focus their resources on areas that are more strategically vital or wealth-generating, so as to recoup their investment.

Whatever the specifics and rationales, though, Sudan has long been conflict-prone, but this civil war seems to be locking the area into a state of total war—where nothing is off the table, and terror against civilians, and to a certain degree wiping out one’s enemies completely, salting the earth, killing all the civilians so they can never threaten your force’s dominance again, is becoming fundamental to everyone’s military strategy—and that state of total war, in addition to be just horrific all by itself, also threatens to roil the rest of the area, including the far more globally integrated and thus well supported and funded Horn of Africa region, which is strategically vital for many nations, due to its adjacency to the Middle East and several vital ports, and the Sahel, which is a strip of land that stretches across the continent, just south of the Sahara desert, and which in modern history has been especially prone to military coups and periods of violence, at times verging on genocide, and which in recent decades has seen a bunch of democratic governments toppled and replaced by military juntas that have done their best to completely disempower all possible future opposition, at times by committing what look a lot like mini-genocides.

This conflict, all by itself, then, is already one of the worst humanitarian situations the world has seen, but the confluence of international distraction—much of our attention and the majority of our resources focused on the also horrible situations in Gaza and Ukraine, and the specter of great power competitions that might arise as a result of Ukraine, or of China deciding to invade Taiwan—alongside the pullback from humanitarian funding, and the seeming distaste previously internationally involved entities, like the US and China, now seem to have when it comes to playing peacemaker, or attempted peacemaker, in these sorts of conflicts.

All of which would seem to make it a lot more likely that this conflict, and others like it, will continue to play out, and may even reach a scale that permanently scars Sudan and its people, and which possibly even cascades into a series of regional conflicts, some interconnected, and some merely inspired by the brazenness they can clearly see across the border, and the seeming lack of consequences for those committing these sorts of atrocities in order to attain more power and control.

Show Notes

https://en.wikipedia.org/wiki/Darfur_genocide

https://en.wikipedia.org/wiki/Sudanese_civil_war_(2023%E2%80%93present)

https://www.theatlantic.com/magazine/archive/2025/09/sudan-civil-war-humanitarian-crisis/683563/?gift=201cWZnM2XBz2eP81zy0pG9Zt_k9jZnrEhnY7lvH1ZQ

https://www.washingtonpost.com/world/2025/08/13/sudan-humanitarian-global-world-order-neglect-conflict/

https://www.nytimes.com/2025/04/19/world/africa/sudan-usaid-famine.html

https://www.reuters.com/world/africa/world-food-programme-reduce-food-support-sudan-due-funding-shortages-2025-04-25/

https://www.eurasiareview.com/25042025-sudan-war-is-a-global-crisis-in-the-making-analysis/

https://apnews.com/article/un-sudan-darfur-war-anniversary-paramilitary-government-dbfff6244d935f595fb7649a87a6e073

https://newleftreview.org/sidecar/posts/sudans-world-war

https://news.un.org/en/story/2025/04/1162576

https://news.un.org/en/story/2025/04/1162096

https://reliefweb.int/report/sudan/sudan-situation-map-weekly-regional-update-18-aug-2025

https://www.bbc.com/news/articles/cx2wryz4gw7o

https://www.nytimes.com/2025/08/30/opinion/sudan-genocide-famine.html

https://en.wikipedia.org/wiki/Sudanese_revolution

https://en.wikipedia.org/wiki/Sudanese_civil_war_(2023%E2%80%93present)

https://en.wikipedia.org/wiki/2021_Sudanese_coup_d%27%C3%A9tat

https://en.wikipedia.org/wiki/Sudan_People%27s_Liberation_Movement%E2%80%93North

https://www.crisisgroup.org/africa/horn-africa/sudan/stopping-sudans-descent-full-blown-civil-war

https://en.wikipedia.org/wiki/Coups_d%27%C3%A9tat_in_Sudan

We also discuss Goldman Sachs, US Steel, and nationalization.

Recommended Book: Abundance by Ezra Klein and Derek Thompson

Transcript

Nationalization refers to the process through which a government takes control of a business or business asset.

Sometimes this is the result of a new administration or regime taking control of a government, which decides to change how things work, so it gobbles up things like oil companies or railroads or manufacturing hubs, because that stuff is considered to be fundamental enough that it cannot be left to the whims, and the ebbs and eddies and unpredictable variables of a free market; the nation needs reliable oil, it needs to be churning out nails and screws and bullets, so the government grabs the means of producing these things to ensure nothing stops that kind of output or operation.

That more holistic reworking of a nation’s economy so that it reflects some kind of socialist setup is typically referred to as socialization, though commentary on the matter will still often refer to the individual instances of the government taking ownership over something that was previously private as nationalization.

In other cases these sorts of assets are nationalized in order to right some kind of perceived wrong, as was the case when the French government, in the wake of WWII, nationalized the automobile company Renault for its alleged collaboration with the Nazis when they occupied France.

The circumstances of that nationalization were questioned, as there was a lot of political scuffling between capitalist and communist interests in the country at that time, and some saw this as a means of getting back against the company’s owner, Louis Renault, for his recent, violent actions against workers who had gone on strike before France’s occupation—but whatever the details, France scooped up Renault and turned it into a state-owned company, and in 1994, the government decided that its ownership of the company was keeping its products from competing on the market, and in 1996 it was privatized and they started selling public shares, though the French government still owns about 15% of the company.

Nationalization is more common in some non-socialist nations than others, as there are generally considered to be significant pros and cons associated with such ownership.

The major benefit of such ownership is that a government owned, or partially government owned entity will tend to have the government on its side to a greater or lesser degree, which can make it more competitive internationally, in the sense that laws will be passed to help it flourish and grow, and it may even benefit from direct infusions of money, when needed, especially with international competition heats up, and because it generally allows that company to operate as a piece of government infrastructure, rather than just a normal business.

Instead of being completely prone to the winds of economic fortune, then, the US government can ensure that Amtrak, a primarily state-owned train company that’s structured as a for-profit business, but which has a government-appointed board and benefits from federal funding, is able to keep functioning, even when demand for train services is low, and barbarians at the gate, like plane-based cargo shipping and passenger hauling, becomes a lot more competitive, maybe even to the point that a non-government-owned entity may have long-since gone under, or dramatically reduced its service area, by economic necessity.

A major downside often cited by free-market people, though, is that these sorts of companies tend to do poorly, in terms of providing the best possible service, and in terms of making enough money to pay for themselves—services like Amtrak are structured so that they pay as much of their own expenses as much as possible, for instance, but are seldom able to do so, requiring injections of resources from the government to stay afloat, and as a result, they have trouble updating and even maintaining their infrastructure.

Private companies tend to be a lot more agile and competitive because they have to be, and because they often have leadership that is less political in nature, and more oriented around doing better than their also private competition, rather than merely surviving.

What I’d like to talk about today is another vital industry that seems to have become so vital, like trains, that the US government is keen to ensure it doesn’t go under, and a stake that the US government took in one of its most historically significant, but recently struggling companies.

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The Emergency Economic Stabilization Act of 2008 was a law passed by the US government after the initial whammy of the Great Recession, which created a bunch of bailouts for mostly financial institutions that, if they went under, it was suspected, would have caused even more damage to the US economy.

These banks had been playing fast and loose with toxic assets for a while, filling their pockets with money, but doing so in a precarious and unsustainable manner.

As a result, when it became clear these assets were terrible, the dominos started falling, all these institutions started going under, and the government realized that they would either lose a significant portion of their banks and other financial institutions, or they’d have to bail them out—give them money, basically.

Which wasn’t a popular solution, as it looked a lot like rewarding bad behavior, and making some businesses, private businesses, too big to fail, because the country’s economy relied on them to some degree. But that’s the decision the government made, and some of these institutions, like Goldman Sachs, had their toxic assets bought by the government, removing these things from their balance sheets so they could keep operating as normal. Others declared bankruptcy and were placed under government control, including Fannie Mae and Freddie Mac, which were previously government supported, but not government run.

The American International Group, the fifth largest insurer in the world at that point, was bought by the US government—it took 92% of the company in exchange for $141.8 billion in assistance, to help it stay afloat—and General Motors, not a financial institution, but a car company that was deemed vital to the continued existence of the US auto market, went bankrupt, the fourth largest bankruptcy in US history. The government allowed its assets to be bought by a new company, also called GM, which would then function as normal, which allowed the company to keep operating, employees to keep being paid, and so on, but as part of that process, the company was given a total of $51 billion by the government, which took a majority stake in the new company in exchange.

In late-2013, the US government sold its final shares of GM stock, having lost about $10.7 billion over the course of that ownership, though it’s estimated that about 1.5 million jobs were saved as a result of keeping GM and Chrysler, which went through a similar process, afloat, rather than letting them go under, as some people would have preferred.

In mid-August of this year, the US government took another stake in a big, historically significant company, though this time the company in question wasn’t going through a recession-sparked bankruptcy—it was just falling way behind its competition, and was looking less and less likely to ever catch up.

Intel was founded 1968, and it designs, produces, and sells all sorts of semiconductor products, like the microprocessors—the computer chips—that power all sorts of things, these days.

Intel created the world’s first commercial computer chip back in 1971, and in the 1990s, its products were in basically every computer that hit the market, its range and dominance expanding with the range and dominance of Microsoft’s Windows operating system, achieving a market share of about 90% in the mid- to late-1990s.

Beginning in the early 2000s, though, other competitors, like AMD, began to chip away at Intel’s dominance, and though it still boasts a CPU market share of around 67% as of Q2 of 2025, it has fallen way behind competitors like Nvidia in the graphics card market, and behind Samsung in the larger semiconductor market.

And that’s a problem for Intel, as while CPUs are still important, the overall computing-things, high-tech gadget space has been shifting toward stuff that Intel doesn’t make, or doesn’t do well.

Smaller things, graphics-intensive things. Basically all the hardware that’s powered the gaming, crypto, and AI markets, alongside the stuff crammed into increasingly small personal devices, are things that Intel just isn’t very good at, and doesn’t seem to have a solid means of getting better at, so it’s a sort of aging giant in the computer world—still big and impressive, but with an outlook that keeps getting worse and worse, with each new generation of hardware, and each new innovation that seems to require stuff it doesn’t produce, or doesn’t produce good versions of.

This is why, despite being a very unusual move, the US government’s decision to buy a 10% stake in Intel for $8.9 billion didn’t come as a total surprise.

The CEO of Intel had been raising the possibility of some kind of bailout, positioning Intel as a vital US asset, similar to all those banks and to GM—if it went under, it would mean the US losing a vital piece of the global semiconductor pie. The government already gave Intel $2.2 billion as part of the CHIPS and Science Act, which was signed into law under the Biden administration, and which was meant to shore-up US competitiveness in that space, but that was a freebie—this new injection of resources wasn’t free.

Response to this move has been mixed. Some analysts think President Trump’s penchant for netting the government shares in companies it does stuff for—as was the case with US Steel giving the US government a so-called ‘golden share’ of its company in exchange for allowing the company to merge with Japan-based Nippon Steel, that share granting a small degree of governance authority within the company—they think that sort of quid-pro-quo is smart, as in some cases it may result in profits for a government that’s increasingly underwater in terms of debt, and in others it gives some authority over future decisions, giving the government more levers to use, beyond legal ones, in steering these vital companies the way it wants to steer them.

Others are concerned about this turn of events, though, as it seems, theoretically at least, anti-competitive. After all, if the US government profits when Intel does well, now that it owns a huge chunk of the company, doesn’t that incentivize the government to pass laws that favor Intel over its competitors? And even if the government doesn’t do anything like that overtly, doesn’t that create a sort of chilling effect on the market, making it less likely serious competitors will even emerge, because investors might be too spooked to invest in something that would be going up against a partially government-owned entity?

There are still questions about the legality of this move, as it may be that the CHIPS Act doesn’t allow the US government to convert grants into equity, and it may be that shareholders will find other ways to rebel against the seeming high-pressure tactics from the White House, which included threats by Trump to force the firing of its CEO, in part by withholding some of the company’s federal grants, if he didn’t agree to giving the government a portion of the company in exchange for assistance.

This also raises the prospect that Intel, like those other bailed-out companies, has become de facto too big to fail, which could lead to stagnation in the company, especially if the White House goes further in putting its thumb on the scale, forcing more companies, in the US and elsewhere, to do business with the company, despite its often uncompetitive offerings.

While there’s a chance that Intel takes this influx of resources and support and runs with it, catching up to competitors that have left it in the dust and rebuilding itself into something a lot more internationally competitive, then, there’s also the chance that it continues to flail, but for much longer than it would have, otherwise, because of that artificial support and government backing.

Show Notes

https://www.reuters.com/legal/legalindustry/did-trump-save-intel-not-really-2025-08-23/

https://www.nytimes.com/2025/08/23/business/trump-intel-us-steel-nvidia.html

https://arstechnica.com/tech-policy/2025/08/intel-agrees-to-sell-the-us-a-10-stake-trump-says-hyping-great-deal/

https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization

https://www.investopedia.com/articles/economics/08/government-financial-bailout.asp

https://www.tomshardware.com/pc-components/cpus/amds-desktop-pc-market-share-hits-a-new-high-as-server-gains-slow-down-intel-now-only-outsells-amd-2-1-down-from-9-1-a-few-years-ago

https://www.spglobal.com/commodity-insights/en/news-research/latest-news/metals/062625-in-rare-deal-for-us-government-owns-a-piece-of-us-steel

https://en.wikipedia.org/wiki/Renault

https://en.wikipedia.org/wiki/State-owned_enterprises_of_the_United_States

https://247wallst.com/special-report/2021/04/07/businesses-run-by-the-us-government/

https://en.wikipedia.org/wiki/Nationalization

https://www.amtrak.com/stakeholder-faqs

https://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization

We also discuss genetic modification, procreation, and tsetse flies.

Recommended Book: 1177 BC by Eric H Cline

Transcript

The term ‘autocidal control‘ refers to a collection of techniques that are meant to control populations of some type of living thing, animal or plant, by disrupting their procreationary capacity.

So rather than attempting to control pest by spraying poisons all over the place, or controlling plants you consider to be invasive weeds by launching huge weed-pulling efforts in the afflicted areas, you might instead figure out how to keep this current generation of pests and weeds from having as many offspring as they might otherwise have, and then repeat the process with the next generation, and the next, and so on, until the unwanted species is either eradicated in the relevant region, or reduced to such a small number that its presence is no longer such a big deal.

There are all kinds of approaches one might take in trying to achieve this sort of outcome.

Experimental genetic modification measures, for instance, have been tried in, so far at least, limited ways, the idea being to either make the disliked species less competitive in some way (by making them slower, and thus more likely to be eaten by predators, maybe), or by making them less likely to have offspring, or less likely to have fit offspring—the next generation becomes super slow and clumsy, or they’re carriers of a gene that keeps them from procreating as much, or at all.

That approach seems like it could be effective, and there are quite a few efforts, globally, that’re working to refine and perfect it with mosquito species in particular, specifically the ones that are carriers of malaria-causing parasites and similar maladies that cause immense harm to local human (and other mammal) populations.

There have also been attempts to spray mating grounds with pheromones that disrupt mating behavior, or to use what’s called the Autodissemination Augmented by Males, or ADAM approach, which has been used to decent effect in some trials, and which involves basically just sprinkling a bunch of male mosquitos with pesticide, releasing them into mosquito mating grounds, and then having them deliver those pesticides to the females they mate with.

All of these efforts are meant to reduce populations via some procreationary mechanism, while also attempting to ameliorate some of the other issues associated with other, widely used pest- and weed-control approaches. Most of which rely on some kind of chemical being introduced into the right environment, that chemical helping to kill or disrupt these populations, but in many cases also leading to unwanted, and often initially unforeseen side effects, like those chemicals messing with other species, getting into the groundwater and possibly being associated with maladies in humans, and so on.

What I’d like to talk about today is another approach, the sterile insect technique, why it’s become so popular in recent decades, and how it’s being used, today, to address a burgeoning population of a pest that was previously eliminated in North America using this technique, but which has recently become a problem, once more.

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The New World screwworm fly is thus named because its larvae, its baby offspring, are planted in warm-blooded animals. These offspring eat not just dead tissues, like the maggots of other flies, but healthy tissues as well.

These maggots are often deposited near wounds, like cuts or scrapes, but also injuries caused by the castration or dehorning of cattle, or orifices and other sensitive areas with soft tissue, like the corner of a host’s eye.

They don’t typically infest humans, but it does happen, and they’re most likely to be found on wild and domesticated mammals, the females of the species depositing somewhere between 250 and 500 eggs in the flesh of their hosts, the maggots screwing their way deeper into their host’s flesh as they grow, burrowing and eating for the next three to seven days, at which point they fall off and enter the next stage of their lifecycle. By that point the host may already be dead, depending on the extent of the damage these things manage to cause in the interim.

These flies were originally found across the Americas and on some Caribbean islands, and they have long been a headache for cattle ranchers in particular, as they will sometimes infect one cow or goat, and then work their way through the entire herd in relatively short order, causing enough damage to seriously injure or kill a whole lot of the rancher’s stock.

As a result, humans have been trying to get rid of these things for ages, but nothing seemed to make much of a dent in their populations until the emergence of what’s called the sterile insect technique, which is exactly what it sounds like: a method of autocidal control that involves sterilizing members of the species, usually the males, and then releasing them back into the population.

Variations on this concept were developed by a few different researchers in a few different places around the world in the lead-up to WWII, but just after that conflict, scientists working at the US Department of Agriculture realized that they could use x-rays to reliably sterilize male screwworm flies, and that if they did this to a large number of them, then released those males into the local population of screwworm flies, to the point where there are more sterilized males than non-sterilized ones, that would serve to dramatically reduce the size of the next generation. If you then repeat this over and over again, you can eventually wipe out the species in a given region, as they successfully showed in the early 1950s by eradicating all the screwworms on Sanibel Island in Florida.

The same technique was then used to kill all the screwworms on the island of Curacao, off the coast of Venezuela—that kill-off achieved in just seven weeks. Over the next few decades, sterilized male flies were then released across other afflicted US states, and both Mexico and Belize were able to kill all their screwworms in the 1980s, followed by Central America in the 1990s.

This approach was also applied to other pests, almost always those that either spread disease to humans, or threatened local industries, like cattle or agricultural industries.

For instance, tsetse flies, carriers of a parasite that causes sleeping sickness, were entirely or almost entirely eradicated from Tanzania, Zanzibar, Senegal, Burkina Faso, Nigeria, and Uganda between the 1940s and late-1990s, Aedes aegypti mosquitoes, the carriers of dengue and yellow fever, were sterilized by a bacteria called Wolbachia in Queensland, Australia, in the late-20-teens, which reduced the populations of this disease-carrier in trial areas by 80%, and Japan eradicated the melon fly, an agricultural pest, in 1993.

This approach to pest-control has become so popular that dozens of facilities have been set up in countries around the world, exclusively to breed and sterilize different species, which can then be shipped to where they will be released. The first of these facilities was built in Mexico in the 1960s, where Mexican fruit flies were bred and then shipped for release in Texas.

It’s maybe fitting then that a new round of construction is happening, today, intending to combat the renewed presence of screwworms in Mexico, which have been making their way up into Texas via these two nations’ cattle industries.

The US Department of Agriculture recently announced that it will be building a sterile screwworm fly facility in Texas, which has suffered due to the US’s recent decisions to halt the import of cattle from across the border in Mexico due to issues with screwworms hitching a ride on that cattle stock, and thus infiltrating US herds. The government tried several times to drop this cessation of imports, as the US cattle industry is pretty reliant on those imports, but each time they tried, new screwworm infestations were found, and the import halt was put back into place.

US cattle populations are already at their lowest level in decades, and that’s impacting meat and dairy prices, while also putting other warm-blooded animals in the afflicted regions, especially Texas, at risk.

The folks behind the new facility have said they hope to be up and running in relatively short order, aiming to be releasing sterile male New World screwworms into the wild within a year. This deployment will operate in tandem with other, more direct efforts, like fly traps and parasite-sniffing dogs stationed at ports of entry.

The concerns here are not just theoretical: screwworms alone cause an estimated $1.5 billion in damage each year, and the cost of implementing a sterilization program of this kind usually adds up to something like a billion dollars, spread across decades; not a bad return on investment.

These programs are not universally effective, though, as in some rare cases non-irradiated males have accidentally been shipped to their intended mating location, temporarily inflating rather than deflating population numbers. And while these programs are relatively cheap to operate on scale, the cost of producing enough sterilized males to make such an effort effective can be prohibitive when aimed at smaller regions, or when attempted by governments or agencies without the budget to see what can sometimes be a long-term project through.

That said, this approach does seem to work very well when done correctly, and while its ecosystem impact is not zero, as, for instance, predators who eat these pests might suddenly find themselves without one of their staple food sources, which can lead to knock-on effects across the food web, it does seem to be one of the least foodweb ripple-producing approaches, as genetic modifications can theoretically lead to far more elaborate unforeseen consequences, and the widespread spraying of chemicals has semi-regularly led to die-offs and maladies in other local species, in addition to sometimes causing long-term, even fatal health problems for humans who rely on local food or water sources.

Show Notes

https://archive.is/20250815192422/https://www.reuters.com/business/environment/usda-build-texas-facility-fight-flesh-eating-screwworms-2025-08-15/

https://www.oregonlive.com/business/2025/08/how-to-stop-flesh-eating-parasite-from-devastating-us-cattle-government-will-breed-billions-of-flies.html

https://apnews.com/article/fly-factories-flesheating-parasite-cattle-texas-429ce91225bbab4a45c9040f1be356a5

https://en.wikipedia.org/wiki/Cochliomyia_hominivorax

https://archive.is/14Rdk

https://archive.is/afmt2

https://archive.is/QfTvG

https://archive.is/dxbcZ

https://www.oregonlive.com/business/2025/08/how-to-stop-flesh-eating-parasite-from-devastating-us-cattle-government-will-breed-billions-of-flies.html

https://en.wikipedia.org/wiki/Sterile_insect_technique

https://en.wikipedia.org/wiki/List_of_sterile_insect_technique_trials

https://web.archive.org/web/20210416164524/http://www-iswam.iaea.org/drd/refs_files/195_The-Area-wide-SIT-Screwworm.pdf

https://www.iaea.org/newscenter/news/sterile-insect-technique-used-to-suppress-mosquito-disease-vectors-in-florida

https://www.cdc.gov/mosquitoes/mosquito-control/genetically-modified-mosquitoes.html

https://www.nature.com/articles/s41598-023-30722-9

https://pmc.ncbi.nlm.nih.gov/articles/PMC4313646/

We also discuss capital expenditure, data centers, and employee compensation.

Recommended Book: The Art of Gathering by Priya Parker

Transcript

Many technology booms have early periods in which innovators have a first-mover advantage, and a lot of what happens in their industry is informed by the decisions those innovators make.

After that—depending on the technology, but this is common enough to be considered a trend—after that there tends to be a period of build-out and consolidation amongst the people and business entities that survived that initial, innovation-focused throw-down.

In the context of personal computers, this moment saw computer-makers like Microsoft and Apple scramble to pivot from figuring out what an operating system should look like and whether or not to use mice to navigate user interfaces, to a period in which they were rushing to scale-up the manufacture of now-essential, but previously comparably rare components: suitable screens for their monitors, chips that could power their increasingly graphical machines, and the magnetic materials necessary to produce floppy disks and spindle-based hard drives.

There’s an initial period in which new ideas and approaches provide these entities with a moat that protects them against competition, in other words, but then the game they’re playing changes, the rules are more fully understood and to some degree locked into place and agreed upon, and instead of competing for the biggest, most brazen new ideas, they lock onto one set of ideas that seemed to be the best of what’s available at that moment and build on those, iterating them at a regular cadence, but focusing especially on scaling them.

So at this second stage, they’re investing in the ability to out-produce their competition in some way, so they can eventually bypass that competition and (they hope) safely increase their prices and make a profit, as opposed to just larger and larger revenues with equal or greater expenses, continuing to be reliant on investor injections of capital, rather than generating their own surplus returns.

By many analysts’ and insiders’ estimates, we’ve just entered that second stage in the generative AI industry. That’s the sort of AI that generates text and images and code and such, and it’s increasingly becoming a sort of commodity, rather than a new, hot things that few companies can offer the market.

What I’d like to talk about today are the increasingly massive financial figures associated with this industry’s shift to that second stage of development, and why some of those insiders and analysts are voicing fresh concerns that this could all lead to a bubble, and possibly an historically large one.

—

There are many ways we could measure the growth of the AI industry over the years.

The US market size, for instance, which is a measure of the value of AI-oriented companies based on how much shares of their company cost or would cost on the open market, has ballooned from just over $100 billion in 2022 to an estimated $174 billion in 2025. That figure is expected to grow at a not quite 20% compound annual growth rate through 2034, which, if accurate, would put this market, in the US alone, at more than $850 billion.

Another metric we might use is that of capital expenditure, or capex, in this corner of the tech industry, which refers to the amount of money AI companies are using to buy, upgrade, or maintain their long-term assets, like new computer chips or the data centers they fill with those chips.

The seven most valuable US tech companies—Meta, Alphabet, Microsoft, Amazon, Apple, NVIDIA, and Broadcom (that last spot formerly held by Tesla, which was dropped from this designation in late-2024)—just those seven companies have spent $102.5 billion on capex this last financial quarter (and most of that was from just four of them, Meta, Alphabet, Microsoft, and Amazon, the remainder only spending something like $6.7 billion).

That’s a staggering amount of money, and due to a recent drop in consumer demand—the money individual US citizens spend on things like food and clothes and smartphones and cars and all the other things people buy—AI-related capex, spending by these massive US tech companies, has added more to GDP growth than consumer spending for the past two quarters.

All the things all the people in the US bought over the past two quarters did not cost as much, in aggregate, as what these companies spent during the same period, on new and existing assets. That’s pretty wild.

And it’s the consequence, partly, of the shift in these companies’ focus from providing goods and services that relied heavily on people—salary and stock compensation, basically, which is not a capex expense, because its spent on employees, not stuff—to spending heavily on all that infrastructure that they believe will be required to help them compete with those other companies that are also frantically investing in the same.

Whomever can built the biggest, baddest, most reliable and powerful data centers, and can get the AI-optimized chips to fill them, will have an advantage over their opponents in the new, developing tech world paradigm, it’s thought, so they’re pumping gobs of resources into exactly those sorts of assets, hoping to get ahead, build an insurmountable advantage, and put their competition out of business—or failing that, to establish themselves as the AI Coca-Cola, versus their opposition’s AI Mr. Pip.

Similar dynamics are playing out elsewhere, especially in China, where the market could reach a value approximating today’s US AI market in 3-5 years, and several times that, up to $1.4 trillion, by 2030—though like all of these figures, it depends on how we choose to measure these sorts of things, including what counts as an AI company, and in China, several of their major AI players are heavily involved in automation, robotics, which itself is expected to be a $5 trillion industry in that country by 2050.

Europe’s market is comparably smaller, as is its overall tech industry, but the AI market is now just shy of 15% of its total tech sector, up from 12% in 2022, and AI startups are attracting about a quarter of all VC funding in the bloc right now—so they’re starting from a less spendy start, but like pretty much everywhere the necessary knowledge and manufacturing base exists at the moment, the European AI market is growing a lot faster than anyone would have expected even just five years ago.

And there are real-deal innovations coming out of this tech; these investments are flooding into AI companies because these technologies, this version of them, the generative AI stuff, has completely rewired the programming world, AI bots and agents helping coders achieve a lot more, faster, and non-coders make things they wouldn’t have been able to build lacking these tools, imperfect as many of those tools are, under the hood.

We’re also seeing an explosion of other sorts of generated content, and the injection of these tools that make such content into Hollywood studios and consulting firms and government agencies, and everything in between, is causing equal parts panic and excitement, depending on whether you’re one of the people who feels like they might be laid off soon, replaced by software, or if you’re someone who profits from all those layoffs, and the payments from the companies that hope to save money by conducting them, replacing their comparably expensive employees with cheaper AI tools.

Things have gotten so wild that Meta’s CEO Mark Zuckerberg has started offering compensation packages ranging from $200 million to more than a billion dollars to top AI talent. Meta’s AI spending is already massive, and could hit $72 billion this year, but the company has said it could hit $100 billion in 2026, while Microsoft’s leadership suggested their 2025 spending of $30 billion could balloon to $120 billion in 2026.

OpenAI recently offered their employees large bonuses, in the hundreds of thousands to millions of dollars range, to counter those sorts of overtures from the likes of Meta, but there’s a lot of money flying around from all direction right now, much of it aimed at more AI infrastructure, or the relatively few people on the planet who understand this tech well enough to make a competitive difference in this industry.

That’s…a lot of money. There’s just so much spending happening, so many resources sloshing around in this one space right now, and all this investment is predicated on the idea that AI will change everything, we’re stepping into a new paradigm, and those who control the AI, will basically own the next game. So they’re all trying to set things up so they win the next game, or at least have the best hand possible when it arrives.

There have been increasingly loud arguments, made by long-time generative AI critics, but also, more recently, ardent AI boosters, that we might be running up against a wall of what these things can do for us; this version of the AI concept, at least.

And these arguments got louder with OpenAI’s release of their long-teased GPT-5 model, which some expected to be true AGI, human-grade, flexible, omni-capable intelligence, while others thought it might be a mono-focused superintelligence of some kind: the perfect coder, the perfect image generator, something like that.

What users got was not that. It seems to be better at some things, still not great at others.

This was an incredibly expensive model to produce—the training costs alone are estimated to be something like a half-billion dollars, and that’s just a portion of the total costs of creating this sort of model—and what OpenAI served up, instead of something groundbreaking, was a slightly better, though in some ways seemingly the same or worse version of what everyone’s been playing with for years, now.

There’s room for disagreement on this, as while there are some more objective tests for measuring models’ capabilities, a lot of it is circumstantial, and depends, among other things, on what you’re trying to do, how the systems are prompted, and so on.

There’s also something to be said for cost-reductions and other sorts of benefits of new models, beyond raw power and capability.

But this thud of a launch for what was supposed to be a sea-changing system has led to the ringing of some alarm bells, industry watchers wondering if we might be careening toward a bubble, at a moment in which, again, this segment of the tech industry is contributing more to the US’s GDP than all of consumer spending, combined.

A bubble, to be clear, wouldn’t mean the collapse of the US economy, or even these companies, necessarily. It would mean a lot of AI entities going under, a lot of invested money lost, and a lot of people who suddenly don’t have jobs.

Almost always there are a few players in these bubbly spaces that make it to the other side, though—eBay, for instance, survived the dotcom bubble intact, as did Amazon, PayPal, and Adobe, among many others.

But the grand shakeout, the sifting for those that could survive a mammoth downturn, and the destruction of the rest, that’s a tough moment for those directly connected to the bubble-popping industry, and those adjacent to it: the folks who feed the employees who are now laid off, the suppliers of the light switches that go in all the data centers, etc.

There are ripple effects to this sort of bubble pop moment, then, and though such sifting might be long-term beneficial, because it maybe weeds out some of the dead-weight and makes things more efficient in that space five or ten years in the future, that won’t help the folks who lose a lot of money when the industry shrinks, including those who have their money at banks that made bad bets, or insurance companies that did the same, with their customers resources.

Everything’s great for everyone when these sorts of high-risk, high-reward bets are paying out, but when the golden goose of huge anticipated future profits disappears, that shakeout leaves a lot of entities and people with emptier pockets.

None of which suggests this is going to happen; there’s a chance that we continue to see better and better models using the current, generative AI technology, or that some of these companies successfully pivot to another AI approach that bears better, next-step fruit, and things just keep getting more and more powerful and less and less expensive for everyone; that could theoretically lead to some pretty cool, broadly beneficial things.

This sort of risk is lurking in the background of everything that’s happening, though, and while upbeat marketing messages and predictions about how cool it will all be when the next-step tools arrive can keep things going for a while, even lacking major milestones that can be pointed at to justify those claims, at some point we’ll probably need to see something really, truly different and novel, or the bottom could fall out, leaving those who were more careful tip-toeing into this collection of technologies looking less like they’re being left behind, and more like they took smart precautions and made safe, reliable investments.

Show Notes

https://www.precedenceresearch.com/us-artificial-intelligence-market

https://www.statista.com/outlook/tmo/artificial-intelligence/united-states

https://techcrunch.com/2024/12/23/ai-startups-attracted-25-of-europes-vc-funding/

https://archive.is/20250809000924/https://www.theverge.com/command-line-newsletter/756561/openai-employees-bonus-sam-altman-ai-talent-wars

https://paulkedrosky.com/honey-ai-capex-ate-the-economy/

https://www.wsj.com/tech/ai/silicon-valley-ai-infrastructure-capex-cffe0431

https://archive.is/20250809000924/https://www.theverge.com/command-line-newsletter/756561/openai-employees-bonus-sam-altman-ai-talent-wars

https://archive.is/20250808224658/https://www.bloomberg.com/news/articles/2025-08-07/tesla-disbands-dojo-supercomputer-team-in-blow-to-ai-effort

https://fortune.com/2025/08/04/billionaire-anthropic-ceo-dario-amodei-ai-staffers-poaching-meta-mark-zuckerberg-100k-six-figure-salaries-openai-sam-altman/

https://www.bbc.com/news/articles/c1e02vx55wpo

https://www.nytimes.com/2025/07/31/business/dealbook/meta-microsoft-ai-spending-shares.html

https://www.techrepublic.com/article/news-meta-billion-dollars-ai-poaching-failed/

We also discuss personal data, AC settings, and Delta’s earnings call.

Recommended Book: How the World Became Rich by Mark Koyama and Jared Rubin

Transcript

The US Robinson-Patman Act of 1936 is also called the Anti-Price Discrimination Act, and it was passed to make it illegal for a product supplier to charge different prices to different customers.

So a company that makes candy bars wouldn’t be allowed to charge one price to most of their customers, all the smaller and mid-sized convenience stores and mom-and-pop grocery stores, for instance, and then a lower price to the big stores, the Walmarts and Amazons of the world.

The concern was that these larger players, which at the time this law was passed were burgeoning grocery stores like A&P, would be able to achieve a monopolistic position in the market for these goods, these slightly lower prices giving them one more advantage over their smaller competitors.

During the four decades or so of this Act’s enforcement, small grocery stores has prices that were, on average, about 1% higher than those offered by their large competitors, and the eight largest grocery store chains only captured about 25% of all grocery sales in the US—essentially every city and town of any size had at least one small grocery store, and most had several of them, during this period. It was a very competitive market.

During the Reagan administration in the 80s, though, enforcement was abandoned, as the folks in charge of that enforcement were convinced this Act was holding back growth; they saw it as a handout to small businesses at the expense of big business, so while it technically remained on the books, they just stopped enforcing it, and the big businesses in these spaces got the message pretty quickly.

Walmart was the first big business to really lean into the new powers afforded them by this fresh governmental stance, and that led to it becoming the country’s largest grocery store chain by 2001, and other big grocery brands, like Kroger and Safeway, began to do the same, consolidating all their buying so they could put in huge orders like Walmart was able to put in, and that allowed them to demand lower prices, which in turn allowed them to dramatically increase profits and gobble up their smaller competition.

All of which led to the emergence of food deserts across the country, a term that was coined in 1995 to refer to areas where there are simply no grocery stores within a reasonable distance of relatively large populations of people, because smaller grocery stores can no longer compete, even when they’re the only player in town; folks have to travel to the larger chain stores, and have no real options closer to home, which can result in food precariousness, and situations in which the only nearby food options are unhealthy ones—the snacks at gas stations, for instance.

This same general pattern played out across all retail spaces, including pharmacies and bookstores and athletic supply stores, and between 1982 and 2017, the total market share of independent retailers in the US dropped from 53% to 22%.

Which in some ways is great at the federal level, as—and this is what the Reagan administration seemed to want, back in the 80s—big businesses can grow a lot faster and bigger than small businesses, and that can lead to outsized GDP numbers, and other such macro-scale figures.

Unfortunately, while independent retailers tend to keep nearly half of the revenue they pull in within their local community, major chains only keep something like 14% in the local community—so the shift from independent to chain retailers has had a deleterious impact on communities across the US, in the sense of having less competition, having food and other sorts of product deserts, and in terms of tax revenues and overall economic wealth being sapped from these areas and moved to other places, creating some relatively few winners and a whole lot of losers, in the process.

What I’d like to talk about today is another type of variable pricing, this one more directly aimed at consumers, and enabled, at least in its modern incarnation, by big data and the devices we use every day.

—

Dynamic pricing refers to changing the price of goods or services based on all sorts of variables.

Demand or surge pricing, for instance, might see the price of a bus ticket or rideshare ride with Uber cost more during rush-hour, the idea being that there are only so many bus seats and only so many available rideshare rides to go around, and when everyone’s either trying to get to work or get home from work, there will be a lot more people wanting these finite number of seats and rides than there are seats and rides available.

Upping the prices, then, is a means of determining who wants these things the most, because they’re willing to pay at times massively inflated prices for something that would cost far less in an hour or two, once the rush has subsided.

Similar price-inflation occurs during peak energy-use periods, and energy companies usually explain this price-bump by suggesting that it encourages their customers to use more energy when it’s abundant and cheap, and to use less of it when it’s scarce and expensive.

On very hot days when everyone is using their air conditioners to stay cool, then, inflated energy prices might encourage them to be less aggressive with their AC settings, keeping their indoor temperatures at a more reasonable level, which in turn ensures there’s more energy available for everyone and less risk of brownouts or blackouts.

This pricing strategy is often seen by those on the receiving end of such price-bumps, as price gouging, which refers to companies taking advantage of temporary variables to massively inflate their prices, at times to abusive levels that they can justify by pointing at those variables and a desire to moderate supply and demand.

So if there’s a big convention in town, local hotels can argue that they’re doubling or tripling their prices because there are not enough rooms for everyone who wants rooms on those days, but this could also be construed as a money-grab, these hotel companies knowing that some people won’t be able to avoid paying for a place to stay during the convention they have to attend, so they’re taking advantage of customers who have no choice but to pay up.

We saw similar dynamics play out globally during the height of the Covid-19 pandemic, when folks who had high-quality masks on hand were able to charge incredible sums for those masks because production hadn’t yet scaled up, so they were relatively scarce and thus precious, and these people and companies with the right product at the right time knew they could get away with charging many times the actual sticker-price of that product, because some people would feel they had no choice but to pay it.

Each situation of this kind will feel reasonable and suitable for the supply-demand situation to some, and completely unreasonable and abusive to others, and it’s possible to have a bit of both in many such situations—the companies in question actually want to manage a scarce supply of something, but are also keen to make as much money as possible while doing it.

Dynamic pricing has become even more common in online marketplaces like Amazon, where it’s not just holidays or events or the sudden emergence of global pandemics that can impact demand and thus, the prices retailers can get away with charging would-be customers.

Amazon has algorithms that keep track of what competitors are charging for the goods they offer, what sort of demand the market is seeing for said goods, what inventory looks like—if they have a lot or very few of something available to sell—and all sorts of other factors that might reasonably impact the price of a product, even a little bit.

As of 2024, the price of a product listed on Amazon changes several times a day, in some cases every 10 minutes, and they make about 2.5 million prices changes every single day, adjusting for those aforementioned micro-scale variables, on a product-by-product basis, but also adjusting their entire catalog so that relatively uncommon goods have higher prices, but common goods have lower prices, which means customers shopping around will tend to see Amazon’s lower-priced goods more often than the higher-priced ones, which in turn can adjust their perception of the company and its marketplace in a favorable, lower-price direction.

Amazon also has access to just a silly amount of data about their customers, some of it scooped up while we surf their sites, and some bought from other data-aggregators. And this allows Amazon, just like most tech companies and retailers, these days to track our behavior, watching what we click on, how long we linger on different products or product types, noticing our searches and contextualizing all of it with where we live, what we’ve purchased in the past, and so on.

The company isn’t very transparent about how it uses all this personal data, but while it’s been been speculated that they might adjust prices based on our individual profiles, most evidence suggests they mostly use it to determine what we’re shown—what products are promoted to us, basically, as opposed to setting prices based on what it thinks we’ll pay, as individuals.

The same generally seems to be true of other retailers right now, though there are concerns that this might change at some point in the near-future, as new technologies, some based on AI, enable the more-rapid and sophisticated crunching of data, and the consequent individualization of prices, even in person.

US airline Delta, for instance, recently announced that it would be using AI to help it boost profits by charging different customers different prices for the same airline seat.

These prices would be based on their customer profile, which means all the data scooped up by Delta from various sources, including things like past purchases, regular flight schedules, and how much money their systems think each customer makes and has available to spend.

The president of the company said on a recent earnings call that they’ve been running a pilot project for this approach that resulted in about 3% of ticket sales being sold based on this model over the past 6 months, and by the end of the year, their goal is to increase that to 20% of tickets.

In theory, this sort of system could be good for some customers some of the time, because it could drop prices on tickets that customers wouldn’t want to, or wouldn’t be able to pay for, otherwise. If I’m considering a trip, but the tickets are more expensive than I want to pay, these systems could theoretically recognize this and offer them to me at a price they can afford to sell them at, and which I can afford. That could lead to more ticket sales, and thus, higher profits.

The evidence on the ground with these sorts of systems usually points at price increases, not decreases, though: the companies using these models to see how much they can get per unit, not using them to sell more units at lower profit margins.

In other words, usually it’s wealthier consumers who get the better deals, as these companies want to keep them coming back, spending larger sums of money on glitzier products and services over time, while poorer consumers have fewer options, and will thus tend to pay whatever they’re told they have to pay.

Delta spent most of July 2025 trying to control the backlash that erupted following that earnings call, and they’re now saying, to the press but also in formal letters to government watchdogs who expressed concerns about what they said they planned to do, that no no no, we misspoke, we’re not using individualized data to set prices, it’s all good, don’t worry about it.

That announcement from Delta came shortly after lawmakers announced they would be pushing to get a new act, the Stop AI Price Gouging and Wage Fixing Act, passed into law, and though some US Senators have said they’ll block such efforts by Delta, other airlines, including Azul, WestJet, Virgin Atlantic, and VivaAerobus are also clients of the Israeli company, Fetcherr, that Delta has been working with to run their AI pricing pilot program—and representatives from Fetcherr have claimed that this pricing model is irresistible to those in charge of these companies, so it will probably take over the airline industry relatively quickly, and they plan to expand into other industries soon.

These sorts of pricing models aren’t typically very popular with customers, and efforts by Walmart and other big grocery chains to remove static in-store pricing labels and replace them with digital versions, or in some extreme cases to remove them entirely and rely on apps on customers’ phone to show prices on goods, raised similar alarm bells, as dynamic pricing can allow the store to more rapidly change their prices based on demand, like Uber’s surge pricing model, but maybe applied to flour or cough medicine instead of rideshare seats, and in-app pricing could allow them to show different prices to different people shopping for the same thing at the same time—again, based on income, buying patterns, and so on.

Walmart and everyone else dabbling in this space has, like Delta, claimed they intend no such dynamism in their pricing, even as their CEOs in some cases continue to brag to investors about the possibilities. As a result, there seems to be a decent chance we’ll see the large-scale deployment of these sorts of models in at least some customer-facing industries within the next year or two, some company deciding to more fully test the regulatory establishment’s appetite for challenging this push into a new pricing paradigm that would, theoretically at least, allow big companies to earn still-higher profits and grow even larger.

Show Notes

https://drive.google.com/file/d/1HQoQhvfVv8p0XmOdDIiWTnmd2YM_za07/view

https://www.businessinsider.com/amazon-price-changes-2018-8

https://en.wikipedia.org/wiki/Algorithmic_pricing

https://en.wikipedia.org/wiki/Dynamic_pricing

https://www.archeraffiliates.com/post/amazon-dynamic-pricing

https://arstechnica.com/tech-policy/2025/08/delta-denies-using-ai-to-come-up-with-inflated-personalized-prices/

https://arstechnica.com/tech-policy/2025/07/will-ai-end-cheap-flights-critics-attack-deltas-predatory-ai-pricing/

https://www.the-sun.com/money/14839597/walmart-kroger-electronic-labels-dynamic-pricing-demand-wendys

https://www.nytimes.com/2024/10/23/business/kroger-walmart-facial-recognition-prices.html

https://www.nerdwallet.com/article/finance/what-is-dynamic-pricing

https://www.theatlantic.com/ideas/archive/2024/12/food-deserts-robinson-patman/680765/

https://www.indieretailermonth.com/statistics

https://en.wikipedia.org/wiki/Robinson%E2%80%93Patman_Act

We also discuss cultural influence, extreme ideologies, and itch.io.

Recommended Book: Limitarianism by Ingrid Robeyns

Transcript

In mid-July of 2025, Valve, the company behind the gaming platform Steam, announced that it was tightening its adult-only content guidelines, its not-safe-for-work content, basically, following pressure by the payment processing companies it works with.

Its new policy even says that “content that may violate the rules and standards set forth by Steam’s payment processors and related card networks and banks, or internet network providers” is not allowed on Steam’s network, which in practice means these games will be more difficult to find and purchase, because of Steam’s prominence in the non-console gaming space.

About a week later, the founder of Itch.io, another gaming marketplace that’s similar in some ways to Steam, as it allows creators to sell their games to folks who use the platform, but which is a bit smaller and more focused on indie games, said that itch.io would likewise be removing NSFW, adult-themed games from its catalog, due to concerns that the payment processors they work with have communicated to their company.

In no uncertain terms, he said itch.io wouldn’t be able to operate without these payment processors, so they had to “prioritize our relationships with our payment partners and take immediate steps toward compliance.”

The folks whose games were removed from itch.io as part of this purge were given no warning, and many critics of the decision have pointed to similarities between this gaming-world censorship, as they see it at least, and what happened back in 2018, when social platform Tumblr banned pornographic content, the company’s owner citing pressure from credit card companies as the rationale for that decision—a decision that led to a huge exodus of users from the platform and a whole lot of criticism from creators, users, and folks who keep tabs on censorship-related issues.

There’s been a lot of the same in response to these moves by itch.io, Steam, and similar platforms which have recently decoupled themselves from certain types of adult content, and statements from these companies seems to be illustrative of what’s happening here: they’re completely reliant on these payment processing companies to exist, because without them they can’t easily accept money for what they’re selling. Thus, they’d better comply with what these companies tell them to do, or else.

There have been claims from some folks who have watched this sort of purge occur in other corners of the web over the years that credit card companies are anti-porn and anti-anything-NSFW because the chargeback rate is huge in these spaces—something like 10-times the number of chargebacks, which is what happens when customers say they didn’t buy something, and in some cases then get their money back, after the fact, compared to the next-highest facet of the payment processing industry. And that’s both a pain and potentially expensive.

Others have pointed out that these sorts of purges tend to be political in nature: the groups that push payment processors to adopt these stances are typically vehemently anti-porn, either ultra-conservative or radical-feminist in nature—two ideologies that are oppositional in many ways, but they loop back around when it comes to some topics and have similar, burn it all down ideas about adult content; we don’t approve, so let’s get rid of all this stuff that we don’t approve of by whatever means necessary.

In most cases this means lobbying to get influence in various political spheres, including with politicians who control various governments’ relationships with these payment processors. If they can get the ear of those who make the rules to which these payment processors must adhere, they can then threaten the payment processors—who in many countries, though especially the United States, have pretty sweet deals that allow them to more or less collect a tax on every payment made for everything across every sector—saying, well, we can push our friends in the government to take those sweetheart deals away. So unless you want to suffer that consequence, push these customers of yours to take down this stuff we don’t like.

What I’d like to talk about today are some similar and overlapping movements that are beginning to see censorship-related success across these and other aspects of the web, and the seeming purpose behind these pushes to censor and purge and create the apparatuses by which censorship and purges can be more thoroughly performed.

—

One of the big concerns about banning certain types of games is that games are just content, and if you’re able to find a reliable means of banning one type of content, you can then, in theory at least, using that same lever to ban other types of content, like books, articles, films, and so on. Some of the stuff banned on itch.io were essentially just books, in fact.

If you can reliably ban any type of content, you can shape the information ecosystem to reflect one world view, and that’s the sort of thing that tends to distort entire societies, creating an artificial, unreflective view of the world that adheres to the beliefs, values, and perspectives of one group while ignoring or putting down, or even outlawing the beliefs, values, and perspectives of others.

It’s easy to miss that when talking about the banning of adult-themed video games, and many of the games that were banned on Steam and itch.io contained themes like incest and rape—taboo themes that many people have ideological issues with, not just standard-fair pornography, whatever that even means these days.

That said, this same general approach has been used to great effect by interest groups using the same general language, that we need to protect women, or we need to protect the children, won’t someone think of the children, to ban books that feature any kind of queer content, or adult-adjacent themes; nothing pornographic, but themes that don’t line up, often, with a particularly conservative, Christian, no-sex-before-marriage ideology.

So if you’re in that interest group and have those beliefs, these sorts of bans make a certain kind of sense if you want to enforce those beliefs on others and ensure the media ecosystem reflects your beliefs and nothing else, but if you don’t share those beliefs, well, this lever could be used to ban all the stuff you want to see and learn about and consider, and can be very oppressive.

The group behind the recent Steam and itch.io bans, Collective Shout, is run by an Australian political activist named Melinda Tankard Reist who describes herself as an advocate for women and girls and a pro-life feminist. And she’s dedicated herself, among other things, to banning adult films, blocking musical artists from performing in Australia if their work contains lyrics she doesn’t approve of, and to removing pornographic games from platforms like Steam, alongside games that contain LGBTQ characters or have references to domestic violence, including those that present content meant to help people who have suffered domestic violence recover from that experience.

A very specific ideology, then, that she has dedicated her life to enforcing on the larger media ecosystem, and thus, society as a whole.

There’s a parallel and in some cases interrelated movement happening globally right now, especially in the UK and US, but in some other countries, too, to varying degrees, oriented around age-gating online content.

The British government, for instance, recently approved the Online Safety Act of 2023, which they’ve said is intended to protect children from pornographic content on the internet.

This law is enforced by an age-gate, which means requiring that people who want to access such content prove they are old enough to access it, usually by uploading their government issued ID, taking a selfie, which is then assessed to see if they’re obviously old enough, or uploading something like a bank card that a child wouldn’t have.

This law punishes online platforms that don’t implement these sorts of age-gate systems, though apparently they’re incredibly ineffective and easy to bypass, as all you have to do is use a VPN to make it look like you’re in another country, and the age-gates go away; that loophole might eventually disappear, as this is something that is still being rolled out, but that’s the general concept and intention here.

The problem with these sorts of age-gates, as noted by all sorts of activists across the political spectrum, is that what’s appropriate and not appropriate is often being determined by people with views and beliefs that are in some way radical and different from that of the average person where these laws are being passed—usually those with more conservative, and thus constrictive ideas about what should be allowed—and that means, again, the informational ecosystems in these places are being reshaped to match that of these extremist people, who either found themselves in the right political positions, or who have over time purchased influenced with the politicians who are helping to make these laws.

The situation is similar in some parts of the US, where age-gating laws are beginning to see implementation in conservative states like Texas, where First Amendment challenges to a recently passed age-gate law were rebuffed by the Supreme Court, which ruled in favor of those passing the law; the US Supreme Court has a large conservative majority right now, and relationships with some of the folks pushing these laws, so this isn’t terribly surprising.

That law, HB1181, which is one of many currently in the works or recently passed in the US, 21 states have a law similar to this, as of mid-2025, and it will require websites with adult content implement age-gating filters to prove users are 18 or older, or, as in the UK, they will be punished.

Also as in the UK, there are relatively simple workarounds to all of these age verification requirements, but there are fears that these sorts of rulings will mostly fail to protect children from anything, and will predominantly be used by radicals with control over aspects of the government to reshape the media and culture in their ideological image.

The folks behind the ultra-conservative Project 2025 plan, the Heritage Foundation, for instance, have said that this is exactly what they intend; by age-gating content they don’t like, they can shape the next generation, and as a nice side benefit, these sorts of filters becoming common makes online identity verification the default, not the exception. And that means it’s easier to track everyone, adult and non-adult, online, attaching their real identity to their behaviors, which can make it easier to pressure or punish folks who do things they don’t like in the otherwise anonymized online world.

This has raised all kinds of alarm bells with First Amendment and freedom of speech activists, but it’s of-a-kind with those aforementioned efforts by folks trying to ban certain types of content in video games and books; if the idea is to reshape everything so that your views are the only ones people see, and anything else is taken down or outlawed, this is one way to accomplish that, even if at first it might simply seem like an attempt to ensure children don’t see nude bodies or sexual acts in their video games.

Similar filters are being tested, both in the practical sense and the legal and political sense, in five EU nations, and a bunch of other countries around the world right now, often by people with the same conservative political slant as in the US and UK, but in some cases by other characters who have similar ambitions with a slightly different ideological tinge.

There is some evidence that pornographic content influences children in negative ways, and there’s some evidence that porn, in general, is not super great for relationships, societies, and individuals.

That said, almost all of these cases have been brought by people or groups with larger interests in shutting down all sorts of content; so calls to protect the children, while perhaps sometimes true, also seem to almost always be a legal foot in the door that then allows for more, next-step censorship, of things and ideas they don’t like and want to ensure no else can access, in subsequent years.

Show Notes

https://action.freespeechcoalition.com/age-verification-bills/

https://www.theverge.com/internet-censorship/686042/supreme-court-fsc-paxton-porn-age-verification-ruling

https://en.wikipedia.org/wiki/Melinda_Tankard_Reist

https://www.rte.ie/news/2025/0704/1521746-meta-eu/

https://web.archive.org/web/20250719204151/https://www.vice.com/en/article/group-behind-steam-censorship-policies-have-powerful-allies-and-targeted-popular-games-with-outlandish-claims/

https://www.readtangle.com/porn-age-verification-law-upheld-by-supreme-court/

https://archive.is/20250715004830/https://www.reuters.com/sustainability/boards-policy-regulation/five-eu-states-test-age-verification-app-protect-children-2025-07-14/

https://www.bbc.com/news/articles/c977njnvq2do

https://www.ofcom.org.uk/online-safety/protecting-children/enforcement-programme-to-protect-children-from-encountering-pornographic-content-through-the-use-of-age-assurance

https://archive.is/20250725221633/https://www.theverge.com/analysis/713773/uk-online-safety-act-age-verification-bypass-vpn

https://www.polygon.com/news/615910/itchio-steam-sex-adult-games-delisting-pulled-vice-controversy

https://www.theverge.com/news/712890/itch-removes-adult-nsfw-games-steam-payment-providers

https://itch.io/updates/update-on-nsfw-content

https://www.ign.com/articles/valve-pulls-adult-only-games-from-steam-as-it-tightens-rules-to-appease-payment-partners

https://www.theverge.com/2022/9/29/23377446/tumblr-matt-mullenweg-post-nsfw-porn-internet-service-moderation-policies

https://www.gamesradar.com/games/it-might-be-porn-games-now-but-they-wont-stop-there-game-devs-join-players-and-artists-rallying-against-credit-card-companies-after-mass-nsfw-game-delisting/

https://www.seamlesschex.com/blog/chargeback-rates-by-industry

We also discuss terrorism, discrimination, and stateless nations.

Recommended Book: A Century of Tomorrows by Glenn Adamson

Transcript

Kurdistan is a cultural region, not a country, but part of multiple countries, in the Middle East, spanning roughly the southeastern portion of Turkey, northern Iraq, the northwestern portion of Iran, and northern Syrian. Some definitions also include part of the Southern Caucasus mountains, which contains chunks of Armenia, Georgia, and Azerbaijan.

So this is a sprawling region that straddles multiple nations, and it’s defined by the presence of the Kurdish people, the Kurds, who live all over the world, but whose culture is concentrated in this area, where it originally developed, and where, over the generations, there have periodically been very short-lived Kurdish nations of various shapes, sizes, and compositions.

The original dynasties from which the Kurds claim their origin were Egyptian, and they governed parts of northeastern African and what is today Saudi Arabia, Yemen, Israel, Lebanon, Syria, and Jordan. That was back in the 8th to 12th century, during which Saladin, who was the sultan of both Egypt and Syria, played a major historical role leading Muslim military forces against the Christian Crusader states during the Third Crusade, and leading those forces to victory in 1187, which resulted in Muslim ownership of the Levant, even though the Crusaders continued to technically hold the Kingdom of Jerusalem for another hundred years or so, until 1291.

Saladin was Kurdish and kicked off a sultanate that lasted until the mid-13th century, when a diverse group of former slave-soldiers called the mamluks overthrew Saladin’s family’s Ayyubid sultanate and replaced it with their own.

So Kurdish is a language spoken in that Kurdistan region, and the Kurds are considered to be an Iranian ethnic group, because Kurdish is part of a larger collection of languages and ethnicities, though many Kurds consider themselves to be members of a stateless nation, similar in some ways to pre-Israel Jewish people, Tibetan people under China’s rule, or the Yoruba people, who primarily live in Nigeria, Benin, and Togo, but who were previously oriented around a powerful city-state in that region, which served as the central loci of the Ife Empire, before the Europeans showed up and decided to forcibly move people around and draw new borders across the African continent.

The Kurds are likewise often politically and culturally powerful, and that’s led to a lot of pushback from leaders in the nations where they live and at times operate as cultural blocs, and it’s led to some very short-lived Kurdish nations these people have managed to establish in the 20th century, including the Kingdom of Kurdistan from 1921-1924, the Republic of Ararat from 1927-1930, and the Republic of Mahabad, which was formed as a puppet state of the Soviet Union in 1946 in northwestern Iran, following a Soviet push for Kurdish nationalism in the region, which was meant to prevent the Allies from controlling the region following WWII, but which then dissolved just a few months after its official formation due to waning support from the Kurdish tribes that initially helped make it a reality.

What I’d like to talk about today is the Kurdistan Worker’s Party, and why their recently declared ceasefire with Turkey is being seen as a pretty big deal.

—

The Kurdistan Worker’s Party, depending on who you ask, is a political organization or a terrorist organization. It was formed in Turkey in late-1978, and its original, founding goal was to create an independent Kurdish state, a modern Kurdistan, in what is today a small part of Turkey, but in the 1990s it shifted its stated goals to instead just get more rights for Kurds living in Turkey, including more autonomy but also just equal rights, as Kurdish people in many nations, including Turkey, have a long history of being discriminated against, in part because of their cultural distinctiveness, including their language, manner of dress, and cultural practices, and in part because, like many tight-knit ethnic groups, they often operate as a bloc, which in the age of democracy also means they often vote as a bloc, which can feel like a threat to other folks in areas with large Kurdish populations.

When I say Kurdish people in Turkey have long been discriminated against, that includes things like telling them they can no longer speak Kurdish and denying that their ethnic group exists, but it also includes massacres conducted by the government against Kurdish people; at times tens of thousands of Kurds were slaughtered by the Turkish army. There was also an official ban on the words Kurds, Kurdistan, and Kurdish by the Turkish government in the 1980s, and Kurdish villages were destroyed, food headed to these villages was embargoed, and there was a long-time ban on the use of the Kurdish language in public life, and people who used it were arrested.

As is often the case in such circumstances, folks who support the Kurdish Worker’s Party, which is often shorthanded as the PKK, will tell you this group just pushes back against an oppressive regime, and they do what they have to to force the government to backtrack on their anti-Kurdish laws and abuses, which have been pretty widespread and violent.

The PKK, in turn, has been criticized for, well, doing terrorist stuff, including using child soldiers, conducting suicide bombings, massacring groups of civilians, engaging in drug trafficking to fund their cause, and executing people on camera as a means of sowing terror.

Pretty horrible stuff on both sides, if you look at this objectively, then, and both sides have historically justified their actions by pointing at the horrible things the other side has done to them and theirs.

And that’s the context for a recent announcement by the leader of the PKK, that the group would be disarming—and very literally so, including a symbolic burning of their weapons in a city in northern Iraq, which was shared online—and they would be shifting their efforts from that of violent militarism and revolution to that of political dialogue and attempting to change the Turkish government from the inside.

Turkish President Erdogan, for his part, has seemed happy to oblige these efforts and gestures, fulfilling his role by receiving delegates from the Turkish, pro-Kurd party, the DEM Party, and smilingly shaking that delegate’s hand on camera, basically showing the world, and those who have played some kind of role in the militant effort against the Turkish government, that this is the way of things now, we’re not fighting physically anymore, we’re moving on to wearing suits and pushing for Kurdish rights within the existing governmental structures.

The founder of the PKK, Abdullah Ocalan, got in on the action, as well, releasing a seven-minute video from prison, which was then broadcast by the PKK’s official media distribution outlet, saying that the fighting is over. This was his first appearance on camera in 26 years, and he used it to say their effort paid off, the Kurds now have an officially recognized identity, and it’s time to leverage that identity politically to move things in the right direction.

Erdogan’s other messages on the matter, to the Kurdish people, but also those who have long lived in fear of the PKK’s mass-violence, have reinforced that sentiment, saying that the Kurds are officially recognized as a political entity, and that’s how things would play out from this point forward—and this will be good for everyone. And both sides are saying that, over and over, because, well, child soldiers and suicide bombings and massacres conducted by both sides are really, really not good for anyone.

By all indications, this has been a very carefully orchestrated dance by those on both sides of the conflict, which again, has been ongoing since 1978, and really picked up the pace and became continuous and ultra-violent, in the 1980s.

There was an attempted peace process back in the 20-teens, but the effort, which included a temporary truce between 2013 and 2015, failed, following the murder of two Turkish police officers, the PKK initially claiming responsibility, but later denying they had any involvement. That led to an uptick in military actions by both groups against the other, and the truce collapsed.

This new peace process began in 2024 and really took off in late-February of 2025, when that aforementioned message was broadcast by the PKK’s leader from prison after lawmakers from the pro-Kurdish DEM Party worked to connect him and the Turkish government, and eventually helped negotiate the resulting mid-May of 2025 disarmament.

Turkey’s military leaders have said they will continue to launch strikes against PKK-affiliated groups that continue to operate in the region, and the PKK’s disarmament announcement has been embraced by some such groups, while others, like the Syrian Democratic Forces, which is tied to the PKK, but not directly affiliated with them, have said this truce doesn’t apply to them.

Most governments, globally, have heralded this disarmament as a major victory for the world and Turkey in particular, though the response within Turkey, and in Kurdish areas in particular, has apparently been mixed, with some people assuming the Turkish government will backtrack and keep the DEM Party from accomplishing much of anything, and worrying about behind-the-scenes deals, including a reported agreement between Erdogan’s government and the DEM Party to support Erdogan’s desire to transform the Turkish presidential system, which would grant him more direct control and power, and allow him to run for another term in office, while others are seemingly just happy to hear that the violence and fear might end.

Also notable here is that a lot of Turkey’s foreign policy has revolved around hobbling and hurting the PKK for decades, including Turkey’s initial hindering of Sweden’s accession to NATO, which was partly a means of getting other nations to give the Turkish government stuff they wanted, like upgraded military equipment, but was also a push against the Swedish government’s seeming protection of people associated with the PKK, since Sweden’s constitution allows people to hold all sorts of beliefs.

Some analysts have speculated that this could change the geopolitics of the Middle East fundamentally, as Turkey has long been a regional power, but has been partly hobbled by its conflict with the PKK, and the easing or removal of that conflict could free them up to become more dominant, especially since Israel’s recent clobbering of Iran seems to have dulled the Iranian government’s shine as the de facto leader of many Muslim groups and governments in the area.

It’s an opportune time for Erdogan to grab more clout and influence, in other words, and that might have been part of the motivation to go along with the PKK’s shift to politics: it frees him and his military up to engage in some adventurism and/or posturing further afield, which could then set Turkey up as the new center of Muslim influence, contra-the Saudis’ more globalized version of the concept, militarily and economically. Turkey could become a huge center of geopolitical gravity in this part of the world, in other words, and that seems even more likely now that this disarmament has happened.

It’s still early days in this new seeming state of affairs, though, and there’s a chance that the Turkish government’s continued strikes on operating PKK affiliated groups could sever these new ties, but those involved seem to be cleaving to at least some optimism, even as many locals continue hold their breath and hope against hope that this time is different than previous attempts at peace.

Show Notes

https://www.pbs.org/newshour/world/heres-what-to-know-about-turkeys-decision-to-move-forward-with-swedens-bid-to-join-nato

https://en.wikipedia.org/wiki/2025_PKK%E2%80%93Turkey_peace_process

https://en.wikipedia.org/wiki/2013%E2%80%932015_PKK%E2%80%93Turkey_peace_process

https://carnegieendowment.org/emissary/2025/05/turkey-pkk-disarm-disband-impacts?lang=en

https://www.middleeasteye.net/news/pkk-claims-deadly-suicide-bombing-turkish-police-station

https://web.archive.org/web/20161016064155/https://hrwf.eu/wp-content/uploads/2016/07/Child-soldiers-in-ISIS-PKK-Boko-Haram%E2%80%A6.pdf

https://en.wikipedia.org/wiki/Kurdistan_Workers%27_Party

https://www.theguardian.com/world/video/2025/jul/11/kurdistan-workers-party-pkk-burn-weapons-in-disarming-ceremony-video

https://www.aljazeera.com/news/2025/7/18/turkiye-pkk-analysis-recalibrates-politics

https://time.com/7303236/erdogan-war-peace-kurds/

https://www.aljazeera.com/news/2025/7/19/unidentified-drone-kills-pkk-member-injures-another-in-iraq

https://www.reuters.com/world/middle-east/unidentified-drone-kills-pkk-member-injures-another-near-iraqs-sulaymaniyah-2025-07-19/

https://www.aljazeera.com/video/inside-story/2025/7/11/why-has-the-pkk-ended-its-armed-struggle

https://archive.is/20250718061819/https://www.haaretz.com/opinion/2025-07-17/ty-article-opinion/.premium/how-the-possible-end-to-turkeys-kurdish-problem-could-become-israels-turkey-problem/00000198-1794-dd64-abb9-bfb5dbf30000

https://en.wikipedia.org/wiki/Kurdistan

https://en.wikipedia.org/wiki/Kurds

https://en.wikipedia.org/wiki/List_of_Kurdish_dynasties_and_countries

https://en.wikipedia.org/wiki/Early_Kurdish_nationalism

We also discuss tech-triggered psychosis, AI partners, and confident nonsense.

Recommended Book: Mr. Penumbra's 24-Hour Bookstore by Robin Sloan

Transcript

In the context of artificial intelligence systems, a hallucination or delusion, sometimes more brusquely referred to as AI BS, is an output usually from an AI chatbot, but it can also be from another type of AI system, that’s basically just made up.

Sometimes this kind of output is just garbled nonsense, as the AI systems, those based on large language models, anyway, are essentially just predicting what words will come next in the sentences they’re writing based on statistical patterns. That means they can string words together, and then sentences together, and then paragraphs together in what seems like a logical and reasonable way, and in some cases can even cobble together convincing stories or code or whatever else, because systems with enough raw materials to work from have a good sense of what tends to go where, and thus what’s good grammar and what’s not, what code will work and what code will break your website, and so on.

In other cases, though, AI systems will seem to just make stuff up, but make it up convincingly enough that it can be tricky to detect the made up component of its answers.

Some writers have reported asking AI to provide feedback on their stories, for instance, only to later discover that the AI didn’t have access to the stories, and they were providing feedback based on the title, or based on the writer’s prompt—the text the writer used to ask the AI for feedback. And their answers were perhaps initially convincing enough that the writer didn’t realize the AI hadn’t read the pieces they asked them to criticize, and the AI systems, because most of them are biased to sycophancy, toward brown-nosing the user and not saying anything that might upset them, or saying what it believes they want to hear, they’ll provide general critique that sounds good, that lines up with what their systems tell them should be said in such contexts, but which is completely disconnected from those writings, and thus, not useful to the writer as a critique.

That combination of confabulation and sycophancy can be brutal, especially as these AI systems become more powerful and more convincing. They seldom make the basic grammatical and reality-based errors they made even a few years ago, and thus it’s easy to believe you’re speaking to something that’s thinking or at the bare-minimum, that understands what you’re trying to get it to help you with, or what you’re talking about. It’s easy to forget when interacting with such systems that you’re engaged not with another human or thinking entity, but with software that mimics the output of such an entity, but which doesn’t experience the same cognition experienced by the real-deal thinking creatures it’s attempting to emulate.

What I’d like to talk about today is another sort of AI-related delusion—one experienced by humans interacting with such systems, not the other way around—and the seeming, and theoretical, pros and cons of these sorts of delusional responses.

—

Research that’s looked into the effects of psychotherapy, including specific approaches like cognitive behavioral therapy and group therapy, show that such treatments are almost aways positive, with rare exceptions, grant benefits that tend to last well past the therapy itself—so people who go to therapy tend to benefit from it even after the session, and even after they stop going to therapy, if they eventually stop going for whatever reason, and that the success rate, the variability of positive impacts, vary based on the clinical location, the therapist, and so on, but only by about 5% or less for each of those variables; so even a not perfectly aligned therapist or a less than ideal therapy location will, on average, benefit the patient.

That general positive impact is part of the theory underpinning the use of AI systems for therapy purposes.

Instead of going into a therapist’s office and speaking with a human being for an hour or so at a time, the patient instead speaks or types to an AI chatbot that’s been optimized for this purpose. So it’s been primed to speak like a therapist, to have a bunch of therapy-related resources in its training data, and to provide therapy-related resources to the patient with whom it engages.

There are a lot of downsides to this approach, including the fact that AI bots are flawed in so many ways, are not actual humans, and thus can’t really connect with patients the way a human therapist might be able to connect with them, they have difficulty shifting from a trained script, as again, these systems are pulling from a corpus of training data and additional documents to which they have access, and that means they’ll tend to handle common issues and patient types pretty well, but anything deviating from that is a toss-up, and, as I mentioned in the intro, there’s a chance they’ll just make stuff up or brown-nose the patient, saying things it seems like the patient wants to hear, rather than the things the patient needs to hear for their mental health.

On the upside, though, there’s a chance some people who wouldn’t feel comfortable working with a human therapist will be more comfortable working with a non-human chatbot, many people don’t have physical access to therapists or therapy centers, or don’t have insurance that covers what they need in this regard, and some people have other monetary or physical or mental health issues that makes therapy inaccessible or non-ideal for whatever reason, and these systems could help fill in the gaps for them, giving them something imperfect, but, well, 80% of what you need can be a lot better than 0% of what you need. In theory, at least.

That general logic is a big part of why the therapy AI bot boom has been so substantial, despite the many instances of human patients seemingly being driven to suicide or other sorts of self-harm after interacting with these bots, which in some cases were later found to either nudge their patients in that direction, or support their decisions to do so. And that’s alongside the other issues associated with any app that sends the user’s information to a third location for processing, like the collection of their data for marketing and other purposes.

The therapy chatbot industry is just one corner of a much larger conversation about what’s become known as ChatGPT Psychosis, which is shorthand for the delusions some users of these AI chatbots, those made by ChatGPT and those made by other companies, begin to have while interacting with these bots, or maybe already had, but then have amplified by their interactions with these systems.

The stories have been piling up, reported in the Times, in Rolling Stone, and in scientific journals, and the general narrative is that someone who seems to be doing fine, but who’s maybe a little depressed or unhappy, a little anxious, but nothing significant, at least to those around them, starts interacting with a chatbot, then gets really, really absorbed in that interaction, and then at some point those around this person realize that their friend or child or spouse or whomever is beginning to have delusions of grandeur, believing themselves to be a prophet or god, or maybe they’re starting to see the world as just an intertangled mess of elaborate, unbacked conspiracy theories, or they come to believe the entire world revolves around them in some fundamental way, or everyone is watching and talking about them—that genre of delusion.

Many such people end up feeling as if they’re living inside nihilistic and solipsistic nightmares, where nothing has meaning and they’re perhaps the only entity of any importance on the planet—everyone else is just playing a minor role in their fantastical existence.

Different chatbots have different skins, in the sense that their outputs are tailored in different ways, to have a different valence and average personality. Some chatbots, like ChatGPT’s GPT-4o, have had their sycophancy setting set so high that it rendered them almost completely useless before it was eventually fixed—early users reported feeling unsettled by their interactions with this bot when it was first released, because it was such a shameless yes-man, they couldn’t get any useful information from it, and all the language it used to deliver the information it did provide made them feel like they were being manipulated by a slavish underling.

For some people, though, that type of presentation, that many compliments and that much fawning attention, will feel good, or feel right.

Maybe they’re disempowered throughout their day in countless subtle and overt ways, and having someone—even if that someone isn’t real—speak to them like they’re important and valuable and smart and attractive and perhaps even the most important person in the world, maybe that feels good.

Others maybe feel like they have hidden potential that’s never been appreciated, and if the chatbot they’re referencing for all sorts of answers about things, and which seems to have most of those answers, and is thus a believable source of good, correct information, starts to talk to them as if they’re the messiah, well, maybe they start to believe they are important, are some kind of messiah: after all, it’s right about so many other things, so why not this thing? It’s something which many of us, to greater or lesser degrees, at least, possibly not always to that extreme, would be psychologically primed to believe, at least on some level, because it feels good to feel important, and so many social narratives, in some cultures at least, make this seem like something that does happen and might someday happen to us.

This effect might be even more pronounced in people who have underlying conditions, like depression or anxiety, and even more so those with conditions like schizophrenia that leave a person prone to various sorts of psychosis.

Folks with such conditions, diagnosed or not, are already frequently triggered by things like social media, which, because of the way these platforms scoop up data and target content at users, can make folks who look at TikTok and scan their Instagram feed feel like the center of the universe, like they’re being watched, like folks they don’t know are sending messages to them, or like there’s some kind of pattern they need to figure out and which they’ve caught a glimpse of, and which seems really, really important.

This is part of why many experts are saying that if AI chatbots are going to be used therapeutically, they should absolutely be used in a hybrid situation, where there are humans in the loop who are capable of checking to make sure the information being conveyed is accurate and not enflaming psychosis, and so they can ensure medication is being prescribed and used, if appropriate. There needs to be someone who can talk someone down and tell them when their brain is leading them awry, basically, which is not something chatbots are generally capable of doing right now—they’re more likely to reinforce a user’s incorrect theories and ideas and understandings, which of course can lead to a slew of other issues across all sorts of other industries and fields, as well, including general knowledge about the world and current events.

Speaking of the news, though, there are just as many articles, these days, reporting on folks who seem to have found love with AI chatbots as there are people who have committed violent acts against others, or various sorts of self-harm as a result of interacting with them.

Some of these pieces are written salaciously—look at these silly people doing silly things—but many do a pretty good job of at least attempting balance, as while the majority of folks featured in these articles seem to be missing something in terms of human interaction, which then presumably put them in the right state of mind to have romantic or companionable feelings toward an unthinking software system, the flip side of that coin is that many of them seem to be happier now than before they met these systems and brought them into their lives in this way.

We have, then, on one hand, AI chatbots telling their users to assassinate celebrities and, in at least one case, British Royalty, and on the other, we have sometimes the same chatbots made by the same companies telling people they are worthwhile and loved and appreciated and that’s exactly what some of their users need to hear at that moment.

It’s been argued, often convincingly, that these sorts of AI-human relationships are a crutch, and a massively unstable one. These systems are prone to change as the models behind them and the businesses that make and maintain those models change, and many of the stories about these people who have these relationships end with their AI partner or spouse suddenly losing interest in them, becoming cold, or in some other way no longer providing what they once provided.

This can be a bad moment for these people who again, in many cases seemed to be lacking something from the humans in their lives, and these AI systems kind of filled in the gaps for them. That’s what a crutch does, wobbly or not.

More ideal, according to the folks keeping tabs on these happenings and who are doing research in this space, at least, would be systems that help folks fill these gaps in more holistic and permanent ways, improving their social or physical or psychological situations so that they don’t rely on software entities and the potential delusions, positive or negative, that come with them. AI bots and companions would ideally help human beings connect with themselves and with other human beings, with the world outside the software, basically, rather than setting them up to use that crutch the rest of their lives.

Right now, though, we’re living through an era in which understandings about how these systems work are not widely disseminated, and collective understandings of their impact on our internal and external lives, our interpersonal relationships, and even our broader cultures is not fully understood; that history is being written day to day, right now.

It may be that this is a momentary thing, these systems filling the roles in our lives that other humans or groups of humans may have once filled, at least for some of us, but only until regulations and software updates and other sorts of things step in to ensure this no longer happens, for a variety of reasons.

Alternatively, it may be that this is just the first step toward a reality in which this sort of thing is more common: these tools further refined to be increasingly wonderful companions, becoming something akin to pets for many of us, something more like partners or spouses for some of us, and either way dramatically changing the nature of human society as a consequence.

Show Notes

https://en.wikipedia.org/wiki/Hallucination_(artificial_intelligence)

https://pmc.ncbi.nlm.nih.gov/articles/PMC11514308/

https://www.theguardian.com/tv-and-radio/2025/jul/12/i-felt-pure-unconditional-love-the-people-who-marry-their-ai-chatbots

https://www.wired.com/story/couples-retreat-with-3-ai-chatbots-and-humans-who-love-them-replika-nomi-chatgpt/

https://www.npr.org/2024/07/01/1247296788/the-benefits-and-drawbacks-of-chatbot-relationships

https://www.theguardian.com/technology/2025/apr/15/she-helps-cheer-me-up-the-people-forming-relationships-with-ai-chatbots

https://arstechnica.com/ai/2025/07/ai-therapy-bots-fuel-delusions-and-give-dangerous-advice-stanford-study-finds/

https://www.nytimes.com/2025/06/13/technology/chatgpt-ai-chatbots-conspiracies.html

https://www.vice.com/en/article/chatgpt-is-giving-people-extreme-spiritual-delusions/

https://www.rollingstone.com/culture/culture-features/ai-spiritual-delusions-destroying-human-relationships-1235330175/

https://pmc.ncbi.nlm.nih.gov/articles/PMC10686326/

https://futurism.com/commitment-jail-chatgpt-psychosis

https://arstechnica.com/tech-policy/2024/10/chatbots-posed-as-therapist-and-adult-lover-in-teen-suicide-case-lawsuit-says/

https://arxiv.org/abs/2504.18412

https://openai.com/index/sycophancy-in-gpt-4o/

We also discuss Cloudflare, the AI gold rush, and automated robots.

Recommended Book: Annie Bot by Sierra Greer

Transcript

Alongside the many, and at times quite significant political happenings, the many, and at times quite significant military conflicts, and the many, at times quite significant technological breakthroughs—medical and otherwise—flooding the news these days, there’s also a whole lot happening in the world of AI, in part because this facet of the tech sector is booming, and in part because while still unproven in many spaces, and still outright flubbing in others, this category of technology is already having a massive impact on pretty much everything, in some cases for the better, in some for the worse, and in some for better and worse, depending on your perspective.

Dis- and misinformation, for instance, is a bajillion times easier to create, distribute, and amplify, and the fake images and videos and audio being shared, alongside all the text that seems to be from legit people, but which may in fact be the product of AI run by malicious actors somewhere, is increasingly convincing and difficult to distinguish from real-deal versions of the same.

There’s also a lot more of it, and the ability to very rapidly create pretty convincing stuff, and to very rapidly flood all available communication channels with that stuff, is fundamental to AI’s impact in many spaces, not just the world of propaganda and misinformation. At times quantity has a quality all of its own, and that very much seems to be the case for AI-generated content as a whole.

Other AI- and AI-adjacent tools are being used by corporations to improve efficiency, in some cases helping automated systems like warehouse robots assist humans in sorting and packaging and otherwise getting stuff ready to be shipped, as is the case with Amazon, which is almost to the point that they’ll have more robots in their various facilities than human beings. Amazon robots are currently assisting with about 75% of all the company’s global deliveries, and a lot of the menial, repetitive tasks human workers would have previously done are now being accomplished by robotics systems they’ve introduced to their shipping chain.

Of course, not everyone is thrilled about this turn of events: while it’s arguably wonderful that robots are being subbed-in for human workers who would previously have had to engage in the sorts of repetitive, physical tasks that can lead to chronic physical issues, in many cases this seems to be a positive side-benefit of a larger effort to phase-out workers whenever possible, saving the company money over time by employing fewer people.

If you can employ 100 people using robots instead of 1000 people sans-robots, depending on the cost of operation for those robots, that might save you money because each person, augmented by the efforts of the robots, will be able to do a lot more work and thus provide more value for the company. Sometimes this means those remaining employees will be paid more, because they’ll be doing more highly skilled labor, working with those bots, but not always.

This is a component of this shift that for a long while CEOs were dancing around, not wanting to spook their existing workforce or lose their employees before their new robot foundation was in place, but it’s increasingly something they’re saying out loud, on investor calls and in the press, because making these sorts of moves are considered to be good for a company’s outlook: they’re being brave and looking toward a future where fewer human employees will be necessary, which implies their stock might be currently undervalued, because the potential savings are substantial, at least in theory.

And it is a lot of theory at this point: there’s good reason to believe that theory is true, at least to some degree, but we’re at the very beginning phases of this seeming transition, and many companies that jumped too quickly and fired too many people found themselves having to hire them back, in some cases at great expense, because their production faltered under the weight of inferior automated, often AI-driven alternatives.

Many of these tools simply aren’t as reliable as human employees yet. And while they will almost certainly continue to become more powerful and capable—a recent estimate suggested that the current wave of large-language-model-based AI systems, for instance, are doubling in power every 7 months or so, which is wild—speculations about what that will mean, and whether that trend can continue, vary substantially, depending on who you talk to.

Something we can say with relative certainty right now, though, is that most of these models, the LLM ones, at least, not the robot-driving ones, were built using content that was gathered and used in a manner that currently exists in a legal gray area: it was scraped and amalgamated by these systems so that they could be trained on a corpus of just a silly volume of human output, much of that output copyrighted or otherwise theoretically not-useable for this purpose.

What I’d like to talk about today is a new approach to dealing with the potentially illegal scraping of copyrighted information by and for these systems, and a proposed new pricing scheme that could allow the creators of the content being scraped in this way to make some money from it.

—

Web scraping refers to the large-scale crawling of websites and collection of data from those websites.

There are a number of methods for achieving this, including just manually visiting a bunch of websites and copying and pasting all the content from those sites into a file on your computer. But the large-scale version of that is something many companies, including entities like Google, do, and for various purposes: Google crawls the web to map it, basically, and then applies all sorts of algorithms and filters in order to build their search results. Other entities crawl the web to gather data, to figure out connections between different sorts of sites, and/or to price ads they sell on their own network of sites or the products they sell, and which they’d like to sell for a slightly lower price than their competition.

Web scraping can be done neutrally, then, your website scraped by Google so it can add your site to its search results, the data it collects telling its algorithms where you should be in those results based on keywords and who links to your site and other such things, but it can also be done maliciously: maybe someone wants to duplicate your website and use it to get unsuspecting victims to install malware on their devices. Or maybe someone wants to steal your output: your writings, your flight pricing data, and so on.

If you don’t want these automated web-scrapers to use your data, or to access some portion or all of your site, you can put a file called robots.txt in your site’s directory, and the honorable scrapers will respect that request: the googles of the world, for instance, have built their scrapers so that they look for a robots.txt file and read its contents before mapping out your website structure and soaking up your content to decide where to put you in their search results.

Not all scrapers respect this request: the robots.txt standard relies on voluntary compliance. There’s nothing forcing any scraper, or the folks running these scrapers, to look for or honor these files and what they contain.

That said, we’ve reached a moment at which many scrapers are not just looking for keywords and linkbacks, but also looking to grab basically everything on a website so that the folks running the scrapers can ingest those images and that writing and anything else that’s legible to their software into the AI systems they’re training.

As a result, many of these systems were trained on content that is copyrighted, that’s owned by the folks who wrote or designed or photographed it, and that’s created a legal quagmire that court systems around the world are still muddling through.

There have been calls to update the robots.txt standard to make it clear what sorts of content can be scraped for AI-training purposes and what cannot, but the non-compulsory, not-legally-backed nature of such requests seem to make robots.txt an insufficient vehicle for this sort of endeavor: the land-grab, gold-rush nature of the AI industry right now suggests that most companies would not honor these requests, because it’s generally understood that they’re all trying to produce the most powerful AI possible as fast as possible, hoping to be at or near the top before the inevitable shakeout moment at which point most of these companies will go bankrupt or otherwise cease to exist.

That’s important context for understanding a recent announcement by internet infrastructure company Cloudflare, that said they would be introducing something along the lines of an enforceable robots.txt file for their customers called pay per crawl.

Cloudflare is US-based company that provides all sorts of services, from domain registration to firewalls, but they’re probably best known for their web security services, including their ability to block DDoS, or distributed denial of service attacks, where a hacker or other malicious actor will lash a bunch of devices they’ve compromised, through malware or otherwise, together, into what’s called a botnet, and use those devices to send a bunch of traffic to a website or other web-based entity all at once.

This can result in so much traffic, think millions or billions of visits per second—a recent attack that Cloudflare successfully ameliorated sent 7.3 terabytes per second against one of their customers, for instance—it can result in so much traffic that the targeted website becomes inaccessible, sometimes for long periods of time.

So Cloudflare provides a service where they’re basically like a firewall between a website and the web, and when something like a DDoS attack happens, Cloudflare’s services go into action and the targeted website stays up, rather than being taken down.

As a result of this and similarly useful offerings, Cloudflare security services are used by more than 19% of all websites on the internet, which is an absolutely stunning figure considering how big the web is these days—there are an estimated 1.12 billion websites, around 200 million of which are estimated to be active as of Q1 2025.

All that said, Cloudflare recently announced a new service, called pay per crawl, that would use that same general principle of putting themselves between the customer and the web to actively block AI web scrapers that want to scrape the customer’s content, unless the customer gives permission for them to do so.

Customers can turn this service on or off, but they can also set a price for scraping their content—a paywall for automated web-scrapers and the AI companies running them, basically.

The nature of these payments is currently up in the air, and it could be that content creators and owners, from an individual blogger to the New York Times, only earn something like a penny per crawl, which could add up to a lot of money for the Times but only be a small pile of pennies for the blogger.

It could also be that AI companies don’t play ball with Cloudflare and instead they do what many tech analysts expect them to do: they come up with ways to get around Cloudflare’s wall, and then Cloudflare makes the wall taller, the tech companies build taller ladders, and that process just spirals ad infinitum.

This isn’t a new idea, and the monetization aspect of it is predicated on some early web conceptions of how micropayments might work.

It’s also not entirely clear whether the business model would make sense for anyone: the AI companies have long complained they would go out of business if they had to pay anything at all for the content they’re using to train their AI models, big companies like the New York Times face possible extinction if everything they pay a lot of money to produce is just grabbed by AI as soon as it goes live, those AI companies making money from that content they paid nothing to make, and individual makers-of-things face similar issues as the Times, but without the leverage to make deals with individual AI companies, like the Times has.

It also seems that AI chatbots are beginning to replace traditional search engines, so it’s possible that anyone who uses this sort of wall will be excluded from the search of the future. Those whose content is gobbled up and used without payment will be increasingly visible, their ideas and products and so on more likely to pop up in AI-based search results, while those who put up a wall may be less visible; so there’s a big potential trade-off there for anyone who decides to use this kind of paywall, especially if all the big AI companies don’t buy into it.

Like everything related to AI right now, then, this is a wild west space, and it’s not at all clear which concepts will win out and become the new default, and which will disappear almost as soon as they’re proposed.

It’s also not clear if and when the larger economic forces underpinning the AI gold rush will collapse, leaving just a few big players standing and the rest imploding, Dotcom Bubble style, which could, in turn, completely undo any defaults that are established in the lead-up to that moment, and could make some monetization approaches no longer feasible, while others, including possibly paywalls and micropayments, suddenly more thinkable and even desirable.

Show Notes

https://www.wired.com/story/pro-russia-disinformation-campaign-free-ai-tools/

https://www.wsj.com/tech/amazon-warehouse-robots-automation-942b814f

https://www.wsj.com/tech/ai/ai-white-collar-job-loss-b9856259

https://w3techs.com/technologies/details/cn-cloudflare

https://www.demandsage.com/website-statistics/

https://blog.cloudflare.com/defending-the-internet-how-cloudflare-blocked-a-monumental-7-3-tbps-ddos/

https://en.wikipedia.org/wiki/Web_scraping

https://en.wikipedia.org/wiki/Robots.txt

https://developers.cloudflare.com/ai-audit/features/pay-per-crawl/use-pay-per-crawl-as-site-owner/set-a-pay-per-crawl-price/

https://techcrunch.com/2025/07/01/cloudflare-launches-a-marketplace-that-lets-websites-charge-ai-bots-for-scraping/

https://www.nytimes.com/2025/07/01/technology/cloudflare-ai-data.html

https://creativecommons.org/2025/06/25/introducing-cc-signals-a-new-social-contract-for-the-age-of-ai/

https://arstechnica.com/tech-policy/2025/07/pay-up-or-stop-scraping-cloudflare-program-charges-bots-for-each-crawl/

https://www.cloudflare.com/paypercrawl-signup/

https://www.cloudflare.com/press-releases/2025/cloudflare-just-changed-how-ai-crawlers-scrape-the-internet-at-large/

https://digitalwonderlab.com/blog/the-ai-paywall-era-a-turning-point-for-publishers-or-just-another-cat-and-mouse-game

We also discuss Arctic ice, satellite resolution, and automated weather observation stations.

Recommended Book: Superbloom by Nicholas Carr

Transcript

The National Oceanic and Atmospheric Administration, or NOAA, is a US scientific and regulatory agency that tackles an array of environmental, climatic, and weather-related issues, alongside its responsibilities managing oceanic ecosystems.

So it’s in charge of managing fishing protections and making sure endangered species within US waters are taken care of, but it also does scientific exploration—mapping the ocean, for instance—it monitors atmospheric conditions and keeps tabs on the various cycles that influence global and US water, air, and temperature happenings, and it tracks macro- and micro-scale weather events.

That latter responsibility means NOAA (which is the modern iteration of several other agencies, including the US Environmental Science Services Administration and the US Weather Bureau) also manages the US National Weather Service, which is the sub-agency that sends out hazardous weather statements when there are severe storms or tornadoes or other weather-related events of note in a given area, and which also provides weather forecast information that local experts on the ground use to make their own predictions.

Most of what the National Weather Service puts out is in the public domain, which means anyone can access and use it, free of charge. That’s a pretty big deal, because the data they collect and informational products they distribute, including all those hazardous weather statements, are at times life and death, but they’re also a big part of what makes standard local weather services possible in the US—they help the FAA and other agencies do their jobs, and they help everyday people understand how hot or cold it’s going to be, whether to pack and umbrella for the day, and so on.

To accomplish all this, the NOAA and its sub-agencies make use of a bunch of facilities and other tracking resources to collect, aggregate, and interpret all those data points, crunching them and spitting them back out as something intelligible and useful to their many end-users.

They’ve got weather observation stations across the US, many of them automated surface observing stations, which are exactly what they sound like: automated stations that collect data about sky conditions, wind direction and speed, visibility, present weather conditions, temperature, dew point, and so on—most of these are close to airports, as this information is also vital for figuring out if it’s safe to fly, and if so, what accommodations pilots should be making for the weather and visibility and such—but they also collect data from smaller weather stations scattered across the country, around 11,000 of them, many operated by volunteers under the auspices of an effort called the Cooperative Observer Program that was established in 1890, and that’s paired with another volunteer data-collection effort called the Citizen Weather Observer Program.

There are also weather buoys and weather ships lingering across the surface of the ocean and other bodies of water, tracking additional data like sea surface temperature and wave height at various points. And there are weather balloons which collect additional information about happenings further up in the atmosphere, alongside the many satellites in orbit that capture various sorts of data and beam that data down to those who can make use of it.

Again, all of this data is collected and crunched and then turned into intelligible outputs for your local weather forecasters, but also the people who run airlines and fly planes, the folks out on boats and ships, people who are managing government agencies, scientists who are doing long-term research on all sorts of things, and everyday people who just want to know if it’ll be sunny, how hot it will be, and so on.

There’s one more major client of the NOAA that’s worth noting here, too: the Department of Defense. And that relationship is a big part of what I want to talk about today, because it seems to be at the root of a major curtailing of weather-related data-sharing that was recently announced by the US government, much to the chagrin of the scientific community.

—

US President Trump has long voiced his skepticism about the NOAA.

There have been claims that this disdain is the result of the agency having called him out on some bald-faced lies he told about hurricane projections during his first administration, when he reportedly altered an NOAA hurricane impact projection map with a Sharpie to support a misstatement he had previously made about a hurricane impacting Alabama; the hurricane in question was not anticipated to hit Alabama, Trump said it would, and he later altered a map in order to make it look like he was right, when all the data, and all the experts, say otherwise.

Whether that’s true or not, the NOAA later released an unsigned statement seeming to support his false assertion, and it’s generally understood that the agency was forced to make that statement against the will of its staff and leadership by the then-president.

It’s also been posited that Trump doesn’t care for the NOAA because of their connection with the Federal Emergency Management Agency, or FEMA.

FEMA became the target of several conspiracy theories on the US political right, which allege that liberal lawmakers, including former President Biden, used it as a sort of piggy bank for their personal projects and priorities; the agency provides funding and on-the-ground support for areas that have been impacted by hurricanes, wildfires, tornadoes, floods, and other such weather-related disasters, but as immigration became more of a focal point of right-leaning and far-right politics in the US, accusations that the Biden administration was using FEMA funds to help immigrants enter and stay in the US grew; there’s no evidence this is the case, but that’s the nature of conspiracy theories—evidence isn’t necessary when something feels true to a big enough group of people.

In any event, FEMA is now on the chopping block, the second Trump administration has said it could be dissolved as soon as December of 2025, the biggest changes to the agency coming just after the end of this year’s hurricane season, which traditionally ends of November. Trump himself said FEMA would be giving out less money to states recovering from weather disasters, and that a panel he’s appointed will figure out exactly how to restructure or replace the agency.

To be clear, the president cannot kill off FEMA, only Congress can do that, and they have said they intend to reform the agency by making it easier for disaster survivors to access resources and by moving FEMA from its current position under the Department of Homeland Security into its own thing; a big contrast to Trump’s ambitions for the agency, which basically seems to be that FEMA shouldn’t do what it currently does, and the states should mostly or exclusively cover disaster costs and provide post-disaster resources, instead of the federal government helping out.

So Trump seemingly has a thing against these sorts of agencies, has semi-regularly called climate change a hoax, doesn’t seem to have any particular fondness for the idea of the US federal government helping out with local problems, or the local consequences of larger-scale problems like weather disasters, and has acted in a variety of ways to cut funding for science and public service related agencies and efforts across the board.

All of that has been pretty fundamental to his platform since his first administration. And while the scientific community has sounded the alarm about these stances, saying what he’s planning will put a lot of people and infrastructure at risk, and while this data and these resources are fundamental to reducing the damage, both human and otherwise, caused by such disasters, in the US and globally, to some degree, that doesn’t seem to bother this administration, which usually cites cost-cutting as their rationale, but also regularly points at the concept of immigration to justify many of the decisions they make, including some of these ones.

So that’s the context shaping the perception of an announcement made by the NOAA in the latter-half of June 2025 that the agency would no longer be importing, processing, or distributing data from the Special Sensor Microwave Imager Sounder, or SSMIS system, as of June 30—which was yesterday, if you’re listening to this episode on the day it’s released.

The agency cited recent service changes as their rationale for this cessation, and weather forecasters have been in a tizzy about this, because the SSMIS system is pretty fundamental to what they do, especially when it comes to hurricane forecasting.

The SSMIS is a satellite-based system that passively maps the whole world twice a day from space in very, very high resolution, and in addition to hurricane-tracking and other weather-related tasks, it also allows scientists to monitor sea ice in the Arctic and other such long-term projects.

The NOAA said that this cessation of service would not impact the quality of hurricane forecasting as we step into the beginning weeks of the traditional Atlantic hurricane season, but non-NOAA scientists and other experts, folks who aren’t on the US federal governments’ payroll, basically, have said this would blind them in this regard, and that while they can approximate some of the same forecasting powers using other data, it won’t be the same, and it won’t be nearly as good.

This system is the only one that allows scientists to see inside the clouds as hurricanes develop, and before such data was available, hurricane projections were a lot less accurate, and powerful storm systems would often sneak up on unsuspecting areas, because we lacked the heightened resolution and power necessary to make more up-to-the-minute and fine-grained projections.

Also, and this is perhaps less of an immediate concern, but might be an even bigger long-term issue than deadly hurricanes, is that there’s a more than 40-year-old study that’s been tracking changes to polar sea ice in the Arctic and Antarctic that will no longer be feasible lacking this data, so everything that’s influenced by global water cycles and sea levels, which is basically everything weather- and climate-related, and that means, well, everything on earth could also be impacted by this new, US government-imposed reduced visibility, all of that research is upended, made less useful, and all of us in turn could suffer some pretty significant consequences because we lack that high-resolution understanding of what’s going on.

What’s worse is that this announcement was made just days before this source of data was scheduled to disappear, leaving them without time to cobble together less-good, but serviceable replacements for everything they’ll be losing as a consequence of these changes; and again, all of this is happening right at the beginning of hurricane season, so the stakes are very high.

Allegations of revenge as a motivation, or speculation that this is part of a larger effort by the Trump administration to systematically dismantle science and the public’s ability to get objective information about the world aside, there have also been rumblings that this might have been a Department of Defense decision, since these satellites are operated by the NOAA for the DoD on behalf of the US Space Force, which has ultimate authority over all satellites owned by the government.

In practice, that might mean that this is the consequence of the US military, or some facet of the US military, deciding that this information is too precious or dangerous to share broadly—as again, most of this information has been flagged public domain, so anyone can see and use it however they like—or it may be that this has been a miscommunication or the result of someone in the Navy making a decision without realizing the full implications of that decision.

As of the day I’m recording this, on the day this data is scheduled to disappear from the public domain, and some reports have indicated it has, indeed, disappeared as scheduled, journalists have been trying to get in touch with the relevant people at the Navy for comment, thus far unsuccessfully, but that outreach and their hopefully eventual contact with those in charge could result in a change in these plans, if it is indeed just a miscommunication or misunderstanding situation.

Either way, we’ll hopefully know more what happened here, as that could help us understand how safe or vulnerable other major sources of vital data might be under this administration, and/or under the current leadership of the DoD and similar military entities.

Show Notes

https://abcnews.go.com/US/hurricane-season-meteorologists-losing-vital-tool-forecasting/story?id=123305760

https://www.npr.org/2025/06/28/nx-s1-5446120/defense-department-cuts-hurricane-ice-weather-satellite

https://www.euronews.com/my-europe/2025/06/29/italy-and-spain-bake-in-heatwave-as-cities-issue-red-alerts-and-regions-mull-work-bans

https://www.upi.com/Science_News/2025/06/28/Defense-Department-ends-satellite-data-hurricane-experts/7881751141308/

https://www.theguardian.com/us-news/2025/jun/28/noaa-cuts-hurricane-forecasting-climate

https://www.scientificamerican.com/article/weather-forecasters-lose-crucial-hurricane-detection-microwave-satellite/

https://www.kgw.com/article/news/nation-world/noaa-discontinues-data-website-trump-executive-order/507-f40d60d7-fb52-4cb4-a64b-f22bd1100562

https://hackaday.com/2025/06/12/end-of-an-era-noaas-polar-sats-wind-down-operations/

https://thehill.com/policy/equilibrium-sustainability/5357564-trump-cuts-noaa-nasa-farmers-climate-change-food-supply/

https://www.washingtonpost.com/weather/2025/05/14/national-weather-service-vacancies-hurricane-season/

https://www.cbc.ca/news/science/us-hurricane-forecasting-cuts-1.7573024

https://apnews.com/article/hurricane-season-disaster-weather-doge-fema-noaa-cd215947480de9099a53fe20669bb923

https://www.theguardian.com/us-news/2025/jun/05/florida-weatherman-john-morales-funding-cuts-forecasts

https://www.frontiersin.org/journals/remote-sensing/articles/10.3389/frsen.2022.1021781/full

https://www.propublica.org/article/fema-grants-trump-emergencies

https://www.nytimes.com/2025/06/26/us/politics/as-fema-shrinks-a-grassroots-disaster-response-is-taking-shape.html

https://www.propublica.org/article/fema-grants-trump-emergencies

https://www.aljazeera.com/news/2025/6/27/is-alligator-alcatraz-detention-centre-funded-by-florida-hurricane-money

https://www.npr.org/2025/06/26/nx-s1-5430469/faq-fema-elimination

https://en.wikipedia.org/wiki/History_of_Atlantic_hurricane_warnings

https://en.wikipedia.org/wiki/Hurricane_Dorian%E2%80%93Alabama_controversy

https://www.wusa9.com/video/weather/dod-stops-providing-noaa-with-satellite-data/65-a35e6409-20ad-4db1-83a1-0b281fcfb38b

https://en.wikipedia.org/wiki/National_Weather_Service

https://en.wikipedia.org/wiki/National_Oceanic_and_Atmospheric_Administration

https://en.wikipedia.org/wiki/National_Hurricane_Center

We also discuss fracking, Israel and Iran’s ongoing conflict, and energy exports.

Recommended Book: Thirteen Ways to Kill Lulabelle Rock by Maud Woolf

Transcript

The global oil market changed substantially in the early 2000s as a pair of innovations—horizontal drilling and hydraulic fracturing—helped the plateauing US oil and gas market boom, unlocking a bunch of shale oil and gas deposits that were previously either entirely un-utilizable, or too expensive to exploit.

This same revolution changed markets elsewhere, too, including places like Western Canada, which also has large shale oil and gas deposits, but the US, and especially the southern US, and even more especially the Permian Basin in Texas, has seen simply staggering boosts to output since those twin-innovations were initially deployed on scale.

This has changed all sorts of dynamics, both locally, where these technologies and approaches have been used to tap ever-more fossil fuel sources, and globally, as previous power dynamics related to such resources have been rewired.

Case in point, in the second half of the 20th century, OPEC, the Organization of the Petroleum Exporting Countries, which is a predominantly Middle Eastern oil cartel that was founded by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela in 1960, was a dominant force in geopolitics, as they collaboratively set global oil prices, and thus, were able to pull the strings connected to elections, war, and economic outcomes in nations around the world.

If oil prices suddenly spiked, that could cause an incumbent leader in a country a hemisphere away to lose their next election, and if anyone threatened one of their number, they could conceivably hold back resources from that country until they cooled down.

Before OPEC formed and established their position of primacy in global energy exports, the so-called Seven Sisters corporations, which consisted of a bunch of US and European companies that had basically stepped in and took control of global oil rights in the early 20th century, including oil rights across the Middle East, were the loci of power in this space, controlling about 85% of the world’s petroleum reserves as of the early 1970s.

That same decade, though, a slew of governments that hosted Seven Sisters facilities and reserves nationalized these assets, which in practice made all these reserves and the means of exploiting them the government’s property, and in most cases they were then reestablished under new, government-controlled companies, like Saudi Aramco in Saudi Arabia and the National Iranian Oil Company in Iran.

In 1973 and 1979, two events in the Middle East—the Yom Kippur War, during which pretty much all of Israel’s neighbors launched a surprise attack against Israel, and the Iranian Revolution, when the then-leader of Iran, the Shah, who was liberalizing the country while also being incredibly corrupt, was overthrown by the current government, the militantly Islamist Islamic Republic of Iran—those two events led to significant oil export interruptions that triggered oil shortages globally, because of how dominant this cartel had become.

This shortage triggered untold havoc in many nations, especially those that were growing rapidly in the post-WWII, mid-Cold War world, because growth typically requires a whole lot of energy for all the manufacturing, building, traveling around, and for basic, business and individual consumption: keeping the lights on, cooking, and so on.

This led to a period of stagflation, and in fact the coining of the term, stagflation, but it also led to a period of heightened efficiency, because nations had to learn how to achieve growth and stability without using so much energy, and it led to a period of all these coming-out-of-stagflation and economic depression nations trying to figure out how to avoid having this happen again.

So while OPEC and other oil-rich nations were enjoying a period of relative prosperity, due in part to those elevated energy prices—after the initial downsides of those conflicts and revolutions had calmed, anyway—other parts of the world were making new and more diversified deals, and were looking in their own backyards to try to find more reliable suppliers of energy products.

Parts of the US were already major oil producers, if not at the same scale as these Middle Eastern giants in the latter portion of the 20th century, and many non-OPEC producers in the US, alongside those in Norway and Mexico, enjoyed a brief influx of revenue because of those higher oil prices, but they, like those OPEC nations, suffered a downswing when prices stabilized; and during that price collapse, OPEC’s influence waned.

So in the 1980s, onward, the previous paradigm of higher oil prices led to a surge in production globally, everyone trying to take advantage of those high prices to invest in more development and production assets, and that led to a glut of supply that lowered prices, causing a lot of these newly tapped wells to go under, a lot of cheating by OPEC members, and all of the more established players to make far less per barrel of oil than was previously possible.

By 1986, oil prices had dropped by nearly half from their 1970s peak, and though prices spiked again in 1990 in response to Iraq’s invasion of fellow OPEC-member Kuwait, that spike only last about nine months, and it was a lot less dramatic than those earlier, 70s-era spikes; though it was still enough to trigger a recession in the US and several other countries, and helped pave the way for investment in those technologies and infrastructure that would eventually lead to the US’s shale-oil and gas revolution.

What I’d like to talk about today is the precariousness of the global oil and gas market right now, at a moment of significantly heightened tensions, and a renewed shooting conflict, in the Middle East.

—

As of the day I’m recording this, the Islamic Republic of Iran is still governing Iran, and that’s an important point to make as while Israel’s official justification for launching a recent series of attacks against Iran’s military and nuclear production infrastructure is that they don’t want Iran to make a nuclear weapon, it also seems a whole lot like they might be aiming to instigate regime change, as well.

Israel and Iran’s conflict with each other is long-simmering, and this is arguably just the most recent and extreme salvo in a conflict dating back to at least 2024, but maybe earlier than that, too, all the way back to the late-70s or early 80s, if you string all the previous conflicts together into one deconstructed mega-conflict. If you want to know more about that, listen to last week’s episode, where I got deeper into the specifics of their mutual dislike.

Today, though, I’d like to focus on an issue that is foundational to pretty much every other geopolitical and economic happening, pretty much always, and that’s energy. And more specifically, the availability, accessibility, and price of energy resources like oil and gas.

We’ve reached a point, globally, where about 40% of all electricity is generated by renewables, like solar panels, wind turbines, and hydropower-generating dams.

That’s a big deal, and while the majority of that supply is coming from China, and while it falls short of where we need to be to avoid the worst-case consequences of human-amplified climate change, that growth is really incredible, and it’s beginning to change the nature of some of our conflicts and concerns; many of the current economic issues between the US and China, these days are focused on rare earths, for instance, which are required for things like batteries and other renewables infrastructure.

That said, oil and gas still enable the modern economy, and that’s true almost everywhere, even today. And while the US changed the nature of the global oil and gas industries by heavily investing in both, and then rewired the global energy market by convincing many of its allies to switch to US-generated oil and gas, rather than relying on supplies from Russia, in the wake of Russia’s invasion of Ukraine a few years ago, a whole lot of these resources still come from at-times quite belligerent regimes, and many of these regimes are located in the Middle East, and belong to OPEC.

Iran is one such belligerent regime.

As of 2025, Iran is the 9th largest producer of oil in the world, and it holds 24% of the Middle East’s and about 12% of the world’s proven oil reserves—that’s the total volume of oil underground that could be pumped at some point. It’s got the world’s 3rd largest proven crude oil reserves and it exports about 2 million barrels of crude and refined oil every day. It also has the world’s second-largest proven natural gas reserves.

Iran isn’t as reliant on oil and gas exports as some of its neighbors, but it still pulled in about $53 billion in net oil exports each year as of 2023; which is a lot less than what it could be making, as international sanctions have made it difficult for Iran to fully exploit its reserves. But that’s still a huge chunk of its total income.

This is important to note because Israel’s recent series of attacks on Iran, in addition to taking out a lot of their military leaders, weapons manufacturing facilities, and nuclear research facilities, have also targeted Iran’s oil and gas production and export capacity, including large gas plants, fuel depots, and oil refineries, some located close to Tehran in the northern part of the country, and some down on its southwestern coast, where a huge portion of Iran’s gas is processed.

In light of these attacks, Iran’s leaders have said they may close the Strait of Hormuz, though which most of their exports pass—and the Strait of Hormuz is the only marine entryway into the Persian Gulf; nearly 20% of all globally consumed oil passes through this 90-mile-wide stretch of water before reaching international markets; it’s a pretty vital waterway that Iran partially controls because its passes by its southern coast.

Fuel prices already ticked up by about 9% following Israel’s initial strikes into Iran this past week, and there’s speculation that prices could surge still-higher, especially following US President Trump’s decision to strike several Iran nuclear facilities, coming to Israel’s aide, as Israel doesn’t possess the ‘bunker-buster’ bombs necessary to penetrate deep enough into the earth to damage or destroy many of these facilities.

As of Monday this week, oil markets are relatively undisrupted, and if any export flows were to be upset, it would probably just be Iran’s, and that would mostly hurt China, which is Iran’s prime oil customer, as most of the rest of the world won’t deal with them due to export sanctions.

That said, there’s a possibility that Iran will decide to respond to the US coming to Israel’s aid not by striking US assets directly, which could pull the US deeper into the conflict, but instead by disrupting global oil and gas prices, which could lead to knock-on effects that would be bad for the US economy, and the US’s relationships with other nations.

The straightest path to doing this would be to block the Strait of Hormuz, and they could do this by positioning ships and rocket launchers to strike anything passing through it, while also heavily mining the passage itself, and they’ve apparently got plenty of mines ready to do just that, should they choose that path.

This approach has been described by analysts as the strategic equivalent of a suicide bombing, as blocking the Strait would disrupt global oil and gas markets, hurting mostly Asia, as China, India, South Korea, Japan, and other Asian destinations consume something like 80% of the oil that passes through it, but that would still likely raise energy prices globally, which can have a lot of knock-on effects, as we saw during those energy crises I mentioned in the intro.

It would hurt Iran itself more than anyone, though, as almost all of their energy products pass through this passage before hitting global markets, and such a move could help outside entities, including the US, justify further involvement in the conflict, where they otherwise might choose to sit it out and let Israel settle its own scores.

Such energy market disruption could potentially benefit Russia, which has an energy resource-reliant economy that suffers when oil and gas prices are low, but flourishes when they’re high. The Russian government probably isn’t thrilled with Israel’s renewed attacks on one of its allies, but based on its lack of response to Syria’s collapse—the former Syrian government also being an ally of Russia—it’s possible they can’t or won’t do much to directly help Iran right now, but they probably wouldn’t complain if they were suddenly able to charge a lot more per barrel of oil, and if customers like China and India were suddenly a lot more reliant on the resources they’re producing.

Of course, such a move could also enrich US energy companies, though potentially at the expense of the American citizen, and thus at the expense of the Trump administration. Higher fuel prices tend to lead to heightened inflation, and more inflation tends to keep interest rates high, which in turn slows the economy. A lot of numbers could go in the opposite direction from what the Trump administration would like to see, in other words, and that could result in a truly bad outcome for Republicans in 2026, during congressional elections that are already expected to be difficult for the incumbent party.

Even beyond the likely staggering human costs of this renewed conflict in the Middle East, then, there are quite a few world-scale concerns at play here, many of which at least touch on, and some of which are nearly completely reliant on, what happens to Iran’s oil and gas production assets, and to what degree they decide to use these assets, and the channels through which they pass, in a theoretical asymmetric counterstrike against those who are menacing them.

Show Notes

https://archive.is/20250616111212/https://www.reuters.com/world/middle-east/an-overview-irans-energy-industry-infrastructure-2025-02-04/

https://www.aljazeera.com/news/2025/6/15/which-iranian-oil-and-gas-fields-has-israel-hit-and-why-do-they-matter

https://www.aljazeera.com/news/2025/6/17/mapping-irans-oil-and-gas-sites-and-those-attacked-by-israel

https://www.aljazeera.com/economy/2025/6/13/oil-markets-are-spooked-as-iran-israel-tensions-escalate

https://archive.is/20250620143813/https://www.bloomberg.com/news/articles/2025-06-20/eu-abandons-proposal-to-lower-price-cap-on-russian-oil-to-45

https://apnews.com/article/russia-economy-recession-ukraine-conflict-9d105fd1ac8c28908839b01f7d300ebd

https://www.nytimes.com/2025/06/22/business/us-iran-oil.html

https://www.bbc.com/news/articles/cvg9r4q99g4o

https://www.weforum.org/stories/2025/04/clean-energy-electricity-nature-and-climate-stories-this-week/

https://archive.is/20250622121310/https://www.ft.com/content/67430fac-2d47-4b3b-9928-920ec640638a

https://oilprice.com/Energy/Crude-Oil/Oil-Markets-Brace-for-Impact-After-US-Attacks-Iran-Facilities.html

https://www.nytimes.com/2025/06/22/business/energy-environment/iran-oil-gas-markets.html

https://www.eia.gov/todayinenergy/detail.php?id=65504&utm_medium=PressOps

https://www.nytimes.com/2025/06/22/business/stocks-us-iran-bombing.html

https://en.wikipedia.org/wiki/Big_Oil

https://en.wikipedia.org/wiki/Fracking_in_Canada

https://en.wikipedia.org/wiki/Fracking_in_the_United_States

https://en.wikipedia.org/wiki/Petroleum_in_the_United_States

https://en.wikipedia.org/wiki/Shale_gas_in_the_United_States

https://en.wikipedia.org/wiki/Yom_Kippur_War

https://en.wikipedia.org/wiki/Iranian_Revolution

https://en.wikipedia.org/wiki/1970s_energy_crisis

https://en.wikipedia.org/wiki/1990_oil_price_shock

https://www.strausscenter.org/energy-and-security-project/the-u-s-shale-revolution/

https://archive.is/20250416153337/https://www.reuters.com/business/energy/us-crude-oil-output-peak-by-2027-eia-projects-2025-04-15/

https://www.investopedia.com/ask/answers/030415/how-does-price-oil-affect-stock-market.asp

We also discuss the Iron Dome, the Iran-Iraq War, and regime change.

Recommended Book: How Much is Enough? by Robert and Edward Skidelsky

Transcript

In late-October of 2024, Israel launched a wave of airstrikes against targets in Iran and Syria. These strikes were code-named Operation Days of Repentance, and it marked the largest such attack on Iran by Israel since the 1980s, during the height of the Iran-Iraq War.

Operation Days of Repentance was ostensibly a response to Iran’s attack on Israel earlier than same month, that attack code-named Operation True Promise II, which involved the launch of around 200 ballistic missiles against Israeli targets. Operation True Promise II was itself a response to Israel’s assassination of the leader of Hamas, the leader of Hezbollah, and the Deputy of Operations for Iran’s Revolutionary Guard.

If you feel like there might be a tit-for-tat pattern here, you’re right. Iran and Israel have been at each other’s throats since 1979, following the Islamic Revolution when Iran cut off all diplomatic relations with Israel; some backchannel relations continued between the two countries, even through part of the Iran-Iraq War, when Israel often supported Iran in that conflict, but things got tense in the early 1980s when Iran, partnering with the Syrian government, started backing Hezbollah and their effort to boot Israel out of Southern Lebanon, while also partnering with Islamist militants in Iraq and Yemen, including the Houthis, and at times Hamas in Gaza, as well.

Most of these attacks have, until recently, been fairly restrained, all things considered. There’s long been bravado by politicians on both sides of the mostly cold war-ish conflict, but they’ve generally told the other side what they would be hitting, and signaled just how far they would be going, telling them the extent of the damage they would cause, and why, which provides the other side ample opportunity to step off the escalatory ladder; everyone has the chance to posture for their constituents and then step back, finding an off-ramp and claiming victory in that specific scuffle.

That back-and-forth in late-2024 largely stuck to that larger pattern, and both sides stuck with what typically works for them, in terms of doing damage: Israel flew more than 100 aircraft to just beyond or just inside Iran’s borders and struck a bunch of military targets, like air defense batteries and missile production facilities, while Iran launched a few hundred far less-accurate missiles at broad portions of Israel—a type of attack that could conceivably result in a lot of civilian casualties, not just damage to military targets, which would typically be a no-no if you’re trying to keep the tit-for-tat strikes regulated and avoid escalation, but because Israel has a fairly effective anti-missile system called the Iron Dome, Iran could be fairly confident that just hurling a large number of missiles in their general direction would be okay, as most of those missiles would be shot down by the Iron Dome, the rest by Israel’s allies in the region, and the few that made it through or struck unoccupied land in the general vicinity would make their point.

While this conflict has been fairly stable for decades, though, the tenor and tone seems to have changed substantially in 2025, and a recent wave of attacks by Israel is generally being seen as the culmination of several other efforts, and possibly an attempt by the Israeli government to change the nature of this conflict, perhaps permanently.

And that’s what I’d like to talk about today; Operation Rising Lion, and the implications of Israel’s seeming expansion and evolution of their approach to dealing with Iran.

—

In mid-June of 2025, Israel’s military launched early morning strikes against more than a dozen targets across Iran, most of the targets either fundamental to Iran’s nuclear program or its military.

The strikes were very targeted, and some were assassinations of top Iranian military leaders and nuclear scientists, like the Commander of the Revolutionary Guard, along with their families, including twenty children, who were presumably collateral damage. Some came from beyond Iran’s borders, some were conducted by assets smuggled into Iran earlier: car bombs and drones, things like that.

More attacks followed that initial wave, which resulted in the collapse of nuclear sites and airport structures, along with several residential buildings in the country’s capitol, Tehran.

This attack was ostensibly meant to hobble Iran’s nuclear program, which the Iranian government has long claimed is for purely peaceful, energy-generation purposes, but which independent watchdog organizations, and pretty much every other non-Iranian-allied government says is probably dual-purpose, allowing Iran to produce nuclear energy, but also nuclear weapons.

There was a deal on the books for a while that had Iran getting some benefits in exchange for allowing international regulators to monitor its nuclear program, but that deal, considered imperfect by many, but also relatively effective compared to having no deal at all, went away under the first Trump administration, and the nuclear program has apparently been chugging along since then with relative success; claims that Iran is just weeks from having enough fissile material to make a nuclear weapon have been common for years, now, but they apparently now have enough nuclear weapons-grade materials to make several bombs, and Israel in particular is quite keen to keep them from building such a weapon, as Iran’s leaders, over the years, have said they’d like to wipe Israel off the face of the Earth, and nuclear weapons would be a relatively quick and easy way to make that happen.

Of course, even without using such a weapon, simply having one or more is a sort of insurance policy against conventionally armed enemies. It ups the stakes in every type of conflict, and allows the nuclear-armed belligerent to persistently raise the specter of nuclear war if anyone threatens them, which is truly terrifying because of how many nuclear-related failsafes are in place around the world: one launch or detonation potentially becoming many, all at once, because of Dr. Strangelove-like automated systems that many militaries have readied, just in case.

So the possibility that Iran might be on the brink of actually, really, truly this time making a nuclear weapon is part of the impetus for this new strike by Israel.

But this is also probably a continuation of the larger effort to dismantle Iran’s influence across the region by the current Israeli government, which, following the sneak attack on Israel by Hamas on October 7, 2023, and the subsequent invasion of the Gaza Strip by Israeli forces, has been trying to undermine Iran’s proxies, which again, include quite a few militant organizations, the most powerful of which, in recent years, have been the trio of Hamas in Gaza, the Houthis in Yemen, and Hezbollah in southern Lebanon, right on Israel’s border.

Israel’s invasion of Gaza, which has led to an absolutely catastrophic humanitarian situation for Gazan civilians, but has also led to the near-total collapse of Hamas as a functioning militant organization in the Strip, could be construed as a successful mission, if you ignore all those civilians casualties and fatalities, and the near-leveling of a good portion of the Strip.

Israel was also able to take out a significant portion of Hezbollah’s leadership via conventional aerial attacks and ground-assaults, and a bizarrely effective asymmetric attack using bombs installed in the pagers used by the organization, and it’s been able to significantly decrease the Houthis’ ability to menace ships passing through the Red Sea, using their own military, but also through their relationship with the US, which has significant naval assets in the area.

Iran has long projected power in the region through its relationship with these proxies, providing them training and weapons and money in exchange for their flanking of Israel. That flanking was meant to keep Israel perpetually off-balance with the knowledge that if they ever do anything too serious, beyond the bounds of the controllable tit-for-tat, Cold War-style conflict in which they were engaged with Iran, they could suffer significant damage at home, from the north via Lebanon, from their southwestern flank via Gaza, or from a little ways to the south and via their coast from Yemen.

Those proxies now largely hobbled, though, Israel found itself suddenly freed-up to do something more significant, and this attack is being seen by analysts as the initial stages of what might be a more substantial, perhaps permanent solution to the Iran problem. Rather than being a show of force or a tit-for-tat play, these might be the beginning days of an assault that’s meant to enact not just a dismantling of Iran’s nuclear program, but full-on regime change in Iran.

And regime change means exactly what it sounds like: Iran’s government is Islamist, meaning that it wants to enforce a fairly brutal, repressive version of Islam globally, and it already does so against its people. There have periodically been successful protests against these measures by Iranian citizens, especially by severely repressed women and minority groups in the country, including folks of different religions and LGBTQ identifying folks, among others, almost always these protests, and any other attempts to attain more rights and equality for people who aren’t strictly Islamist men, generally result in violence, the black-bagging of protest leaders, extrajudicial killings and lifetime imprisonment and torture; a whole lot of really authoritarian, generally just villain-scale behavior by the Iranian government against anyone who steps out of line.

So the Iranian government is pretty monstrous by most modern, democratic standards, and the Israeli government’s seeming desire to crush it—to cry false on the regime’s projection of strength, and create the circumstances for revolution, if that is indeed what they’re doing—could be construed as a fairly noble goal.

It perhaps serves the purposes of Israel, as again, Iran has said, over and over, that they want to destroy Israel and would totally do so, given the chance. But it arguably also serves the purpose of democratic-leaning people, and perhaps even more so folks who are suffering under the current Iranian regime, and maybe even other, similar regimes in the region. Which again, in terms of spreading democracy and human rights, sounds pretty good to some ears.

That said, Israel is killing a lot of Iranian civilians alongside military targets, and its efforts in Gaza have led to accusations that it’s committing genocide in the region. Israeli leaders have themselves been accused of anti-democratic actions, basically doubling-down on the nation’s furthest-right, most militant, and most authoritarian and theocratic impulses, which makes any claims of moral superiority a little tricky for them to make, at this point.

There’s a chance, of course, that all this speculation and analysis ends up being completely off-base, and Israel is really, truly just trying to hobble Iran a bit, taking out some of their missile launchers and missile- and drone-manufacturing capacity, while also pushing back their acquisition of nuclear weapons by some meaningful amount of time; that amount of time currently unknown, as initial reports, at least, indicate that many of the attacks on Iran’s most vital nuclear research and development facilities were perhaps not as effective as Israel had hoped. There’s a chance that if enough overall damage is done, Iran’s government will enthusiastically return to the negotiating table and perhaps be convinced to set their nuclear program aside willingly, but at the moment both Iran and Israel seem committed to hurting each other, physically.

On that note, so far, as of the day I’m recording this, Iran has launched around 100 missiles, killed a few dozen Israelis, and injured more than 500 of the same. The Iranian government has said Israel’s strikes have killed at least 224 people and wounded more than 1,200; though a human rights group says the death toll in Iran could be quite a bit higher than official government numbers, with more than 400 people killed, around half of them civilians, so far.

It’s been nearly a week of this, and it looks likely that these strikes will continue for at least another few days, though many analysts are now saying they expect this to go one for at least a few weeks, if indeed Israel is trying to knock out some of Iran’s more hardened nuclear program-related targets; several of which are buried deep down in the ground, thus requiring bunker-buster-style missiles to reach and destroy, and Israel doesn’t have such weapons in their arsenal.

Neutralizing those targets would therefore mean either getting those kinds of weapons from the US or other allies, taking them out via some other means, which would probably take more time and entail more risk, or doing enough damage quickly than Iran’s government is forced to the negotiation table.

And if that ends up being the case, if Israel is really just gunning for the nuclear program and nothing else, this could be remembered as a significant strike, but one that mostly maintains the current status quo; same Iranian leadership, same perpetual conflict between these two nations, but Israel boasting even more of an upper-hand than before, with less to worry about in terms of serious damage from Iran or its proxies for the next several years, minimum.

It does seem like a good moment to undertake regime change in Iran, though, as doing so could help Israel polish up its reputation, at least a little, following the reputational drubbing it has taken because of its actions in Gaza. I doubt people who have really turned on Israel would be convinced, as doing away with an abusive, extremist regime, while doing abusive, extremist regime stuff yourself the homefront, probably won’t be an argument that convinces many Palestinian liberation-oriented people; there’s a chance some of those people will even take up the cause of Iranian civilians, which is true to a point, as many Iranian civilians are suffering and will continue to suffer under Israel’s attacks—though of course that leaves out the part about them also suffering, for much longer, under their current government.

That said, taking Iran out of the geopolitical equation would serve a lot of international interests, including those of the US—which has long hated Iran—and Ukraine, the latter of which because Russia has allied itself with the Iranian government, and buys a lot of drones, among other weapons, from Iran. That regime falling could make life more difficult for Russia, at least in the short term, and it would mean another ally lost in the region, following the fall of the Assad regime in Syria in late-2024.

There’s a chance that these same geopolitical variables could pull other players into this conflict, though: Russia could help Iran, for instance, directly or indirectly, by sending supplies, taking out Israeli missiles and drones, maybe, while the US could help Israel (more directly, that is, as it’s apparently already helping them by shooting down some of Iran’s counterstrike projectiles) by providing bunker-buster weapons, or striking vital military targets from a distance.

Such an escalation, on either side, would probably be pretty bad for everyone except possibly Iran, though Israel has said it wants the US to join in on its side, as that would likely result in a much quicker victory and far fewer casualties on its side.

The US government is pretty keen to keep out of foreign conflicts right now, though, at least directly, and Russia is pretty bogged down by its invasion of Ukraine; there’s a chance other regional powers, even smaller ones, could act as proxies for these larger, outside forces—the Saudis taking the opportunity to score some damage on their long-time rival, Iran, for instance, by helping out Israel—but any such acts would expand the scope of the conflict, and it’s seldom politically expedient to do anything that might require your people make any kind of sacrifice, so most everyone will probably stay out of this as long as they can, unless there are serious benefits to doing so.

Show Notes

https://en.wikipedia.org/wiki/June_2025_Israeli_strikes_on_Iran

https://www.politico.com/news/magazine/2025/06/13/israel-iran-regime-attack-goal-column-00405153

https://www.foreignaffairs.com/israel/real-threat-iran-tehran-most-dangerous-option-responding-israel

https://www.twz.com/news-features/could-iran-carry-out-its-threat-to-shut-the-strait-of-hormuz

https://www.jpost.com/israel-news/defense-news/article-857713

https://kyivindependent.com/israel-asks-us-to-join-strikes-on-irans-nuclear-sites-officials-told-axios/

https://www.timesofisrael.com/liveblog-june-15-2025/

https://www.twz.com/air/israel-escalates-to-attacking-iranian-energy-targets-after-ballistic-missiles-hit-tel-aviv

https://www.cnn.com/world/live-news/israel-iran-strikes-news-06-14-25

https://www.timesofisrael.com/idf-confirms-irgc-air-force-chief-top-echelon-killed-in-israeli-strike/

https://time.com/7294186/israel-warns-tehran-will-burn-deadly-strikes-traded-nuclear-program/

https://www.nytimes.com/live/2025/06/14/world/israel-iran-news

https://www.nytimes.com/2025/06/13/opinion/israel-iran-strikes.html

https://www.nytimes.com/2025/06/14/world/middleeast/drones-smuggled-israel-iran-ukraine-russia.html

https://www.nytimes.com/live/2025/06/15/world/iran-israel-nuclear

https://www.nytimes.com/2025/06/15/world/middleeast/iran-military-leaders-killed.html

https://www.nytimes.com/2024/04/14/world/europe/israel-iron-dome-defense.html

https://www.nytimes.com/2025/06/14/world/middleeast/israel-iran-missile-attack.html

https://www.nytimes.com/2025/06/14/world/middleeast/iran-israel-energy-facility-strikes-tehran.html

https://www.cnn.com/world/live-news/israel-iran-strikes-news-06-15-25

https://www.lawfaremedia.org/article/was-israel-s-strike-on-iran-a-good-idea--four-questions-to-ask

https://apnews.com/article/israel-iran-missile-attacks-nuclear-news-06-16-2025-c98074e62ce5afd4c3f6d33edaffa069

https://www.nytimes.com/2025/06/16/world/middleeast/iran-israel-war-off-ramp.html

https://en.wikipedia.org/wiki/October_2024_Iranian_strikes_on_Israel

https://en.wikipedia.org/wiki/October_2024_Israeli_strikes_on_Iran

https://en.wikipedia.org/wiki/Axis_of_Resistance

https://en.wikipedia.org/wiki/2024_Lebanon_electronic_device_attacks

We also discuss casualty numbers, population superiority, and lingering munitions.

Recommended Book: The Burning Earth by Sunil Amrith

Transcript

Eight years after Russia launched a halfheartedly concealed invasion of Ukraine’s Crimean peninsula, under the guise of helping supposedly oppressed Russian-speakers and Russia loyalists in the area, in February of 2022, Russia launched a full-scale invasion of Ukraine.

This invasion followed months of military buildup along the two countries’ shared borders, and was called a special military operation by Russian President Putin. It was later reported that this was intended to be a quick, one or a few day decapitation attack against Ukraine, Russia’s forces rapidly closing the distance between the border and Ukraine’s capitol, Kyiv, killing or imprisoning all the country’s leadership, replacing it with a puppet government loyal to Putin, and that would be that.

Ukraine had been reorienting toward the European Union and away from Russia’s sphere of influence, and Russia wanted to put a stop to that realignment and bring the country fully back under its control, as was the case before 2014, when a series of protests turned into an uprising that caused their then-leader, a puppet of Russia, to flee the country; he, of course, fled to Russia.

On paper, Ukraine was at a massive disadvantage in this renewed conflict, as Russia is a global-scale player, while Ukraine is relatively small, and back in 2014 had one of its major ports and a huge chunk of its territory stolen by Russia.

Russia also has nukes, has a massive conventional military, and has a far larger economy and population. Analysts near-universally assumed Ukraine would collapse under the weight of Russia’s military, perhaps holding out for weeks or months if they were really skillful and lucky, but probably days.

That didn’t end up being the case. Despite Russia’s substantial and multifarious advantages, Ukraine managed to hold out against the initial invasion, against subsequent pushes, and then managed to launch its own counterattacks. For more than three years, it has held its ground against Russia’s onslaught, against continuous land incursions, and against seemingly endless aerial attacks by jets, by bombers, and by all sorts of rockets, missiles, and drones.

It’s difficult, if not impossible, to determine actual casualty and fatality numbers in this conflict, as both sides are incentivized to adjust these figures, either to show how horrible the other side is, or to make it seem like they’re suffering less than they are for moral purposes.

But it’s expected that Russia will hit a milestone of one million casualties sometime in the summer of 2025, if it hasn’t actually hit that number already, and it’s estimated that as many as 250,000 Russian soldiers have already been killed in Ukraine.

For context, that’s about five-times as many deaths as Russia suffered in all the wars it fought, post-WWII (as both the Soviet Union and Russia), combined. That’s also fifteen-times as many fatalities as they suffered in their ten-year-long war in Afghanistan, and ten-times as many deaths as in their 13-year-long war in Chechnya.

It’s also estimated that Russia has lost something like 3,000-4,000 tanks, 9,000 armored vehicles, 13,000 artillery systems, and more than 400 air defense systems in the past year, alone; those numbers vary a bit depending on who you listen to, but those are likely the proper order of magnitude.

The country is rapidly shifting to a full-scale war footing, originally having intended to make do with a few modern systems and a whole lot of antique, Soviet military hardware they had in storage to conduct this blitzkrieg attack on Ukraine, but now they’re having to reorient basically every facet of society and their economy toward this conflict, turning a huge chunk of their total manufacturing base toward producing ammunition, tanks, missiles, and so on.

Which, to be clear, is something they’re capable of doing. Russia is currently on pace to replace this hardware, and then some, which is part of why other European governments are increasing their own military spending right now: the idea being that once Russia has finished their reorientation toward the production of modern military hardware, they’ll eventually find themselves with more tanks, missiles, and drones than they can use in Ukraine, and they’ll need to aim them somewhere, or else will find themselves have to pay upkeep on all this stuff as it gathers dust and slowly becomes unusable.

The theory, then, is that they’ll have to open up another conflict just to avoid being bogged down in too much surplus weaponry; so maybe they’ll try their luck in the Baltics, or perhaps start shipping more hardware to fellow travelers, terrorists and separatists, in places like Moldova.

In the meantime, though, Russian forces are continuing to accrue gains in Ukraine, but very, very slowly. This year they’ve captured an average of about 50 meters of Ukrainian territory per day, at a cost of around 1,140 casualties per day, of which about 975 are fatalities.

That’s a huge and horrific meatgrinder, but there’s little pushback against the invasion in Russia at this point, as speaking out against it has been criminalized, and a lot of high-profile fines, arrests, kidnappings, and seeming assassinations of people who have said anything even a little bit negative about the war or the Russian government have apparently been effective.

Ukraine is holding its own, then, but Russia still has the upper-hand, and will likely have even more weight behind it in the coming months, as its manufacturing base pivots further and further toward a total war stance.

What I’d like to talk about today is a seeming renewed effort on the part of Ukraine to strike within Russian territory, taking out military assets, but also destabilizing Russian support for the war, focusing especially on one such recent, wildly successful asymmetric attack.

—

In addition to all the other advantages Russia has in this conflict, Ukraine’s population is about one-fourth the size of Russia’s, and that means even if Ukraine is, by some measures, losing one soldier to every two that Russia loses, over time Russia is still gaining firmer and firmer footing; that’s a war of attrition Russia will eventually win just because their population is bigger.

By some indications, the Russian government is also using this conflict as an opportunity to clear out its prisons, offering prisoners a chance at freedom if they go to the front line and survive for a period of time, many of them dying, and thus freeing up prison space and resources that would otherwise be spent on them, but also sending a disproportionate number of their poor, their disliked ethnic and religious groups, and their young radicals into the meatgrinder, forcing them to serve as cannon fodder, as most of those people will die or be grievously wounded, but those people also, as a side-benefit, will no longer be a problem for the government.

Russia is also bringing in troops from its ally, North Korea, to fight on the front lines, alongside all the weapon systems and ammo it’s been procuring from them and other allies, like China and Iran.

So while this is obviously not great for Russia, losing that many fighters for relatively small gains, they’ve also figured out a way to make it not so bad, and in some ways even a positive development, according to their metrics for positive, anyway, and again, if they can keep warm bodies flooding to the front lines, they will eventually win, even if it takes a while—at their current rate of advance, it would take about 116 years to capture the rest of the country—and even if the body count is shockingly high by the time that happens.

To counter this increasing advantage that Russia has been leveraging, Ukraine has been leaning more heavily on drones, as the invasion has progressed.

In this context, a drone might be anything from the off-the-shelf, quadcopter models that hobbyists use to race and shoot aerial photographs, to higher-end, jet or missile or glider-like models similar to what major military forces, like the US military, use to scout and photograph enemy forces and terrain, and in some cases launch assassination attacks or bombing raids on the same.

They can be low-flying quad-copters, or they can be something like lingering, unmanned missiles or jet fighters, then, and they can be completely unarmed, or they can be rigged with grenades to drop, bombs to use in a suicide attack, missiles to fire, shotguns to blast enemy fighters in the face, or nets to ensnare enemy drones.

Drones of all shapes and sizes have been fundamental to the way modern militaries operate since the 1990s, when early, remotely piloted aircraft, like the Predator drone, were used for aerial reconnaissance purposes in mostly Middle Eastern war zones.

Later versions were then equipped with bombs and missiles, and in some cases have even been used for the assassination of individuals, as was the case with a drone that fired a modified Hellfire missile that was reportedly use to kill an al Quaeda leader in Afghanistan in 2022, the missile deploying six large blades before hitting its intended target, shredding him instead of blowing him up, and thus avoiding civilian casualties.

Mexican cartels have also been enthusiastically adopting drones in their attacks and assassinations, their so-called dronero drone-operators often rigging off-the-shelf drones with deployable bombs, allowing them to fly the drone into an enemy’s home or other supposedly safe space, killing them with minimum risk to the attacker, and with sufficient fog-of-war so that if the attacker doesn’t want to be known, they can maintain anonymity.

Ukraine’s military has been using drones from the beginning of the conflict in a similarly asymmetric manner, but they’ve also been improving upon the state-of-the-art by coming up with sophisticated new uses for existing drone models, while also developing their own drones and software systems, allowing them to maintain the meat-grinder Russian forces face with fewer Ukrainian casualties, while also giving them new opportunities to strike Russia within its own borders.

That latter point is important, as for pretty much this entire conflict, Ukraine’s allies have provided them with weapons, but with the stipulation that they cannot fire those weapons into Russia territory—the fear being that Russia might use that as justification to expand the scope of the conflict. Those stipulations have been lightening, with some allies now saying it’s fine that Ukraine uses these weapons however they like, but the Ukrainians have been pushed into making more of their own weapon systems in part because they can use those systems however they choose, without limits, including being able to target infrastructure within Russian territory.

One such innovation is a speedboat-based anti-aircraft missile system called the Magura V7, which reportedly shot down two Russian Su-30 warplanes, which are roughly equivalent to the US F-16, in May of 2025, which was the first-ever successful downing of fighter jets by drone boats.

These boats can hang out in open water for days at a time, watching and waiting for Russian jets, and then ambushing them, seemingly out of nowhere. It’s also been speculated that a recent attack on a vital supply channel for Russian forces in occupied Crimea, the Crimean Bridge, was conducted using an underwater drone, which if true could signal a new frontier of sorts in this conflict, as Ukraine has already managed to menace Russia’s Black Sea fleet into near-inoperability using conventional weaponry, and the widespread deployment of more difficult to detect underwater drones could make any Russian naval presence even more difficult, if not impossible, to maintain.

Ukraine has been coming up with all sorts of interesting countermeasures for Russia’s anti-drone tech, including connecting their spy drones to the drone’s operator using thin strands of fiber optic cable, which renders electronic warfare countermeasures all but useless, alongside efforts to make attack drones more capable if cut off from their operators, allowing the drones to continue tracking targets over time, and to follow through with an attack if their communication signals are jammed.

A new approach to offensively leveraging drones, which was the biggest drone attack by Ukraine, so far, and the most impactful, was called Operation Spider’s Web, and was deployed on June 1 of this year. It involved 117 drones launching coordinated attacks across Russia, successfully striking about 20 high-end Russian military aircraft, ten of which were destroyed.

This is notable in part because some of the aircraft in question were strategic bombers and A-50 military spy planes, both of which are incredibly expensive and valuable; and Russia only has two of that type of spy plane. But it’s also notable because some of these targets were struck far from Ukraine, one of the targeted air bases located about 2,700 miles away, which for context is nearly the width of the continental United States.

The Ukrainian military was able to accomplish this synchronized attack, which took about a year and a half to plan, by concealing drone parts in wooden shipping containers that were designed to look like a type of mobile wooden cabin that are commonly carried on flatbed trucks throughout the area. Those parts were assembled into finished drones inside Russia’s borders, and then on June 1, all at the same time, the roofs of these mobile containers slid open, the drones flew out, and they made for their targets simultaneously.

This attack is said to have caused billions of dollars in damage, and to have hit about a third of Russia’s cruise missile carriers.

Earlier this week, Russia launched what’s being called the biggest overnight drone bombardment of the war, so far, launching 479 drones at Ukrainian targets, alongside 20 missiles of different types. The Ukrainian military says it destroyed 277 drones and 19 missiles mid-flight, and that only 10 drones and missiles hit their targets. One person was reportedly injured by the barrage; though like all numbers in this conflict, it’s impossible to know whether these figures are real or not.

This is of-a-kind with other recent attacks by Russia against Ukrainian targets, in that it was aimed at several military, but also many major civilian targets—apparently with the intention of demoralizing civilians and soldiers, alike. And most of these attacks are overnight attacks, because it’s more difficult to see the drones and take them out before they hit their target when it’s dark outside.

That said, there are some murmurs in the analyst community that Russia might not be able to escalate things too much, right now, despite the big success of Operation Spider’s Web, as it’s already throwing a lot at Ukraine. Both countries are seemingly going all-out in their offensives on the theory that if peace talks do ever go anywhere, as some foreign governments, including Trump’s US government, would prefer, the side that seems to be doing the best and have the best prospects at that moment will have an advantage in those talks.

Ukraine’s attacks within Russia have mostly targeted fuel and ammo depots, drone manufacturing facilities, and similar combat-related infrastructure. There’s a chance they might also aim at demoralizing the Russian public through attacks on civilian targets at some point, but they seem to be sticking with military targets for now, and that would seem to be a better strategy, considering that speaking out against the war is illegal and severely punished in Russia—so hitting Russia’s capacity for maintaining the invasion would be more likely to lead to positive outcomes for Ukraine, as that could hobble Russia’s capacity to invade, which in turn could reduce the populations’ sense of the governments power.

However those talks, if they do eventually happen in earnest, play out, there’s apparently now a change in tone and tact, as Ukraine has shown that it’s capable of striking Russian targets deep within Russia, and it’s likely making things tricky for Russia’s economy, as they’ll now have to spend more time and resources checking all sorts of shipping containers and other possible points of ingress, lest they contain drone parts or other weapons.

Not a huge deal, all things considered, perhaps, a little extra work and expense across the economy but one more of many papercuts Ukraine seems to be inflicting on its more powerful foe that, in aggregate, might eventually force that foe to find a way to back off.

Show Notes

https://www.bbc.com/news/articles/cz708lpzgxro

https://www.nytimes.com/interactive/2025/03/03/world/europe/ukraine-russia-war-drones-deaths.html

https://www.nytimes.com/2025/06/08/world/europe/ukraine-russia-drones-weapons.html

https://www.twz.com/news-features/inside-ukraines-fiber-optic-drone-war

https://www.19fortyfive.com/2025/04/russias-black-sea-has-been-functionally-inactive-for-over-1-year/

https://www.twz.com/news-features/inside-ukraines-fiber-optic-drone-war

https://en.wikipedia.org/wiki/Drone_warfare

https://en.wikipedia.org/wiki/Operation_Spider%27s_Web

https://airandspace.si.edu/stories/editorial/predator-drone-transformed-military-combat

https://www.wsj.com/world/ukraine-russia-drone-attack-bombers-cc77e534

https://www.reuters.com/business/aerospace-defense/us-believes-russia-response-ukraine-drone-attack-not-over-yet-expects-multi-2025-06-07/

https://www.reuters.com/business/aerospace-defense/ukraine-hit-fewer-russian-planes-than-it-estimated-us-officials-say-2025-06-04/

https://defensescoop.com/2025/04/03/ukraine-russian-tanks-destroyed-attack-drones-cavoli/

https://www.csis.org/analysis/russias-battlefield-woes-ukraine

https://understandingwar.org/backgrounder/russian-offensive-campaign-assessment-june-5-2025

https://en.wikipedia.org/wiki/Russian_invasion_of_Ukraine

We also discuss the germ line, mad scientists, and science research funding.

Recommended Book: The Siren’s Call by Chris Hayes

Transcript

Back in November of 2018, a Chinese scientist named He Jiankui achieved global notoriety by announcing that he had used a relatively new gene-editing technique on human embryos, which led to the birth of the world’s first gene-edited babies.

His ambition was to help people with HIV-related fertility problems, one of which is that if a parent is HIV positive, there’s a chance they could transmit HIV to their child.

This genetic modification was meant to confer immunity to HIV to the children so that wouldn’t be an issue. And in order to accomplish that immunity, He used a technology called CRISPR/Cas9 to modify the embryos’ DNA to remove their CCR5 gene, which is related to immune system function, but relevant to this undertaking, also serves as a common pathway for the HIV-1 virus, allowing it to infect a new host.

CRISPR is an acronym that stands for clustered regularly interspaced short palindromic repeats, and that refers to a type of DNA sequence found in all sorts of genomes, including about half of all sequenced bacterial genomes and just shy of 90% of all sequenced archaea genomes.

Cas9 stands for CRISPR-associated protein 9, which is an enzyme that uses CRISPR sequences, those repeating, common sequences in DNA strands, to open up targeted DNA strands—and when paired with specific CRISPR sequences, this duo can search for selected patterns in DNA and then edit those patterns.

This tool, then, allows researchers who know the DNA pattern representing a particular genetic trait—a trait that moderates an immune system protein that also happens to serve as a convenient pathway for HIV, for instance—to alter or eliminate that trait. A shorthand and incomplete way of thinking about this tool is as a sort of find and replace tool like you have in a text document on your computer, and in this instance, the gene sequence being replaced is a DNA strand that causes a trait that in turn leads to HIV susceptibility.

So that’s what He targeted in those embryos, and the children those embryos eventually became, who are usually referred to as Lulu and Nana, which are pseudonyms, for their privacy, they were the first gene-edited babies; though because of the gene-editing state of the art at the time, while He intended to render these babies’ CCR5 gene entirely nonfunctional, which would replicate a natural mutation that’s been noted in some non-gene-edited people, including the so-called Berlin Patient, who was a patient in Germany in the late-90s who was functionally cured of HIV—the first known person to be thus cured—while that’s what He intended to do, instead these two babies actually carry both a functional and a mutant copy of CCR5, not just the mutant one, which in theory means they’re not immune to HIV, as intended.

Regardless of that outcome, which may be less impactful than He and other proponents of this technology may have hoped, He achieved superstardom, briefly, even being named one of the most influential people in the world by Time magazine in 2019. But he was also crushed by controversy, stripped of his license to conduct medical research by the Chinese government, sent to prison for three years and fined 3 million yuan, which is more than $400,000, and generally outcast from the global scientific community for ethical violations, mostly because the type of gene-editing he did wasn’t a one-off sort of thing, it was what’s called germ-line editing, which means those changes won’t just impact Lulu and Nana, they’ll be passed on to their children, as well, and their children’s children, and so on.

And the ethical implications of germ-line editing are so much more substantial because while a one-off error would be devastating to the person who suffers it, such an error that is passed on to potentially endless future generations could, conceivably, end humanity.

The error doesn’t even have to be a botched job, it could be an edit that makes the edited child taller or more intelligent by some measure, or more resistant to a disease, like HIV—but because this is fringy science and we don’t fully understand how changing one thing might change other things, the implications for such edits are massive.

Giving someone an immunity to HIV would theoretically be a good thing, then, but if that edit then went on the market and became common, we might see a generation of humans that are immune to HIV, but potentially more susceptible to something else, or maybe who live shorter lives, or maybe who create a subsequent generation who themselves are prone to all sorts of issues we couldn’t possibly have foreseen, because we made these edits without first mapping all possible implications of making that genetic tweak, and we did so in such a way that those edits would persist throughout the generations.

What I’d like to talk about today is another example of a similar technology, but one that’s distinct enough, and which carries substantially less long-term risk, that it’s being greeted primarily with celebration rather than concern.

—

In early August of 2024, a gene-editing researcher at the University of Pennsylvania, Dr. Kiran Musunuru, was asked if there was anything he could do to help a baby that was being treated at the Children’s Hospital of Philadelphia for CPS1 deficiency, which manifests as an inability to get rid of the ammonia that builds up in one’s body as a byproduct of protein metabolism.

We all generate a small amount of ammonia just as a function of living, and this deficiency kept the baby from processing and discarding that ammonia in the usual fashion. As a result, ammonia was building up in its blood and crossing into its brain.

The usual method of dealing with this deficiency is severely restricting the suffer’s protein intake so that less ammonia is generated, but being a baby, that meant it wasn’t able to grow; he was getting just enough protein to survive and was in the 7th percentile for body weight.

So a doctor at the Children’s Hospital wanted to see if there was anything this gene-editing researcher could do to help this baby, who was at risk of severe brain damage or death because of this condition he was born with.

Gene-editing is still a very new technology, and CRISPR and associated technologies are even newer, still often resulting in inaccurate edits, many of which eventually go away, but that also means the intended edit sometimes goes away over time, too—the body’s processes eventually replacing the edited code with the original.

That said, these researchers, working with other researchers at institutions around the world, though mostly in the US, were able to rush a usually very cumbersome and time-consuming process that would typically take nearly a decade, and came up with and tested a gene-editing approach to target the specific mutation that was causing this baby’s problems, and they did it in record time: the original email asking if Dr Musunuru might be able to help arrived in August of 2024, and in late-February of 2025, the baby received his first infusion of the substance that would make the proper edits to his genes; they divided the full, intended treatment into three doses, the first being very small, because they didn’t know how the baby would respond to it, and they wanted to be very, very cautious.

There were positive signs within the first few weeks, so 22 days later, they administered the second dose, and the third followed after that.

Now the research and medical worlds are waiting to see if the treatment sticks; the baby is already up to the 40th percentile in terms of weight for his age, is able to eat a lot more protein and is taking far less medication to help him deal with ammonia buildup, but there’s a chance that he may still need a liver transplant, that there might be unforeseen consequences due to that intended edit, or other, accidental edits made by the treatment, or, again, that the edits won’t stick, as has been the case in some previous trials.

Already this is being heralded as a big success, though, as the treatment seems to be at least partially successful, hasn’t triggered any serious, negative consequences, and has stuck around for a while—so even if further treatments are needed to keep the gene edited, there’s a chance this could lead to better and better gene-editing treatments in the future, or that such treatments could replace some medications, or be used for conditions that don’t have reliable medications in the first place.

This is also the first known case of a human of any age being given a custom gene-editing treatment (made especially for them, rather than being made to broadly serve any patient with a given ailment or condition), and in some circles that’s considered to be the future of this field, as individually tailored gene-treatments could help folks deal with chronic illnesses and genetic conditions (like cystic fibrosis, Huntington’s disease, muscular dystrophy, and sickle cell), but also possibly help fight cancers and similar issues.

More immediately, if this treatment is shown to be long-term efficacious for this first, baby patient, it could be applied to other patients who suffer the same deficiency, which afflicts an estimated 1 in 1.3 million people, globally. It’s not common then—both parents have to have a mutant copy of a specific gene for their child to have this condition—but that’s another reason this type of treatment is considered to be promising: many conditions aren’t widespread enough to justify investment in pharmaceuticals or other medical interventions that would help them, so custom-tailored gene-editing could be used, instead, on a case-by-case basis.

This is especially true if the speed at which a customized treatment can be developed is sped-up even further, though there are concerns about the future of this field and researchers’ ability to up its efficiency as, at least in the US, the current administration’s gutting of federal research bodies and funding looks likely to hit this space hard, and previous, similar victories that involved dramatically truncating otherwise ponderous developmental processes—like the historically rapid development of early COVID-19 vaccines—are not looked at favorably by a larger portion of the US electorate, which could mean those in charge of allocating resources and clearing the way for such research might instead pull even more funding and put more roadblocks in place, hobbling those future efforts, rather than the opposite.

There are plenty of other researchers and institutions working on similar things around the world, of course, but this particular wing of that larger field may have higher hurdles to leap to get anything done in the coming years, if current trends continue.

Again, though, however that larger context evolves, we’re still in the early days of this, and there’s a chance that this approach will turn out to be non-ideal for all sorts of reasons.

The concept of tailored gene-editing therapies is an appealing one, though, as it could replace many existing pharmaceutical, surgical, and similar approaches to dealing with chronic, inherited conditions in particular, and because it could in theory at least allow us to address such issues rapidly, and without needing to mess around with the germ-line, because mutations could be assessed and addressed on a person-by-person basis, those edits staying within their bodies and not being passed on to their offspring, rather than attempting to make genetic customizations for future generations based on the imperfect knowledge and know-how of today’s science, and the biased standards and priorities of today’s cultural context.

Show Notes

https://www.nejm.org/doi/full/10.1056/NEJMoa2504747

https://www.nih.gov/news-events/news-releases/infant-rare-incurable-disease-first-successfully-receive-personalized-gene-therapy-treatment

https://www.wired.com/story/a-baby-received-a-custom-crispr-treatment-in-record-time/

https://www.wsj.com/tech/biotech/crispr-gene-editing-therapy-philadelphia-infant-8fc3a2c5

https://www.washingtonpost.com/science/2025/05/15/crispr-gene-editing-breakthrough/

https://www.npr.org/sections/shots-health-news/2025/05/15/nx-s1-5389620/gene-editing-treatment-crispr-inherited

https://interestingengineering.com/health/first-personalized-crispr-gene-therapy

https://www.nature.com/articles/d41586-025-01496-z

https://www.nytimes.com/2025/05/15/health/gene-editing-personalized-rare-disorders.html

https://www.nytimes.com/2025/05/31/world/asia/us-science-cuts.html

https://www.livescience.com/health/genetics/us-baby-receives-first-ever-customized-crispr-treatment-for-genetic-disease

https://en.wikipedia.org/wiki/He_Jiankui_affair

https://en.wikipedia.org/wiki/CCR5

https://en.wikipedia.org/wiki/Berlin_Patient

https://en.wikipedia.org/wiki/CRISPR_gene_editing

https://en.wikipedia.org/wiki/CRISPR

https://pmc.ncbi.nlm.nih.gov/articles/PMC6813942/

We also discuss coal power plants, natural gas, and gigatons.

Recommended Book: What If We Get It Right? by Ayana Elizabeth Johnson

Transcript

In 2024, global CO2 emissions hit a new all-time high of 37.8 gigatons, that figure including emissions from industrial processes, oil well flaring, and the combustion of fuel, like petroleum in a vehicle.

And for context, a gigaton is one billion metric tons, which is about 2.2 trillion pounds. A single gigaton is about the weight of 10,000 fully equipped aircraft carriers, it’s about twice the mass of all human beings on the planet, and it’s approximately the same mass of all non-human land-mammals on earth.

That’s one gigaton, and global CO2 emissions last year hit 37.8 gigatons; so quite a lot of carbon dioxide headed into the atmosphere, every year, these days.

That’s up about .8% from 2023 levels, and it resulted in an atmospheric CO2 concentration of about 422.5 parts per million, which is around 3 ppm higher than 2023, and 50% higher than pre-industrial levels. And again, for context, if we don’t want to experience global average temperature increases, more extreme weather, and disrupted water cycles, the general consensus is that we want to keep atmospheric CO2 levels at or below 350 ppm, and we’re currently at 422.5 ppm.

That said, while emissions grew last year, mostly because fuel combustion increased by around 1%, which overshadowed the decrease in industrial process emissions, which was down 2.3% for the year, emissions growth in 2024 was less than GDP growth; and that’s important because for a long time it was assumed that in order to grow global wealth, according to that metric for wealth, at least, more fossil fuels would need to be burned, because that was the pattern for a long time, industrial revolution, onward.

Beginning in the early 2000s, though, GDP growth and emissions growth diverged, and that decoupling has become more prominent as many wealthy nations, including the US, have upped the efficiency of many previously energy-hogging aspects of their economies—things like appliances and the aforementioned industrial processes—while also shifting a lot of energy generation away from massively polluting fuels like coal and oil, over to less-polluting fuels like gas, and non-polluting sources like solar and wind, and in some cases nuclear, as well.

This relationship varies significantly from country to country, and the benefits are mostly being seen in so-called advanced economies right now, as many poorer nations are still seeing increased emissions from more polluting power sources, generating electricity, and the growth in wealth leading to more people buying cars and scooters, many of which run on dirty fuels.

In the US, though, GDP has doubled since 1990, but CO2 emissions have dropped back down to around 1990 levels.

Which to be clear is still a whole lot, as Americans consume a lot of stuff and use a lot of energy, and there are a lot of people living in the US using all that energy and buying all that stuff. But it serves as a good example of this divergence, which we’re also seeing across the EU, where European economies, on average, are 66% larger than in 1990, and CO2 emissions are about a third lower than levels from that same year.

What I’d like to talk about today, though, is how this dynamic is playing out in China, a place with a staggeringly high population, a rapidly enlarging middle class, and a whole lot of energy needs.

—

China is a renewable energy powerhouse.

It’s an energy of all kinds powerhouse, truthfully, but its development of renewable energy technologies, and its deployment of those technologies, has been truly remarkable, especially over the past decade or so.

China has more renewable energy capacity—mostly solar and wind—than the next 13 countries combined. The US comes in second place, but China has four-times as much renewable energy capacity than the US.

Despite that, though, because of China’s huge population and its remarkable wealth-spreading success story, having brought something like 800 million people out of poverty over the past 40 years, a lot of people in the country need a lot more energy, every year. Because as people make more money, they tend to use more electricity and heat, and they tend to buy more things, need bigger homes, and so on. All of which requires more energy.

So even though they’ve been building solar panels and wind turbines at a blistering rate, spreading these things all over the place, massively increasing their capacity for clean electricity, they’ve also been building more fossil fuel-burning power plants, especially coal power plants, and that’s made it the world’s biggest emitter of greenhouse gases; a little less than half of the country’s total installed generation capacity burns fossil fuels, which is a huge drop from even a handful of years ago, but because so much of the remaining fossil fuel stock is coal-burning, those energy assets account for an outsized portion of global emissions.

New, official data released by the Chinese government, so probably smart to take it with a grain of salt, though these sorts of numbers are usually more reliable than the economy-related numbers they put out, these days, but new data was crunched by Carbon Brief, and they found that March of 2024 was China’s most recent peak in terms of emissions, and since then, their emissions have dropped by 1%.

The drop might be accelerating, too, as they also found that new installations in the first quarter of 2025 dropped emissions by 1.6% compared to the same quarter in 2024, so they may be scaling up their renewables deployment efforts, which could lead to even more of a drop.

And remarkably, China’s power sector tallied an emissions drop of 5.8%, despite demand for power increasing by 2.5% that same period: which suggests that although China’s population is still wanting more electricity and stuff, the same energy, or rather, a bit more of it, now produces fewer emissions, which means the ratio of renewables to non-renewables in their grid is shifting further in renewables’ favor.

Now, as with many other countries, China is beginning to replace coal in some of their power plants with natural gas, instead of swapping them out for solar, wind, and nuclear. Which is absolutely better than coal, but gas still emits CO2 when burned, and there are entirely different problems associated with gas infrastructure, including leaky pipes than allow methane to seep into the atmosphere, which stays up there for a shorter duration than CO2, but is a lot more potent, in terms of heat-capture—so gas in better in some ways, especially short-term ways, than coal, and less polluting for people on the ground, too, but definitely not as good for long-term outcomes as renewables.

All that said, there’s some optimism here, as this is the first time this sort of peak and drop has been noted in China’s emission numbers in a context where that drop hasn’t been directly attributable to economic factors; the pandemic, for instance, where a lot less energy was needed, fewer people were driving, and thus there were far fewer emissions globally, for a while.

There’s a chance, though, that this trend could be disrupted by the burgeoning trade-war between the Trump administration and essentially everyone, but China in particular. The China-facing component of Trump’s tariffs has been mellowed for a few months, but is still significant at around 30% as of the day I’m recording this. And that could lead to a rewiring of global supply chains, but also a shift in what China manufacturers are producing, how they’re getting those goods to their destination.

Those shifting variables could lead to short-term or long-term changes in who’s producing what, how it’s being shipped, and thus, what sorts of energy expenditures we’ll see, and how that energy’s being produced, because of the peculiarities of those new, perhaps rapidly deployed, needs.

Show Notes

https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience

https://e360.yale.edu/features/china-renewable-energy

https://arstechnica.com/science/2025/05/analysis-shows-that-chinas-emissions-are-dropping-due-to-renewables/

https://www.carbonbrief.org/analysis-clean-energy-just-put-chinas-co2-emissions-into-reverse-for-first-time/

https://mn350.org/understanding350

https://www.iea.org/reports/global-energy-review-2025/co2-emissions

https://www.iea.org/commentaries/the-relationship-between-growth-in-gdp-and-co2-has-loosened-it-needs-to-be-cut-completely

https://wmo.int/media/news/record-carbon-emissions-highlight-urgency-of-global-greenhouse-gas-watch

https://www.carbonbrief.org/analysis-global-co2-emissions-will-reach-new-high-in-2024-despite-slower-growth/

https://ourworldindata.org/co2-emissions

We also discuss crypto wealth, robberies, and memecoins.

Recommended Book: The Status Game by Will Storr

Transcript

In 2008, a white paper published by someone writing under the pen name Satoshi Nakamoto proposed a method for making a decentralized asset class called a cryptocurrency that led to the creation of bitcoin, which was implemented and began trading in 2009.

While there were other variations on this theme, and attempts to create something like a cryptocurrency previously, bitcoin is generally considered to be the first modern incarnation of this asset class, and its approach—using a peer-to-peer network to keep track of who owns what tokens on a publicly distributed ledger called a blockchain—led to the development of many copycats, and many next-generation cryptoassets based on similar principles, or principles that have been iterated in all sorts of directions, based on the preferences and beliefs of those assets’ founders.

In its early days, bitcoin didn’t make much of a splash and was considered to be kind of an anomaly, mostly interesting to a very small number of people who speculated about alternative currencies and how they might be developed and implemented in the real world, but as of mid-May 2025, the global market cap for all cryptocurrencies is $3.39 trillion, bitcoin accounting for more than $2 trillion of that total.

That said, there are tens of thousands of cryptocurrencies available, these days, though the majority of them have been formally discontinued or simply allowed to go fallow, becoming functionally inactive.

That’s partly the consequence of a surge in interest during the height of the COVID-19 pandemic, the price of bitcoin popping from just over $5,000 at the start of the pandemic to around $68,000 in late-2021.

Bitcoin and most of the other crypto-assets that sprung up during that tumultuous period then collapsed when the US Federal Reserve hiked interest rates, intending to temper inflation, which had the knock-on effect of reining in risky bets on things like seed-level startups and alternative assets classes, like crypto—bitcoin dropped to less than $17,000 in 2023, partly as a result of that move—but as inflation levels cooled and investors started to look for assets that might pay out big time again, there was another wave of crypto-asset launches, especially of the ‘meme coin’ variety, which basically means a crypto token that’s launched either as a joke, or to try to make some money off something that’s trending—the most famous meme coin is probably Dogecoin, which was originally released in 2013 as a joke, but then boomed in popularity and price during the pandemic.

Through it all, and well before most people knew what bitcoin or cryptocurrencies were, Coinbase has served as a central pillar of the crypto-asset ecosystem.

The company was founded in 2012 by a former Airbnb engineer as a crypto exchange: a place where you can swap crypto assets for other crypto assets, but importantly, where you can also sell those assets for real world money, or buy them for real world money.

And that’s what I want to talk about today, and more specifically a recent hack of Coinbase, and the potential implications of that hack.

—

In mid-May of 2025, Coinbase reported, in a legally required Securities and Exchange Commission filing, that their company was hacked, and that the hack may end up costing Coinbase between $180 and $400 million, all told.

According to that filing, Coinbase received an email from the hacker on May 11, saying that they’d obtained a bunch of information about Coinbase customers and their accounts, alongside other Coinbase documentation related to their account management systems and customer service practices. The hacker demanded $20 million from the company, which the company refused to pay.

Coinbase officials have been keen to note that passwords and private keys were not compromised in the hack, so the hackers couldn’t just log into someone’s account and empty their crypto wallets or the real-deal money they might be keeping there, but they did access names, addresses, phone numbers, and email addresses, alongside the last four digits of some users’ social security numbers, their government ID images, like drivers licenses and passports, and their account balances.

All of which isn’t as bad as passwords and private keys being stolen, but it’s not good, either. The hackers, or people working with them, have reportedly been launching phishing attacks against some of the higher net-worth individuals whose information was stolen, those attacks—which usually involve tricking victims into divulging other information, like passwords—made a million times easier because the folks doing the attacks had that stolen information.

What’s more, and this isn’t necessarily obvious from reading the pieces published about this hack, but it’s important context surrounding all of this, people who have a lot of money in crypto-assets are increasingly likely to be targeted for other sorts of crimes, compared to people with a lot of wealth in conventional assets, like money, homes, and stocks.

Case in point, in early May of this year, a trio of Florida teens kidnapped a man at gunpoint in Las Vegas, drove him to a remote desert area about an hour away, and then stole about $4 million in crypto and other digital assets, like NFTs.

They apparently waited for him at his apartment complex and when he pulled up, they threatened him, and said they had his dad, and would kill him if he didn’t get in their car, and then they got his account passwords and other information from him, once he was away from any possible help.

In Canada, back in early November of 2024, the CEO of a crypto company based in Toronto was kidnapped during rushhour, forced into the kidnappers’ vehicle and forced to pay a million dollars in ransom before he was released.

According to a security firm that specializes in protecting wealthy people with crypto-assets, that CEO’s kidnapping was the 171st instance of criminals using physical violence, including kidnapping, but also other types of robbery, to steal crypto assets; they also said there tend to be more such cases when the price of these assets is high.

Well, the price of a bitcoin is high right now, more than $103,000 per coin, as of the day I’m recording this, and France and other Western European nations are seeing a spate of kidnappings of high net-worth crypto-holders, some of which have resulted in mutilation, as was the case with a 60-year-old man who was kidnapped in broad daylight, at 10:30am in Paris—four men in ski-masks pushed him into the back of a delivery van, and his kidnappers demanded his crypto-millionaire son pay a ransom; they cut off the older man’s finger during the ordeal.

The kidnappers demanded something like 5-7 million euros, which wasn’t paid, and they were eventually captured by police. But law enforcement is seeing a lot of this sort of thing all over the world right now, people who made fortunes in crypto being kidnapped, and in some cases their friends and family, or partners, also being kidnapped, or kidnapped instead. Whatever the specifics, the person with the crypto-wealth is then hit up for a ransom.

Often, the people being targeted are known to be wealthy because their wealth, their gains in this particular asset market, is publicized.

The big concern amongst many people in the crypto-world right now, then, is that although the Coinbase hack didn’t result in lost passwords or keys, the information that was stolen, including the balance of users’ accounts, could make these users targets, giving anyone with access to this stolen data a list of people they might steal from, and information about where to find them, how to contact them, and how much they can probably hit them up for.

On top of that, they can see who has had large balances in the past, how much cash they sold their holdings for, and who maybe previously had large holdings on Coinbase, but then transferred those assets to a private wallet—so even if they don’t have large Coinbase balances, they possibly have large balances hidden on a harddrive somewhere.

Crypto wealth is generally considered to be easier to steal, and to get away with said theft, because of its very nature; it’s largely disconnected from traditional banking systems and many traditional banking regulations, and it’s often simpler to launder crypto assets than real money, converting bitcoin into stable coins into other coins before then converting those assets into real money, for instance.

So while Coinbase seems to be doing what they can to make their users whole, including paying back users whose information was lost in the breach, that information then used to phish them, successfully—so if you were conned out of money because the hackers got this information and then tricked you—Coinbase will pay you back what you lost.

But it’s not really possible to undo other, non-immediate damage, like the new level of threat some of these hacking victims maybe face, as the global economy gets weird, job security is iffy for many people in many industries, at best, and there’s this list of people who seem to have plenty of money, that money held in more-stealable-than-usual assets, alongside what amounts to a map to where they can be found, and all sorts of information that paints an incomplete, but potentially leveragable, portrait of their lives.

Show Notes

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001679788/000167978825000094/coin-20250514.htm

https://www.cnbc.com/2025/05/15/coinbase-says-hackers-bribed-staff-to-steal-customer-data-and-are-demanding-20-million-ransom.html

https://techcrunch.com/2025/05/15/coinbase-says-customers-personal-information-stolen-in-data-breach/

https://www.nytimes.com/2025/04/24/magazine/crybercrime-crypto-minecraft.html?unlocked_article_code=1.Hk8.UV7K.VEEqHFsUu24g&smid=url-share

https://www.yahoo.com/news/florida-teens-kidnap-las-vegas-200918594.html

https://www.cbc.ca/news/canada/toronto/kidnapping-toronto-businessman-cryptocurrency-1.7376679

https://www.theguardian.com/world/2025/may/04/french-police-investigate-spate-of-cryptocurrency-millionaire-kidnappings

https://www.advisor.ca/investments/market-insights/the-reasons-behind-bitcoins-surge/

https://www.statista.com/statistics/863917/number-crypto-coins-tokens/

https://www.forbes.com/digital-assets/crypto-prices/?sh=c86585d24785

https://en.wikipedia.org/wiki/Coinbase

https://en.wikipedia.org/wiki/Cryptocurrency

https://en.wikipedia.org/wiki/Bitcoin

https://www.sciencedirect.com/science/article/abs/pii/S0378437122005696

https://en.wikipedia.org/wiki/Meme_coin

We also discuss incentive programs, waste heat, and the EPA.

Recommended Book: Africa Is Not a Country by Dipo Faloyin

Transcript

In the United States, fuel-efficiency laws for vehicles sold on the US market are set by the National Highway Traffic Safety Administration, or NHTSA. They set the Corporate Average Fuel Economy, or CAFE standards by which vehicle-makers have to abide, and that, in turn, establishes the minimum standards for companies like Ford or Toyota making vehicles for this market.

That CAFE standard is paired with another guideline set by the Environmental Protection Agency that sets standards related to tailpipe emissions. The former says how many miles a vehicle should be able to travel on a gallon of fuel, while the latter says how much CO2, methane, and other pollutants can be legally emitted as that fuel is burnt and those miles are traversed.

These two standards address different angles of this issue, but work together to, over time, reduce the amount of fuel consumed to do the same work, and pollution created as that work is accomplished; as a result, if you’re traveling 50 miles today and driving a modern car in the US, you’ll consume a lot less fuel than you would have traveling the same distance in a period-appropriate car twenty years ago.

Back in the final year of the Biden administration, the president was criticized for not pushing for more stringent fuel-efficiency standards for US-sold and driven vehicles. The fuel economy requirements were increased by 2% per year for model years 2027 to 2031 for passenger cars, and the same 2% per year requirement will be applied to SUVs and other light trucks for model years 2029 to 2031.

This is significantly lower than a previously proposed efficiency requirement, which would have seen new vehicles averaging about 43.5 mpg by model year 2032—an efficiency gain of 18%. And the explanation at the time was that Biden really wanted to incentivize carmakers to shift to EVs, and if they weren’t spending their time and resources on fuel-efficiency tech deployment for their gas-guzzlers, which Biden hoped to start phasing out, they could spend more on refining their EV offerings, which were already falling far behind China’s EV models.

Biden wanted half of all new vehicles sold in the US by 2030 to be electric, so the theory was that fuel-efficiency standards were the previous war, and he wanted to fight the next one.

Even those watered-down standards were estimated to keep almost 70 billion gallons of gasoline from being consumed through the year 2050, which in turn would reduce US driver emissions by more than 710 million metric tons of CO2 by that same year. They were also expected to save US drivers something like $600 in gas costs over the lifetime of each vehicle they own.

Since current president Trump returned to office, however, all of these rules and standards have come into question. Just as when he was president the first time around, rolling back a bunch of Obama-era fuel-efficiency standards—which if implemented as planned would have ensured US-sold vehicles averaged 46.7 mpg by 2026, so better than we were expected to get by 2032 under Biden’s revised minimum—just as he did back then, Trump is targeting these new, Biden standards, while also doing away with a lot of the incentives introduced by the Biden administration meant to make EVs cheaper and more appealing to consumers, and easier to make and sell for car companies.

What I’d like to talk about today is another standard, this one far less politicized and widely popular within the US and beyond, that is also being targeted by the second Trump administration, and what might happen if it goes away.

—

In 1992, the US Environmental Protection Agency, under the endorsement of then-president George HW Bush, launched the Energy Star program: a voluntary labeling program that allowed manufacturers of various types of products to affix a little blue label that says Energy Star on their product, boxes, and/or advertising if their product met the efficiency standards set by this program.

So it’s a bit like if those aforementioned fuel-efficiency standards set for vehicles weren’t required, and instead, if your car met the minimum standards, you could slap a little sticker on the car that said it was more energy efficient than cars without said sticker.

A low bar to leap, and one that wasn’t considered to be that big a deal, either in terms of being cumbersome for product-makers, or in terms of accomplishing much of anything.

Energy Star standards were initially developed for the then-burgeoning field of personal computers and accessories, but in 1995 things really took off, when the program was expanded to include heating and cooling infrastructure, alongside other components for housing and other buildings.

From there, new product categories were added on a semi-regular basis, and the government agency folks running the program continued to deploy more technical support and testing tools, making it easier and easier for companies wanting to adhere to these standards to do so, relatively easily and inexpensively.

And to provide a sense of what was required to meet Energy Star standards in the days when they were really beginning to take off and become popular, in the early 2000s, refrigerators needed to be about 20% more efficient, in terms of electricity consumption, than the minimum legal standard for such things, while dishwashers needed to be 41% more efficient. Computers around that time, more specifically in 2008, were required to have an 85% efficiency at half load and something close to that at 20% and 100% power load—which basically means it they needed to use most of the energy they drew, and release less of it as waste-heat, which was a big issue for desktop computers at the time.

Energy Star TVs had to use 30% less energy than average, with more modern versions of the standard requiring they draw 3 watts or less while in standby mode, and a slew of 90s and early 2000s-era technologies, like VCRs and cordless home phones were required to use something like 90% less electricity than the average at the time.

This standard helped push the development of more energy efficient everything, as it was a selling point for companies making things for real estate developers, in particular. Energy-hogs like light fixtures, which cost a fortune to power if you’re thinking in terms of skyscrapers or just building a bunch of houses, became far more energy efficient after the folks in charge of buying the lighting for these projects were able to eyeball options and use the Energy Star label as a shorthand indication that the cost of operation for those goods would be far less, over time, than their competition; it was kind of pointless to buy anything else in many cases, because why would you want to spend all that extra money over time buying less-efficient fluorescent lights for your office buildings, especially now that it was so easy to see, at a glance, which ones were best in this regard?

And the same general consensus arrived on the consumer market not long after, as qualified lighting was something like 75% more efficient than non-qualified, legal-minimum-meeting lighting, and Energy Star verified homes were something like 20% cheaper to own.

It was estimated that US homeowners living in Energy Star certified homes saved around $360 million on their energy bills in 2016, alone, and another estimate suggests that US citizens, overall, have saved about half a trillion dollars over the past 33 years as a result of the program and the efficiency standards it encourages.

So this is a relatively lightweight program that’s optional, and which basically just rewards companies willing to put more efficient products on the market. They can use the little label if they live up to these standards, and that tells customers that this stuff will use less energy than other, comparable products, which in turn saves those customers money over time, and puts less strain on the US electrical grid.

This program, consequently, has been very popular, for customers, for the companies making these products—because by jumping through a few hoops, they can get some of their products certified, and that gives them a competitive advantage over companies that don’t do the same, and especially over companies selling cheaper goods from overseas, which tend to be a lot less efficient because of that cheapness—and it’s been popular for politicians across the political spectrum, because people who buy things and pay energy bills vote those politicians into office, and companies that make such goods hire lobbyists to influence their decisions.

All of which brings us to today, mid-May of 2025, a point at which the second Trump administration seems to be considering possibly getting rid of the Energy Star certification program.

Initial reports on the matter are seemingly well-sourced, but anonymous, as is the case with a lot of White House briefs right now, so some of this should be taken with a grain of salt, because of how it’s being reported and because this administration has flip-flopped a whole lot already, and on things much bigger and more prominent than this, since returning to office, so this could just go away after being reported upon, even if they actually intended to do it before that pushback.

But what seems to have happened is this:

In January of 2025, after returning to the White House, Trump’s administration put a big Trump supporter and Republican politician, Lee Zelden, in charge of the Environmental Protection Agency.

Zelden publicly holds a lot of standard Republican talking points, including what’s often called skepticism about climate science and vehement support of oil drilling, including fracking. He did say that climate change is a real issue that needs to be addressed during his EPA head confirmation hearing, however.

Under Trump’s second administration, many government agencies have been either completely done away with, or wiped out, in terms of funding and staff, so that they’re basically just zombie agencies at this point, and the EPA is an agency that Trump has historically not been a big fan of, and which he seems to be trying to rewire toward deregulation: so regulations like fuel efficiency standards are not good according to some strains of usually more conservative politics, and for some business owners, because these are additional rules they have to legally abide by, which costs them money.

And back in March of 2025 Zelden announced that the EPA would be pulling back on regulations related to power plants, would incentivize rather than disincentivize the production of oil and gas, would do away with a bunch of pollution-related standards, especially those related to coal power plants and how much pollution they can emit, and many other similar things, which—to shorthand all this—may be somewhat popular if you think climate change concerns are overblown and that it’s more important to keep coal mines operational than to keep streams and rivers clean, but which will generally look really, really bad if you’re any kind of environmentalist and/or are concerned about climate change.

The government also recently cut the EPA’s budget by 54.5%, dropping said budget back to where it was when Ronald Reagan was president. This cut, along with cuts to other agencies responsible for tracking dangerous weather, saving sea turtles, and keeping US National Parks clean and functional, will, according to the government, save US taxpayers $163 billion.

According to reports from a recent all-hands meeting of the EPA’s Office of Atmospheric Protection, Trump administration officials announced that that office would be dissolved, and that the Energy Star program would be eliminated.

Now, there’s a chance that this is just the result of the administration’s at times seemingly blind cutting of budgets, backtracking only when there’s sufficient pushback, and there’s a chance this is a continuation of a political moment a few years back when the Biden administration was considering doing away with Energy Star certification for gas ranges, the idea being that if it uses gas instead of electricity, it’s part of the problem, even if it’s more efficient than other ranges.

Republican politicians responded to lobbying efforts from the US gas industry and stirred that up into a big frenzy, to the point that people were vehemently defending their right to own a gas stove, which was never under threat, but that’s how these sorts of astroturfed moral panics work, and it could be that they’re looking to replicate some of that magic now, taking down a standard that they hope to frame as an example of liberal overreach, telling people that these things take away their right to choose what they want to buy, and how much energy or fuel to burn, even when that’s not actually true.

There’s also a chance, as I mentioned earlier, though, that this is just a trial balloon, and that once they realize there’s a decent amount of bipartisan support for this program, they’ll step back from this cut, and maybe even claim it for themselves, using it as an example of American exceptionalism: look how great American-made goods are, we’re more efficient than anybody else—not bad messaging at a time in which that kind of competitive language is popular with those in charge, though that competition might not be the real point of all this, at least for some of the people making some of these decisions, right now.

Show Notes

https://www.usatoday.com/story/news/nation/2025/05/09/trump-budget-cuts-environmental-programs/83441472007/

https://www.epa.gov/newsreleases/epa-launches-biggest-deregulatory-action-us-history

https://en.wikipedia.org/wiki/Lee_Zeldin

https://web.archive.org/web/20201214180957/https://www.energystar.gov/about/origins_mission/energy_star_overview/about_energy_star_residential_sector

https://web.archive.org/web/20161202012204/https://www.energystar.gov/index.cfm?c=about.ab_milestones

https://web.archive.org/web/20170622184250/http://www.dailytech.com/New+Energy+Star+50+Specs+for+Computers+Become+Effective+Today/article15559.htm

https://insideclimatenews.org/news/08052025/energy-star-program-could-be-eliminated-by-trump-administration/

https://cleantechnica.com/2025/05/10/energy-star-program-gets-the-kiss-of-death/

https://www.theverge.com/news/664670/water-energy-efficiency-standards-trump-dishwasher-washing-machine-showerhead-toilet

https://en.wikipedia.org/wiki/Energy_Star

https://edition.cnn.com/2025/05/06/climate/energy-star-trump

https://www.nytimes.com/2025/05/06/climate/epa-energy-star-eliminated.html

https://www.washingtonpost.com/climate-environment/2025/05/06/energy-star-program-epa-trump/

https://www.energy.gov/eere/buildings/energy-star

https://www.npr.org/2025/05/07/g-s1-64905/energy-star-program-cuts

https://apnews.com/article/trump-appliances-consumers-energy-efficiency-3b6100e001a2629dfea9be231f467841

https://www.reuters.com/article/business/environment/trump-finalizes-rollback-of-obama-era-vehicle-fuel-efficiency-standards-idUSKBN21I25R/

https://apnews.com/article/climate-trump-mpg-fuel-economy-standards-automakers-0ef9147a0c3874a50a194e439f604261

https://apnews.com/article/vehicle-fuel-economy-requirement-nhtsa-epa-85e4c3b7bbba9a9a9b7e5b117fe099bd

https://apnews.com/article/epa-electric-vehicles-emissions-limits-climate-biden-e6d581324af51294048df24269b5d20a

https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy

We also discuss artificial intelligence, Anthropic, and protocols.

Recommended Book: Fuzz by Mary Roach

Transcript

In the wake of WWII, the US government implemented the European Recovery Program, more commonly known as the Marshall Plan, to help Western Europe recover from a conflict that had devastated the afflicted countries’ populations, infrastructure, and economies.

It kicked off in April of 1948, and though it was replaced by a successor program, the Mutual Security Act, just three years later in 1951—which was similar to the Marshall Plan, but which had a more militant, anti-communism bent, the idea being to keep the Soviets from expanding their influence across the continent and around the world—the general goal of both programs was similar: the US was in pretty good shape, post-war, and in fact by waiting to enter as long as it did, and by becoming the arsenal of the Allied side in the conflict, its economy was flourishing, its manufacturing base was all revved up and needed something to do with all the extra output capacity it had available, all the resources committed to producing hardware and food and so on, so by sharing these resources with allies, by basically just giving a bunch of money and assets and infrastructural necessities to these European governments, the US could get everybody on side, bulwarked against the Soviet Union’s counterinfluence, at a moment in which these governments were otherwise prone to that influence; because they were suffering and weaker than usual, and thus, if the Soviets came in with the right offer, or with enough guns, they could conceivably grab a lot of support and even territory. So it was considered to be in everyone’s best interest, those who wanted to keep the Soviet Union from expanding, at least, to get Europe back on its feet, posthaste.

So this program, and its successor program, were highly influential during this period, and it’s generally considered to be one of the better things the US government has done for the world, as while there were clear anti-Soviet incentives at play, it was also a relatively hands-off, large-scale give-away that favorably compared with the Soviets’ more demanding and less generous version of the same.

One interesting side effect of the Marshall Plan is that because US manufacturers were sending so much stuff to these foreign ports, their machines and screws and lumber used to rebuild entire cities across Europe, the types of machines and screws and lumber, which were the standard models of each in the US, but many of which were foreign to Europe at the time, became the de facto standard in some of these European cities, as well.

Such standards aren’t always the best of all possible options, sometimes they stick around long past their period of ideal utility, and they don’t always stick, but the standards and protocols within an industry or technology do tend to shape that industry or technology’s trajectory for decades into the future, as has been the case with many Marshall Plan-era US standards that rapidly spread around the world as a result of these giveaways.

And standards and protocols are what I’d like to talk about today. In particular a new protocol that seems primed to shape the path today’s AI tools are taking.

—

Today’s artificial intelligence, or AI, which is an ill-defined type of software that generally refers to applications capable of doing vaguely human-like things, like producing text and images, but also somewhat superhuman things, like working with large data-sets and bringing meaning to them, are developing rapidly, becoming more potent and capable seemingly every day.

This period of AI development has been in the works for decades, and the technologies required to make the current batch of generative AI tools—the type that makes stuff based on libraries of training data, deriving patterns from that data and then coming up with new stuff based on the prompting of human users—were originally developed in the 1970s, but the transformer, which was a fresh approach to what’s called deep learning architectures, was first proposed in 2017 by a researcher at Google, and that led to the development of the generative pre-trained transformer, or GPT, in 2018.

The average non-tech-world person probably started to hear about this generation of AI tools a few years later, maybe when the first transformer-based voice and image tools started popping up around the internet, mostly as novelties, or even more likely in late-2022 when OpenAI released the first version of ChatGPT, a generative AI system attached to a chatbot interface, which made these sorts of tools more accessible to the average person.

Since then, there’s been a wave of investment and interest in AI tools, and we’ve reached a point where the seemingly obvious next-step is removing humans from the loop in more AI-related processes.

What that means in practice is that while today these tools require human prompting for most of what they do—you have to ask an AI for a specific image, then ask it to refine that image in order to customize it for your intended use-case, for instance—it’s possible to have AI do more things on their own, working from broader instructions to refine their creations themselves over multiple steps and longer periods of time.

So rather than chatting with an AI to come up with a marketing plan for your business, prompting it dozens or hundreds of times to refine the sales copy, the logo, the images for the website, the code for the website, and so on, you might tell an AI tool that you’re building a business that does X and ask it to spin up all the assets that you need. From there, the AI might research what a new business in that industry requires, make all the assets you need for it, go back and tweak all those assets based on feedback from other AI tools, and then deploy those assets for you on web hosting services, social media accounts, and the like.

It’s possible that at some point these tools could become so capable in this regard that humans won’t need to be involved at all, even for the initial ideation. You could ask an AI what sorts of businesses make sense at the moment, and tell it to build you a dozen minimum viable products for those businesses, and then ask it to run those businesses for you—completely hands off, except for the expressing your wishes part, almost like you’re working with a digital genie.

At the moment, components of that potential future are possible, but one of the main things standing in the way is that AI systems largely aren’t agentic enough, which in this context means they need a lot of hand-holding for things that a human being would be capable of doing, but which they largely, with rare exceptions, aren’t yet, and they often don’t have the permission or ability to interact with other tools required to do that kind of building—and that includes things like the ability to create a business account on Shopify, but also the ability to access and handle money, which would be required to set up business and bank accounts, to receive money from customers, and so on.

This is changing at a rapid pace, and more companies are making their offerings accessible to specific AI tools; Shopify has deployed its own cluster of internal AI systems, for instance, meant to manage various aspects of a business its customers perch on its platform.

What’s missing right now, though, is a unifying scaffolding that allows these services and assets and systems to all play nice with each other.

And that’s the issue the Model Context Protocol is meant to address.

The Model Context Protocol, or MCP, is a standard developed by AI company Anthropic, and it’s open and designed to be universal. The company intends for it to be the mycelium that connects large language model-based AI to all sorts of data and tools and other systems, a bit like the Hypertext Transfer Protocol, or HTTP, allows data on the web to be used and shared and processed, universally, in a standardized way, and to dip back into the world of physical objects, how standardized shipping containers make global trade a lot more efficient because everyone’s working with the same sized boxes, cargo vessels, and so on.

The Universal Serial Bus standard, usually shorthanded as USB, is also a good comparison here, as the USB was introduced to replaced a bunch of other standards in the early days of personal computing, which varied by computer maker, and which made it difficult for those makers, plus those who developed accessories, to make their products accessible and inexpensive for end-users, as you might buy a mouse that doesn’t work with your specific computer hardware, or you might have a cable that fits in the hole on your computer, but doesn’t send the right amount of data, or provide the power you need.

USB standards ensured that all devices had the same holes, and that a certain basic level of data and power transmission would be available. And while this standard has since fractured a bit, a period of many different types of USB leading to a lot of confusion, and the deployment of the USB C standard simplying things somewhat, but still being a bit confounding at times, as the same shaped plug may carry different amounts of data and power, despite all that, it has still made things a lot easier for both consumers and producers of electronic goods, as there are fewer plugs and charger types to purchase, and thus less waste, confusion, and so on. We’ve moved on from the wild west era of computer hardware connectivity into something less varied and thus, more predictable and interoperable.

The MCP, if it’s successful, could go on to be something like the USB standard in that it would serve as a universal connector between various AI systems and all the things you might want those AI systems to access and use.

That might mean you want one of Anthropic’s AI systems to build you a business, without you having to do much or anything at all, and it may be capable of doing so, asking you questions along the way if it requires more clarity or additional permissiosn—to open a bank account in your name, for instance—but otherwise acting more agentically, as intended, even to the point that it could run social media accounts, work with manufacturers of the goods you sell, and handle customer service inquiries on your behalf.

What makes this standard a standout compared to other options, though—and there are many other proposed options, right now, as this space is still kind of a wild west—is that though it was developed by Anthropic, which originally made it to work with its Claude family of AI tools, it has since also been adopted by OpenAI, Google DeepMind, and several of the other largest players in the AI world.

That means, although there are other options here, all with their own pros and cons, as was the case with USB compared to other connection options back in the day, MCP is usable with many of the biggest and most spendy and powerful entities in the AI world, right now, and that gives it a sort of credibility and gravity that the other standards don’t currently enjoy.

This standard is also rapidly being adopted by companies like Block, Apollo, PayPal, CloudFlare, Asana, Plaid, and Sentry, among many, many others—including other connectors, like Zapier, which basically allows stuff to connect to other stuff, further broadening the capacity of AI tools that adopt this standard.

While this isn’t a done deal, then, there’s a good chance that MCP will be the first big connective, near-universal standard in this space, which in turn means many of the next-step moves and tools in this space will need to work with it, in order to gain adoption and flourish, and that means, like the standards spread around the world by the Marshall Plan, it will go on to shape the look and feel and capabilities, including the limitations, of future AI tools and scaffoldings.

Show Notes

https://arstechnica.com/information-technology/2025/04/mcp-the-new-usb-c-for-ai-thats-bringing-fierce-rivals-together/

https://blog.cloudflare.com/remote-model-context-protocol-servers-mcp/

https://oldvcr.blogspot.com/2025/05/what-went-wrong-with-wireless-usb.html

https://arxiv.org/html/2504.16736v2

https://en.wikipedia.org/wiki/Model_Context_Protocol#cite_note-anthropic_mcp-1

https://github.com/modelcontextprotocol

https://www.anthropic.com/news/integrations

https://www.theverge.com/2024/11/25/24305774/anthropic-model-context-protocol-data-sources

https://beebom.com/model-context-protocol-mcp-explained/

https://techcrunch.com/2025/03/26/openai-adopts-rival-anthropics-standard-for-connecting-ai-models-to-data/

https://techcrunch.com/2025/04/09/google-says-itll-embrace-anthropics-standard-for-connecting-ai-models-to-data/

https://en.wikipedia.org/wiki/Generative_artificial_intelligence

https://en.wikipedia.org/wiki/USB

https://www.archives.gov/milestone-documents/marshall-plan

https://en.wikipedia.org/wiki/Marshall_Plan

https://www.congress.gov/crs-product/R45079

https://www.ebsco.com/research-starters/history/marshall-plan

https://www.history.com/articles/marshall-plan

We also discuss the global order, sovereignty, and tit-for-tat escalation.

Recommended Book: Power Metal by Vince Beiser

Transcript

When then British India was partitioned by the British in 1947, the country carved up by its colonialist rulers into two new countries, one Hindu majority, the Union of India, and one Muslim majority, the Dominion of Pakistan, the intention was to separate two religious groups that were increasingly at violent odds with each other, within a historical context in which Muslims were worried they would be elbowed out of power by the Hindu-majority, at a moment in which carving up countries into new nations was considered to be a solution to many such problems.

The partition didn’t go terribly well by most measures, as the geographic divisions weren’t super well thought out, tens of millions of people had to scramble to upend their entire lives to move to their new, faith-designated homelands, and things like infrastructure and wealth were far from evenly distributed between the two new regions.

Pakistan was also a nation literally divided by India, part of its landmass on the other side of what was now another country, and its smaller landmass eventually separated into yet another country following Bangladesh’s violent but successful secession from Pakistan in 1971.

There was a lot more to that process, of course, and the reverberations of that decision are still being felt today, in politics, in the distribution of land and assets, and in regional and global conflict.

But one affected region, Kashmir, has been more of a flashpoint for problems than most of the rest of formerly British India, in part because of where it’s located, and in part because of happenings not long after the partition.

Formerly Jammu and Kashmir, the Kashmir region, today, is carved up between India, Pakistan, and China. India controls a little over half of its total area, which houses 70% of the region’s population, while Pakistan controls a little less than a third of its land mass, and China controls about 15%.

What was then Jammu and Kashmir dragged its feet in deciding which side of the partition to join when the countries were being separated, the leader Hindu, though ruling over a Muslim state, but an invasion from the Pakistan side saw it cast its lot in with India. India’s counter-invasion led to the beginning of what became known as both the Indo-Pakistani war of 1947-1948, the first of four such wars, but is also sometimes called the first Kashmir war, the first of three, though there have been several other not-officially-a-war conflicts in and over the region, as well.

Things only got more complicated over the next several decades; China seized the eastern part of the region in the 1950s, and while some Kashmiris have demanded independence, both India and Pakistan claim the region as totally their own, and point at historical markers that support their claim—some such markers based on fact, some on speculation or self-serving interpretations of history.

What I’d like to talk about today is what looks to be a new, potentially serious buildup around Kashmir, following an attack at a popular tourist hotspot in the territory, and why some analysts are especially concerned about what India’s government will decide to do, next.

—

Early in the afternoon of April 22, 2025, a group of tourists sightseeing in a town in the southern part of Kashmir called Pahalgam were open-fired on by militants. 26 people were killed and another 17 were injured, marking one of the worst attacks on mostly Indian civilians in decades.

In 2019, Kashmir’s semiautonomous governance was revoked by the Indian government, which in practice meant the Indian government took more complete control over the region, clamping down on certain freedoms and enabling more immigration of Indians into otherwise fairly Muslim-heavy Kashmir.

It’s also become more of a tourist destination since then, as India has moved more soldiers in to patrol Indian Kashmir’s border with Pakistan Kashmir, and the nature of the landmass makes it a bit of a retreat from climate extremes; at times it’s 30 or 40 degrees cooler, in Fahrenheit, than in New Delhi, so spendy people from the city bring their money to Kashmir to cool off, while also enjoying the natural settings of this less-developed, less-industrialized area.

Reports from survivors indicate that the attackers took their time and seemed very confident, and that no Indian security forces were anywhere nearby; they walked person to person, asking them if they were Muslim and executing those who were not. Around 7,000 people were visiting the area as tourists before the attack, but most of them have now left, and it’s unclear what kind of financial hit this will have on the region, but in the short-term it’s expected to be pretty bad.

In the wake of this attack, the Indian government claimed that it has identified two of the three suspected militants as Pakistani, but Pakistan has denied any involvement, and has called for a neutral probe into the matter, saying that it’s willing to fully cooperate, seeks only peace and stability, and wants to see justice served.

A previously unknown group calling itself the Kashmir Resistance has claimed responsibility for the attack, and Indian security forces have demolished the homes of at least five suspected militants in Kashmir in response, including one who they believe participated in this specific attack.

The two governments have launched oppositional measures against each other, including Pakistan closing its airspace to Indian airlines and shutting down trade with its neighbor, and India shutting down a vital land crossing, revoking Pakistani visas, and suspending a 1960 treaty that regulates water-sharing along the Indus River and its tributaries—something that it’s threatened to do, previously, and which could devastate Pakistan’s agricultural sector and economy, as it basically regulates water that the country relies on for both human consumption and most of its crop irrigation; and for context, Pakistan’s agricultural sector accounts for about a forth of its economy.

So if India blocks this water source, Pakistan would be in a very bad situation, and the Pakistani government has said that any blockage of water by India would be considered an act of war. Over the past week, a Pakistani official accused the Indian government of suddenly releasing a large volume of water from a dam into a vital river, which made flooding in parts of Pakistan-held Kashmir a real possibility, but as of the day I’m recording this they haven’t closed the taps, as Pakistan has worried.

For its part, India wouldn’t really suffer from walking away from this treaty, as it mostly favors Pakistan. It serves to help keep the peace along an at times chaotic border, but beyond that, it does very little for India, directly.

So historically, the main purpose of maintaining this treaty, for India, has been related to its reputation: if it walked away from it, it would probably suffer a reputational hit with the international community, as it would be a pretty flagrantly self-serving move that only really served to harm Pakistan, its weaker arch-nemesis.

Right now, though, geopolitics are scrambled to such a degree that there are concerns India might not only be wanting to make such moves, whatever the consequences, but it may also be hankering for a larger conflict—looking to sort out long-term issues during a period in which such sorting, such conflict, may cause less reputational damage than might otherwise be the case.

Consider that the US government has spoken openly about wanting to take, by whatever means, Greenland, from the Danish, a long-time ally, and that it’s maybe jokingly, but still alarmingly, said that Canada should join the US as the 51st state.

These statements are almost certainly just braggadocio, but that the highest-rung people in the most powerful government on the planet would say such things publicly speaks volumes about the Wild West nature of today’s global order.

Many leaders seem to be acting like this is a moment in which the prior paradigm, and the post-WWII rules that moderated global behavior within that paradigm, are fraying or disappearing, the global police force represented by the US and its allies pulling inward, not caring, and in some cases even becoming something like bandits, grabbing what they can.

Under such circumstances, if you’re in a position of relative power that you couldn’t fully leverage previously, for fear of upsetting that global police force and tarnishing your reputation within that system they maintained, might you leverage it while you can, taking whatever you can grab and weakening your worst perceived enemy, at a moment in which it seems like the getting is good?

It’s been argued that Russia’s violation of Ukraine’s sovereignty may have helped kick-off this new paradigm, but Israel’s behavior in Gaza, the West Bank, and increasingly Syria, as well, are arguably even better examples of this changing dynamic.

While the Democrats and Joe Biden were in the White House, Israeli Prime Minister Netanyahu seemed to be mostly playing ball, at least superficially, even when he very clearly wasn’t—he did what he could to seem to be toeing rules-based-order lines, even when regularly stepping over them, especially in Gaza.

But now, post-Trump’s return to office, that line-toeing has almost entirely disappeared, and the Israeli government seems to be grabbing whatever they can, including large chunks of southwestern Syria, which was exposed by the fall of the Assad regime. The Israeli military launched a full aerial campaign against the Syrian army’s infrastructure, declared a 1974 disengagement agreement with Syria to be void, and though it initially said it would hold the territory it has taken temporarily, it has more recently said it would hold it indefinitely—possibly permanently expanding its country’s land mass at the expense of its neighbor, another sovereign nation, at a moment in which it felt it could get away with doing so.

It’s not clear that India has any ambitions on Pakistani territory, beyond what it holds in Kashmir, at least, but there’s a chance it sees this moment the same way the Israeli government does: as a perhaps finite moment during which the previous state of things, the global rules-based-order, no longer applies, or doesn’t apply as much, which suggests it could do some serious damage to its long-time rival and not suffer the consequences it would have, reputationally or otherwise, even half a year ago.

And India’s leader, Narendra Modi, is in some ways even better positioned than Israel’s Netanyahu to launch such a campaign, in part because India is in such a favorable geopolitical position right now. As the US changes stance, largely away from Europe and opposing Russia and its allies, toward more fully sidling up to China in the Pacific, India represents a potential counterweight against Chinese influence in the region, where it has successfully made many of its neighbors reliant on its trade, markets, and other resources.

Modi has reliably struck stances midway between US and Chinese spheres of influences, allowing it to do business with Russia, buying up a lot of cheap fuel that many other nations won’t touch for fear of violating sanctions, while also doing business with the US, benefitting from a slew of manufacturers who are leaving China to try to avoid increasingly hefty US tariffs.

If India were to spark a more concentrated conflict with Pakistan, then, perhaps aiming to hobble its economy, its military, and its capacity to sponsor proxies along its border with India, which periodically launch attacks, including in Kashmir—that might be something that’s not just tolerated, but maybe even celebrated by entities like China and the US, because both want to continue doing their own destabilizing of their own perceived rivals, but also because both would prefer to have India on their side in future great power disagreements, and in any potential future large-scale future conflict.

India is richer and more powerful than Pakistan in pretty much every way, but in addition to Pakistan’s decently well-developed military apparatus, like India, it has nukes. So while there’s a chance this could become a more conventional tit-for-tat, leading to limited scuffles and some artillery strikes on mostly military installations across their respective borders, there’s always the potential for misunderstandings, missteps, and tit-for-tat escalations that could push the region into a nuclear conflict, which would be absolutely devastating in terms of human life, as this is one of the most densely populated parts of the world, but could also pull in neighbors and allies, while also making the use of nuclear weapons thinkable by others once more, after a long period of that fortunately not being the case.

Show Notes

https://www.france24.com/en/asia-pacific/20250427-indian-pakistani-troops-exchange-fire-for-third-night-in-disputed-kashmir

https://www.france24.com/en/live-news/20250422-at-least-24-killed-in-kashmir-attack-on-tourists-indian-police-source

https://www.france24.com/en/asia-pacific/20250424-india-will-identify-track-and-punish-kashmir-attack-perpetrators-modi-says

https://www.nytimes.com/2025/04/27/world/asia/india-pakistan-kashmir.html

https://archive.is/20250426143222/https://www.reuters.com/world/india/india-pakistan-exchange-gunfire-2nd-day-ties-plummet-after-attack-2025-04-26/

https://www.nytimes.com/2025/04/24/world/asia/india-pakistan-indus-waters-treaty.html

https://www.nytimes.com/2025/04/23/world/asia/kashmir-pahalgam-attack-victims.html

https://apnews.com/article/india-pakistan-kashmir-attack-829911d3eae7cfe6738eda5c0c84d6ae

https://www.bbc.com/news/world-south-asia-11693674

https://en.wikipedia.org/wiki/Partition_of_India

https://en.wikipedia.org/wiki/Kashmir

https://en.wikipedia.org/wiki/Kashmir_conflict

https://en.wikipedia.org/wiki/Indo-Pakistani_war_of_1947%E2%80%931948

We also discuss Inkitt, Galatea, and LLM grooming.

Recommended Book: New Cold Wars by David E. Sanger

Transcript

There’s evidence that the US Trump administration used AI tools, possibly ChatGPT, possibly another, similar model or models, to generate the numbers they used to justify a recent wave of new tariffs on the country’s allies and enemies.

It was also recently reported that Democratic mayoral candidate Andrew Cuomo used AI-generated text and citations in a plan he released called Addressing New York’s Housing Crisis. And this case is a bit more of a slam dunk, as whomever put the plan together for him seems to have just copy-pasted snippets from the ChatGPT interface without changing or checking them—which is increasingly common for all of us, as such interfaces are beginning to replace even search engine results, like those provided by Google.

But it’s also a practice that’s generally frowned upon, as—and this is noted even in the copy provided alongside many such tools and their results—these systems provide a whole lot of flawed, false, incomplete, or otherwise not-advisable-to-use data, in some cases flubbing numbers or introducing bizarre grammatical inaccuracies, but in other cases making up research or scientific papers that don’t exist, but presenting them the same as they would a real-deal paper or study. And there’s no way to know without actually going and checking what these things serve up, which can, for many people at least, take a long while; so a lot of people don’t do this, including many politicians and their administrations, and that results in publishing made-up, baseless, numbers, and in some cases wholesale fabricated claims.

This isn’t great for many reasons, including that it can reinforce our existing biases. If you want to slap a bunch of tariffs on a bunch of trading partners, you can ask an AI to generated some numbers that justify those high tariffs, and it will do what it can to help; it’s the ultimate yes-man, depending on how you word your queries. And it will do this even if your ask is not great or truthful or ideal.

These tools can also help users spiral down conspiracy rabbit holes, can cherry-pick real studies to make it seem as if something that isn’t true is true, and it can help folks who are writing books or producing podcasts come up with just-so stories that seem to support a particular, preferred narrative, but which actually don’t—and which maybe aren’t even real or accurate, as presented.

What’s more, there’s also evidence that some nation states, including Russia, are engaging in what’s called LLM grooming, which basically means seeding false information to sources they know these models are trained on so that said models will spit out inaccurate information that serves their intended ends.

This is similar to flooding social networks with misinformation and bots that seem to be people from the US, or from another country whose elections they hope to influence, that bot apparently a person who supports a particular cause, but in reality that bot is run by someone in Macedonia or within Russia’s own borders. Or maybe changing the Wikipedia entry and hoping no one changes it back.

Instead of polluting social networks or Wikis with such misinfo, though, LLM grooming might mean churning out websites with high SEO, search engine optimization rankings, which then pushes them to the top of search results, which in turn makes it more likely they’ll be scraped and rated highly by AI systems that gather some of their data and understanding of the world, if you want to call it that, from these sources.

Over time, this can lead to more AI bots parroting Russia’s preferred interpretation, their propaganda, about things like their invasion of Ukraine, and that, in turn, can slowly nudge the public’s perception on such matters; maybe someone who asks ChatGPT about Russia’s invasion of Ukraine, after hearing someone who supports Russia claiming that it was all Ukraine’s fault, and they’re told, by ChatGPT, which would seem to be an objective source of such information, being an AI bot, that Ukraine in fact brought it upon themselves, or is in some way actually the aggressor, which would serve Russia’s geopolitical purposes. None of which is true, but it starts to seem more true to some people because of that poisoning of the informational well.

So there are some issues of large, geopolitical consequence roiling in the AI space right now. But some of the most impactful issues related to this collection of technologies are somewhat smaller in scale, today, at least, but still have the potential to disrupt entire industries as they scale up.

And that’s what I’d like to talk about today, focusing especially on a few recent stories related to AI and its growing influence in creative spaces.

—

There’s a popular meme that’s been shuffling around social media for a year or two, and a version of it, shared by an author named Joanna Maciejewska (machie-YEF-ski) in a post on X, goes like this: “You know what the biggest problem with pushing all-things-AI is? Wrong direction. I want AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes.”

It could be argued, of course, that we already have technologies that do our laundry and dishes, and that AI has the capacity to make both of those machines more efficient and effective, especially in term of helping manage and moderate increasingly renewables-heavy electrical grids, but the general concept here resonates with a lot of people, I think: why are some of the biggest AI companies seemingly dead-set on replacing creatives, who are already often suffering from financial precarity, but who generally enjoy their work, or at least find it satisfying, instead of automating away the drudgery many of us suffer in the work that pays our bills, in our maintenance of our homes, and in how we get around, work on our health, and so on.

Why not automate the tedious and painful stuff rather than the pleasurable stuff, basically?

I think, looking at the industry more broadly, you can actually see AI creeping up on all these spaces, painful and pleasurable, but generative AI tools, like ChatGPT and its peers, seem to be especially good at generating text and images and such, in part because it’s optimized for communication, being a chatbot interface over a collection of more complex tools, and most of our entertainments operate in similar spaces; using words, using images, these are all things that overlap with the attributes that make for a useful and convincing chatbot.

The AI tools that produce music from scratch, writing the lyrics and producing the melodies and incorporating different instruments, working in different genres, the whole, soup to nuts, are based on similar principles to AI systems that work with large sets of linguistic training data to produce purely language based, written outputs.

Feed an AI system gobs of music, and it can learn to produce music at the prompting of a user, then, and the same seems to be true of other types of content, as well, from images to movies to video games.

This newfound capacity to spit out works that, for all their flaws, would have previously requires a whole lot of time and effort to produce, is leading to jubilation in some spaces, but concern and even outright terror in others.

I did an episode not long ago on so-called ‘vibe coding,’ about people who in some cases can’t code at all, but who are producing entire websites and apps and other products just by learning how to interact with these AI tools appropriately. And these vibe coders are having a field day with these tools.

The same is increasingly true of people without any music chops who want to make their own songs. Folks with musical backgrounds often get more out of these tools, same as coders tend to get more from vibe coding, in part because they know what to ask for, and in part because they can edit what they get on the other end, making it better and tweaking the output to make it their own.

But people without movie-making skills can also type what they want into a box and have these tools spit out a serviceable movie on the other end, and that’s leading to a change similar to what happened when less-fiddly guns were introduced to the battlefield: you no longer needed to have super well-trained soldiers to defeat your enemies, you could just hand them a gun and teach them to shoot and reload it, and you’d do pretty well; you could even defeat some of your contemporaries who had much better trained and more experienced soldiers, but who hadn’t yet made the jump to gunpowder weapons.

There are many aspects to this story, and many gray areas that are not as black and white as, for instance, a non-coder suddenly being able to out-code someone who’s worked really hard to become a decent coder, or someone who knows nothing about making music creating bops, with the aide of these tools, that rival those of actual musicians and singers who have worked their whole life to be able to the same.

There have been stories about actors selling their likenesses to studios and companies that work with studios, for instance, those likenesses then being used by clients of those companies, often without the actors’ permission.

For some, this might be a pretty good deal, as that actor is still free to pursue the work they want to do, and their likeness can be used in the background for a fee, some of that fee going to the actor, no additional work necessary. Their likeness becomes an asset that they wouldn’t have otherwise had—not to be used and rented out in that capacity, at least—and thus, for some, this might be a welcome development.

This has, in some cases though, resulted in situations in which said actor discovers that their likeness is being used to hawk products they would never be involved with, like online scams and bogus health cures. They still receive a payment for that use of their image, but they realize that they have little or no control over how and when and for what purposes it’s used.

And because of the aforementioned financial precarity that many creatives in particular experience as a result of how their industries work, a lot of people, actors and otherwise, would probably jump at the chance to make some money, even if the terms are abusive and, long-term, not in their best interest.

Similar tools, and similar financial arrangements, are being used and made in the publishing world.

An author named Manjari Sharma wrote her first book, an enemies-to-lovers style romance, in a series of installments she published on the free fanfic platform Wattpad during the height of the Covid pandemic. She added it to another, similar platform, Inkitt, once it was finished, and it garnered a lot of attention and praise on both.

As a result of all that attention, the folks behind Inkitt suggested she move it from their free platform to their premium offering, Galatea, which would allow Sharma to earn a portion of the money gleaned from her work.

The platform told her they wanted to turn the book into a series in early 2024, but that she would only have a few weeks to complete the next book, if she accepted their terms. She was busy with work, so she accepted their offer to hire a ghostwriter to produce the sequel, as they told her she’d still receive a cut of the profits, and the fan response to that sequel was…muted. They didn’t like it. Said it had a different vibe, wasn’t well-written, just wasn’t very good. Lacked the magic of the original, basically.

She was earning extra money from the sequel, then, but no one really enjoyed it, and she didn’t feel great about that. Galatea then told Sharma that they would make a video series based on the books for their new video app, 49 episodes, each a few minutes long, and again, they’d handle everything, she’d just collect royalties.

The royalty money she was earning was a lot less than what traditional publishers offer, but it was enough that she was earning more from those royalties than from her actual bank job, and the company, due to the original deal she made when she posted the book to their service, had the right to do basically anything they wanted with it, so she was kind of stuck, either way.

So she knew she had to go along with whatever they wanted to do, and was mostly just trying to benefit from that imbalance where possible. What she didn’t realize, though, was that the company was using AI tools to, according to the company’s CEO, “iterate on the stories,” which basically means using AI to produce sequels and video content for successful, human-written books. As a result of this approach, they have just one head of editorial and five “story intelligence analysts” on staff, alongside some freelancers, handling books and supplementary content written by about 400 authors.

As a business model, it’s hard to compete with this approach.

As a customer, at the moment, at least, with today’s tools and our approach to using them, it’s often less than ideal. Some AI chatbots are helpful, but many of them just gatekeep so a company can hire fewer customer service humans, saving the business money at the customer’s expense. That seems to be the case with this book’s sequel, too, and many of the people paying to read these things assumed they were written by humans, only to find, after the fact, that they were very mediocre AI-generated knock-offs.

There’s a lot of money flooding into this space predicated in part on the promise of being able to replace currently quite expensive people, like those who have to be hired and those who own intellectual property, like the rights to books and the ideas and characters they contain, with near-free versions of the same, the AI doing similar-enough work alongside a human skeleton crew, and that model promises crazy profits by earning the same level of revenue but with dramatically reduced expenses.

The degree to which this will actually pan out is still an open question, as, even putting aside the moral and economic quandary of what all these replaced creatives will do, and the legal argument that these AI companies are making right now, that they can just vacuum up all existing content and spit it back out in different arrangements without that being a copyright violation, even setting all of that aside, the quality differential is pretty real, in some spaces right now, and while AI tools do seem to have a lot of promise for all sorts of things, there’s also a chance that the eventual costs of operating them and building out the necessary infrastructure will fail to afford those promised financial benefits, at least in the short term.

Show Notes

https://www.theverge.com/news/648036/intouch-ai-phone-calls-parents

https://arstechnica.com/ai/2025/04/regrets-actors-who-sold-ai-avatars-stuck-in-black-mirror-esque-dystopia/

https://archive.ph/gzfVC

https://archive.ph/91bJb

https://www.cnn.com/2025/03/08/tech/hollywood-celebrity-deepfakes-congress-law/index.html

https://www.npr.org/2024/12/21/nx-s1-5220301/deepfakes-memes-artificial-intelligence-elections

https://techcrunch.com/2025/04/13/jack-dorsey-and-elon-musk-would-like-to-delete-all-ip-law/

https://www.404media.co/this-college-protester-isnt-real-its-an-ai-powered-undercover-bot-for-cops/

https://hellgatenyc.com/andrew-cuomo-chatgpt-housing-plan/

https://www.theverge.com/news/642620/trump-tariffs-formula-ai-chatgpt-gemini-claude-grok

https://www.wsj.com/articles/ai-cant-predict-the-impact-of-tariffsbut-it-will-try-e387e40c

https://www.washingtonpost.com/technology/2025/04/17/llm-poisoning-grooming-chatbots-russia/

We also discuss money laundering, the Cambodian government, and Tether.

Recommended Book: The Longevity Imperative by Andrew J. Scott

Transcript

The portmanteau ‘smishing’ combines SMS and phishing to refer to the practice of using text messages to trick the recipients of said messages into revealing information that allows scammers to access their victim’s accounts on various platforms.

One common variation of smishing, which I’ve seen a lot recently, personally, are messages purportedly from toll road operators that tell the recipient they’ve got an unpaid toll, and they need to follow a link that’s provided in order to pay it. If the person receiving that message follows the instructions, they’ll tend to land on a webpage that’s convincing enough, which looks like the sort of site you might go to if you’re paying that kind of toll, online, and you enter your payment information and are then either immediately charged for this fake toll, or that information is used in some more cohesive manner—maybe the card is stolen, maybe it’s added to a larger collection of data they have on you which is then leveraged for a larger payout.

This type of scam has become more common in recent years because of innovations deployed by what security researchers have called the Smishing Triad, which is a trio of mobile phishing groups operating out of China that seem to have refined their infrastructure and techniques so that messages they send via iMessage to iPhone users and RCS to Android users can bypass mobile phone networks and enjoy a nearly 100% delivery rate—which makes the name a little ironic, since these groups don’t use SMS to deliver these scam texts anymore, as those other methods of delivery are more reliable for such messages, these days.

The big innovation introduced by these groups, though, beyond that deliverability, is the productization of mobile phishing, which basically means they’ve packaged up applications that allow their customers, which are usually smaller-time phishing groups and individuals, to share links to convincing-looking copies of Paypal, Mastercard, Stripe, and CitiGroup payment sites, among others, including individual banks, and that makes knee-jerk payments from the victims receiving these texts more likely, and less likely to set of alarm bells in the minds those receiving them, because they look like just normal payment sites.

These pre-packaged scam assets also include regularly rotated web domains, which makes them less likely to trigger the recipient’s anti-scam software—their browser will be less likely to flag them as problematic, basically. And the Triad has hundreds of actual humans working desk jobs, worldwide, supporting their customer base, which again is a bunch of scammers that use this package of tools to try to steal money from their marks.

All of this is enabled, in part, by clever emulation software that allows Triad customers to leverage legit and legit-seeming phone numbers from a computer or phone, those devices then sending out around 100 messages per second, per device, to phone numbers in the targeted region. They’re able to do this on a budget because of the efficiency of the software acquired from the Smishing Triad, and the Triad stays just ahead of regulators and law enforcement by rapidly iterating their offerings, which in turn does the same for all of their customers—which grants the benefits of a larger institution to all these individual and smaller scam groups.

What I’d like to talk about today is another alleged backend for scammers, this one this more overt and public facing, and perhaps even more impactful because of its size and because of the nature of its offerings.

—

The Huione (hu-WAY-wahn) Group is a financial conglomerate primarily based in Cambodia, though it also has satellite offices in other countries, mostly in Southeast Asia.

Folks use the entity’s QR codes to pay for stuff all around Cambodia, from restaurant tabs to hotel bills to supermarket tallies, and it offers normal banking stuff like checking and savings accounts, alongside things like escrow services and a cryptocurrency exchange.

This is a company that buys billboards along major highways throughout the country and which has well-connected people in charge, including one of the Cambodian prime minister’s cousins, who is the director of a Huione company.

In addition to its many legitimate offerings, though, Huione has also been accused to providing a range of gray and blackmarket products and services to folks who are doing skeevy but partially legal things, alongside wholly criminal enterprises, like a human trafficking outfit in Myanmar and folks running large smishing schemes in other parts of Southeast Asia.

Huione’s primary offering for the criminal underworld though, is allegedly serving as a money laundering go-between.

If you run a smishing scammer network, or a group that kidnaps people and sell them into various types of modern slavery in Myanmar, you may have trouble using the money you earn for these efforts because they’re off-book, blackmarket sorts of income. You need to clean, to launder that money to make it seem legitimate, so that you can put it in banks or otherwise use it to pay for things like you would with normal, non-illegally earned money.

Money laundering matchmaker services maintain networks of what are called money mules, and these mules are sometimes individuals, and they’re sometimes shell companies with bank accounts or their own cryptocurrency wallets.

If you’re scamming people out of their money, you might use this type of service to connect you with a money mule, and you provide that mule’s bank or crypto account information to your victim—so when you receive a scammy text message and follow it to completing, the bank your money is sent to will probably be that of a mule, not the person or group doing the scamming.

So the victim transfers their money to that mule’s account, and the mule then moves said money from one account to another to another to another to another, eventually converting it into an asset like a cryptocurrency, once the path has been suitably muddled. They take their cut, which is often something like 15%, somewhere along the way, and you, their customer, the scammer, are handed neutralized, clean resources in the form of that cryptocurrency—which you can then convert into real money at some point—on the other end.

An entity like Huione makes money by connecting scammers and other criminals with mules, but also by serving as a guarantor on these transactions.

So this entity allegedly, via a network of Telegram channels it maintains, telegram being an anonymizing chat app similar to WhatsApp, it allows matchmakers to advertise on these channels, using thinly veiled language to promote their services, and Huione is able to make money selling ads to mules and other matchmakers who want to promote via these highly trafficked channels, one of which has more than 400,000 users—and they have many of these things, and that alone apparently brings in a fair bit of revenue, serving as a sort of hard-to-track Craigslist for this component of the scam economy.

The guarantor component of this digital bazaar means that Huione holds the transactions between scammer and mules in escrow, just like any other escrow service: they take the money and hold it until the service has been completed, at which point they release it, taking a small cut for the service of ensuring that no one gets ripped off—except for the original victim of the scam, of course.

The majority of these transactions are completed using Tether, which is a stablecoin that tries to peg its value to the US dollar, each token worth exactly one USD, rather than fluctuating like speculative crypto assets, like Bitcoin, and this allows everyone involved to maintain a veil of both feigned ignorance and anonymity, making it difficult to track who does what, how much money changes hands, and who gets paid and does the paying.

This setup allows Huione to claim ignorance any time someone accuses them of doing illegal stuff: after all, they can’t possibly be responsible for what all the entities using their services are up to, right? All everything is just muddled and anonymized enough to grant seeming truthfulness to that claim of ignorance.

Because of how all this is set up, most of what we know about this is the result of whistleblowing from insiders and leaked documents, alongside divulgences from security researchers who know how to get into these sorts of networks and who at times hack those involved in various ways.

And it seems, based on those divulgences and other gleaned knowledge, that Huione’s money laundering services, alone, have been linked to nearly $27 billion in cryptocurrency transactions since 2021—though that could be a significant undercount because of the blurry nature of this industry and the entities involved with it.

Thus far, Huione has never been targeted for sanctions by any government.

Tether took action to freeze some of its accounts after law enforcement officials flagged them for criminal behavior, and Telegram has closed some of those illicit, matchmaking channels, but it’s easy enough to set up new versions of both, while the escrow subsidiary of Huione, previously called Huione Guarantee, denies any connection to these activities and even changed its name to Haowang Guarantee in October of 2024, though that denial seems to be public-facing only: the escrow-providing company continues to claim that the larger Huione Group is one of its strategic partners and shareholders.

Huione also has its own matchmatching service, called Huione International Pay, which operates as a real-deal bank, but also does what all the other matchmakers do—it helps criminal enterprises shuffle their money around, taking a fee to provide them with clean money, usually in the shape of Tether crypto tokens, on the other end.

Though notably, Huione also recently launched their own stablecoin called USDH, alongside an in-house communication service called ChatMe and an array of mini-games that seem optimized for automation, which is another means of laundering money via what seems like gambling apps, allowing their clients to cut out the casinos that are sometimes used as part of the laundering process. All of which seems primed to internalize more of this process, slowly doing away with the need for Telegram and Tether and those casinos, which would seem to remove some of the risk associated with those external, uncontrolled-by-Huione, platforms.

Despite all this, this enterprise has been allowed to flourish and grow like it has, according to a threat analyst with the UN, at least, because of lax enforcement in Cambodia, and the conglomerate’s connections with the government and ability to say, basically, we’re legit, look, we’re just a bank, we can’t control what other people might do with our services. Their whole setup is obscure enough, too, that anyone who takes a close look at their entangled business structure quickly gets lost in its complexity and many tangles and dead-ends.

Some governments, including the Chinese government, have been cracking down on entities like Huione operating within their borders, but many such crackdowns are hobbled when they’re aimed at operations based in different countries, especially those with lax enforcement, like Cambodia.

Also worth noting is that if someone’s going to get caught, it’ll most likely be the mules, not the matchmakers or scammers, and that’s by design. It’s a bit like street-level drug dealers being more likely to be picked up by police than the folks running the larger drug enterprise of which they’re a part. Huione and other entities like it are largely insulated from major consequences, even if the mules who use their services periodically get caught in dragnets cast by law enforcement.

That said, the National Bank of Cambodia recently announced that it hasn’t renewed Huione’s license to operate its payment service in the country, the one that runs all those QR codes, because it didn’t meet renewal requirements. That happened in late-March of 2025, so pretty recently, though the company has already said that it will register its business in Japan and Canada, so it seems to be looking for a suitable plot of land on which to rebuild this component of its setup.

Many security researchers and law enforcement officials have warned that the time to crack down on Huione and similar conglomerates is now, because they’re currently reliant on partially exposed third-parties like Telegram and Tether. Once they successfully move those activities inward, they’ll be a lot more difficult to track, but also nearly impossible to shutter, unless there’s a significant change in the government and enforcement climate in the countries in which they’re based, which at this point at least, looks unlikely.

Show Notes

https://www.nytimes.com/2025/03/23/world/asia/cambodia-money-laundering-huione.html

https://www.wired.com/story/the-largest-illicit-online-marketplace-ever-is-growing-at-an-alarming-rate/

https://www.wired.com/story/pig-butchering-scam-crypto-huione-guarantee/

https://www.wired.com/story/interpol-pig-butchering-scams-rename/

https://www.propublica.org/article/casinos-cambodia-myanmar-laos-southeast-asia-fraud-cybercrime

https://krebsonsecurity.com/2025/04/china-based-sms-phishing-triad-pivots-to-banks/#more-70793

https://en.wikipedia.org/wiki/Mobile_phone_spam

We also discuss falling indices, stagflation, and theories of operation.

Recommended Book: The Serviceberry by Robin Wall Kimmerer

Transcript

Stagflation, which is a portmanteau of stagnation and inflation, is exactly what it sounds like: a combination of those two elements, usually with high levels of unemployment, as well, that can cause a prolonged period of economic sluggishness and strain that slows growth and can even lead to a recession.

The term was coined in the UK in the 1960s to describe issues they were facing at the time, but it was globally popularized by the oil shocks of the 1970s, which sparked a period of high prices and slow growth in many countries, including in the US, where inflation boomed, productivity floundered, and economic growth plateaud, leading to a stock market crash in 1973 and 1974.

Inflation, unto itself, can be troubling, as it means prices are going up faster than incomes, so the money people earn and have saved is worth less and less each day. That leads to a bunch of negative knock-on effects, which is a big part of why the US Fed has kept interest rates so high, aiming to trim inflation rates back to their preferred level of about 2% as quickly as possible in the wake of inflation surges following the height of the Covid pandemic.

Stagnant economic growth is also troubling, as it means lowered GDP, reduced future outlook for an economy, and that also tends to mean less investment in said economy, reduced employment levels—and likely even lower employment levels in the future—and an overall sense of malaise that can become a self-fulfilling prophecy, no one feeling particularly upbeat about where their country is going; and that’s not great economically, but it can also lead to all sorts of social issues, as people with nothing to look forward to but worse and worse outcomes are more likely to commit crimes or stoke revolutions than their upbeat, optimistic, comfortable kin.

The combination of these two elements is more dastardly than just the sum of their two values implies, though, as measures that government agencies might take to curb inflation, like raising interest rates and overall tightening monetary policy, reduces business investment which can lead to unemployment. On the flip-side, though, things a government might do to reduce unemployment, like injecting more money into the economy, tends to spike inflation.

It’s a lose-lose situation, basically, and that’s why government agencies tasked with keeping things moving along steadily go far out of their way to avoid stagflation; it’s not easily addressed, and it only really goes away with time, and sometimes a very long time.

There are two primary variables that have historically led to stagflation: supply shocks and government policies that reduce output and increase the money supply too rapidly.

The stagflation many countries experienced in the 1970s was the result of Middle Eastern oil producing nations cutting off the flow of oil to countries that supported Israel during the 1973 Yom Kippur War, though a sharp increase in money supply and the end of the Bretton Woods money management system, which caused exchange rate issues between global currencies, also contributed, and perhaps even more so than the oil shock.

What I’d like to talk about today is another major variable, the implementation of a huge package of new tariffs on pretty much everyone by the US, that many economists are saying could lead to a new period of stagflation, alongside other, more immediate consequences.

—

A tariff is a type of tax that’s imposed on imported goods, usually targeting specific types of goods, or goods from a particular place.

Way back in the day these were an important means of funding governments: the US government actually made most of its revenue, about 90% of it, from tariffs before 1863, because there just wasn’t a whole of lot other ways for the young country to make money at the time.

Following the War of 1812, the US government attempted to double tariffs, but that depleted international trade, which led to less income, not more—gross imports dropped by 71%, and the government scrambled to implement direct and excise taxes, the former of which is the tax a person or business pays that isn’t based on transactions, while the latter is a duty that’s paid upon the manufacture of something, as opposed to when it’s sold.

Tariffs resurfaced in the following decades, but accounted for less and less of the government’s income as the country’s manufacturing base increased, and excise and income taxes made up 63% of the US’s federal revenue by 1865.

Tax sources have changes a lot over the years, and they vary somewhat from country to country.

But the dominant move in the 20th century, especially post-WWII, has been toward free trade, which usually means no or low tariffs on goods being made in one place and sold in another, in part because this tends to lead to more wealth for everyone, on average, at least.

This refocus toward globalized free trade resulted in a lot of positives, like being able to specialize and make things where they’re cheap and sell them where they’re precious, but also some negatives, like the offshoring of jobs—though even those negatives, which sucked for the people who lost their jobs, have been positive for some, as the companies who offshored the jobs did so because it saved them money, the folks who were hired were generally paid more than was possible in their region, previously, and the people consuming the resulting goods were able to get them cheaper than would otherwise be feasible.

It’s been a mixed bag, then, but the general consensus among economists is that open trade is good because it incentivizes competition and productivity. Governments are less likely to implement protectionist policies to preserve badly performing local business entities from better performing foreign versions of the same, and that means less wasted effort and resources, more options for everyone, and more efficient overall economic operation, which contributes to global flourishing. And not for nothing, nations that trade with each other tend to be less likely to go to war with each other.

Now that’s a massively simplified version of the argument, but again, that’s been the outline for how things are meant to work, and aside from some obvious exceptions—like China’s protection of its local tech sector from foreign competition, and the US’s protection of its aviation and car industries—it’s generally worked as intended, and the world has become massively wealthier during this period compared to before this state of affairs was broadly implemented, post-WWII; there’s simply no comparison, the difference is stark.

There are renewed concerns about stagflation in the United States, however, because of a big announcement made by US President Trump on April 2, 2025, that slapped substantial and at times simply massive new tariffs on just about everyone, including the country’s longest-term allies and most valuable trading partners.

On what the president called “Liberation Day,” he announced two new types of tariff: one is a universal 10% import duty on all goods brought into the US, and another that he called a reciprocal tariff on imports from scores of countries, including 15 that will be hit especially hard—a list that includes China, EU nations, Canada, and Japan, among others.

The theory of these so-called reciprocal tariffs is that Trump thinks the US is being taken advantage of, as, to use one example that he cited, the US charges a 2.5% tariff on imported cars, while the EU charges a 10% tariff on American cars imported to their union.

The primary criticism of this approach, which has been cited by most economists and entities like the World Trade Organization, is that the numbers the US administration apparently used to make this list don’t really add up, and seem to include some made-up measures of trade deficits, which some analysts suspect were calculated by AI tools like ChatGPT, as the same incorrect measures are spat out by commonly use chatbots like ChatGPT when they’re asked about how to balance these sorts of things. But the important takeaway, however they arrived at these numbers, is that the comparisons used aren’t really sensical when you look at the details.

Some countries simply can’t afford American exports, for instance, while others have no use for them. The idea that a country that can’t afford American goods should have astoundingly large tariffs applied to their exports to the US is questionable from the get-go, but it also means the goods they produce, which might be valuable and important for Americans, be they raw materials like food or manufactured goods like car parts, will become more expensive for Americans, either because those Americans have to pay a higher price necessitated by the tax, or because the lower-price supplier is forced out of the market and replaced by a higher-price alternative.

In short, the implied balance of these tariffs don’t line up with reality, according to essentially everyone except folks working within Trump’s administration, and the question then is what the actual motivation behind them might be.

The Occam’s Razor answer is that Trump and/or people in his administration simply don’t understand tariffs and global economics well enough to understand that their theory on the matter is wrong. And many foreign leaders have said these tariffs are not in any way reciprocal, and that the calculation used to draw them up was, in the words of Germany’s economic minister, “nonsense.” That’s the general consensus of learned people, and the only folks who seem to be saying otherwise are the one’s responsible for drawing these tariffs up, and defending them in the press.

Things have been pretty stellar for most of the global economy since free trade became the go-to setup for imports and exports, but this administration is acting as if the opposite is true. That might be a feigned misunderstanding, or it might be genuine; they might truly not understand the difference between how things have been post-WWII and how they were back in the 1800s when tariffs were the go-to method of earning government revenue.

But in either case, Trump is promising that rewiring the global order, the nature of default international trade in this way, will be good for Americans because rather than serving as a linchpin for that global setup, keeping things orderly by serving as the biggest market in the world, the American economy will be a behemoth that gets what it’s owed, even if at the expense of others—a winner among losers who keep playing because they can’t afford not to, rather than a possibly slightly less winning winner amongst other winners.

This theory seems to have stemmed from a 1980s understanding of things, which is a cultural and economic milieu from which a lot of Trump’s views and ideas seem to have originated, despite in many cases having long since been disproved or shown to be incomplete. But it’s also a premise that may be more appealing to very wealthy people, because a lot of the negative consequences from these tariffs will be experienced by people in lower economic classes and people from poorer nations, where the price hikes will be excruciating, and folks in the middle class, whose wealth is primarily kept in stocks. Folks in the higher economic echolons, including those making most of these decisions, tend to make and build their wealth via other means, which won’t be entirely unimpacted, but will certainly be less hurt by these moves than everyone else.

It’s also possible, and this seems more likely to me, but it’s of course impossible to know the truth of the matter right now, that Trump is implementing a huge version of his go-to negotiating tactic of basically hurting the folks on the other end of a negotiation in order to establish leverage over them, and then starting that negotiation by asking what they’ll do for him if he limits or stops the pain.

The US is expected to suffer greatly from these tariffs, but other countries, especially those that rely heavily on the US market as their consumer base, and in some cases for a huge chunk of their economy, their total GDP, will suffer even more.

There’s a good chance many countries, in public or behind closed doors, will look at the numbers and decide that it makes more sense to give Trump and his administration something big, up front, in exchange for a lessening of these tariffs. That’s what seems to be happening with Vietnam, already, and Israel, and there’s a good chance other nations have already put out feelers to see what he might want in exchange for some preferential treatment in this regard—early reports suggest at least 50 governments have done exactly that since the announcement, though those reports are coming from within the White House, so it’s probably prudent to take them with a grain of salt, at this point. That said, this sort of messaging from the White House suggests that the administration might be hoping for a bunch of US-favoring deals and will therefore make a lot of noise about initial negotiations to signal that that’s what they want, and that the pain can go away if everyone just kowtows a little and gestures at some new trade policies that favor the US and make Trump look like a master negotiator who’s bringing the world to heel.

There’s been pushback against this potentiality, however, led by China, which has led with its own, very large counter-tariffs rather than negotiating, and the EU looks like it might do the same. If enough governments do this, it could call Trump’s bluff while also making these other entities, perhaps especially China, which was first out the door with counter-tariffs and statements about not be cowed by the US’s bluster, seem like the natural successors to the US in terms of global economic leadership. It could result in the US giving away all that soft power, basically, and that in turn could realign global trade relationships and ultimately other sorts of relationships, too, in China’s favor.

One other commonly cited possibility, and this is maybe the grimmest of the three, but it’s not impossible, is that Trump and other people in his administration recognize that the world is changing, that China is ascendent and the US is by some metrics not competing in the way it needs to in order to keep up and retain its dominance, and that’s true in terms of things like manufacturing and research, but also the potential implications of AI, changing battlefield tactics, and so on. And from that perspective, it maybe makes sense to just shake the game board, knocking over all the pieces rather than trying to win by adhering to what have become common conventions and normal rules of play.

If everyone takes a hit, if there’s a global recession or depression and everything is knocked asunder because those variables that led to where we are today, with all their associated pros and cons, are suddenly gone, that might lead to a situation in which the US is hurt, but not as badly as everyone else, including entities like China. And because the US did the game board shaking, the US may thus be in a better position as everything settles back into a new state of affairs; a new state of affairs that Trump and his people want to be more favorable to the US, long-term.

There’s some logic to this thinking, even if it’s a very grim, me-first, zero-sum kind of logic. The US economy is less reliant on global trade than the rest of the G20, the wealthiest countries in the world; only about 25% of its GDP is derived from trade, while that number is 37% for China, 63% for France, and a whopping 88% for Germany.

Other nations are in a relatively more vulnerable position than the US in a less-open, more tariff-heavy world, then, and that means the US administration may have them over a barrel, making the aforementioned US-favoring negotiations more likely, but also, again, potentially just hurting everyone, but the US less so. And when I say hurting, I mean some countries losing a huge chunk of their economy overnight, triggering a lot more poverty, maybe stagflation and famines, and possibly even revolutions, as people worldwide experience a shocking and sudden decrease in both wealth and future economic outlook.

Already, just days after Trump announced his tariffs, global markets are crashing, with US markets on track to record its second-worst three-day decline in history, after only the crash of 1987—so that’s worse than even the crashes that followed 9/11, the Covid-19 pandemic, the debt crisis, and many others.

Foreign markets are doing even worse, though, with Hong Kong’s recently high-flying Hang Seng falling 13% in trading early this week, and Japan’s Nikkei dropping 8%.

Other market markers are also dropping, the price of oil falling to a pandemic-era level of $60 per barrel, Bitcoin losing 10% in a day, and even the US dollar, which theoretically should rise in a tariff scenario, dropping 0.1%—which suggests investors are planning for a damaging recession, and the US market and currency as a whole might be toxic for a while; which could, in turn, lead to a boom for the rest of the world, the US missing out on that boom.

There are also simpler theories, I should mention, that tariffs may be meant to generate more profits to help pay for Trump’s expanded tax cuts without requiring he touch the third-rails of Medicare or Social Security, or that they’re meant to address the US’s booming debt by causing investors to flee to Treasury bills, which has the knock-on effect of reducing the interest rates that have to be paid on government debt.

That flight toward Treasuries is already happening, though it seems to be primarily because investors are fleeing the market as stocks collapse in value and everyone’s worrying about their future, about stagflation, and about mass layoffs and unemployment.

It may be that all or most of these things are true, too, by the way, and that this jumble of events, pros and cons alike, are seen as a net-positive by this administration.

For what it’s worth, too, the US Presidency doesn’t typically get to set things like tariffs—that’s congress’ responsibility and right. But because Congress is currently controlled by Republicans, they’ve yet to push back on these tariffs with a veto, and they may not. There are rumblings within the president’s party about this, and a lot of statements about how it’ll ultimately be good, but that maybe they would have done things differently, but there hasn’t been any real action yet, just hedging. And that could remain the case, but if things get bad enough, they could be forced by their constituents to take concrete action on the matter before Trump’s promised, theoretical positive outcomes have the chance to emerge, or not.

Show Notes

https://www.everycrsreport.com/files/20060925_RL33665_4a8c6781ce519caa3e6b82f95c269f73021c5fdf.pdf

https://en.wikipedia.org/wiki/Tariff

https://www.washingtonpost.com/business/2025/03/31/tariffs-affect-consumer-spending/

https://www.wsj.com/tech/exempt-or-not-the-chip-industry-wont-escape-tariffs-a6c771db

https://www.wsj.com/economy/central-banking/goldman-sachs-lifts-u-s-recession-probability-to-35-ce285ebc

https://www.axios.com/newsletters/axios-am-9d85eb00-1184-11f0-8b11-0da1ebc288e3.html

https://apnews.com/article/trump-tariffs-democrats-economy-protests-financial-markets-90afa4079acbde1deb223adf070c1e98

https://www.wsj.com/economy/trade/trade-war-explodes-across-world-at-pace-not-seen-in-decades-0b6d6513

https://www.mufgamericas.com/sites/default/files/document/2025-04/The-Long-Shadow-of-William-McKinley.pdf

https://x.com/krishnanrohit/status/1907587352157106292

https://www.nytimes.com/2025/04/04/business/trump-stocks-tariffs-trade.html

https://www.nytimes.com/2025/04/05/opinion/trump-tariffs-theories.html

https://www.nytimes.com/2025/04/06/world/asia/vietnam-trump-tariff-delay.html

https://www.nytimes.com/2025/04/06/world/europe/trade-trump-tariffs-brexit.html

https://marginalrevolution.com/marginalrevolution/2025/04/why-do-domestic-prices-rise-with-tarriffs.html

https://www.foxnews.com/politics/how-we-got-liberation-day-look-trumps-past-comments-tariffs

https://www.pbs.org/wgbh/frontline/article/trumps-tariff-strategy-can-be-traced-back-to-the-1980s/

https://www.nytimes.com/2024/12/12/us/politics/trump-tv-stock-market.html

https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf

https://economictimes.indiatimes.com/news/international/us/over-50-countries-push-for-tariff-revisions-will-donald-trump-compromise-heres-what-the-white-house-said/articleshow/120043664.cms

https://www.nytimes.com/2025/04/06/business/stock-market-plunge-investment-bank-impact.html

https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-07-25

https://www.wsj.com/world/china/china-trump-tariff-foreign-policy-6934e493

https://www.wsj.com/economy/in-matter-of-days-outlook-shifts-from-solid-growth-to-recession-risk-027eb2b4

https://asia.nikkei.com/Business/Markets/Asia-Pacific-stocks-sink-from-Trump-s-tariff-barrage-Hong-Kong-down-13

https://www.reuters.com/markets/eu-seeks-unity-first-strike-back-trump-tariffs-2025-04-06/

https://www.washingtonpost.com/politics/2025/04/07/trump-presidency-news-tariffs/

https://www.nytimes.com/2025/04/07/world/asia/china-trade-war-tariffs.html

https://www.bloomberg.com/news/newsletters/2025-04-07/global-rout-carries-whiff-of-panic-as-trump-holds-fast-on-tariffs

https://en.wikipedia.org/wiki/Stagflation

https://finance.yahoo.com/news/economists-fed-recent-projections-signal-120900777.html

https://en.wikipedia.org/wiki/1973_oil_crisis

https://en.wikipedia.org/wiki/Economic_stagnation

We also discuss code abstraction, economic repercussions, and DOGE.

Recommended Book: How To Know a Person by David Brooks

Transcript

In late-November of 2022, OpenAI released a demo version of a product they didn’t think would have much potential, because it was kind of buggy and not very impressive compared to the other things they were working on at the time. This product was a chatbot interface for a generative AI model they had been refining, called ChatGPT.

This was basically just a chatbot that users could interact with, as if they were texting another human being. And the results were good enough—both in the sense that the bot seemed kinda sorta human-like, but also in the sense that the bot could generate convincing-seeming text on all sorts of subjects—that people went absolutely gaga over it, and the company went full-bore on this category of products, dropping an enterprise version in August the following year, a search engine powered by the same general model in October of 2024, and by 2025, upgraded versions of their core models were widely available, alongside paid, enhanced tiers for those who wanted higher-level processing behind the scenes: that upgraded version basically tapping a model with more feedstock, a larger training library and more intensive and refined training, but also, in some cases, a model that thinks longer, than can reach out and use the internet to research stuff it doesn’t already know, and increasingly, to produce other media, like images and videos.

During that time, this industry has absolutely exploded, and while OpenAI is generally considered to be one of the top dogs in this space, still, they’ve got enthusiastic and well-funded competition from pretty much everyone in the big tech world, like Google and Amazon and Meta, while also facing upstart competitors like Anthropic and Perplexity, alongside burgeoning Chinese competitors, like Deepseek, and established Chinese tech giants like Tencent and Baidu.

It’s been somewhat boggling watching this space develop, as while there’s a chance some of the valuations of AI-oriented companies are overblown, potentially leading to a correction or the popping of a valuation bubble at some point in the next few years, the underlying tech and the output of that tech really has been iterating rapidly, the state of the art in generative AI in particular producing just staggeringly complex and convincing images, videos, audio, and text, but the lower-tier stuff, which is available to anyone who wants it, for free, is also valuable and useable for all sorts of purposes.

Just recently, at the tail-end of March 2025, OpenAI announced new multimodal capabilities for its GPT-4o language model, which basically means this model, which could previously only generate text, can now produce images, as well.

And the model has been lauded as a sort of sea change in the industry, allowing users to produce remarkable photorealistic images just by prompting the AI—telling it what you want, basically—with usually accurate, high-quality text, which has been a problem for most image models up till this point. It also boasts the capacity to adjust existing images in all sorts of ways.

Case-in-point, it’s possible to use this feature to take a photo of your family on vacation and have it rendered in the style of a Studio Ghibli cartoon; Studio Ghibli being the Japanese animation studio behind legendary films like My Neighbor Totoro, Spirited Away, and Princess Mononoke, among others.

This is partly the result of better capabilities by this model, compared to its precursors, but it’s also the result of OpenAI loosening its policies to allow folks to prompt these models in this way; previously they disallowed this sort of power, due to copyright concerns. And the implications here are interesting, as this suggests the company is now comfortable showing that their models have been trained on these films, which has all sorts of potential copyright implications, depending on how pending court cases turn out, but also that they’re no long being as precious with potential scandals related to how their models are used.

It’s possible to apply all sorts of distinctive styles to existing images, then, including South Park and the Simpsons, but Studio Ghibli’s style has become a meme since this new capability was deployed, and users have applied it to images ranging from existing memes to their own self-portrait avatars, to things like the planes crashing into the Twin Towers on 9/11, JFK’s assassination, and famous mass-shootings and other murders.

It’s also worth noting that the co-founder of Studio Ghibli, Hayao Miyazaki, has called AI-generated artwork “an insult to life itself.” That so many people are using this kind of AI-generated filter on these images is a jarring sort of celebration, then, as the person behind that style probably wouldn’t appreciate it; many people are using it because they love the style and the movies in which it was born so much, though. An odd moral quandary that’s emerged as a result of these new AI-provided powers.

What I’d like to talk about today is another burgeoning controversy within the AI space that’s perhaps even larger in implications, and which is landing on an unprepared culture and economy just as rapidly as these new image capabilities and memes.

—

In February of 2025, the former AI head at Tesla, founding team member at OpenAI, and founder of an impending new, education-focused project called Eureka Labs named Andrej Karpathy coined the term ‘vibe coding’ to refer to a trend he’s noticed in himself and other developers, people who write code for a living, to develop new projects using code-assistant AI tools in a manner that essentially abstracts away the code, allowing the developer to rely more on vibes in order to get their project out the door, using plain English rather than code or even code-speak.

So while a developer would typically need to invest a fair bit of time writing the underlying code for a new app or website or video game, someone who’s vibe coding might instead focus on a higher, more meta-level of the project, worrying less about the coding parts, and instead just telling their AI assistant what they want to do. The AI then figures out the nuts and bolts, writes a bunch of code in seconds, and then the vibe coder can tweak the code, or have the AI tweak it for them, as they refine the concept, fix bugs, and get deeper into the nitty-gritty of things, all, again, in plain-spoken English.

There are now videos, posted in the usual places, all over YouTube and TikTok and such, where folks—some of whom are coders, some of whom are purely vibe coders, who wouldn’t be able to program their way out of a cardboard box—produce entire functioning video games in a matter of minutes.

These games typically aren’t very good, but they work. And reaching even that level of functionality would previously have taken days or weeks for an experienced, highly trained developer; now it takes mere minutes or moments, and can be achieved by the average, non-trained person, who has a fundamental understanding of how to prompt AI to get what they want from these systems.

Ethan Mollick, who writes a fair bit on this subject and who keeps tabs on these sorts of developments in his newsletter, One Useful Thing, documented his attempts to make meaning from a pile of data he had sitting around, and which he hadn’t made the time to dig through for meaning. Using plain English he was able to feed all that data to OpenAI’s Deep Research model, interact with its findings, and further home in on meaningful directions suggested by the data.

He also built a simple game in which he drove a firetruck around a 3D city, trying to put out fires before a competing helicopter could do the same. He spent a total of about $13 in AI token fees to make the game, and he was able to do so despite not having any relevant coding expertise.

A guy named Pieter Levels, who’s an experienced software engineer, was able to vibe-code a video game, which is a free-to-play, massively multiplayer online flying game, in just a month. Nearly all the code was written by Cursor and Grok 3, the first of which is a code-writing AI system, the latter of which is a ChatGPT-like generalist AI agent, and he’s been able to generate something like $100k per month in revenue from this game just 17 days, post-launch.

Now an important caveat here is that, first, this game received a lot of publicity, because Levels is a well-known name in this space, and he made this game as part of a ‘Vibe Coding Game Jam,’ which is an event focused on exactly this type of AI-augmented programming, in which all of the entrants had to be at least 80% AI generated. But he’s also a very skilled programmer and game-maker, so this isn’t the sort of outcome the average person could expect from these sorts of tools.

That said, it’s an interesting case study that suggests a few things about where this category of tools is taking us, even if it’s not representative for all programming spaces and would-be programmers.

One prediction that’s been percolating in this space for years, even before ChatGPT was released, but especially after generative AI tools hit the mainstream, is that many jobs will become redundant, and as a result many people, especially those in positions that are easily and convincingly replicated using such tools, will be fired. Because why would you pay twenty people $100,000 a year to do basic coding work when you can have one person working part-time with AI tools vibe-coding their way to approximately the same outcome?

It’s a fair question, and it’s one that pretty much every industry is asking itself right now. And we’ve seen some early waves of firings based on this premise, most of which haven’t gone great for the firing entity, as they’ve then had to backtrack and starting hiring to fill those positions again—the software they expected to fill the gaps not quite there yet, and their offerings suffering as a consequence of that gambit.

Some are still convinced this is the way things are going, though, including people like Elon Musk, who, as part of his Department of Government Efficiency, or DOGE efforts in the US government, is basically stripping things down to the bare-minimum, in part to weaken agencies he doesn’t like, but also, ostensibly at least, to reduce bloat and redundancy, the premise being that a lot of this work can be done by fewer people, and in some cases can be automated entirely using AI-based systems.

This was the premise of his mass-firings at Twitter, now X, when he took over, and while there have been a lot of hiccups and issues resulting from that decision, the company is managing to operate, even if less optimally than before, with about 20% the staff it had before he took over—something like 1,500 people compared to 7,500.

Now, there are different ways of looking at that outcome, and Musk’s activities since that acquisition will probably color some of our perceptions of his ambitions and level of success with that job-culling, as well. But the underlying theory that a company can do even 90% as well as it did before with just a fifth of the workforce is a compelling argument to many people, and that includes folks running governments, but also those in charge of major companies with huge rosters of employees that make up the vast majority of their operating expenses.

A major concern about all this, though, is that even if this theory works in broader practice, and all these companies and governments can function well enough with a dramatically reduced staff using AI tools to augment their capabilities and output, we may find ourselves in a situation in which the folks using said tools are more and more commodified—they’ll be less specialized and have less education and expertise in the relevant areas, so they can be paid less, basically, the tools doing more and the humans mostly being paid to prompt and manage them. And as a result we may find ourselves in a situation where these people don’t know enough to recognize when the AI are doing something wrong or weird, and we may even reach a point where the abstraction is so complete that very few humans even know how this code works, which leaves us increasingly reliant on these tools, but also more vulnerable to problems should they fail at a basic level, at which point there may not be any humans left who are capable of figuring out what went wrong, since all the jobs that would incentivize the acquisition of such knowledge and skill will have long since disappeared.

As I mentioned in the intro, these tools are being applied to images, videos, music, and everything else, as well. Which means we could see vibe artists, vibe designers, vibe musicians and vibe filmmakers. All of which is arguably good in the sense that these mediums become more accessible to more people, allowing more voices to communicate in more ways than ever before.

But it’s also arguably worrying in the sense that more communication might be filtered through the capabilities of these tools—which, by the way, are predicated on previous artists and writers and filmmakers’ work, arguably stealing their styles and ideas and regurgitating them, rather than doing anything truly original—and that could lead to less originality in these spaces, but also a similar situation in which people forget how to make their own films, their own art, their own writing; a capability drain that gets worse with each new generation of people who are incentivized to hand those responsibilities off to AI tools; we’ll all become AI prompters, rather than all the things we are, currently.

This has been the case with many technologies over the years—how many blacksmiths do we have in 2025, after all? And how many people actually hand-code the 1s and 0s that all our coding languages eventually write, for us, after we work at a higher, more human-optimized level of abstraction?

But because our existing economies are predicated on a certain type of labor and certain number of people being employed to do said labor, even if those concerns ultimately don’t end up being too big a deal, because the benefits are just that much more impactful than the downsides and other incentives to develop these or similar skills and understandings arise, it’s possible we could experience a moment, years or decades long, in which the whole of the employment market is disrupted, perhaps quite rapidly, leaving a lot of people without income and thus a lot fewer people who can afford the products and services that are generated more cheaply using these tools.

A situation that’s ripe with potential for those in a position to take advantage of it, but also a situation that could be devastating to those reliant on the current state of employment and income—which is the vast, vast majority of human beings on the planet.

Show Notes

https://en.wikipedia.org/wiki/X_Corp

https://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/

https://www.wired.com/story/doge-rebuild-social-security-administration-cobol-benefits/

https://www.wired.com/story/anthropic-benevolent-artificial-intelligence/

https://arstechnica.com/tech-policy/2025/03/what-could-possibly-go-wrong-doge-to-rapidly-rebuild-social-security-codebase/

https://en.wikipedia.org/wiki/Vibe_coding

https://www.newscientist.com/article/2473993-what-is-vibe-coding-should-you-be-doing-it-and-does-it-matter/

https://nmn.gl/blog/dangers-vibe-coding

https://x.com/karpathy/status/1886192184808149383

https://simonwillison.net/2025/Mar/19/vibe-coding/

https://arstechnica.com/ai/2025/03/is-vibe-coding-with-ai-gnarly-or-reckless-maybe-some-of-both/

https://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/

https://www.creativebloq.com/3d/video-game-design/what-is-vibe-coding-and-is-it-really-the-future-of-app-and-game-development

https://arstechnica.com/ai/2025/03/openais-new-ai-image-generator-is-potent-and-bound-to-provoke/

https://en.wikipedia.org/wiki/Studio_Ghibli

We also discuss electric vehicles, free speech, and Georgia.

Recommended Book: Red Rising by Pierce Brown

Transcript

Greenpeace is a protest-focused, environmentalist nongovernmental organization that was originally founded in Canada in the early 1970s, but which has since gone on to tackle issues ranging from commercial whaling to concerns about genetic engineering, worldwide.

They have 26 independent organizations operating across nearly 60 countries, and their efforts are funded by a combination of grants and donations from individual supporters; and that’s an important detail, as they engage in a lot of highly visible acts of protest, many of which probably wouldn’t be feasible if they had corporate or government funders.

They piss a lot of people off, in other words, and even folks who consider themselves to be environmentalists aren’t always happy with the things they do. Greenpeace is vehemently anti-nuclear, for instance, and that includes nuclear power, and some folks who are quite green in their leanings consider nuclear power to be part of the renewable energy solution, not something to be clamped down on. The same is true of their other stances, like their protests against genetic engineering efforts and their at times arguably heavy-handed ‘ecotage’ activities, which means sabotage for ecological purposes, to making their point and disrupt efforts, like cutting down forests or building new oil pipelines, that they don’t like.

Despite being a persistent thorn in the side of giant corporations like oil companies, and despite sometimes irritating their fellow environmentalists, who don’t always agree with their focuses or approaches, Greenpeace has nonetheless persisted for decades in part because of their appreciation for spectacle, and their ability to get things that might otherwise be invisible—like whaling and arctic oil exploration—into the press. This is in turn has at times raised sufficient awareness that politicians have been forced to take a stand on things they wouldn’t have otherwise been forced to voice an opinion on, much less support or push against, and that is often the point of protests of any size or type, by any organization.

A recent ruling by a court in North Dakota, though, could hobble this group’s future efforts. A company involved in the building of the Dakota Access pipeline accused Greenpeace of defamation, trespass, nuisance, civil conspiracy, and other acts, and has been awarded about $667 million in damages, payable by Greenpeace, because of the group’s efforts to disrupt the construction of this pipeline.

The folks at the head of Greenpeace had previously said that a large payout in this case could bankrupt the organization, and while there’s still a chance to appeal the ruling, and they’ve said they intend to do so, this ruling is already being seen as a possible fulcrum for companies, politicians, and government agencies that want to limit protests in the US, where the right to assemble and peaceably express one’s views are constitutionally protected by the first amendment, but where restrictions on protest have long been used by government officials and police to stifle protests they don’t like for various reasons.

What I’d like to talk about today is another, somewhat unusual wave of protests we’re seeing in the US and to some degree globally right now, too, and the larger legal context in which these protests are taking place.

—

When US President Trump first stepped into office back in early 2017, there were protests galore, huge waves of people coming out to protest the very idea of him, but especially his seeming comfort with, and even celebration of, anti-immigration, racist, and misogynistic views and practices, including his alleged sexual abuse and rape of dozens of women, one of whom successfully took him to court on the matter, winning a big settlement for proving that he did indeed sexually assault her.

The response to his second win, and his ascension to office for another term in 2025, has been more muted. There have been a lot of protests, but not at the scale of those seen in 2017. Instead, the majority of enthusiasm for protest-related action against this administration has been aimed at Elon Musk, a man who regularly tops the world’s richest people lists, owns big-name companies like SpaceX and Tesla, and who has his own collection of very public scandals and alleged abuses.

One such scandal revolves around Musk’s decision to plow hundreds of millions of dollars into getting Trump reelected. As a result of that investment, he was brought into the president’s confidence, and now serves as a sort of hatchet-man via a pseudo-official agency called the Department of Government Efficiency, or DOGE.

Musk and his team have been jumping from government agency to government agency, conducting mass firings, harassing employees, hacking and by some accounts stealing and deleting all sorts of sensitive data, and generally doing their best to cause as much disruption as possible. Many of their efforts have been pushed back against, eventually, by courts, but that’s only after a lot of damage has already been done.

The general theory of their operation is ostensibly to cut costs in the US government, and though outside analysts and watchdogs have shown that they haven’t really managed to do that on any scale, and that their actions will probably actually add to the government’s deficit, not reduce it, Musk and Trump claim otherwise, and that’s enough for many people in their orbit. The unsaid purpose of this group, though, seems to be making the government so ineffective and hollow that businesses, like Musk’s and those of his friends, can step in and do things that were previously done by government agencies, and can reap massive profits as a consequence; folks having to pay more for what was previously provided by the government, and a bunch of rich folks profiting because they’re the only ones capable of providing such services, now that the agencies have been gutted.

The courts are still scrambling, as they move a lot slower than individuals with seeming authority and the support of a vindictive president can move, but this has already caused a lot of consternation across the political spectrum, and Musk, though popular with a certain flavor of Republican and far-right voter, has pissed off a lot of more conventional Republicans, in addition to pretty much every Democrat.

This is important context for understanding why the most vocal and enthusiastic protests in the US these first few months of 2025 have targeted Musk, and more specifically, Musk’s electric vehicle company, Tesla.

Tesla was once celebrated by the political left as the EV company that made EVs sexy and popular, at a time in which this type of vehicle was anything but.

Musk’s shift to the political far-right changed that, though, and the general theory of these protests is that Musk is mostly held financially afloat by Tesla’s huge market valuation: Tesla stocks are worth way more than those of other car companies, with a price multiple—how much the stock is worth, compared to how much business the company actually does, and how much their assets are worth—is more akin to that of a dotcom-era tech startup than a car company, the stock price valued at something like 120-times the apparent book value of the company.

So Musk, who owns a lot of Tesla stock, can basically borrow money against that stock, and this allows him to tap tens of billions of dollars worth of borrowed money on a whim, because the banks know he’s good for it. In this way he can inflate his supposed worth while also getting liquid cash whenever he needs it, despite not having to sell those stocks he owns.

This method of acquiring liquid wealth by leveraging non-liquid assets has allowed him to support Trump’s reascension, but it’s also allowed him to do things like buy Twitter, which he has renamed X and converted into a sort of voicebox for the right and far-right. It has also allowed him to do things like offer money to potential voters who are signed up to vote and who sign petitions that are supportive of far-right causes; which is not quite paying for votes, which is illegal in the US, but it is the closest thing to paying for votes you can get away with, and there’s still debate whether this is actually legal or not, but either way, until the courts catch on up this, too, he’s been able to influence vote outcomes to varying degrees because of that access to money.

Some of the biggest and most consistent protesting efforts in the post-second-term-Trump US have revolved around Tesla, its cars, and its dealerships, and the theory of operation here is that by protesting Tesla, you might be able to decrease the company’s market valuation, which in turn decreases Musk’s access to money. Less market value for the company means Musk can’t borrow as much money against it, and if he has less access to liquid wealth, to cash rather than stocks and other illiquid assets, he may become less relevant in the administration, and less capable of influencing elections across the country (and to some degree the world, as he’s throwing money at candidates he favors globally, now, too).

These protests have been traditional, in the sense of gathering peacefully outside Tesla dealerships, chanting slogans and carrying signs, but also of a more aggressive sort, including spraypainting Tesla vehicles, doing things to embarrass folks who own these cars, and in some few cases, setting them on fire or otherwise destroying them.

The general idea, again, is to make the brand toxic, which in turn should reduce sales, and that, ideally, for the protestors, would then reduce Musk’s access to money, which he is using to influence elections and other such activities and outcomes.

The administration has responded to these protests with a bizarre and, it’s generally agreed, pretty embarrassing car commercial for Tesla, held outside the White House, in which Trump claimed he was buying one, and told Americans to buy a car to support Tesla because it’s a wholesome American company.

Trump also recently said that he would consider people caught defacing Teslas or even just protesting the brand in non-destructive ways to be domestic terrorists, which is a pretty chilling thought, as some post-9/11 rules about how the government can treat terrorists are still on the books; calling someone a terrorist is a means of doing away with due process and human rights, basically, so this is a threat to go full violent authoritarian on people using their first amendment rights in ways this administration doesn’t like.

These protests are occurring within the context of another notable, protest-oriented storyline, one in which students who participated in protests against the US and Israel’s actions in Gaza at Columbia University in New York last spring have been arrested; one was on a visa to the US and was in the process of becoming a doctor—her visa has now been revoked—and the other, who has a green card, and who is thus a permanent US resident, and who has no criminal record, faces a case in immigration court in Louisiana, where he was shipped after being arrested by Immigration and Customs Enforcement, or ICE.

His hearing has been scheduled for April 8, and his lawyers are challenging both his detention and the government’s apparent efforts to make an example of him, trying to deport him and do away with his citizenship because he protested against the government’s actions.

The administration is claiming they can do this, and can do a bunch of other stuff, including deporting immigrants who they claim, without evidence, are members of a Venezuelan gang; they say there’s legal precedent that gives them the ability to deport enemy aliens, those who are antagonistic to the US and its government, basically—the same sort of rulings that were used to justify deporting anyone sympathetic to the communist party back in the mid-to-late 20th century.

This same concept is being floated to justify the deportation of some of the people who have protested against Israel’s and the US’s actions in Gaza, the accusation being that they are supporting Hamas and other organizations that have been declared terrorist organizations by the US, so when folks protest against these governments’ activities in the region, they’re also supporting the causes of terrorist organizations—which then arguably gives the US government the right to deport them, because they weren’t born in the US.

The legality of all this is still being debated and working its way through the court system, but the ultimate goal seems to be giving the administration the ability to deport whomever they like, and establishing that immigrants of any kind don’t have the free speech rights that natural born US citizens enjoy; which isn’t concretely established in law, and which these many efforts and court cases are meant to sort out more formally.

This administration has also shown itself to be just really antagonistic against any person or entity that defies or criticizes it, including journalistic entities, politicians, or protesting individuals; they’ve used lawsuits, executive orders, and a slew of other tools to legally punish, financially punish, and in many cases socially punish, telling their supporters that it would be a real shame if something happened to these people, seemingly aiming to scare their opponents, while also possibly sparking stochastic violence against them.

And this isn’t a US-exclusive thing.

In Georgia, the country not the state, the government is levying huge fines on people who protested against its pivot toward allying with Russia instead of moving toward the EU two years ago; they’re using a so-called “foreign agent bill” to accuse anyone who says or does something against the government of being paid by foreign entities, which in turn allows them to crack down on these people hard, while seemingly not violating their good, dedicated, patriotic citizens’ rights.

They’ve also started levying fines for the equivalent of about $16,000 on those who participate in protests that even briefly block traffic, which is one more way to asymmetrically hobble people and organizations that might otherwise cause a regime trouble; anyone who does these things in their favor can just have these fines waived or ignored.

We’re seeing similar things in Turkey and Hungary, right now, two other countries that have seen widescale protests and significant efforts by their governments to attack those protestors, to get them to stop. In some case these efforts backfire, leading to more and more substantial pushback by the population against increasingly aggressive and abusive regimes.

It’s impossible to know ahead of time which way things will go, though, and right now, in the US, most of these anti-protestor efforts are still young, as are the anti-Tesla, anti-Musk protests, themselves. One side or the other could be forced to pivot by judicial rulings—though this could also lead to a long-predicted constitutional crisis, in which the judges say the government can’t do something they want to do, and the government just ignores that ruling, creating an entirely different and arguably more substantial problem.

Show Notes

https://apnews.com/article/columbia-protests-immigration-detention-mahmoud-khalil-755774045e5e82849e3281e8ff72f26d

https://www.cnn.com/2025/03/21/middleeast/turkey-protests-erdogan-mayor-intl-latam/index.html

https://www.nytimes.com/2025/03/23/world/middleeast/turkey-ekrem-imamoglu-istanbul.html

https://www.nytimes.com/2025/03/22/world/middleeast/turkey-erdogan-democracy-istanbul-mayor-detention.html

https://en.wikipedia.org/wiki/2025_Turkish_protests

https://apnews.com/article/turkey-mayor-jailed-istanbul-f962743f724f00a318f84ffaed7f58de

https://www.nytimes.com/2025/03/22/us/politics/what-is-doge-elon-musk-trump.html

https://www.nbcnews.com/news/us-news/protesters-gather-tesla-showrooms-dealerships-denounce-elon-musk-doge-rcna197595

https://www.nytimes.com/2025/03/22/nyregion/columbia-trump-concessions-watershed.html

https://apnews.com/article/hungary-pride-ban-orban-lgbtq-rights-e7a0318b09b902abfc306e3e975b52df

https://www.bbc.com/news/articles/c5y0zrg9kpno

https://www.reuters.com/world/europe/hungarys-president-signs-law-banning-pride-parade-despite-protests-2025-03-19/

https://www.reuters.com/world/europe/hungarys-orban-vows-fast-crackdown-media-ngos-over-foreign-funding-2025-03-15/

https://www.cnn.com/2025/02/15/europe/georgia-protests-authoritarianism-fears-intl-cmd/index.html

https://www.amnesty.org/en/latest/news/2025/03/georgia-authorities-freeze-accounts-of-organizations-supporting-protesters-to-kill-the-peaceful-protests/

https://www.france24.com/en/live-news/20250323-georgia-cracks-down-on-pro-eu-protests-with-crippling-fines

https://www.nytimes.com/2025/03/23/nyregion/mahmoud-khalil-trump-allegations.html

https://www.nytimes.com/2025/03/23/us/politics/spacex-contracts-musk-doge-trump.html

https://www.theguardian.com/us-news/2025/mar/21/oil-protest-activism-greenpeace-dakota-pipeline-verdict

https://www.theguardian.com/us-news/2025/mar/19/greenpeace-lawsuit-energy-transfer-dakota-pipeline

https://www.cnn.com/2025/03/18/climate/greenpeace-lawsuit-first-amendment/index.html

https://www.pbs.org/newshour/nation/what-to-know-about-greenpeace-after-it-was-found-liable-in-the-dakota-access-protest-case

https://apnews.com/article/greenpeace-dakota-access-pipeline-lawsuit-verdict-5036944c1d2e7d3d7b704437e8110fbb

https://en.wikipedia.org/wiki/Greenpeace

https://en.wikipedia.org/wiki/Right_to_protest

We also discuss inflation, GDP, and uncertainty.

Recommended Book: A Brief History of Intelligence by Max S. Bennett

Transcript

On January 20, 2025, mere hours after being sworn into his second term in office as President of the United States, Donald Trump announced new 25% tariffs on most incoming goods from Canada and Mexico, accusing the two allies of failing to halt the flow of drugs and illegal migrants into the US. These tariffs would go into effect on February 1, he said, and they would be in addition to existing tariffs that were already in effect for specific import categories.

On that same day, he also speculated that he might impose a universal tariff on all imports, saying that he believed all countries, allies or not, were taking advantage of the US, and he didn’t like that.

Less than a week later, Trump announced that he would impose 25% tariffs on all good from Colombia, with immediate effect, and would double that tariff to 50% within a week. This appears to have been a punishment for the Colombian government’s decision to turn back planes full of immigrants the US government deported and sent their way, without approval from the intended recipient of those deported people, the Colombian government. There was a minor tiff between these governments, but the White House declared victory on the matter later that night, saying the tariffs would be held in reserve, implying they could come back at any time if their demands are not met.

An executive order implementing the threatened 25% tariffs on Canada and Mexico was signed on February 1, and a new 10% tariff on China went into effect the same day. Countermeasures were threatened by everyone involved, and after Trump published a social media post saying there would probably be economic pain for a while, his government agreed to a 30 day pause on tariffs for Mexico and Canada, while also threatening new tariffs against the European Union; another long-time US ally.

The new 10% tariff on Chinese imports went into effect on February 4, and China retaliated with its own counter-tariffs on US goods, including things like farm machinery and energy products. It also implemented new restrictions on the export of rare earth minerals to the US—a category of raw materials everyone is scrambling to secure, as they’re vital for the production of batteries and other fundamental technologies—and they launched a new antimonopoly investigation into Google, which deals with some Chinese companies.

On February 10, Trump reimposed a 25% tariff on all foreign steel and aluminum; a move that made US metal companies happy, but essentially all other US companies very unhappy, and in mid-February he threatened even more, broad, and vague tariffs on basically everyone, saying he’s doing what he’s doing in order to force companies to move manufacturing infrastructure back to the US, after decades of offshoring everything.

At the end of February, Trump said the delayed tariffs on Canada and Mexico would go into effect, as planned, on March 4, alongside those new 10% tariffs on China. On that day, Canada implemented its own counter-tariffs on the US to the tune of 25% on about $155 billion of US goods imported by the country.

Canada and Mexico send about 80% of their exports to the US market, so their economies are expected to be hit hard by this trade war. China, in contrast, only sends about 15% of its exports to the US, so the impact will be more tempered.

These three countries, though, are the US’s largest trading partners, collectively accounting for over 40% of US imports and exports. In addition to buying a lot of US goods, they also export the majority of things like oil, beer, copper wire, chocolate, and other goods that the US consumes; and the cost of tariffs are almost always passed on to the end-consumer, so higher tariffs on these sorts of goods mean raised prices on a lot of stuff across the economy.

On March 6, after a lot of back-and-forth with US automakers and with the Mexican and Canadian governments, a lot of the tariffs placed on goods from these countries were suspended, the US government denying that their withdrawal had anything to do with the US market, which was suffering in response to this wave of economic disruptions—though many tariffs were kept in place, and Trump said the US would still impose tariffs on all steel and aluminum imports beginning on March 12.

On the 12th, the EU and Canada announced a new wave of retaliatory tariffs against the US, though the European side said they would hold off on their implementation of these tariffs, waiting till April 1 to see what happens. The next day, Trump threatened a 200% charge on alcoholic products from the EU in response to their planned 50% tariffs on US whiskey and other products within their borders.

At the moment, as of mid-March 2025, a lot of these tariffs are still speculative, as it’s generally understood, from Trump’s bombastic approach to deal-making and his previous backtracking from these sorts of threats, that many of these tariffs could disappear, announced solely to provide leverage against those Trump wants to squeeze for more concessions and what he considers to be more favorable trade terms. Some of them could become concrete reality, though, and part of the issue here is that it’s nearly impossible to know which is which, because there also seems to be a larger effort to rewire the US and global economies by this administration—and that effort, plus the uncertainty caused by tariffs and similar actions, are leading to some pretty severe market upsets within the US, and resultantly around the world, as well.

And that’s what I’d like to talk about today: the impacts of these tariffs and other actions by this administration, so far, and what might happen next, based on currently available numbers and analysis.

—

Economies are ridiculously complex systems, and it’s impossible to say with 100% certainty what caused what, and to what degree things would be different had some other path been taken by those in control of various regulatory and economic levers.

That said, the nonpartisan Tax Foundation has estimated that just those first batch of proposed tariffs by the US government, not including impacts from foreign retaliations, which could be substantial, will reduce US GDP by about 0.4% and reduce total hours worked by the equivalent of 309,000 full-time jobs; so a lot less output, and a lot less overall productivity.

That’s on top of the estimated 0.2% long-term decrease in US GDP caused by the first Trump administration’s tariffs, which were maintained by the subsequent Biden administration.

These existing tariffs raised prices in the US and reduced both output and employment, which means the boom the US economy saw under the Biden administration might have been even boomier, had those tariffs been dropped. But now they’re more or less locked in, and these new tariffs will probably amplify their effect, near-term and long-term.

On top of that, the constant threats and pullbacks and seemingly off-the-cuff decisions to implement what amounts to all sorts of huge-scale taxes on a frenetic array of goods, including luxuries, but also some very fundamental things, like the metals we use to build and manufacture basically everything, is stoking uncertainty throughout the US and global economies.

That uncertainty has wide-ranging impacts, but one of the most direct consequences is that consumer sentiment in the US has nose-dived, as ordinary people worry about the combined impacts of tariffs, cuts to government programs, layoffs across government agencies, and new restrictions on immigration, which even ignoring the human element of such things can cause all sorts of issues across industries that rely on immigrant workers to stay afloat.

In mid-March of this year, US consumer sentiment hit 57.9, down from 64.7 in February. That’s the lowest its been since November of 2022, it’s down 27% from a year earlier, and it’s a lot lower than economist predictions for this month, which were set at 63.2.

Consumer sentiment tells us how people are feeling about the economy, about their potential to earn, and about where things are going. This influences how people spend, how they consume, and that in turn helps determine how the overall economy will go in the coming years, as people will be more likely to hunker down and save, taking as few risks as possible and making fewer purchases if they believe things will be rough; which in some cases can become a self-fulfilling prophecy, because those behaviors tend to shrink the economy, which leads to less output, fewer investments being made, more layoffs, and so on. That means a drop in consumer sentiment can make things bad even if they would otherwise be good, but if they’re bad already, they can become even worse because folks stop doing things that would improve the economy, out of self-preservation.

And that impact can be just as pronounced when things are weird and wobbly, rather than outright bad, as seems to be the case in the US at the moment.

There’s no firm evidence that the US economy is destined for a recession at this point, but the Russell 2000 index, which is made up of smaller companies than indexes like the S&P 500, and which is thus more prone to on-the-ground variables than its larger index kin, has dropped more than 16% since November, when it hit a new high on optimism about what the new Trump administration might do for businesses and the economy.

The S&P 500 also collapsed, though about half as much, and it rallied somewhat last week as investors bought the dip, scooping up stocks at lower prices following that drop. But there’s a lot of speculation that this might be a so-called dead cat bounce recovery—a moment in which a market seems to be recovering from a drop, but where it’s actually just bouncing up a little before heading back downward—and even this index, which is packed with corporations that are less susceptible to brief market wobbles than those in the Russell, might be heading for another downswing in the coming weeks, based on a lot of the economic numbers used to predict such things, at the moment.

One such metric is interest in alternative assets like gold, and the price of gold hit a new high last Friday, surpassing $3,000 per ounce for the first time ever.

That’s not something you tend to see when markets are healthy and people expect them to do well; if they are healthy and expected to surge rather than collapse, people tend to put their money in the market, not in shiny metals. But the shiny metals bet seems to be appealing right now, which hints at an even broader suspicion of the US economy than even that consumer sentiment and those bad market figures anticipate.

And the market figures have been bad. In just 3 weeks, beginning on February 19, the S&P alone lost more than $5 trillion in value.

The Atlanta Fed, which uses a fairly reliable model to predict future US GDP numbers, was predicting a healthy nearly 4% increase for the US’s GDP for the first quarter of 2025 back in late-January, early-February, but that prediction plummeted from positive 4% to negative 2.4% by early March.

That figure could still change, as it’s informed by data that don’t all arrive at the same time, but it’s still a staggering drop, and it reflects the impact of all these tariffs, but also all the destruction of government programs and agencies, the mass firings, and of course the uncertainty caused by all of these things in aggregate, alongside the impacts of said uncertainty on everyone at all scales, from trade partners to US-based small businesses to individual consumers.

So few people and institutions are happy about what’s happening right now, but it does look like, in the immediate future, at least, there are some beneficiaries of all this tumult.

Markets in China are flourishing, especially Hong Kong’s Hang Seng index, which is up more than 20% since Trump’s inauguration on January 20. And Europe’s market, which has struggled with stasis for years now, is up more than 4% over that same period.

Uncertainty about markets, but also military alliances, especially NATO, have pushed Germany—which has struggled since Russia invaded Ukraine, when their energy markets were utterly scrambled, which in turn hobbled their massive manufacturing base—Germany has unleashed a huge amount of government funds on their economy, and that big uptick in spending has helped basically the whole EU market grow. The German government has traditionally been tight-pocketed, but a declaration by the incoming Chancellor that they would do whatever it takes to both defend themselves and boost their economic outlook in the face of unreliable backing from their long-time ally, the US, has bolstered enthusiasm and optimism throughout the region, bringing EU nations closer together, increasing spending on all sorts of fundamentals, and bringing them closer to the Canadian government, as well.

The Chinese government has recently indicated they’ll be injecting a bunch of money and other types of support in their economy, as well, which creates a stark contrast with the US government, which seems to be refocusing on pulling government resources from across society and the economy, and spending mostly on tax cuts for the wealthiest people and biggest companies, instead.

The US government’s efforts to go America first, and not do anyone, even its longest-term, most reliable allies, any favors, or even trade in what might be considered a balanced way, thus seems to be scrambling US markets while simultaneously stoking those that are being cut off, unifying aspects of the rest of the world in antagonism against the US, while also providing them with incentive to reinvest in their own markets; which could be good for them long-term, making them less reliant on the US in all sorts of ways, but which seems pretty bad for the US in particular, short-term, and casts the US-dominated global order into disarray for the immediate future, with all sorts of consequences, economic and otherwise.

The degree to which this impacts Trump’s approval ratings has yet to be seen, as while his approval is collapsing, especially on the economy, right now, a lot of the most serious economic impacts are expected to fall hard on regions that most enthusiastically voted for him, and Republican talking points have already pivoted toward messaging that implies suffering for a while is good and patriotic.

That message might succeed and keep people on side even as their investments collapse and tariff-driven inflation hits their bottom-lines, or it might not. But it seems like the administration is ramping up for a version of austerity that doesn’t actually reduce the deficit, but instead takes a bunch of money from programs and investments that helped these areas, and moves it to other stuff that mostly helps fund tax cuts for wealthy allies of the administration—and that could come back to bite them, come election season.

All of this is also happening in parallel to the many political maneuverings of the administration and its opposition, though, and just recently the Republican-held congress was able to pass a funding bill, moving a lot more authority and control to the White House; so whatever the short-term approval numbers show, none of this seems to be having much of a negative impact on Trump’s control of government. That could change, though, over the course of the next year, leading into 2026’s midterm election, when the makeup of congress could be influenced by these and similar decisions.

Show Notes

https://www.reuters.com/markets/us/futures-rise-after-volatile-week-consumer-data-tap-2025-03-14/

https://www.wsj.com/economy/consumers/consumer-confidence-march-2025-drops-trump-trade-e7e0964d

https://www.axios.com/2025/03/15/economic-indicators-recession-risk

https://www.cnn.com/2025/03/14/investing/gold-price-today-3000-ounce-intl/index.html

https://www.cnbc.com/2025/03/14/us-stock-market-loses-5-trillion-in-value-in-three-weeks.html

https://www.nytimes.com/2025/03/14/business/russell-2000-bear-market.html

https://www.atlantafed.org/cqer/research/gdpnow

https://www.nytimes.com/2025/03/14/us/politics/stock-market-correction-trump-tariffs.html

https://www.nfib.com/wp-content/uploads/2025/03/NFIB-SBET-Report-Feb.-2025.pdf

https://www.nytimes.com/2025/03/14/your-money/car-shopping-trump-tariffs-cfpb.html

https://www.nytimes.com/2025/03/16/business/trump-sp-500-stocks-europe-china.html

https://archive.ph/GNPRf

https://www.realclearpolling.com/polls/approval/donald-trump/issues/economy

https://www.nytimes.com/interactive/2025/03/15/business/economy/tariffs-trump-maps-voters.html

https://www.nytimes.com/2025/03/15/us/politics/trump-spending-bill-government-shutdown.html

https://www.wsj.com/finance/stocks/investing-stocks-risk-strategies-trump-policies-c4a5d3d9

https://www.wsj.com/finance/currencies/trump-trade-tariffs-us-dollar-value-814cbe37

https://www.wsj.com/livecoverage/stock-market-today-dow-nasdaq-sp500-03-17-2025

https://www.politico.com/news/2025/03/16/wall-street-hoped-scott-bessent-would-keep-trump-in-check-he-had-other-ideas-00231771

https://www.businessinsider.com/wall-street-mergers-acquisitions-ipos-hiring-slumps-trump-tariffs-2025-3

https://www.politico.com/news/2025/03/14/trump-trade-wars-consumer-sentiment-00230833

https://archive.ph/fUKPs

https://www.nytimes.com/2025/03/13/business/economy/trump-tariff-timeline.html

https://www.nytimes.com/2025/03/14/business/energy-environment/trump-energy-oil-gas.html

https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

We also discuss European security, NATO, and the western-led world order.

Recommended Book: Storm Front by Jim Butcher

Transcript

In February of 2014, pro-Russian protests racked parts of southeastern Ukraine and Russian soldiers, their uniforms and weapons stripped of flags and other identifying markers, occupied another part of Ukraine called Crimea.

This was seemingly in response to Ukraine’s overthrow of its pro-Russian president, Viktor Yanukovych, who was toppled as part of the Euromaidan protests, which were themselves a response to Yanukovych deciding to aim for closer ties with Russia, rather than signing an association agreement with the EU, which would have committed Ukraine to several EU-oriented reforms, related to corruption, among other things, while also giving Ukrainians many new rights, including visa-free movement and access to the European Investment Bank, beginning a few years later, in 2017.

This sudden pivot away from the EU and toward Russia didn’t go down well with the Ukrainian public, which had repeatedly shown it wanted to lean toward the west, and the Euromaidan protests were focused on weeding out government corruption; the existing government was accused of being all sorts of corrupt, and had also been accused of human rights abuses and allowing Russian oligarchs undo influence at the highest rungs of power; Yanukovych was in Russia’s pocket, basically, and his overthrow made Russia worry that they would lose control of their neighbor.

So Russia moved in to take part of Ukraine, basically uncontested, both internally and externally—a lot of other governments made upset noises about this, but Russia gave itself cover by removing their flags from their personnel, and that gave them the ability to paint everything that happened as a natural uprising from within Ukraine, the people wanting freedom from their Ukrainian oppressors, and Russia was just supporting this cry to overthrow oppressive tyrants, because they’re very nice and love freedom.

For the next eight years, the Ukrainian government fought separatist forces, funded and reinforced by the Russian government, in the southeastern portion of their country, while Russia expanded their infrastructure in Crimea, which again, they stole from Ukraine early on, and where they previously leased vital naval facilities from Ukraine; and those facilities are assumed to be a big part of why all this went down the way it did, as without said naval facilities, they wouldn’t have a naval presence in the Black Sea.

Then, in February of 2022, after a multi-month buildup of troops and military hardware along their shared border, which they provided all sorts of excuses for, and which many commentators and governments around the world excused as just a bunch of saber-rattling, nothing to worry about, Russia launched a full-scale invasion of Ukraine, initially aiming for a blitzkrieg-like assault that was meant to take Ukraine’s capital city, Kyiv, and decapitate the country’s government within just days, at which point they could replace the government with someone who’s working for them, another puppet they controlled.

As of the day I’m recording this, in early March of 2025, the war is still ongoing, though. And in the years since it began, it’s estimated that more than a million people have been killed or injured, while entire cities across Ukraine have been leveled and tens of thousands of Ukrainian refugees have fled Russia’s forces as they’ve raped and pillaged and murdered their way across the Ukrainian countryside, those refugees leaving for destinations around the world, but creating a refugee crisis in nearby European nations like Poland and Germany, in particular.

There’s been a lot of back and forth in this conflict, Russia initially thought to have a massive upper hand, probably winning within days, as intended, but then Ukraine held fast, Russia redeployed its troops and armor, Ukraine got some remarkable counter-attacks in, and then Russia started to reset its economy to allow for a more drawn-out conflict.

As of early 2025, Russia is once against considered to have the upper-hand, and though Ukraine has been holding the line even in the most under-assault regions in the eastern portion of its territory, and has in recent weeks managed to take some Russian-held territory back, Russia’s comparably larger number of troops, its recent resupply of soldiers from North Korea, its larger economy and number of supply chains, and its relationships with entities like China and Iran, in addition to North Korea, all of which have been supplying it with things it needs to keep the war effort going, at length, have all conspired to put Ukraine on the back foot.

Additionally, Ukraine is struggling, after this many years of total war, to refill empty boots and make do with whatever their allies can and will offer them, in terms of money, weapons, but also the basics, like food and fuel. They’ve been able to shore-up some limited aspects of their economy, and have innovated like crazy when it comes to things like drones and other fundamentals of asymmetric, defensive warfare, but right now at least, the larger forces swirling around in the geopolitical realm are making life difficult for Ukraine, and for those who are still supporting them.

And that’s what I’d like to talk about today; the continuing conflict in Ukraine, but especially what’s happening on the sidelines, beyond the battle itself—and how those sideline happenings might lead to some fundamental changes in how Europe is organized, and the makeup of the modern world order.

—

At this point I’ve done probably half a dozen or more episodes on this conflict; it’s long-lasting, it’s big, it’s important locally, but also globally, and it’s been informing both geopolitical and economic outcomes since day one.

Today I’d like to talk about some recent happenings, most of them from the past few months, that could prove impactful on the eventual outcome of this conflict, and might even determine when that end of fighting arrives.

And at the center of these happenings is recently reelected US President Trump, who has always had a, let’s call it unusual, public appreciation for Russian President Putin, and the strongman image he and other global authoritarians wield, while at the same time not being a big fan of Ukrainian President Zelensky—perhaps in part because Trump called Zelensky back in 2019 to try to get him to come up with evidence supporting a debunked conspiracy theory about his opponent, Joe Biden’s administration, related to alleged impropriety in US-Ukrainian relations.

Zelensky could find no such evidence, and when he told Trump there was nothing to be found, Trump blocked payments on $400 million worth of military aid for Ukraine, holding it hostage until Zelensky came up with what he wanted. This became a big scandal only after the fact, and before it could be made public or became known by congress via a whistleblower complaint, Trump released the money. This led to a formal impeachment inquiry into Trump later that year, which led to his impeachment for abusing his power and obstructing Congress—but he was then acquitted by the Republican-led Senate.

This, it’s thought, may have colored Trump’s behavior toward Zelensky when the two men sat down, alongside several other US officials, including US Vice President JD Vance, to discuss a potential mineral deal between the US and Ukraine, which was based on an earlier deal that the Ukrainian government dismissed.

The original deal basically required that Ukraine exploit its mineral wealth and put half of the money it makes from those minerals into a fund that would be used to pay the US back for the military assistance it’s provided so far, to the tune of $500 billion; which is quite a lot more than the $175 billion or so the US has spent on this conflict since Russia invaded, only $128 billion of which has directly aided the Ukrainian government, as opposed to funding US activities associated with the war, or supporting other affected countries thereabouts.

So originally the US asked for more than double what’s been provided so far, in return, paid for by Ukraine’s mineral wealth, which includes a lot of the types of rare earth minerals that are vital for common modern technologies, like computers, batteries, and solar panels.

That didn’t fly, mostly because it didn’t contain a security guarantee for Ukraine—the US saying it would protect them if necessary, basically, in exchange for this huge sum of money—so the new deal asked for $500 billion be placed in a fund, and that fund would be jointly controlled by the US and Ukraine, the funds used to rebuild the country after the war.

50% of all revenues from Ukrainian natural resources newly exploited after the war, so not from existing mines and ports and such, would be put into this fund. Like the first time around, this deal didn’t include a security agreement from the US, but the general idea was that this fund would incentivize new investment in the area, and because Ukraine has a lot of unexploited mineral wealth, this could give the US a new source for these sorts of valuable raw materials that are currently mostly controlled by China, but which the US government is attempting to claim more of, now that it’s realized it’s way behind on locking down sources of these really important things.

At the meeting where this second deal was meant to be signed, though, Zelensky flying to the US to sit down with Trump to make it happen, the President and Vice President more or less verbally attacked Zelensky, criticizing him for not being more overtly grateful, and telling him he was wrong when he said that Russia started the war by invading Ukraine.

It was all pretty bizarre, and even folks in Trump’s own party seemed pretty puzzled by the whole thing, some of them calling it embarrassing, as Trump and Vance were basically parroting Putin’s propaganda that no one actually believes because they ignore easily verifiable facts.

In any event, this led to a lot of fallout between the US and Ukrainian governments, with Trump suggesting he would lean more heavily on Ukraine to get them to accept peace on Russia’s terms, because the Ukrainians couldn’t see reason and accept his version of reality, essentially.

Trump has also suggested that he’s been talking a lot with Putin, and that he believes Putin wants peace, and it’s time to end the war. Putin, for his part, has not seemed inclined to give up anything in order to achieve peace, and Russian attacks on Ukraine have increased in scale since Trump came into office, and even more so after talks about a supposed peace agreement began.

All of which has had implications on the ground.

In Ukraine, Ukrainian soldiers have had to operate with fewer resources, as Trump cut off additional funding and supply shipments, post-meeting. He recently ordered that the US not share intelligence with them, too, and they cut off the sharing of satellite imagery, which Ukraine has used to great effect to strike Russian targets from a distance.

This has also had implications across Europe, though, as while Ukraine is being invaded now, there are concerns that if Putin gets away with taking part or all of Ukraine, he’ll go for other previous Soviet assets, next, maybe starting with the Baltic nations—Estonia, Latvia, and Lithuania—and then tearing off chunks of Poland, Finland, or other neighbors that were previously part of the Soviet Union, like eastern Germany.

The European Union, despite a fair bit of warning about Trump’s stance on the issue, and the possibility that he would return to office, has been seemingly dumbstruck by Trump’s sudden pivot away from supporting Ukraine, and away from NATO more broadly, toward a stance that favors Russia, instead. European governments have been scrambling to come up with an aid package that will replace some of what the US would have given, and have started sharing more intelligence, as well, including satellite imagery.

It won’t be easy, though, as the US versions of these things, from monetary resources to eyes in the sky vastly outshine what even the combination of British, French, and German assets can offer—at least at this stage. And the US has traditionally handled the lion’s share of spending and building in these areas, shouldering the majority of NATO spending, because, well, it could, and that was a major premise of the post-WWII, western-led world order. The US said it would protect global capitalist democracies with its military might and nukes, if necessary, and European nations have been generally happy with this setup as it has generally allowed European governments to spend less money on their militaries and more on other stuff.

That state of affairs seems to have ended, or at the very least become too unreliable to bet on, though, so EU nations are attempting to fill in the gaps left by the suddenly less-reliable-seeming US government, not just for Ukraine, but for themselves, as well.

Poland’s president recently announced that he wants to develop nuclear weapons and wants every adult male to undergo military training, so the country can field an army 500,000-strong.

The French president has said he wants to extend his country’s nuclear umbrella—guaranteed deterrence, basically, using nuclear weapons—to the whole of the EU. France has far fewer nukes than the US and Russia, but this captures a sense of the moment in the Union, where a bunch of currently underfunded militaries are realizing they might not be able to rely on the US in a pinch. And while they collectively have a lot more people and resources than Russia, Russia is fully mobilized and has shown itself to be willing to attack sovereign nations, whenever it pleases, caring a lot less for the human lives it spends, in the process, than is typical in western-style democracies.

Even short of full-scale, out of nowhere invasions, Russia could pose a threat to European governments via asymmetrical routes. It’s been seemingly approving all sorts of espionage operations meant to increase immigration arrivals in European nations where immigration is already a hot-button issue, nudging politics to the far-right, and it’s allegedly been attacking infrastructure, in terms of hacking and just blowing stuff up, in order to sow discord and fear.

As I mentioned earlier, too, part of Germany was previously held by the Soviet Union, and that same part of the country has recently voted heavily in favor of the country’s furthest-right party, which wants stronger ties with Russia. So while conventional military issues are at the forefront of discussion, right now, Russia’s long history of asymmetric warfare is also getting a fair bit of attention, as it could conceivably use these groups as a casus belli to attack, carving off pieces of its European neighbors and slowly incorporating them into its sphere of influence, similar to what it did in Ukraine, beginning in 2014; if eastern Germany supports Russia, it could fund and in other ways support uprising efforts in these regions, creating chaos and potentially even breaking off separatist states that would pull those regions into Russia’s orbit.

It’s a tumultuous moment in this part of the world, then, in part because of the conflict that’s still ongoing—a much larger and more powerful nation having invaded its smaller, less-powerful neighbor. But it’s also tumultuous because of the implications of that conflict, especially if Russia comes out on top. If they win, there would seem to be a far greater chance of their deciding to keep the ball rolling, replicating a model that worked (without significant long-term consequences) across more neighboring nations.

And if they can do that before Europe reinforces itself—assuming that’s what the EU does, as it can be difficult to get a bunch of people with a bunch of at times competing interests to agree on anything, and even more so when said agreement involves both money and potentially sending civilians into harm’s way—if Russia can get there before a new, restructured and reinforced Europe emerges, we could see another, similar conflict soon, and this one could be even more successful than the last, if Russia tweaks its formula to make it more effective, and European governments succumb to war weariness, exhausted by the war in Ukraine, in the meantime.

Show Notes

https://www.cfr.org/article/how-much-us-aid-going-ukraine

https://en.wikipedia.org/wiki/Trump%E2%80%93Ukraine_scandal

https://www.csis.org/analysis/breaking-down-us-ukraine-minerals-deal

https://www.nytimes.com/2025/03/08/world/europe/ukraine-russia-north-korea-kursk.html

https://www.washingtonpost.com/world/2025/03/08/zelensky-trump-fallout-ukraine/

https://www.nytimes.com/2025/03/04/world/europe/ukraine-us-trump-military-support.html

https://www.nytimes.com/2025/03/06/us/politics/ukraine-zelensky-trump-russia.html

https://apnews.com/article/russia-ukraine-war-dobropillya-us-intelligence-3d0bad105a93933e9cdaca5cf31fcf74

https://mwi.westpoint.edu/no-substitute-for-victory-how-to-negotiate-from-a-position-of-strength-to-end-the-russo-ukraine-war/

https://www.reuters.com/world/europe/eu-leaders-cautiously-welcome-macrons-nuclear-umbrella-offer-2025-03-06/

https://www.nytimes.com/2025/03/07/world/europe/bulgarians-guilty-spying-russia-uk.html

https://www.politico.com/news/2025/03/08/europe-scrambles-to-aid-ukraine-after-us-intelligence-cutoff-00219678

https://www.bbc.com/news/articles/c9wpy9x890wo

https://www.cbsnews.com/news/keith-kellogg-ukraine-intelligence-sharing-pause/

https://www.bbc.com/news/articles/ce8yz5dk82wo

https://www.nytimes.com/2025/03/07/world/us-ukraine-satellite-imagery.html

https://www.bbc.com/news/articles/c05m907r39qo

https://www.nytimes.com/2025/03/07/us/politics/trump-russia-sanctions-tariffs.html

https://www.csis.org/analysis/ukraines-future-vision-and-current-capabilities-waging-ai-enabled-autonomous-warfare

https://www.politico.eu/article/donald-tusk-plan-train-poland-men-military-service-russia

https://www.euronews.com/my-europe/2025/03/08/poland-says-it-plans-to-give-every-adult-male-military-training

https://www.nytimes.com/2025/02/22/world/europe/ukraine-trump-minerals.html

https://apnews.com/article/ten-days-that-upended-us-support-for-ukraine-8930c01a15910a7ad8a7f7c7fac9ba3a

https://www.wsj.com/world/white-house-and-ukraine-close-in-on-deal-for-mineral-rights-e924c672

https://ca.finance.yahoo.com/news/ukraine-us-still-ironing-parts-191805611.html

https://www.reuters.com/business/us-could-cut-ukraines-access-starlink-internet-services-over-minerals-say-2025-02-22/

https://www.nytimes.com/2025/02/25/world/europe/ukraine-minerals-deal.html

https://www.cnn.com/2025/02/26/europe/ukraine-us-mineral-resources-deal-explained-intl-latam/index.html

https://www.spglobal.com/commodity-insights/en/news-research/latest-news/electric-power/122624-eu-moving-to-develop-infrastructure-for-nuclear-energy-expansion-officials

https://www.bloomberg.com/news/articles/2025-03-07/european-stocks-see-most-inflows-in-decade-amid-defense-splurge

https://www.nytimes.com/2025/02/10/business/ai-summit-paris.html

https://apnews.com/article/germany-ukraine-debt-brake-economy-military-spending-74be8e96d8515ddddd53a99a69957651

https://www.nytimes.com/interactive/2025/03/03/world/europe/ukraine-russia-war-drones-deaths.html?unlocked_article_code=1.2U4.b15Z.1EA4tDb_37Bq

https://www.nytimes.com/2025/03/10/world/europe/ukraine-russia-eastern-front-line.html

https://www.iiss.org/online-analysis/military-balance/2025/02/combat-losses-and-manpower-challenges-underscore-the-importance-of-mass-in-ukraine/

https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-march-7-2025

https://en.wikipedia.org/wiki/Euromaidan

https://en.wikipedia.org/wiki/European_Union%E2%80%93Ukraine_Association_Agreement

https://en.wikipedia.org/wiki/Russo-Ukrainian_War

https://en.wikipedia.org/wiki/Timeline_of_the_Russian_invasion_of_Ukraine_(1_January_2025_%E2%80%93_present)

We also discuss the private space launch industry, lunar landers, and regolith.

Recommended Book: The Mercy of Gods by James S.A. Corey

Transcript

In 1959, Luna 2, a Soviet impactor-style spacecraft, successfully reached the surface of the Moon—the first-ever human-made object to do so.

Luna 2 was very of its era; a relatively simple device, similar in many ways to the better-known Sputnik satellite, but getting a craft to the moon is far more difficult than placing something in orbit around Earth, in part because of the distance involved—the Moon is about 30-Earth’s from the surface of the earth, that figure varying based on where in its elliptical orbit it is at the moment, but that’s a good average, around 239,000 miles which is about 384,000 km, while Sputnik’s orbit only took it something like 359 miles, around 578 km from the surface. That’s somewhere in the neighborhood of 670-times the distance.

So new considerations, like fuel to get there, but also charting paths to the moon that would allow the human-made object to actually hit it, rather than flying off into space, and even figuring out whether craft would need to be designed differently if they made it out of Earth’s magnetic field, were significant hurdles that had to be leapt to make this mission a success; everything was brand new, and there were gobs of unknowns.

That said, this craft didn’t settle onto the moon—it plowed into it like a bullet, a so-called ‘hard landing.’ Which was still an astonishing feet of research and engineering, as at this point in history most rockets were still blowing up before making it off the launch pad, including the projects that eventually led to the design and launch of Luna 2.

The US managed their own hard landing on the Moon in 1962, and it wasn’t until 1966 that the first soft landing—the craft slowing itself before impact, so that some kind of intact device would actually continue to exist and function on the surface of the moon—was accomplished by the Luna 9.

The Luna 9 used an ejectable capsule that was protected by airbags, which helped it survive its 34 mph, which is about 54 kmh impact. This successful mission returned the first panoramic photographs from the surface of the moon, which was another notable, historic, incredibly difficult at the time feat.

A series of rapid-fire firsts followed these initial visits, including the first-ever crewed flight to the Moon, made by the US Apollo 8 mission in 1968—that one didn’t land, but it did circle the Moon 10 times before returning to Earth, the first successful crewed mission to the surface of the Moon made by the Apollo 11 team in 1969, and by the early 70s humans had made several more moon landings: all of them were American missions, as the US is still the only country to have performed successful crewed missions to the Moon’s surface, but the Apollo 11, 12, 14, 15, 16, and 17 missions all put people on the lunar surface, and then returned them safely to Earth.

The Luna 24, another Soviet mission launched in 1976, was the last big space race era mission to return lunar samples—chunks of moon rock and regolith—to earth, though it was a robotic mission, no humans aboard. And by many measures, the space race actually ended the previous year, in 1975, when Apollo and Soyuz capsules, US and Soviet missions, respectively, docked in orbit, creating the first international space mission, and allowing US astronauts and Soviet cosmonauts to shake hands, symbolically burying the hatchet, at least in terms of that particular, non-earthbound rivalry.

What I’d like to talk about today is a recent, successful soft landing on the lunar surface that’s historic in nature, but also contemporarily significant for several other reasons.

—

Firefly Space Systems was founded in the US in 2014 by a team of entrepreneurs who wanted to compete with then-burgeoning private space companies like SpaceX and Virgin Galactic by, like these competitors, reducing the cost of getting stuff into low Earth orbit.

They were planning to become profitable within four years on the back of the also-burgeoning small satellite industry, which basically means selling space on their rockets, which are capable of carrying multiple small satellites on what’s often called a ‘rideshare’ basis, to companies and agencies that were keen to launch their own orbital assets.

These smaller satellites were becoming increasingly popular and doable because the tech required was shrinking and becoming cheaper, and that meant you no longer needed a boggling amount of money to do basic research or to lob a communications satellite into orbit; you could spent a few million dollars instead of tens or hundreds of millions, and buy space on a rocket carrying many small satellites, rather than needing to splurge on a rocket all by yourself, that rocket carrying only your giant, extremely costly and large conventional satellite.

This path, it was hoped, would provide them the benefits of economies of scale, allowing them to build and launch more rockets, which in turn would bring the costs of such rockets and launches down, over time.

And the general concept was sound—that’s basically what SpaceX has managed to do, with mammoth success, over the past decade completely rewiring how the space launch industry works; their many, reusable rockets and rocket components, and abundant launches, many of which are used to lob their own StarLink in-orbit satellites into space, while also usually carrying smaller satellites provided by clients who pay to go along for the ride, bringing all of these costs down dramatically.

So that model is basically what Firefly was aiming for, as well—but the Firefly team, which was made up of folks from Virgin Galactic, SpaceX, and other industry entities was sued by Virgin Galactic, which alleged that a former employee who left them to work for Firefly provided Firefly with intellectual property and committed what amounts to espionage, destroying data and hardware before they left.

These allegations were confirmed in 2016, and some of Firefly’s most vital customers and investors backed out, leaving the company without enough money to move forward. A second lawsuit from Virgin Orbit against Firefly and some of its people hit that same year, and that left the company insolvent, its assets put up for auction in 2017.

Those assets were bought by an investment company called Noosphere Ventures, which relaunched Firefly Space Systems as Firefly Aerospace. They then reworked the designs of their rockets a bit and relocated some of the company’s research assets to Ukraine, where the head of Noosphere Ventures is from.

They picked up a few customers in the following years, and they leased a private launch pad in Florida and another in California. In 2021, they were awarded more than $90 million to develop exploration tech for the Artemis Moon program, which was scheduled for 2023 and was meant to help develop the US’s private space industry; NASA was trying out a model that would see them hire private companies to deliver assets for a future moon-based mission, establishing long-term human presence on the moon, over the course of several years, and doing so on a budget by basically not having to build every single aspect of the mission themselves.

That same year, the head of Noosphere Ventures was asked by the US Committee on Foreign Investment to sell nearly 50% of his stake in Firefly for national security reasons; he was born in Ukraine, and the Committee was apparently concerned about so much of the company’s infrastructure being located in a country that, even before Russia invaded the following year, was considered to be a precarious spot for security-vital US research and development assets.

This is considered to be something of a scandal, as it was implied that this Ukrainian owner was himself under suspicion of maybe being a Russian asset—something that seems to have been all implication and no substance, as he’s since moved back to Ukraine and has gone on to be something of a war hero, providing all sorts of tech and other resources to the anti-invasion effort.

But back then, he complied with this request, though not at all happily—and it sounds like that unhappiness was probably justified, though there are still some classified documents on the matter that maybe say otherwise; we don’t know for sure publicly right now.

In any event, he and Noosphere sold most of their stake in Firefly to a US company called AE Industrial Partners, and the following year, in 2022 it successfully launched, for the first time, its Alpha rocket, intended to be its core launch option for small satellite, rideshare-style customers.

The satellites placed in orbit by that first launch didn’t reach their intended height, so while the rocket made it into orbit, another launch, where the satellites were placed where they were supposed to go, actually happened in 2023, is generally considered to be the first, true successful launch of the Alpha rocket.

All of which is interesting because this component of the larger space industry has been heating up; SpaceX has dominated, soaking up most of the oxygen in the room and claiming the lion’s share of available contracts. But there are quite a few private space companies from around the world profitably launching rockets at a rapid cadence, these days. And many of them are using the same general model of inexpensive rideshare rockets carrying smaller satellites into orbit, and the money from those launches then funds their other explorations, ranging from government mission components like rovers, to plans for futuristic space stations that might someday replace the aging International Space Station, to larger rockets and launch craft that might further reduce the cost of launching stuff into space, while also potentially serving as in-orbit or off-planet habitations—as is the case with SpaceX’s massive Starship craft.

This is also notable, though, because Firefly launched a lander as part of its Blue Ghost mission, to the Moon on January 15 of 2025. That craft reached the moon, and successfully soft-landed there, on March 2 the same year.

This lander was partly funded by that aforementioned 2021 Artemis award by NASA—it ultimately received just over $100 million from the agency to conduct this mission—and it was launched atop a SpaceX Falcon 9 rocket, as the company’s own Alpha rockets don’t yet have the right specs to launch their lander, the Blue Ghost M1; which interestingly shared space in this rocket with another lander produced by a Japanese company called ispace, whose name you might recognize, as ispace managed to get a previous lunar lander, the Hakuto-R 1, to the moon in 2023, but communication was lost with the craft a few seconds before it was scheduled to land. It was confirmed later that year that the lander crashed; though again, even just getting something to the moon is a pretty impressive feat.

So this SpaceX rocket, launched in mid-January of 2025, had two competing lunar landers on it, one made by Firefly and one made by ispace. That latter lander is scheduled to arrive on the surface sometime in early May of this year, though that might change, based on all sorts of variables. But the former, Firefly’s Blue Ghost, successfully touched-down, soft-landing on the lunar surface on March 2.

There’s another lander from Intuitive Machines—the American company that can claim to be the first to successfully soft-land on the lunar surface, but whose first effort tipped over. Their new lander could arrive as soon as March 6, just days after Blue Ghost, and it’ll be aiming for an area just 100 miles from the moon’s south pole; an area that’s of particular interest because of water ice contained in permanently shadowed areas thereabouts, which could be vital for long-term human occupation of the moon.

So things are heating up on the lunar surface these days, but soft-landing something on the moon is still an accomplishment that few nations, much less private companies, have managed.

In the past decade alone, India, Russia, and a nonprofit based in Israel have attempted and failed to achieve soft-landings, and those aforementioned Japanese and US companies managed to soft-land on the moon, but their landers tipped over, limiting the amount of research they could conduct once there. China is the only nation to have successfully achieved this feat on their first attempt, and they benefitted from decades of preexisting research and engineering know-how.

And it’s not surprising that this is such a rare feat: in addition to the incredible distances involved, the Blue Ghost lander was traveling at around 3,800 mph, which is more than 6,100 kpm just 11 minutes before it landed. It then had to slow itself down, while also adjusting its orientation in order to safely land on an uneven, crater-paved moonscape; it slowed to the pace of a slow walk just before it touched down.

Science-wise, this lander is carrying tools that will help it measure the stickiness of regolith on different materials, that will allow for more precise measurements of the distance between earth and the moon, and that will help researchers study solar winds, radiation-tolerant technologies, and the moon’s mantle. It has equipment that allowed it to detect GPS and Galileo signals from earth, which suggests these satellites might be used by craft and rovers on the moon, for navigation, at some point, and it has a drill that will allow it to penetrate the lunar regolith up to nine feet deep, among several other project assets.

This has also served as a sort of proof of concept for this lander and mission type, as another Blue Ghost lander is scheduled to launch in 2026, that one aiming for the far side of the moon, with a third currently meant to head out in 2028, destined for a currently under-explored volcanic region.

The aggregate goal of these US missions, alongside the research tools they deliver, is to eventually start building-out and supplying the necessary infrastructure for long-term human occupation of the moon, culminating with the construction of a permanently crewed base there.

These sorts of ambitions aren’t new, but this approach—funding companies to handle a lot of the legwork, rather than keeping those sorts of efforts in-house, within NASA—is novel, and it arguably recognizes the nature of the moment, which is increasingly defined by cheaper and cheaper, and in most ways better and better offerings by private space companies, while those deployed by NASA are still really solid and impressive, but incredibly slow and expensive to develop and deploy, in comparison.

This is also happening at a moment of heightened geopolitical competition in space, and one in which private entities are equipping the nation states that would have traditionally dominates this industry.

China’s space agency has enjoyed a flurry of moon-related successes in recent years, and many of these missions have relied at least in part on efforts by private, or pseudo-private, as tends to be the case in China, companies.

Business entities from all over the world are also regularly making the satellites and probes and components of landers that make these things work, so solar system exploration and space travel are no longer the exclusive wheelhouses of government agencies—the private sector is becoming a lot more influential in this area, and that’s led to some novel security issues, alongside massive swings in influence and power for the folks running these companies: perhaps most notably SpaceX CEO Elon Musk’s increasing sway over governments and even inter-governmental conflict, due in part to his company’s space launch capabilities, and their capacity to beam internet down to conflict zones, earthside, via their StarLink satellite array.

So this is an area that’s heating up, both for earthbound and space-faring reasons, and the incentives and peculiarities of the private market are increasingly shaping the type of research and missions being conducted, while also changing the math of what’s possible, how quickly, and maybe even what level of risk is acceptable within a given mission or program.

Show Notes

https://www.cnn.com/science/live-news/moon-landing-blue-ghost-03-02-25/index.html

https://en.wikipedia.org/wiki/Hakuto-R_Mission_1

https://en.wikipedia.org/wiki/Hakuto-R_Mission_2

https://spacenews.com/ae-industrial-partners-to-acquire-stake-in-firefly-from-noosphere/

https://en.wikipedia.org/wiki/Artemis_program

https://en.wikipedia.org/wiki/Firefly_Alpha

https://www.nasa.gov/news-release/nasa-selects-firefly-aerospace-for-artemis-commercial-moon-delivery-in-2023/

https://www.theverge.com/2019/2/22/18234604/firefly-aerospace-cape-canaveral-florida-launch-site-slc-20

https://www.newscientist.com/article/dn25861-next-generation-of-space-cowboys-get-ready-to-fly/

https://apnews.com/article/moon-landings-failures-successes-545ea2f3ffa5a15893054b6f43bdbb98

https://www.nytimes.com/2025/03/01/science/blue-ghost-firefly-mission-1-moon-landing.html

https://en.wikipedia.org/wiki/Firefly_Aerospace

https://www.space.com/the-universe/moon/were-on-the-moon-private-blue-ghost-moon-lander-aces-historic-lunar-landing-for-nasa

https://www.bbc.com/news/articles/cd9208qv1kzo

https://www.reuters.com/technology/space/us-firm-fireflys-blue-ghost-moon-lander-locks-lunar-touchdown-2025-03-02/

https://www.nytimes.com/2025/02/26/science/intuitive-machines-second-moon-landing-launch-how-to-watch.html

https://en.wikipedia.org/wiki/Lunar_south_pole

https://www.livescience.com/space/the-moon/how-far-away-is-the-moon

https://en.wikipedia.org/wiki/Luna_2

https://en.wikipedia.org/wiki/Moon_landing

https://www.space.com/12841-moon-exploration-lunar-mission-timeline.html

https://en.wikipedia.org/wiki/Luna_24

We also discuss colonialism, coffee houses, and religious uppers.

Recommended Book: On Writing and Worldbuilding by Timothy Hickson

Transcript

Like many foods and beverages that contain body- or mind-altering substances, coffee was originally used, on scale at least, by people of faith, leveraging it as an aid for religious rituals. Sufis in what is today Yemen, back in the early 15th century, consumed it as a stimulant which allowed them to more thoroughly commit themselves to their worship, and it was being used by the Muslim faithful in Mecca around the same time.

By the following century, it spread to the Levant, and from there it was funneled into larger trade routes and adopted by civilizations throughout the Mediterranean world, including the Ottomans, the Mamluks, groups in Italy and Northern Africa, and a few hundred years later, all the way over to India and the East Indies.

Western Europeans got their hands on this beverage by the late 1600s, and it really took off in Germany and Holland, where coffee houses, which replicated an establishment type that was popularized across the Muslim world the previous century, started to pop up all over the place; folks would visit these hubs in lieu of alehouses, subbing in stimulants for depressants, and they were spaces in which it was appropriate for people across the social and economic strata to interact with each other, playing board games like chess and backgammon, and cross-pollinating their knowledge and beliefs.

According to some scholars, this is part of why coffee houses were banned in many countries, including England, where they also became popular, because those up top, including but not limited to royalty, considered them to be hotbeds of reformatory thought, political instability, and potentially even revolution. Let the people hang out with each other and allow them to discuss whatever they like, and you end up with a bunch of potential enemies, and potential threats to the existing power structures.

It’s also been claimed, and this of course would be difficult to definitively prove, though the timing does seem to line up, that the introduction of coffee to Europe is what led to the Enlightenment, the Age of Reason, and eventually, the Industrial Revolution. The theory being that swapping out alcohol, at least during the day, and creating these spaces in which ideas and understandings and experiences could be swapped, without as much concern about social strata as in other popular third places, spots beyond the home and work, that allowed all sorts of political ideas to flourish, it helped inventions become realized—in part because there were coffee houses that catered to investors, one of which eventually became the London Stock Exchange—but also because it helped people organize, and do so in a context in which they were hyper-alert and aware, and more likely to engage in serious conversation; which is a stark contrast to the sorts of conversations you might have when half- or fully-drunk at an alehouse, exclusively amongst a bunch of your social and economic peers.

If it did play a role in those movements, coffee was almost certainly just one ingredient in a larger recipe; lots of variables were swirling in these areas that seem to have contributed to those cultural, technological, economic, and government shifts.

The impact of such beverages on the human body and mind, and human society aside, though, coffee has become globally popular and thus, economically vital. And that’s what I’d like to talk about today; coffee’s role in the global economy, and recent numbers that show coffee prices are ballooning, and are expected to balloon still further, perhaps substantially, in the coming years.

—

For a long while, coffee was a bit of a novelty outside of the Muslim world, even in European locales that had decently well-established coffeehouses.

That changed when the Dutch East India Company started importing the beans to the Netherlands in the early 17th century. By the mid-1600s they were bringing commercial-scale shipments of the stuff to Amsterdam, which led to the expansion of the beverage’s trade-range throughout Europe.

The Dutch then started cultivating their own coffee crops in colonial territories, including Ceylon, which today is called Sri Lanka, and the island of Java. The British East India Company took a similar approach around the same time, and that eventually led to coffee bean cultivation in North America; though it didn’t do terribly well there, initially, as tea and alcoholic beverages were more popular with the locals. In the late 18th century, though, North Americans were boycotting British tea and that led to an uptick in coffee consumption thereabouts, though this paralleled a resurgence in tea-drinking back in Britain, in part because they weren’t shipping as much tea to their North American colonies, and in part because they conquered India, and were thus able to import a whole lot more tea from the thriving Indian tea industry.

The Americas became more important to the burgeoning coffee trade in the mid-1700s after a French naval officer brought a coffee plant to Martinique, in the Caribbean, and that plant flourished, serving as the source of almost all of today’s arabica coffee beans, as it was soon spread to what is today Haiti, and by 1788, Haiti’s coffee plantations provided half the world’s coffee.

It’s worth remembering that this whole industry, the portion of it run by the Europeans, at least, was built on the back of slaves. These Caribbean plantations, in particular, were famously abusive, and that abuse eventually resulted in the Haitian revolution of 1791, which five years later led to the territory’s independence.

That said, coffee plantations elsewhere, like in Brazil and across other parts of South and Central America, continued to flourish throughout this period, colonialists basically popping into an area, conquering it, and then enslaving the locals, putting them to work on whatever plantations made the most sense for the local climate.

Many of these conquered areas and their enslaved locals were eventually able to free themselves, though in some cases it took a long time—about a century, in Brazil’s case.

Some plantations ended up being maintained even after the locals gained their freedom from their European conquerers, though. Brazil’s coffee industry, for instance, began with some small amount of cultivation in the 1720s, but really started to flourish after independence was won in 1822, and the new, non-colonialist government decided to start clearing large expanses of rainforest to make room for more, and more intensive plantations. By the early 1900s, Brazil was producing about 70% of the world’s coffee exports, with their neighbors—Colombia and Guatemala, in particular—making up most of the rest. Eurasian producers, formerly the only places where coffee was grown, remember, only made up about 5% of global exports by that time.

The global market changed dramatically in the lead-up to WWII, as Europe was a primary consumer of these beans, and about 40% of the market disappeared, basically overnight, because the continent was spending all their resources on other things; mostly war-related things.

An agreement between South and Central American coffee producing countries and the US helped shore-up production during this period, and those agreements allowed other Latin American nations to develop their own production infrastructure, as well, giving Brazil more hemispheric competition.

And in the wake of WWII, when colonies were gaining their independence left and right, Ivory Coast and Ethiopia also became major players in this space. Some burgeoning Southeast Asian countries, most especially Vietnam, entered the global coffee market in the post-war years, and as of the 2020s, Brazil is still the top producer, followed by Vietnam, Indonesia, Colombia, and Ethiopia—though a few newer entrants, like India, are also gaining market share pretty quickly.

As of 2023, the global coffee market has a value of around $224 billion; that figure can vary quite a lot based on who’s numbers you use, but it’s in the hundreds of billions range, whether you’re looking just at beans, or including the ready-to-drink market, as well, and the growth rate numbers are fairly consistent, even if what’s measured and the value placed on it differs depending on the stats aggregator you use.

Some estimates suggest the market will grow to around $324 billion, an increase of around $100 billion, by 2030, which would give the coffee industry a compound annual growth rate that’s larger than that of the total global caffeinated beverage market; and as of 2023, coffee accounts for something like 87% of the global caffeinated beverage market, so it’s already the dominant player in this space, and is currently, at least, expected to become even more dominant by 2030.

There’s concern within this industry, however, that a collection of variables might disrupt that positive-seeming trajectory; which wouldn’t be great for the big corporations that sell a lot of these beans, but would also be really bad, beyond shareholder value, for the estimated 25 million people, globally, who produce the beans and thus rely on the industry to feed their families, and the 100-110 million more who process, distribute, and import coffee products, and who thus rely on a stable market for their paychecks.

Of those producers, an estimated 12.5 million work on smaller farms of 50 acres or less, and 60% of the world’s coffee is made by people working on such smallholdings. About 44% of those people live below the World Bank’s poverty metric; so it’s already a fairly precarious economic situation for many of the people at the base-level of the production system, and any disruptions to what’s going on at any level of the coffee industry could ripple across that system pretty quickly; disrupting a lot of markets and local economies, alongside the human suffering such disruptions could cause.

This is why recent upsets to the climate that have messed with coffee crops are causing so much anxiety. Rising average temperatures, bizarre cold snaps, droughts, heavy and unseasonable rainfalls—in some cases all of these things, one after another—combined with outbreaks of plant diseases like coffee rust, have been putting a lot of pressure on this industry, including in Brazil and Vietnam, the world’s two largest producers, as of the mid-2020s.

In the past year alone, because of these and other externalities, the price of standard-model coffee beans has more than doubled, and the specialty stuff has seen prices grow even more than that.

Higher prices can sometimes be a positive for those who make the now-more-expensive goods, if they’re able to charge more but keep their expenses stable.

In this case, though, the cost of doing business is going up, because coffee makers have to spend more on protecting their crops from diseases, losing crops because of those climate issues, and because of disruptions to global shipping channels. That means profit margins have remained fairly consistent rather than going up: higher cost to make, higher prices for consumers, about the same amount of money being made by those who work in this industry and that own the brands that put coffee goods on shelves.

The issue, though, is that the cost of operation is still going up, and a lot of smallholders in particular, which again, produce about 60% of all the coffee made, worldwide, are having trouble staying solvent. Their costs of operation are still going up, and it’s not a guarantee that consumers will be willing to continue spending more and more and more money on what’s basically a commodity product; there are a lot of caffeinated beverages, and a lot of other types of beverage they could buy instead, if coffee becomes too pricy.

And at this point, in the US, for instance, the retail price of ground roast coffee has surpassed an average of $7 per pound, up 15% in the past year. Everyone’s expecting that to keep climbing, and at some point these price increases will lose the industry customers, which in turn could create a cascading effect that kills off some of these smaller producers, which then raises prices even more, and that could create a spiral that’s difficult to stop or even slow.

Already, this increase in prices, even for the traditionally cheaper and less desirable robusta coffee bean, has led some producers to leave coffee behind and shift to more consistently profitable goods; many plantations in Vietnam, for instance, have converted some of their facilities over to durian fruit, instead of robusta, and that’s limited the supply of robusta, raising the prices of that bean, which in turn is causing some producers of robusta to shift to arabica, which is typically more expensive, and that’s meant more coffee on the market is of the more expensive variety, adding to those existing price increases.

The futures markets on which coffee beans are traded are also being upended by these pricing issues, resulting in margin calls on increasingly unprofitable trades that, in short, have necessitated that more coffee traders front money for their bets instead of just relying on short positions that have functioned something like insurance paid with credit based on further earnings, and this has put many of them out of business—and that, you guessed it, has also resulted in higher prices, and more margin calls, which could put even more of them out of business in the coming years.

There are ongoing efforts to reorganize how the farms at the base on this industry are set up, both in terms of how they produce their beans, and in terms of who owns what, and who profits, how. This model typically costs more to run, and results in less coffee production: in some cases 25% less. But it also results in more savings because trees last up to twice as long, the folks who work the farms are much better compensated, and less likely to suffer serious negative health impacts from their labor, and the resultant coffee is of a much higher quality; kind of a win win win situation for everyone, though again, it’s less efficient, so up till now the model hasn’t really worked beyond some limited implementations, mostly in Central America.

That could change, though, as these larger disruptions in the market could also make room for this type of segue, and indeed, there has apparently been more interest in it, because if the beans are going to cost more, anyway, and the current way of doing things doesn’t seem to work consistently anymore, and might even collapse over the next decade if something doesn’t change, it may make sense, even to the soulless accounting books of major global conglomerates, to reset the industry so that it’s more resilient, and so that the people holding the whole sprawling industry up with their labor are less likely to disappear some day, due to more favorable conditions offered by other markets, or because they’re simply worked to death under the auspices of an uncaring, fairly brutal economic and climatic reality.

Show Notes

https://www.nytimes.com/2025/02/22/business/coffee-prices-climate-change.html

https://web.archive.org/web/20100905180219/https://www.web-books.com/Classics/ON/B0/B701/12MB701.html

https://www.jstor.org/stable/1246099?origin=crossref

https://www.theguardian.com/australia-news/2025/jan/07/coffee-prices-australia-going-up-cafe-flat-white-cost

https://www.bbc.com/news/articles/c5y37dvlr70o

https://www.nytimes.com/2024/12/28/business/coffee-prices-climate-change.html

https://markets.businessinsider.com/news/commodities/coffee-prices-food-inflation-climate-change-eggs-bank-of-america-2025-2

https://www.statista.com/statistics/675807/average-prices-arabica-and-robusta-coffee-worldwide/

https://www.ft.com/content/9934a851-c673-4c16-86eb-86e30bbbaef3

https://www.cnn.com/2024/08/01/business/your-coffees-about-to-get-more-expensive-heres-why/index.html

https://www.marketresearchfuture.com/reports/caffeinated-beverage-market-38053

https://www.grandviewresearch.com/industry-analysis/caffeinated-beverage-market

https://en.wikipedia.org/wiki/Coffee

https://en.wikipedia.org/wiki/English_coffeehouses_in_the_17th_and_18th_centuries

https://en.wikipedia.org/wiki/Coffeehouse

https://en.wikipedia.org/wiki/History_of_coffee

https://sites.udel.edu/britlitwiki/the-coffeehouse-culture/

https://www.openculture.com/2021/08/how-caffeine-fueled-the-enlightenment-industrial-revolution-the-modern-world.html

We also discuss the CDC, raw milk, and politics.

Recommended Book: Nexus by Yuval Noah Harari

Transcript

In late-January of 2025, staff at the US Centers for Disease Control, the CDC, were told to stop working with the World Health Organization, and data, and some entire pages containing such data, and analysis of it, were removed from the CDC’s web presence—the collection of sites it maintains to provide information, resources, and raw research numbers and findings from all sorts of studies related to its remit.

And that remit is to help the US public stay healthy. It provides services and guidelines and funding for research and programs that are meant to, among other things, prevent injury, help folks with disabilities, and as much as possible, at least, temper the impacts of disease spread.

Its success in this regard has been mixed, historically, in part because these are big, complex, multifaceted issues, and with current technology and existing systems it’s arguably impossible to completely control the spread of disease and prevent all injury. But the CDC has also generally been a moderating force in this space, not always getting things right, itself, but providing the resources, monetary and otherwise, to entities that go on to do big, generally positive things across this range of interconnected fields.

Many of the pages that were taken down from the CDC’s web presence in late-January popped back up within a few weeks, and now, according to experts from around the world, these pages have been altered—some mostly the same as they were, but others missing a whole lot of data, while still others now contain misinformation and/or polemic. A lot of that misinformation and political talking points are related to things the recently re-ascendent Trump administration has made a cornerstone of its ideological platform, including anti-trans policies and things that cast skepticism on vaccines, abortion, birth control, and even information related to sexually transmitted infections.

Scientists doing research that is in any way connected to concepts like diversity, equality, and inclusivity—so-called DEI issues—have been forced to halt these studies, and research that even includes now-banned words in different contexts—words like gender, LGBT, and nonbinary—have likewise been halted, or in some cases banned altogether. Data sets and existing research that happen to include any reference to this collection of terms have likewise been pulled from the government’s publicly accessible archives; so some stuff actually connected to DEI issues, but initial looks into what’s been halted and cancelled shows that things like cancer research and other, completely non-political stuff, too, has been stopped because somewhere in the researchers’ paperwork was a word that is now not allowed by the new administration.

All of which is part of a much bigger story, one that I won’t get into right now, as it’s still evolving, and is very much it’s own thing; that of the purge of government agencies that’s happening in the US right now, at the apparent behest of the president, and under the management of the world’s wealthiest person, Elon Musk, via his task force, the Department of Government Efficiency, or DOGE.

This process and the policies underpinning it are facing a lot of legal pushback, even from other Republicans, in at least a few cases. But it’s also a story that’s evolving by the day, if not the minute, and the long-term ramifications are still up in the air; some are calling it the first move in an autogolpe, a coup from within, while others are calling it a hamfisted attempt to seem to be doing things, to be reducing expenses in the government, but in such a way that none of the actions will be particularly effective, and most will be countered by judicial decisions, once they catch up with the blitzkrieg-like speed of these potentially illegal actions.

There’s been some speculation that this will end up being more of an albatross around the neck of the administration, than whatever it is they actually hope to accomplish with it—though of course there are just as many potentially valid concerns that, again, this is a grab for power, meant to centralize authority within the executive, with the president, and that, in turn could make it difficult for anyone but a Republican, and anyone but a staunch ally of Trump and his people, to ever win the White House again, at least for the foreseeable future.

But right now, as all those balls are in the air and we’re waiting to see what the outcome of that flurry of activity will actually be, practically, I’d like to focus on one particular aspect of this culling of the CDC’s records, publicly available information, and staff.

What I’d like to talk about today is bird flu, and what we think we know about its presence in the US right now, and how that presence is being felt by everyday people, already.

—

What we colloquially call bird flu, or sometimes avian flu, or the avian influenza, if you’re fancy, is actually a subtype of influenza called Influenza A virus subtype H5N1, or just H5N1.

There have been many subtypes of bird flu over the generations, some of which have disappeared from the record (as far as we can tell, at least), while others are still tracked, but in animal populations in locations that make them low-risk, in terms of spreading beyond their host species.

We’ve been studying various types of bird flu since at least the late-1800s, when researchers in Italy started looking into a disease colloquially called “fowl plague,” because it was afflicting chicken and other poultry flocks. This wasn’t the first time something that seems like it was probably this disease afflicted flocks and was recorded as having done so, but it was the first time such a plague was differentiated from bacterial diseases that were also prevalent in such poultry communities, and thus they could say it was something distinct from, for instance, fowl cholera, which was also pretty common back then.

In the 1950s, it was confirmed that this avian flu was similar to flus that afflict humans, and in the 1970s, researchers figured out that the flus they were tracking in bird populations were diverse, in the sense that there were many subtypes, not just one universal disease.

Today, we know that this type of Influenza A virus, of which H5N1 is just one example, are super common in wild waterfowl, and they’ve achieved this commonality, in part, by living in their respiratory and gastrointestinal systems without negatively effecting their host. So the birds can fly around and eat and peck at things without even getting a case of the bird sniffles, which means they’re less likely to isolate from their kin, which means they’re more likely to spread it to all of their friends.

Waterfowl also tend to travel great distances, just as a matter of course, migrating across continents, in some cases, but in others simply flitting from lake to pond to puddle, looking for food.

Domesticated birds, like chicken and ducks that are kept for their eggs or meat, tend to catch bird flu either by socializing with their wild kin, or by coming into contact with their feces, or surfaces that have been contaminated by their feces.

In this way, traveling flocks of ducks and geese and seagulls, which maybe set down to get a drink or some food at a source of water in a bird meat facility, could infect a chicken directly, but just by flying overhead and pooping, they can do the same, as chickens will tend to peck around at the ground, and if that poop is somewhere nearby, boom, chicken infected, and then, in relatively short order, the whole coop is also infected.

There are vaccines that can protect chickens and other domesticated birds from avian flu, but because of how widespread H5N1 in particular is, it mutates rapidly, so these vaccines are not a silver bullet. On top of that, buying and administrating them costs poultry companies more money, and because they might administer a vaccine that hasn’t kept up with the mutations of the disease, that could end up being a sunk cost; so the money question sometimes keeps poultry providers from vaccinating their flocks, but even those who do apply this layer of protection don’t always benefit from the investment as much as they would like.

And birds that are thus infected spread the disease rapidly, but also tend to die in large numbers. The relatively chilled-out symptoms experienced by water fowl doesn’t always translate to other types of birds, so chickens will sometimes conk out pretty quickly, and on top of that, when bird flu gets into a poultry population and mutates within them, the new mutation of the disease might get out into the water fowl population, and that can then cause anywhere from mild flu symptoms to reliable death in those ducks and geese and such. So the version they have might be mundane, they give that mundane version to chickens, where it mutates into something else, and that new bird flu variant then goes back into the water fowl and, no longer mundane, kills them all.

So part of the problem here, as is the case with any virulent, quick-spreading, treatment-resistant pathogen with large wild reservoirs where it can survive even when the populations we’re tracking are cured or culled, is that this thing evolves just really quickly. And that means anything we do, vaccines, killing infected populations or potentially infected populations, dividing flocks into smaller, easier to manage and segment groups, generally doesn’t keep up with the emergence of new versions of the disease.

This can, in turn, result in new versions that spread even quicker, that are harder to detect, or which simply kill a lot faster.

It can also lead to mutations that spread more readily to and within other species, including mammals.

And that’s what seems to be happening in meat and dairy cattle, at the moment, in addition to some of the humans who work closely with birds and with cows.

There have been reports over the past couple of years of folks in the US coming into close contact with infected birds or cows contracting bird flu, or testing positive for bird flu antibodies, which means the disease hit them, but they either managed to fend it off or had it for a while, and then their immune system took care of it—even if they didn’t have symptoms.

Such infections, those we know about for certain, anyway, as opposed to having hints of suggestions of them, still seem to be relatively small in number. A recent study, which the CDC was eventually able to publish, after those pulled pages and hidden data sets started to come back online, indicates that of 150 cow veterinarians tested for evidence of bird flu infection, only three had such evidence.

That said, two of those three did not have any known exposure to bird flu-infected animals, and one didn’t even practice in a state with any known infections. So this is a mixed outcome; good, in a sense, that infection evidence in humans who come into contact with potentially infected animals isn’t more widespread, but alarming in the sense that those who did have such infection indicators were mostly doing work that wouldn’t seem to have put them at risk of infection, based on what our data tell us, and yet, they were put at such risk. Which suggests our sense of how widespread this thing has gotten is probably way, way off at this point; the official data on where bird flu is, and even what animals it’s infecting, is perhaps uselessly out of date in the US.

So at this point, the official CDC data say there have been 68 cases of bird flu in humans in the US since 2024, and one of those infections has resulted in death.

41 of those infections were the result of exposure to dairy cattle, 23 were from exposure to poultry farms or poultry meat production facilities, 1 was from another unspecified animal contact, and 3 were from unknown sources.

The major concern, here, is that these numbers suggest bird flu isn’t having a hard time moving from birds to other mammals to humans, at this point, so that aforementioned 68 cases in humans since 2024 could be a vast undercount; we might already be in the early days of a new pandemic, and we don’t realize it because we simply don’t have the data.

I think it’s worth noting, though, that the biggest bird-flu related threat, the biggest one we have data for, anyway, globally, is people who are coming into contact with infected animals, or in some cases consuming their meat or milk.

Most of the officially documented cases of bird flu in humans, since the early 2000s, have been in Southeast Asia, and there have been around 950 humans infections and just over 460 deaths caused by various types of bird flu since 2003, according to World Health Organization numbers; most of those deaths were in in the early 2000s.

So not a ton of either infections or death over that span of time, but that also means this disease has a fatality rate of something like 50% in humans; around half the people who contract it die. Which is not great. And that’s part of why the concern about this type of flu may to seem a little out of proportion to the recent infection numbers—if it mutates, evolving a version of itself that is transmissible between humans so that we see transmission similar to what we see in bird flocks, that would be very, very bad.

At the moment, though, even if something like that never manifests, poultry and dairy industries could suffer significant losses as a consequence of this animal-world pandemic, and to some degree, they already have. Especially those in the US.

This is spreading in flocks globally, to a limited degree, but US poultry, beef, and dairy industries are being absolutely clobbered by the dual impact of infections that are necessitating additional protections against infection, and the increasing number of mass-cullings—killing entire flocks, because one of their number has been infected—that have been necessary in recent years. This has put a lot of such companies out of business, and the amount of stock, of animals, that have had to be killed as a precautionary measure, to keep one or a few infections from spreading more widely, have been staggering.

Egg prices have been a semi-reliable indicator of inflation rates in the US for a long time, but the investments required and cullings committed have ballooned egg prices in recent months, hitting record highs and stoking outcries both within the industry, and amongst consumers who have seen average egg prices more than double between late-2023 and January 2025; and that’s when eggs have been reliably available on supermarket shelves, which hasn’t always been the case during this period.

On top of that, there are heightening concerns about bird flu in the egg, meat, and milk supply; US government agencies have said that cooking meat appropriately, to the recommended temperatures, kills pathogens, including bird flu, and the pasteurization of milk, which basically means rapidly heating it, briefly, to kill germs, has been shown to kill the bird flu virus. But a purity- or naturalism-based movement, often closely tied with the anti-vaccine movement, has seen a surge in popularity in the US, and many people who subscribe to that ideological have also become supporters of consuming raw milk, which isn’t pasteurized, and thus this virus, and other pathogens, can survive in it, potentially becoming a new vector of infection for humans.

So there’s a lot going on in the US government right now that’s making tracking such things difficult, and trusting the information even more so, in some cases. And that could remain the case, and could become even more muddled, based on the stated beliefs of some of the people who are being put in charge of these agencies, the studies they conduct, the things they track, and the information they divulge.

But at the base level, right now at least, it looks like bird flu has become a persistent reality within the US poultry and cattle industries, that most humans probably don’t have a lot to worry about, yet, but that this could change rapidly, if those industries aren’t able to get things back under control, as that would provide more viral reservoirs for this disease in which it can mutate, and reservoirs that are closer to large populations of humans than the wild waterfowl flocks that otherwise serve as the largest stockpile of these viral colonies.

Show Notes

https://www.nytimes.com/2025/01/23/nyregion/long-island-duck-farm-bird-flu.html?unlocked_article_code=1.rk4.oY1r.MEdP-NpwG4ow

https://doc.woah.org/dyn/portal/digidoc.xhtml?statelessToken=USHi9N-71EDqawTHVX0wYrVCjSlZ8B8vx8qFYu3Ngcw=&actionMethod=dyn%2Fportal%2Fdigidoc.xhtml%3AdownloadAttachment.openStateless

https://en.wikipedia.org/wiki/Avian_influenza

https://en.wikipedia.org/wiki/Influenza_A_virus_subtype_H5N1

https://www.cdc.gov/mmwr/volumes/74/wr/mm7404a2.htm

https://www.cdc.gov/bird-flu/situation-summary/index.html

https://www.npr.org/sections/shots-health-news/2025/02/13/nx-s1-5296672/cdc-bird-flu-study-mmwr-veterinarians

https://arstechnica.com/health/2025/02/h5n1-testing-in-cow-veterinarians-suggests-bird-flu-is-spreading-silently/

https://cdn.who.int/media/docs/default-source/wpro---documents/emergency/surveillance/avian-influenza/ai_20250131.pdf

https://www.washingtonpost.com/business/2025/02/15/bird-flu-influenza-eggs/

https://archive.ph/QDcZi

https://www.washingtonpost.com/dc-md-va/2025/02/15/return-to-office-mandate-trump-desks/

https://arstechnica.com/health/2025/02/the-country-is-less-safe-cdc-disease-detective-program-gutted/

https://arstechnica.com/health/2025/02/a-sicker-america-senate-confirms-robert-f-kennedy-jr-as-health-secretary/

https://www.npr.org/sections/shots-health-news/2025/02/06/nx-s1-5288113/cdc-website-health-data-trump

https://www.vox.com/future-perfect/399319/trump-cdc-health-data-removed-obesity-suicide

https://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Prevention

We also discuss Bruce Willis, Theia, and the Moon.

Recommended Book: Exadelic by Jon Evans

Transcript

In the 1998 action flick Armageddon, an asteroid the size of Texas is nudged into a collision course with earth by a comet, and NASA only notices it 18 days before impact.

The agency recruits a veteran oil driller, played by Bruce Willis, to fly out to the asteroid and drill a hole in it, and to detonate a nuke in that hole, which should destroy it before it hits earth, which undetonated, that rock not broken up ahead of time, would wipe out everything on the planet. It’s a fun late-90s flick loaded with some of the biggest names of the era, so I won’t ruin it for you if you haven’t seen it, but the crux of the plot is that there’s a lot going on in space, and at some point there’s a chance one of these big rocks hurling around in the void will line up just right with earth’s orbit, and that rock—because of how fast things move in space—would hit with enough force to wipe out a whole lot of living things; perhaps all living things.

This film’s concept was predicated on historical events. Not the oilmen placing a nuke on a rogue asteroid, but the idea of an asteroid hitting earth and killing off pretty much everything.

One theory as to how we got our Moon is that an object the size of Mars, called Theia, collided with Earth around 4.5 billion years ago. That collision, according to some versions of the so-called “giant impact hypothesis,” anyway, could have brought earth much of its water, as the constituent materials required for both water and carbon based life were seemingly most prevalent in the outer solar system back in those days, so this object would have slammed into early earth, created a disk of debris that combined that early earth’s materials with outer solar system materials, and that disk would have then reformed into a larger body, earth, and a smaller body, the moon.

In far more recent history, though still unthinkably ancient by the measure of a human lifespan, an asteroid thought to be somewhere between 6 and 9 miles, which is about 10 to 15 km in diameter hit off the coast of what is today Mexico, along the Yucatan Peninsula, killing about 70% of all species on earth.

This is called the Chicxulub Event, and it’s believed to be what killed the dinosaurs and all their peer species during that period, making way for, among other things, early mammals, and thus, eventually, humans.

So that was an asteroid that, on the low end, was about as wide as Los Angeles. You can see why those in charge back in the 90s tapped Bruce Willis to help them handle an asteroid the size of Texas.

Thankfully, most asteroid impacts aren’t as substantial, though they can still cause a lot of damage.

What’s important to remember is that because these things are moving so fast, even though part of their material will be burnt up in the atmosphere, and even though they might not all be Texas-sized, they generate an absolutely boggling amount of energy upon impact.

The exact amount of energy will vary based on all sorts of things, including the composition of the asteroid , the angle at which it hits, and where it hits; an oceanic impact will result in a whole lot of that energy just vaporizing water, for instance, while a land impact, which is less common because a little more than 70% of the planet is water, will result in more seismic consequences.

That said, an asteroid that’s about 100 meters in diameter, so about 328 feet, which is a lot smaller than the aforementioned 6 to 9 mile asteroid—a 100 meter, 328 foot object hitting earth can result in a force equivalent to tens of megatons of TNT, each megaton equaling a million tons, and for comparison, the atomic bombs dropped on Hiroshima and Nagasaki at the end of WWII ranged from 15,000 to 21,000 tons of TNT, mere kilotons. So a 100 meter, 328 foot asteroid hitting earth could generate somewhere between a few hundred thousand and a few million atomic bombs’ worth of energy.

None of which would be particularly devastating on a planetary scale, in the sense that the ground beneath out feet would barely register such an impact. But the thin layer of habitable surface where most or all of the world’s life exists, certainly does. And that’s the other issue here, is that on top of even a relatively small asteroid being a city-killer, wiping out everyone and everything in a large area around where it strikes, it can also cause longer-term devastation by hurling a bunch of water and soil and detritus and dust and ash into the atmosphere, acting as a cloak around the planet, messing with agriculture, messing with growth patterns and other cycles for plants and animals; the water and heat cycles completely thrown off. All of which can cause other knock-on effects, like more severe storms in unusual places, periods of famine, and even conflict over scarcer resources.

What I’d like to talk about today is a recently discovered asteroid that is being called a potential city-killer, and which is raising alarms in the planetary defense world because of its relatively high likelihood of hitting earth in 2032.

—

Asteroid 2024 YR4 is thought to be around 130-300 feet, which is about 40-90m in diameter, and it has what’s called an Earth-crossing, or Apollo-type orbit. Asteroids with this type of orbit won’t necessarily ever intersect with earth, and some are incredibly unlikely to ever do so. But some relatively few of them, that we’re aware of, anyway, have orbits that periodically get really close to earth’s, to the point that even a small tweak to their orbit, caused by gravitational perturbances or maybe being nudged by something else in space, could put them on course to cause a lot of damage.

Global astronomical bodies keep tabs on these sorts of asteroids, and they keep an especially close eye on what are called PHAs, or potentially hazardous asteroids, because they are objects that are close-ish to Earth, are in orbits that could bring them even closer, perhaps even on an intersection path with earth at some point, and they have an absolute magnitude of 22 or brighter, which means they’re big enough to be fairly visible to our instruments, and that generally means they’ll be 500 feet or around 140m in diameter or larger, which puts them in the “will cause severe damage if it hits earth” category.

That latter component of the definition is important, as while the Chelyabinsk meteor that blew up in what’s called an air burst over southwestern Russia in 2013 caused a lot of damage—generating about 400-500 kilotonnes of TNT worth of energy, about 30-times the energy released by the atomic bomb that blew up Hiroshima, resulting in a shock wave that injured nearly 1,500 people sufficiently that they had to seek medical attention, alongside all the broken glass and thousands of damaged buildings caused by that shockwave (which in turn caused those injuries)—that meteor is considered to be pretty tame compared to what we would expect from a larger impact. It was only about 60 feet, around 18m in diameter.

That’s part of why asteroid 2024 YR4 is getting so much attention; it’s more than twice, maybe as much as five times that large, and current orbital models suggest that on December 22, 2032, it has a small chance of hitting earth.

Small is a relative term here, though, both in the sense that the exact likelihood figure keeps changing, and will continue to do so as we’re able to capture more data leading up to that near-future deadline, and in the sense that even very small possibilities that a city-killer asteroid will hit earth is something that we should arguably be worried about, out of proportion to the smallness of the statistical likelihood.

If you are told there’s a 1% chance you’ll die today, that means there’s a 99% chance you won’t, but that 1% chance is still really substantial in the context of living or not living.

Similarly, a 1% chance of a large asteroid impacting earth is considered to be substantial because that means a 1% chance that a city could be completely wiped out, along with all the maybe millions of people living in it, all the plants an animals in the region, too, and we could see all those aforementioned weather effects, atmospheric issues, and so on, for a long time into the future.

At the moment, as of the day I’m recording this, there’s a 2.2% chance this asteroid will hit earth on that day, December 22, 2032. Its likely impact zone, if it were to hit, stretches roughly along the equator, from just south of Mexico, across upper south america and the middle of africa, over to eastern India. If it’s on the larger side of current estimates, it’s possible that its blast could stretch for 31 miles in all directions from where it hits, because it’s a hard object the size of a large building traveling at around 38,000 miles per hour.

So just shy of 7 years, 11 months from now, which is around 2,870 days, that thing could plow into a span of earth that contains quite a few major cities—but it could also hit a stretch of ocean, causing a separate set of problems, ranging from tsunamis to borked weather patterns and loads of sun-concealing, globe-spanning cloud cover.

Again, though, the numbers here are weird because of the things they’re describing. Nearly 8 years is a long time in many ways, but if you’re staring down the barrel of a potentially city-killing asteroid, that begins to feel like not long at all; Bruce Willis only had 18 days, but he also lived in the world of Hollywood fantasy. In real life, spinning up that kind of mission takes a lot longer, and that’s after you settle on who’s going to pay for some kind of asteroid killing or deflecting program, how it’s going to work, and so on.

Fortunately for everyone involved, back in late-2022, NASA launched a project called the Double Asteroid Redirection Test, or DART, which entailed launching a spacecraft that rendezvoused with pair of asteroids with a known trajectory. That spacecraft shot an impacter, basically a little space bullet, at one of the asteroids, which allowed the craft, along with a supplementary satellite, to collect all sorts of data about what happened to the asteroid after it was hit.

The hope was that using this method, launching a craft that shoots space bullets at asteroids, we would be able to reduce the target asteroid’s orbit by 73 seconds, which is an orbital measurement. Instead, it shortened it by 32 minutes, which is way, way more, and generally considered to be a huge success beyond what the mission planners could have hoped for.

Not all of what was learned from the DART mission will be transferable to other possible missions, because asteroids have different compositions, have different spins and speeds, and some will be easier to hit than others, and to hit in a way that would move them beneficially: we want to move them away from a path that lines up with earth’s orbit, not in such a way that a strike becomes more likely.

But this success suggests that it may be possible to basically nudge asteroids away from a collision trajectory with our planet, rather than having to blow the things up with nukes, which would be a far more involved and dangerous undertaking.

We’ve also seen the costs associated with space launches drop dramatically over the past ten years, to the point where launching this sort of mission will cost a fraction of what it would have cost back in the 90s, which is fortunate, as historically governments have shown less enthusiasm for firing space bullets than for firing bullets planet-side, so if worse comes to worse, there’s a chance even a beneficent billionaire, maybe even a millionaire, could fund such a project in a pinch.

At the moment, it’s still overwhelmingly likely that asteroid 2024 YR4 will miss earth in 2032. A 2.2% chance of an impact is worrying, and we’ll hopefully start building the infrastructure we need to deflect such objects sooner rather than later, as even if we don’t end up using said craft this time around, it seems prudent to have those sorts of missions ready to go at a moment’s notice, should we someday find ourselves in an Armageddon situation, with only a few weeks before something really, really bad happens.

That said, even with today’s quite high likelihood, that still means there’s a 97.8% chance it won’t be anything to worry about. We should know a fair bit more by April of this year, after which point this asteroid will be really far away and thus trickier to see until 2028, when it loops back in our direction.

There would still be time to do something about it then, if warranted, but more time is typically better with this sort of thing—again, because we want to be sure any deflection attempt is successfully launched, but also that it deflects it away from us, not toward us. And our best bet to deflect would be during that 2028 close flyby, so it’s likely by April, or just after that, we’ll have some kind of decision by the folks in charge about whether to launch a deflection mission in 2028 or thereabouts.

All of which would be historic, but would also probably be a good idea and a worthwhile investment, wherever this specific asteroid’s path ends up taking it. As our space neighborhood is rich with these sorts of rocks and other astronomical bodies, and because, as our in-space sensory assets have become more numerous and sophisticated, we’ve been able to see just how lucky we are, that we haven’t had more horrible impacts, so far; there’s a lot of stuff flying around out there, and the moon probably helps by taking some of those bullets for us, but even with that extra layer of natural protection, we might want to play a more active role in managing our orbital neighborhood, soon, as it would be really embarrassing to have all this knowledge and these capacities, but to not be able to use them when we need them because we failed to plan ahead.

Update, February 24, 2025: Whew.

Show Notes

https://en.wikipedia.org/wiki/List_of_Earth-crossing_asteroids

https://cneos.jpl.nasa.gov/about/neo_groups.html

https://en.wikipedia.org/wiki/Chelyabinsk_meteor

https://x.com/Astro_Jonny/status/1886742128199336362

https://en.wikipedia.org/wiki/2024_YR4

https://www.nytimes.com/2025/02/08/science/asteroid-yr4-2024-impact-odds.html

https://www.usatoday.com/story/news/nation/2025/02/08/asteroid-hitting-earth-2032-nasa/78322607007/

https://en.wikipedia.org/wiki/99942_Apophis

https://science.nasa.gov/solar-system/asteroids/2024-yr4/

https://www.cbsnews.com/news/asteroid-2024-yr4-chance-hit-earth-what-to-know/

https://blogs.nasa.gov/planetarydefense/2025/02/07/nasa-continues-to-monitor-orbit-of-near-earth-asteroid-2024-yr4/

https://www.nasa.gov/news-release/nasa-confirms-dart-mission-impact-changed-asteroids-motion-in-space/

https://en.wikipedia.org/wiki/Double_Asteroid_Redirection_Test

https://science.nasa.gov/mission/dart/

https://www.space.com/nasa-dart-mission-dimorphos-didymos-asteroid-impact-reshaping

https://www.cnn.com/2024/02/27/world/nasa-dart-dimorphos-impact-scn/index.html

https://en.wikipedia.org/wiki/AIDA_(international_space_cooperation)

https://www.planetary.org/notable-asteroid-impacts-in-earths-history

https://en.wikipedia.org/wiki/Origin_of_water_on_Earth

https://en.wikipedia.org/wiki/Theia_(planet)

https://science.nasa.gov/earth/deep-impact-and-the-mass-extinction-of-species-65-million-years-ago/

https://en.wikipedia.org/wiki/Chicxulub_crater

https://www.lpi.usra.edu/publications/books/barringer_crater_guidebook/chapter_11.pdf

https://en.wikipedia.org/wiki/Armageddon_(1998_film)

https://www.history.com/news/7-major-asteroids-strikes-in-earths-history

https://en.wikipedia.org/wiki/Impact_event

https://world-nuclear.org/information-library/safety-and-security/non-proliferation/hiroshima-nagasaki-and-subsequent-weapons-testin

https://www.astronomy.com/science/earths-greatest-hits-a-history-of-asteroid-impacts/

We also discuss EVs, Canada, and economic competition.

Recommended Book: How Sanctions Work by Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani, and Ali Vaez

Transcript

On January 20, 2025, the 45th President of the United States, Donald Trump, was inaugurated as the 47th President of the US following a hard-fought election that he ultimately won by only a little bit in terms of the popular vote—49.8% to 48.3%—but he won the electoral vote by a substantial margin: 312 to opponent Kamala Harris’ 226.

Trump is the oldest person in US history to assume the country’s presidency, at 78 years old, and he’s only the second US president to win a non-consecutive term, the first being Grover Cleveland back in 1893.

This new Trump presidency kicked off even before he officially stepped into office, his people interviewing government officials and low-level staff with what have been called loyalty tests, to assess who’s with them and who’s against them, including questions about whether they think the previous election, which Trump lost to former president Biden, was rigged against Trump—a conspiracy theory that’s popular with Trump and many of his supporters, but for which there’s no evidence.

There was also a flurry of activity in Israel and the Gaza Strip, last minute negotiations between then-president Biden’s representatives gaining additional oomph when Trump’s incoming representatives added their heft to the effort, resulting in a long-pursued ceasefire agreement that, as of the day I’m recording this at least, still holds, a few weeks after it went into effect; hostages are still being exchanged, fighting has almost entirely halted between Israeli forces and Hamas fighters in Gaza, and while everyone involved is still holding their breath, worried that the whole thing could fall apart as previous efforts toward a lasting ceasefire have, negotiations about the second phase of the three-phase ceasefire plan started yesterday, and everything seems to be going mostly according to plan, thus far.

That said, other aspects of the second Trump presidency have been less smooth and less celebrated—outside of the president’s orbit, at least.

There have been a flurry of firings and forced retirements amongst long-serving public officials and employees—many seemingly the result of those aforementioned loyalty tests. This has left gaps in many fundamental agencies, and while those conducting this purge of said agencies have claimed this is part of the plan, and that those who have left or been forced to leave are part of the alleged deep state that has it in for Trump, and who worked against him and his plans during his first presidency, and that these agencies, furthermore, have long been overstaffed, and staffed with people who aren’t good at their jobs—so these purges will ultimately save the government money, and things will be restructured to work better, for some value of “better,” anyway.

There have been outcries about this seeming gutting of the system, especially the regulatory system, from pretty much everyone else, national and international, with some analysts and Trump opponents calling this a coup in all but name; doing away with the systems that allow for accountability of those in charge, basically, and the very structures that allow democracy to happen in the country. And even short of that, we’re seeing all sorts of issues related to those empty seats, and could soon see consequences as a result of the loss of generational knowledge in these agencies about how to do things; even fairly basic things.

All of which has been accompanied by a wave of revenge firings and demotions, and threats of legal action and even the jailing of Trump opponents. In some cases this has included pulling security details from anyone who’s spoken out against Trump or his policies in the past, including those who face persistent threats of violence, usually from Trump supporters.

On the opposite side, those who have stuck by Trump, including those who were charged with crimes related to the January 6 incursion at the US Capitol Building, have been pardoned, given promotions, and at times publicly celebrated by the new administration. Some have been given cushy jobs and promotions for the well-connected amongst his supporters; Ken Howery the partner of venture capitalist and owner of government contractor Palantir, Peter Thield, and close ally of serial CEO and enthusiastic Trump supporter Elon Musk, was recently made ambassador to Denmark, for instance.

Some of these moves have caused a fair bit of chaos, including a plane colliding with a military helicopter, which may have been the result of understaffing at the FAA, alongside an executive order that froze the funding of federal programs across the country.

That executive order has been blocked by judges in some areas, and the Trump administration has since announced that they’ve rescinded the memo announcing that shutdown, but the initial impact was substantial, including the closure of regional Social Security, Medicare, and Medicaid infrastructure, and the halting of government funded research and educational programs.

Lots of people had their livelihoods threatened, lots worried they wouldn’t be able to afford necessary medical procedures or be able to pay their bills, and many people worried this might cause the country to lose ground against competitors in terms of scientific and technological development, while also leading to some pretty widespread negative health outcomes—the government has also pulled health data, so information about disease spread and even pandemics is now inaccessible, further amplifying that latter concern.

And that’s just a very abbreviated, incomplete summary of some of the actions Trump’s administration has taken in its first two weeks back in office; part of a desire on their part to hit the ground rolling and get rid of elements that might stand in their way as they fundamentally change the US system of government to better match their ambitions and priorities.

What I’d like to talk about today, is a specific focus of this new administration—one that was a focus of Trump’s previous administration, and to a certain degree Biden’s administration too: that of US protectionism, and the use of tariffs against perceived enemies; but also, in Trump’s case, at least, against long-time allies, as well.

—

On February 2 of 2025, Trump posted about tariffs on the twitter-clone he owns, Truth Social. And I’m going to quote the post in full, here, as I think it’s illustrative of what he intends to do in this regard in the coming months.

“The “Tariff Lobby,” headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA. THOSE DAYS ARE OVER! The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the “Stupid Country” any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example? THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE — AND THE RESULTS WILL BE SPECTACULAR!!!”

So there are several things happening there, probably the most fundamental of which is the claim that other countries, including the US’s allies, like Canada and Mexico, are taking advantage of the US when it comes to trade. This post followed Trump’s signature of an executive order that applied a 25% tariff on all Canadian and Mexican imports, and a 10% tariff on all Chinese imports.

A tariff is basically a tax on certain goods brought into a country from other countries.

So the US might impose a tariff on Chinese cars in order to keep those cars from flooding US markets and competing with US- and European-made models. And that’s what the US did under the first Trump, and then the Biden administration—it imposed a 100% border tax on electric vehicles from China, the theory being that these cars are underpriced because of how the Chinese economy works, because of how workers there are treated, and because the Chinese government subsidizes many of their industries, including the EV industry, so their cars are quite good and sold at low prices, but they got that way because they’re competing unfairly, according to this argument. Chinese cars sold at their sticker price on the US market, then, might kill off US car companies, which is not something the US government wants.

Thus, the price on Chinese EVs is effectively doubled on the US market, and that, on a practical level, kills that competition, giving US carmakers cover until they can up their game and compete with their foreign rivals.

The usual theory behind imposing tariffs, then, if you’re doing so for ostensible competitive reasons, at least, is that slapping an additional tax on such goods should allow local businesses to better compete against them, because that additional tax raises prices, and that means local offerings have a government-provided advantage. This can help level a perceptually imbalanced playing field, or it can rebalance things in favor of brands in your country.

In reality, though, tariffs often, though not always, become a tax on customers, not on the companies they’re meant to target.

Chinese vehicles have had trouble coming to the US for other reasons beyond price, including a change in safety standards that would be regulatorily required, and a slew of advantages provided to US companies beyond the hobbling tariffs enforced on their foreign competition. But other goods come into the US market from all over the place, and when there’s a tariff of say 10 or 25%, that tax is generally just tacked on to the sticker price on the US market, and US consumers thus pay more for something they might have otherwise bought more cheaply, sans tariffs.

This creates an effective tax within various industries in the US economy, and it generally has an inflationary effect, as a consequence; things become more expensive, so the money people earn doesn’t go as far.

So the new Trump administration announced a new 10% tariff on all Chinese goods, and 25% tariffs on goods from Canada and Mexico, though energy products like oil from Canada will only face a 10% tariff.

China has already lobbed a bunch of counter-tariffs at the US over the past few administrations, and it suggested it would add more to the tally in response to this new flat tariff, and now Canada and Mexico are rattling the same sabers, saying they won’t stand by while their neighbor, with the world’s biggest economy, elbows them out, causing possibly substantial damage to their local businesses that export goods to the US.

The Canadian government has said it will apply 25% tariffs on $155 billion of American goods, including things like orange juice and appliances, those tariffs phased in over the next three weeks. And the Mexican government has said they’ll do similar things, without giving specific details, as of yet.

That means US manufacturers, companies that make stuff that ends up being sold in Canada and Mexico, could soon see comparable tariffs on their goods sold in those markets. That, in turn, could lead to significant economic consequences for such companies, but also everyday people living in all the affected countries, because of that inflationary effect—that effective tax on all of these goods.

So even without those counter-tariffs, these new tariffs from the Trump administration against Canada, Mexico, and China to are expected to cause some real damage to the US economy, and to normal Americans. The Tax Foundation has estimated that they’ll shrink US economic output by .4% and increase taxes by $1.2 trillion between 2025 and 2034, which on a micro-scale represents an average household tax increase of about $830 in 2025, alone; an extra $830 out of pocket per household on average because of these punishments that are ostensibly aimed at other countries, to try to get them to do things Trump wants them to do.

Most of that $1.2 trillion tax increase is just from the Mexico and Canada tariffs: $958 billion of it, in fact. And during his first term in office, Trump’s tariffs imposed about $80 billion worth of new taxes on American households in a single year, from 2018 to 2019—which isn’t the same as just hiking taxes, but it amounts to the same outcome; and when compared to straight-up tax hikes, this represents one of the largest tax increases in several decades.

Biden kept most of Trump’s tariffs from his first administration in place when he stepped into office, and Biden added some of his own, too: especially on strategically vital tech components like computer chips, and next-step product categories like electric vehicles. And the net-impact of these tariffs on the US economy is generally considered to be mostly negative, in terms of practical tax hikes and its inflationary impact, but also in terms of reduced economic activity and employment.

Trade wars can sound pretty tough and often serve as nationalistic red meat when reported upon, but most economists consider them to be the legislative equivalent of shooting oneself in the foot; completely open, free trade comes with downsides, as well, including the potential for a nation like China to dump products at low prices in foreign markets, putting local manufacturers out of business, then raising their prices once they’ve soaked up all the oxygen.

But trade conflicts often result in a lot of downsides for everyday, tax-paying citizens, have long-term negative effects on businesses, and can also stoke inflation, causing secondary and tertiary negative effects that are hard to tamp down, later.

Knowing this, many analysts have speculated that Trump might be using these tariffs as a sort of shot across the bow, wanting to renegotiate all sorts of agreements with enemies and allies, alike, and using the madman theory of negotiation, trying to convince those on the other side of the eventual negotiation that he’s not in his right mind and is willing to burn it all down, wounding himself and his country in order to take out those who he feels have wronged him, if he doesn’t get what he wants.

There’s a chance this could work for him, and his many threats and implied threats have already led to a whole lot of cowtowing and cancelled lawsuits against him and his people, even from folks and entities that have previously been staunchly against Trump and everything he stands for.

There’s also a good chance that these other governments will see whatever it is he’s demanding from them as a small price to pay to get back to something approaching normal relations with the US, and normal dealings with the US’s economy.

His demands so far, though, have mostly revolved around seeming specters; he’s alleging insufficient efforts aimed at drug imports into the US, and that both Mexico and Canada are enabling all manners of money laundering and transnational crimes; allegations that both countries deny, but which probably aren’t the point to begin with. These accusations are generally being seen as a means of forcing these tariffs through without the usual process, which would take a while and present the opportunity for government systems to derail or weaken them, which happened to some of the tariffs Trump wanted to hurl at other governments during his first administration.

So those seeming rationales might be primarily justifications to force these tariffs through, and it could be that the tariffs are meant to be negotiating leverage first and foremost, going away as soon as he gets what he wants—whatever that actually is.

That said, it’s also been speculated that a manman-theory-style false threat that’s seen to be a false threat—hardcore, arguably nonsensical tariffs against allies, for instance—may not serve their purpose, because everyone knows they’re false. That may mean those on the other end of them, if they hold their ground and are willing to suffer a little, could make it out the other side without giving too much away, the US suffering more, and thus, the president eventually giving up, coming up with justification for shifting to a new strategy but mostly just trying to lower inflation levels he raised, and bring life back to a stock market that he collapsed.

Either way, it looks like there’s a pretty good chance a lot of established norms and folkways will be trampled over the next few years, possibly with good reason, if you support the ends of this administration, at least, though by some indications maybe because of a fundamental misunderstanding of how economics works at this scale, or maybe for different reasons entirely: part of that larger plan to disrupt and demolish aspects of the US system of governance, making way for replacements that are more to the current administration’s liking.

Note: after recording this episode, but before it went live, the Chinese tariffs went into effect, but the tariffs against Mexico and Canada (and those countries’ counter-tariffs) were paused. More information: https://www.nytimes.com/live/2025/02/04/us/trump-tariffs-news#here-are-the-latest-developments

Show Notes

https://www.npr.org/2024/05/06/1248065838/cheap-chinese-evs-us-buy-byd-electric-vehicles

https://ustr.gov/usmca

https://www.axios.com/2025/02/01/trump-cfpb-rohit-chopra-fired

https://www.axios.com/2025/02/02/trump-netanyahu-gaza-ceasefire-hostage-deal

https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

https://taxfoundation.org/blog/trump-tariffs-impact-economy/

https://www.axios.com/2025/01/03/biden-blocks-us-steel-nippon-japan

https://truthsocial.com/@realDonaldTrump/posts/113934450227067577

https://www.washingtonpost.com/business/2025/01/02/biden-blocks-nippon-us-steel-deal/

https://www.axios.com/2025/01/03/nippon-steel-us-steel-sue-biden

https://restofworld.org/2024/china-tech-tariffs-which-countries-will-impose/

https://www.nytimes.com/live/2025/02/02/us/trump-tariffs

https://www.nytimes.com/2025/02/02/business/trump-tariffs-china.html

https://apnews.com/article/trump-tariffs-trade-china-mexico-canada-inflation-753a09d56cd318f2eb1d2efe3c43b7d4

https://www.reuters.com/business/trump-stretches-trade-law-boundaries-with-canada-mexico-china-tariffs-2025-02-02/

https://www.theverge.com/news/600334/trump-us-tariffs-imported-semiconductors-chips

https://www.uschamber.com/international/u-s-chamber-tariffs-are-not-the-answer

https://www.bbc.com/news/articles/c627nx42xelo

https://www.axios.com/2025/02/01/trump-canada-mexico-tariffs

https://www.bloomberg.com/news/articles/2025-02-02/mexico-pledges-retaliatory-tariffs-against-us-while-calling-for-cooperation?embedded-checkout=true

https://www.cbsnews.com/news/what-are-tariffs-trump-canada-mexico-what-to-know/

https://www.wsj.com/opinion/donald-trump-tariffs-25-percent-mexico-canada-trade-economy-84476fb2

https://english.elpais.com/international/2025-02-02/from-cartels-to-terrorists-trump-imposes-a-new-paradigm-on-mexico-in-the-war-on-drugs.html

https://www.theguardian.com/us-news/live/2025/feb/02/canada-mexico-china-donald-trump-trade-tariffs-us-politics-live

https://budgetlab.yale.edu/research/economic-and-fiscal-effects-trump-administrations-proposed-tarrifs

https://www.nytimes.com/2025/01/31/us/trump-freeze-blocked.html

https://en.wikipedia.org/wiki/2024_United_States_presidential_election

https://apnews.com/article/israel-palestinians-hamas-war-news-ceasefire-hostages-02-01-2025-bb560151db1437d0b35ac1d568457a46

https://www.axios.com/2025/02/01/trump-moves-missed-plane-crash-dei

https://apnews.com/article/trump-tariffs-dei-federal-workers-plane-crash-733303f2c808834f4cc4b30dfaf308a7

https://apnews.com/article/trump-federal-grants-pause-freeze-e5f512ae6f1212f621d5fa9bbec95e08

We also discuss o1, AGI, and efficiency.

Recommended Book: The Shortest History of Economics by Andrew Leigh

Transcript

One of the bigger news items these past few weeks, in terms of the numbers involved, at least, was an announcement by US tech company OpenAI that it will be starting a new company called the Stargate Project, which will boast a total $500 billion-worth of investment, the first $100 billion of which will be deployed immediately.

All that money will be plowed into artificial intelligence infrastructure, especially large-scale computing clusters of the kind required to operate AI systems like ChatGPT, and the funds are coming from OpenAI itself, alongside SoftBank, Oracle, and MGX, with Arm, Microsoft, and NVIDIA also involved as technology partners.

It’s a big, beefy enterprise, in other words, and the fact that this has been in the works since 2022, it’s official announcement seemingly held back so that newly returned US President Trump could announce it as part of his administration’s focus on American infrastructure and AI dominance, didn’t dim the glow of the now-formal announcement of what looks to be a truly audacious bet on this collection of technologies, doubts about the players involved having the money they’ve promised ready, notwithstanding.

That said, this is far from the only big, billions and tens of billions-scale wager in this space right now.

Last year, Microsoft announced a $30 billion infrastructure fund, in collaboration with BlackRock, and earlier in January of 2025, Google’s CEO said that his company would spend about $80 billion on the same, separate from their commitment to Stargate.

Meta’s CEO Mark Zuckerberg recently divulged that the company would spend somewhere between $60-65 billion on capital expenditures, mostly on AI, in 2025—that’s up about 70% from 2024 spending.

And last December, xAI CEO Elon Musk announced that his company had just raised a fresh $6 billion to build-out more compute infrastructure; and his role at the head of that company is assumed to be part of why he trash-talked the aforementioned Stargate effort, though there’s also a long-simmering animus between him and OpenAI CEO Sam Altman, and the fact that everyone seems to be trying to get in good with Trump—which is probably part of why many of these announcements are happening right now: Trump is in the position to king-make or cripple their respective efforts, so whomever can get in good with him, or best with him, might have an advantage in what’s become a very expensive knife-fight in this most rapidly burgeoning of tech investment loci.

There’s a reason there’s so much money flowing to this space, announcements aside, right now, too: the chatbots that’ve emerged from the GPT, LLM era of AI systems are impressive and useful for many things, and AI powered bots could even replace other sorts of user interfaces, like search engines and apps, with time.

But there are also some more out-there efforts that are beginning to bear fruit.

AI is helping Google’s DeepMind team discover new materials at an astonishing rate—including both the discovery and the testing of their properties, stage.

AI systems are also being used to accelerate drug discovery and trial design, and a company (backed by OpenAI’s Altman) is trying to extend human life by a decade using exactly this process.

Meta has a new tool that enables real-time speech and text translation between up to (depending on the type of translation being done) 101 different languages, and we’re even seeing AI systems meant to detect and track small, otherwise overlooked infrastructure issues, like potholes, at a local level.

And to be clear, this is far from a US government and US-based tech company effort: government agencies, globally, are scrambling to figure out how to regulate AI in such a way that harms are limited but research, investment, and innovation isn’t hampered, and entities all over the place are plowing vast wealth into these projects and their related infrastructure; India’s Reliance Group recently announced it will build what could become the world’s biggest data center, planned to go into operation within two years—a project with an estimated price tag of somewhere between $20-30 billion. And that, all by itself, would more than triple the country’s data center footprint.

So this scramble is big but also global, and it’s partly motivated by the gold rush-like desire to be first to something like artificial general intelligence, or AGI, which would theoretically be capable of doing basically anything a human can do, and possibly better.

That could, depending on the cost of developing and running such a system, put a lot of humans out of work, scrambling the world and its economy it all sorts of ways, and causing untold disruptions and maybe even havoc. That chaos could be very good for business, however, for whomever is able to sell this new commodity of labor to everyone else, replacing most or all of their employees with digital versions of the same—each one cheaper than a comparable human would be to perform the same work.

What I’d like to talk about today, though, is a challenge to the currently dominant theory of operation in this industry, and why a new family of AI models is sending many of the tech world’s biggest players into a panic.

—

A lot of the news coming out of the AI world, at the moment, is focused on what are called agents, or agentic AI.

An AI agent is a system that can operate with agency: it can do things on its own. So you could have one of these systems, something you might engage with like a chatbot, but one capable of taking complex instructions, and you could tell it to find the best e-bike for your use case, and it would then take your info, your context, your needs into consideration, do a bunch of research, and maybe even buy and set up the delivery of the bike for you, with limited check-ins required on your part.

A truly agentic AI would operate as sort of a personal assistant, capable of doing anything a human personal assistant would be able to do—sans the physical body, of course—though that could come later.

This is generally seen as a step on the path toward AGI, and perhaps even AI superintelligence, which would be AGI that’s massively smarter and better at everything than any human, all of which also moves these things from the realm of “tool to be wielded by humans”, toward something more like a robot that can do all the things it’s supposed to do, without a human present; a different category of product and service.

This type of AI, with this level of capability, is generally considered to be really expensive to make—to train, in the industry parlance—and to use, because of how much computing power is required to run the code required to leverage these sorts of smarts.

In 2020, ChatGPT-3 cost somewhere between $2-4 million to train. Its successor, ChatGPT-4, which was deployed in 2023 cost more like $75-100 million.

That’s a lot more money. The model is a lot more powerful, granted, but the scaling laws that have seemed to be at play in this space, the increase in cost between generations of AI, have suggested that getting another capability leap comparable to what we saw between ChatGPT-3 and 4 would cost something like a billion dollars, and even that might give us a jump, but not the same staggering growth in performance that we saw between those generations.

The are arguments to be made that the size and type of dataset matter, here, and that the culling of said datasets, and how the models are tuned to use the data and respond to things are also vital, perhaps as much or more so than the initial training.

Companies like OpenAI have also figured out all sorts of ways to wring more performance out of less training and compute, including things like allowing the AI to reference other sources—basically doing a web search or checking wikipedia and similar references, in addition to knowledge that already exists in its training dataset—or allowing them to “think” longer, giving them more time to work through a problem or task, which tends to lead to better results, even with weaker—in terms of training and compute power—systems.

Ultimately, though, most of these companies seem to be assuming that more money churned into more infrastructure and compute capability will be necessary, to make these things better at doing science and solving global problems, at maybe running military campaigns-scale issues, but also at replacing humans as employees—creating more agentic, ultimately, they hope, AGI-level systems.

So that’s a big part of why there’s so much money sloshing around in the AI world right now: all these companies want to build the biggest, baddest model, they would love to develop AGI and put everyone out of work, and they assume that more money will equal more potency, so if they don’t start building now, they risk being left behind in a couple of years when all their competitor’s snazzy new assets are available and powering their AI systems—which could allow their competitors to get there first, and there’s a general assumption that it’s important to be first or close to first on this, as truly AGI-level, or beyond AI could theoretically allow them to refine their own systems faster, which could secure them a permanent lead over their opposition, moving forward.

Though the US is generally considered to be in the prime position in that particular race, so far, China has been investing a lot in this space, as well, and many of their investments have been similar to those of their Western competitors; dropping lots of money on the issue, building big infrastructure, and so on.

They’ve been hindered quite a lot by Western, especially US, sanctions, though, and that’s made it more difficult, not impossible, but more time-consuming and expensive for them, to get the highest-end chips optimized for AI systems, like those made by NVIDIA.

This has forced them to take some different approaches to their international peers, and while many of those approaches still involve huge price tags and build-outs, some of them have instead focused on a less-celebrated aspect of the industry: that of smaller models that are a lot more efficient, achieving gains that are out of proportion to their training and operating costs.

Case in point are the new DeepSeek R1 models, which are a collection of AI models that were cheap to make, released free for public use and editing, and which seem to beat OpenAI’s o1 reasoning models—which are very much not free, and which were a lot more expensive to develop—on some of the most widely used performance benchmarks.

These models apparently cost something like 3-5% what OpenAI spent on its o1 model, a mere $5.6 million, and again, they’re free to use, but also open source, so anyone who wants to build their own business or new AI atop them can do so; and their API costs are more than 90% lower than o1’s, so it’s also a lot cheaper to use these models for development purposes than OpenAI’s options.

This isn’t the first time a Chinese company has taken a look at what folks are doing in the west and then massively undercut their efforts by amplifying the efficiency many fold. Also, again, there’s a constraint on Chinese companies’ ability to get the latest and greatest AI hardware, which incentivizes this path of development, and they also have a super competitive tech industry in China, which tends to force a lot of their sub-industries, like batteries and solar panels, to iterate rapidly and push costs as low as functionally possible.

This family of models was made as kind of a side project by someone who’s been competing within that somewhat brutal evolutionary context, and the rest of the world, by comparison, just hasn’t had the same forcing functions influencing its development path—so this level of efficiency with this level of performance has been, up to this point, unheard of. And as a result, these DeepSeek models have sent the US and other western tech industries into a tizzy.

And it makes sense that these people would be panicking: they have spent, and are intending to continuing spending heavily on next-gen AI infrastructure, and this type of model, trained for basically nothing, demonstrating this level of performance? It calls all those investments into question, even to the point that some commentators—without evidence, so there’s no reason to believe this is the case—have wondered out loud if this might be some kind of psyop by China to kill the US’s AI industry, basically making it look like a bad investment, if these kinds of results can be achieved so inexpensively elsewhere.

Again, that’s almost certainly not what’s happening here, but these models have reportedly landed like a live hand grenade in the offices of the US AI industry, with folks in big tech companies frantically trying to figure out how DeepSeek does what it does, and then surreptitiously copying whatever they can to try to get ahead of this, build their own version of the same and maybe work those findings into their planned investments.

Meta in particular has apparently been on edge about this, as they’ve tried to own the free, open AI model space with their Llama family of AI models; which have been generally well received, but apparently DeepSeek’s earlier model, v3, was already messing with their heads, surpassing what they were able to do with llama, and this new family, the R1 family, has them worried they won’t be able to hold onto that position, and might not even be able to compete, despite their tens of billions of dollars worth of investment.

What’s more, something this effective and efficient can be run by a lot of companies that would otherwise have had to rely on entities like OpenAI and Meta, which have the computing infrastructure—all those big buildings they’re constructing at a frantic rate and high cost—to handle the larger models.

Non-AI companies that want to use these systems, though, could theoretically just buy their own, smaller setup and run their own AI, in-house, which would alleviate some security concerns related having all that stuff processed off-site, but it would also almost certainly be cheaper over the long-term, compared to just paying someone like Google or OpenAI for their services, forever.

All of this has resulted in a fair bit of volatility in the US stock market, which has been heavily reliant on AI-oriented tech stocks for growth over the past year, with NVIDIA in particular taking a hit, due to the possibility that heavyweight chips might not be vital to creating high-end AI systems.

There are downsides to DeepSeek, of course, perhaps most obviously that this model, having come from China, is laden with censorship about exactly the sorts of things you would expect: Tianammen Square, China’s government and it’s many well-documented abuses, and so on. There could be more issues, too, that the folks who look into such things will discover after spending more time with this family of AI, though thus far, the response has generally been very positive, even with those caveats.

Either way, this challenges the assumption that the US or any other country can stifle another nation’s, or group’s, AI ambitions with hardware sanctions.

It also suggests that, if this general approach could be replicated, we may see a lot more models that are cheap and easy to run, but which are also effective enough for a lot of those next-step, higher-end utilities. And that would allow AI to spread a lot more quickly, more people being able to wield more powerful tools, while also potentially doing away with many of the moats—the defendable, unique value propositions—these larger tech companies assumed they would have by building and controlling the pricy infrastructure they assumed would be necessary to spin-up AI systems of that calibre.

Show Notes

https://www.microsoft.com/en-us/research/story/ai-meets-materials-discovery/

https://semianalysis.com/2025/01/23/openai-stargate-joint-venture-demystified/

https://openai.com/index/announcing-the-stargate-project/

https://techcrunch.com/2025/01/24/stargate-will-use-solar-and-batteries-to-power-100b-ai-venture/

https://www.ft.com/content/4541c07b-f5d8-40bd-b83c-12c0fd662bd9

https://www.politico.com/news/2025/01/23/trump-staff-musk-conflict-00200311

https://www.nytimes.com/2024/12/24/technology/elon-musk-xai-funding.html

https://www.cnbc.com/2025/01/22/trump-had-phone-call-with-openais-sam-altman-last-week.html

https://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/

https://apnews.com/article/trump-ai-artificial-intelligence-executive-order-eef1e5b9bec861eaf9b36217d547929c

https://restofworld.org/2025/global-ai-regulation-big-tech/

https://www.wsj.com/tech/ai/meta-spending-ai-facebook-data-centers-9452a88f

https://www.reuters.com/technology/meta-invest-up-65-bln-capital-expenditure-this-year-2025-01-24/

https://www.bloomberg.com/news/articles/2025-01-23/billionaire-mukesh-ambani-plans-world-s-biggest-data-center-in-india-s-gujarat?embedded-checkout=true

https://www.bloomberg.com/news/articles/2025-01-24/apple-enlists-company-veteran-kim-vorrath-to-help-fix-ai-and-siri?embedded-checkout=true

https://www.ft.com/content/25a473ea-9f87-474a-8729-bc5287df853a

https://spectrum.ieee.org/machine-translation

https://techcrunch.com/2025/01/24/elevenlabs-has-raised-a-new-round-at-3b-valuation-led-by-iconiq-growth-sources-say/

https://www.bloomberg.com/news/articles/2025-01-24/vc-lightspeed-bets-big-on-ai-megadeals-backing-anthropic-xai-mistral

https://www.ft.com/content/7dcd4095-717e-49f8-8d12-6c8673eb73d7

https://www.nytimes.com/2025/01/23/technology/ai-test-humanitys-last-exam.html

https://every.to/chain-of-thought/we-tried-openai-s-new-agent-here-s-what-we-found

https://www.platformer.news/openai-operator-ai-agent-hands-on/

https://techcrunch.com/2025/01/23/openai-launches-operator-an-ai-agent-that-performs-tasks-autonomously/

https://www.axios.com/2025/01/19/ai-superagent-openai-meta

https://blog.google/technology/google-deepmind/google-gemini-ai-update-december-2024/

https://arstechnica.com/ai/2025/01/china-is-catching-up-with-americas-best-reasoning-ai-models/

https://www.macrumors.com/2025/01/27/deepseek-ai-app-top-app-store-ios/

https://www.statista.com/chart/33114/estimated-cost-of-training-selected-ai-models/

https://sherwood.news/tech/a-free-powerful-chinese-ai-model-just-dropped-but-dont-ask-it-about/

https://www.axios.com/2025/01/17/deepseek-china-ai-model

https://www.nytimes.com/2025/01/23/technology/deepseek-china-ai-chips.html

https://archive.ph/WMUbb

https://x.com/pmarca/status/1882719769851474108

https://venturebeat.com/ai/tech-leaders-respond-to-the-rapid-rise-of-deepseek/

https://archive.ph/vDsQ4

https://archive.ph/CrbGO

https://x.com/nealkhosla/status/1882859736737194183

https://x.com/samfbiddle/status/1882882950368473161

https://x.com/samfbiddle/status/1882884223008493887

We also discuss Hamas, Qatar, and the new US administration.

Recommended Book: Witch King by Martha Wells

Transcript

On October 7, 2023, the militant group Hamas launched a sneak attack from the Israeli occupied Gaza Strip against Israel itself, killing about 1,200 people and taking just over 250 hostages.

Israeli forces were caught stunningly unaware by this, but shortly thereafter, Israel launched a counterattack into Gaza, sweeping through the Strip, with both on the ground incursions of tanks and troops, and with seemingly endless air raids and missile strikes, ostensibly to clear out Hamas fighters and find their leadership, but the net impact of this, on top of Hamas’ organization being substantially degraded, was the reductiond entire cities to rubble and the displacement almost the entirety of the Gazan population—something like 2.3 million people, most of whom have been living on the streets or in ramshackle encampments, without reliable sources of food, water, or shelter, as aid shipments from elsewhere have been held back by Israeli forces, for more than a year.

Gaza’s Health Ministry estimates that more than 46,000 Palestinians and other Gazan residents have been killed as a result of the fighting over the past 15 months, with more than double that, nearly 110,000 wounded. The Israeli military says they’ve killed more than 17,000 militants over the course of their invasion, though both sources are biased and are operating from incomplete numbers, so these figures are all considered to be suspect at this point, if probably in the right general ballpark, in terms of orders of magnitude.

The hostages taken by Hamas during that initial attack into Israel have remained a tricky issue throughout this conflict, as Hamas leaders have continuously used them as bargaining chips and at times, human shields, and the Israeli government has regularly reassured the hostages’ families that they’re focused on returning those captives home safely—but they’ve done this while also, in many cases, seemingly doing the opposite; focusing on taking out Hamas and its leadership, first and foremost, to the point that Israeli forces have seemingly killed many of the hostages they’re attempting to rescue, because they went in after a Hamas leader or bombed a neighborhood into oblivion without first checking to see who was in that neighborhood.

This stance has in some cases been incredibly inconvenient for the Israeli government, as the families of the hostages have in some cases been at the center of, or even sparked, some of the large protests against the Israeli government and its actions that have become a fixture of Israeli life since this war started.

Prime Minister Netanyahu and his military leaders have been a particular focus of this internal ire, but the Israeli government in general has been targeted by seemingly endless public acts, meant to show civilian discontent with how they’re doing things.

Since that day when Hamas attacked Israel in October of 2023, this war has expanded to encompass not just Israel and Hamas, but also other militant groups, like the Houthis operating out of Yemen, and Hezbollah, operating out of Southern Lebanon, just on the other side of Israel’s northern border.

All three groups are supported, in terms of training, weapons, and money, by Iran’s government, and they’ve helped Iran sustain a collection of proxy conflicts throughout the region for years, without Iran ever having to get directly involved.

These relationships and that sponsoring of these groups has allowed Iran to exert its influence throughout the Middle East and beyond, including into the Red Sea, which typically serves as a vital international shipping channel, but because of regular attacks against shipping vessels by the Houthis from Yemen, the whole of the global supply chain has been disrupted, all sorts of things becoming more expensive and goosing already high inflation levels, because of the longer routes and thus, more expensive shipping costs that have become necessary in an era in which this channel is dangerous to traverse.

This dynamic, of Iran playing puppetmaster with its proxies throughout the Middle East, has shifted a fair bit over the course of this war, as these attacks, on Israel and other entities in the region, have attracted counterattacks by Israel and their allies, including the US, and that in turn has left Hezbollah all but destroyed—a series of brazen decapitation attacks by Israeli forces basically wiping out the whole of the group’s upper ranks and resource stockpiles within a matter of days. They’ve also destroyed much of Hamas’ local infrastructure and leadership, and the Houthis, while attracting a lot more attention and prestige for their efforts in the Red Sea, have also seen their capacity to operating more broadly degraded by the presence of a swelling, and increasingly aggressive, anti-Houthi fleet.

All of which has significantly diminished Iran’s reach, and its capacity to move pieces on the board. Attacks directly against Iran by Israel, too—which were met with remarkably ineffective counterattacks—have likewise destroyed infrastructure, but perhaps more importantly substantially reduced Iran’s credibility as a true force in the region; they’re still a huge military power, in other words, but unless something changes, like their military managing to develop a nuclear weapon, they’re no longer considered force they were at the beginning of all this; their weakness at range, in particular, makes them look downright ineffectual compared to pretty much all the other military powers in the region, right now.

This has also, arguably, made them a less appealing ally for Russia. And though the two nations recently announced a new defense pact, this pact was seemingly signed because both nations recently lost a valuable supplicant state in Syria, which saw its Assad government toppled not long ago—the new government not clearly aligned with either of them, and perhaps even oppositional to them.

This pact was made from a place of relative weakness, then, not strength, and its dictates are pretty limited: no mutual defense clause, no formal alliance. It’s basically meant to indicate that the two nations won’t actively help anyone else attack the other from their territory, which is about as noncommittal as these sorts of agreements get.

To Russia, still, then, Iran is more or less a provider of drones and rockets, not a peer or even true regional power. And that’s partly the result of the weakness Iran has shown in the face of repeated Israeli aggression toward them, during this conflict.

This conflict has also shaped global politics, as people on the political left, in particular, have tended to rally for innocent Gazan civilians, while those on the right have tended to support Israel’s (also conservative) government, and it’s decision to conduct the war as it has.

This may have nudged the recent US presidential election in Trump’s favor, and other campaigns have likewise been at least minutely affected by this issue, and its polarizing, at times fracturing impact on left-leaning parties in particular.

What I’d like to talk about today, though, is what looks to be the beginning of the end of this conflict, and what a newly negotiated ceasefire between the involved parties entails.

—

The events I breezed through in the intro paint a far from complete picture of what’s happened during this war; it’s been big, expansive, expensive, and brutal, and has fundamentally changed the geopolitical setup of the region, and in some ways the world, as well.

Just as potentially wide-reaching is the ceasefire that’s been negotiated and, as of the day I’m recording this at least, one day after it officially came into effect, is so far still active, and which seems primed to nudge things away from active conflict and toward some new state of affairs in the region.

So let’s jump in and talk about the details of this ceasefire.

Governments have been shipping diplomats to the region since this thing broke out, all wanting to polish their reputation as peacemakers and reliable intermediaries, and all trying to formalize something like this, some kind of lasting peace, pretty much from the day Hamas launched that sneak attack, but even more so after Israel began pummeling Gaza to dust.

And Qatar has been a focal point for these peace efforts from the get-go, enjoyinf some initial success in helping the two groups establish a four-day ceasefire in late-November 2023, that period later extended by several days, so that in total 100 Israeli hostages were freed in exchange for the freedom of 240 Palestinian women and children who were being held in Israeli jails.

Qatar has been building its reputation for these sorts of negotiations, and Egypt joined in, partly for the same reputational reasons, but also because Israel’s invasion has come dangerously close to their shared border, and there have been concerns that displaced Palestinians might be forced across that border by Israel’s attack, creating a humanitarian crisis within Egypt that would have been expensive and disruptive in many ways.

The worst case version of that concern didn’t materialize, but Egypt maintained its involvement in the peacemaking process, working with representatives from the US and Qatar, the former a staunch ally of Israel, the latter on good terms with Hamas, even housing some of their leaders, to keep negotiators from Hamas and Israel talking.

Throughout the war, these and other involved parties have generally supported a three-phase ceasefire proposal, which would begin with a ceasing of hostilities, followed by the release of all Israeli hostages being held in Gaza and a bunch of Palestinians being held in Israeli prison, and following that, if everything goes according to plan, the establishment of a permanent ceasefire, which would see Israel pulling its forces from Gaza and the beginning of a reconstruction process in the Strip—which again, has had many of its most populous cities leveled, completely unlivable, at this point, while almost all of its population has been living on the streets and in camps, without things like power, water, or electricity.

This plan sounds pretty straightforward, on its face, but the specifics are fuzzy, and the negotiation has thus been fraught, and any implementation is inherently riddled with diplomatic landmines and other perils. And this is part of why previous versions of this ceasefire agreement have been hamstrung. Back in mid-2024, Netanyahu halted progress on what seemed to be an acceptable to everyone version of the plan, saying he wouldn’t support any resolution that ended the war, only one that implemented a partial ceasefire, and that seemed to be a political move on his part. But throughout the negotiation process, there have been a lot of good faith concerns and disagreements, as well, so this has been a slow, frustrating grind for those involved.

Pressure from those aforementioned involved parties, though, and almost certainly Israel’s successes on the ground against all those Iranian proxies, and Iran, itself, seems to have led to the right combination of circumstances that even Netanyahu has indicated it’s probably a good time for a ceasefire.

There have been murmurs, unconfirmed at this point, that freshly reelected US President Trump pressured Netanyahu to move in this direction, and that this new pressure from the incoming administration, which has long been on friendly terms with Netanyahu’s people, combined with those other, existing pressures, might have been what sealed the deal; and is probably why all this has coincided with Trump’s recent inauguration.

Whatever the specifics of the genesis of this agreement, though, there was finally enough appetite for a three-stage ceasefire to come together, and the resulting plan was approved by Israel’s security cabinet, and then the government’s full cabinet, on January 17, 2025. The other parties were already on board, so this was enough to move the thing forward.

This plan, which was officially implemented a few days before this episode goes live, on January 19, 2025, will start with a 42-day pause in fighting that will see Israeli forces leave Gaza, pulling back to a buffer zone along the periphery of the Strip. This will allow civilians to return to what’s left of their homes, while also enabling the import and distribution of a whole lot more aid deliveries, which have been hampered by those Israeli forces up till this point.

There will be a complete ceasefire from this point forward, if everything goes according to plan, and a bunch of hostages will be released—33 Israeli civilians and female soldiers freed by Hamas, and some larger number of Palestinian prisoners held by Israel released, in exchange, a portion of that total number released each week at regular intervals.

Shortly after the first stage’s implementation, the Rafah crossing that divides Gaza and Egypt will also be reopened to allow sick and wounded people to leave the Strip, though it’s not clear at the moment if control of that crossing, which is currently held by Israeli forces, will be returned to the Palestinians soon, at a later stage, or at all.

After that six week period, the second stage will focus on the exchange of the remaining Israeli hostages, alive and dead, and the release of a proportionate number of Palestinians prisoners; though prisoners who have been convicted of murder will be released to prisoners in other countries, rather than back into Gaza or the West Bank.

Israel would also completely withdraw from Gaza, at this point, though Israel’s cabinet hasn’t yet voted on this specific condition, and far-right members of that cabinet have said they’re not in favor of this, so it could end up being a sticking point.

This second stage currently has an unknown duration, which is another complexity that could ultimately trip things up, as an inability to agree upon the end of a stage could keep the next one from ever happening, without technically derailing the agreement as a whole.

The third stage, if and when we get there, could last a long time, even years, and it would include an exchange of the dead bodies of hostages and Hamas members that haven’t yet been returned, while also kicking off a three- to five-year reconstruction period that would see the Strip being rebuilt under international supervision.

This is also when some kind of Palestinian governance will need to be reestablished in the Strip. Though while many international players want the Palestinian Authority, which governs the Israeli-occupied West Bank, to retake control of Gaza—they governed the area previously, but were booted by Hamas back in 2007—Israel isn’t in favor of PA leadership being reintroduced to the region, so that’s another point of contention that could derail things before the whole of the peace process can play out.

The thing to watch, right now, is whether these first six weeks go as planned, with the first several dozen hostages successfully returned to their families by Hamas, and a far larger number of Palestinian prisoners released by Israel, in exchange.

There should be a full-on ceasefire for the duration of this process, and that ceasefire should become permanent along the way, with Gazan civilians able to move freely and return to their homes, throughout. About 600 truckloads of aid scheduled is to arrive each day, too, which is up from around 18 truckloads, pre-agreement. That should help stabilize the humanitarian catastrophe that’s been simmering on the ground for more than a year—though to be clear, this is a stabilization to still dire circumstances, not a return to anything close to normal for those afflicted.

From there, it’s a question as to whether Israel sticks to its agreement to limit its forces to the buffer zone, and whether the specifics of that pull-back, the negotiations for which have been scheduled for February 4, end up working for everyone, including those aforementioned hawks in Netanyahu’s cabinet.

We may also see Hamas unable to provide as many living hostages as claimed, which already happened once during that previous exchange back in November of 2023, which could disrupt this new exchange process, and possibly serve as justification for one side or the other to backtrack on promises made and conditions to which they’ve committed.

So it’s possible that things will go smoothly, that no one will be perfectly happy, but everyone will be generally satisfied—which is what tends to happen with a well negotiated ceasefire of this kind.

Israel seems to be in a good spot to lock in their winnings, basically, having hobbled their primary enemies in the region and apparently gotten away with committing some seemingly serious atrocities that have been condemned by all sorts of international bodies—those atrocities maybe swept under the rug as one more incentive to basically get them to stop, which is a benefit other victors in similar conflicts have historically enjoyed.

Hamas also seems to still exist, if in a far diminished form, and as soon as the ceasefire was implemented, they started fanning their people across Gaza, establishing a sort of police force—the message apparently being “we’re still here and in charge,” and they might be hoping this de facto governance will sway things in their favor, put control and the ability to strike Israel in the future back in their hands, no matter who the international community eventually decides should take official control of the region.

At the same time, it’s also possible that one side or the other might use this ceasefire as cover, doing what they need to do to keep it afloat and technically still in motion, while basically preparing for their next antagonistic effort against their enemies.

Other facets of this process, like what’s happening in the north, where the Lebanese government has insisted Israeli forces leave the southern portion of their country by January 26, could complicate things; Hezbollah has agreed, as part of this ceasefire plan, to pull its forces back to a point about 20 miles from the country’s border with Israel, but there are still weapons caches belonging to either Hezbollah or some other militant organization in that part of Lebanon, according to UN peacekeepers.

It’s possible that some small violation on some component of this larger plan, purposeful or not, could give one of the involved justification for perpetuating some aspect of this conflict; and that’s true now, at the very beginning, but it’s also true later on, even after a permanent ceasefire has technically been signed, and full-on war has officially stopped.

Show Notes

https://www.timesofisrael.com/these-are-the-33-hostages-set-to-be-returned-in-phase-one-of-the-gaza-ceasefire/

https://apnews.com/article/gaza-ceasefire-negotiations-mediators-3a646fe5606d87db767e8a434f7a5f74

https://www.nytimes.com/2025/01/16/world/middleeast/israel-gaza-strikes-ceasefire.html

https://www.aljazeera.com/news/2025/1/15/what-do-we-know-about-the-israel-gaza-ceasefire-deal

https://www.theguardian.com/world/2025/jan/19/how-will-the-gaza-ceasefire-and-hostage-deal-work

https://responsiblestatecraft.org/gaza-ceasefire-2670859688/

https://www.propublica.org/article/biden-blinken-state-department-israel-gaza-human-rights-horrors

https://jacobin.com/2025/01/ceasefire-deal-gaza-israel-hamas/

https://www.nytimes.com/2025/01/18/world/middleeast/israel-gaza-ceasefire.html

https://www.wsj.com/world/middle-east/shattered-homes-uncertain-fates-israels-hostage-families-anxiously-await-reunion-865cc923

https://www.nytimes.com/2025/01/17/world/middleeast/gaza-returning-home-after-war.html

https://www.nytimes.com/live/2025/01/19/world/israel-hamas-gaza-ceasefire#heres-what-to-know-about-the-cease-fire

https://www.aljazeera.com/news/2025/1/18/israel-must-withdraw-from-lebanon-by-january-26-deadline-president-aoun?traffic_source=rss

https://apnews.com/article/israel-cia-fbi-telegram-eb0215277fc5f521f9ee2efa4da70adc

https://www.bbc.com/news/articles/cy5klgv5zv0o

https://en.wikipedia.org/wiki/Israel%E2%80%93Hamas_war

https://apnews.com/article/israel-palestinians-hamas-war-news-01-09-2025-ffae654d619e8e848e2ceda8576e8fe5

https://www.aljazeera.com/news/2025/1/18/iran-russia-analysis-syria-setback

We also discuss developed property values, arsons, and the cost of disasters.

Recommended Book: The Data Detective by Tim Harford

Transcript

Natural disasters, whether we’re talking about storms or fires or earthquakes, or some combination of those and other often related issues, like flooding, can be incredibly expensive.

This has always been true, both in terms of lives and material damage caused, but also in terms of raw currency—the value of stuff that’s destroyed and thus has to be rebuilt, replaced, or in some rare cases partitioned off so that similar things don’t happen in the future, or because the space is just so irreparably demolished that it’s not cost effective to do anything with the land, moving forward.

The four most expensive natural disasters that we’ve been able to tally—so this doesn’t include historical disasters that are far enough back that we can’t really quantify the damage, due to an inability to directly compare, or insufficient data upon which to base such quantification—the top four that we can line up against other such disasters and compare the numbers for are all earthquakes.

The earthquake in Japan in 2011 that, in addition to causing a lot of damage unto itself, also caused the disaster at the Fukushima nuclear plant tops the list, with a cost at the time of around $360 billion, which would be nearly $490 billion in today’s dollars.

The second most expensive natural disaster is also an earthquake in Japan, this one hitting a region called Hanshin in 1995, causing about $200 billion worth of damage in mid-90s money, which would be about $400 billion, today, and the third was an earthquake not too long ago, the 2023 quake that struck along Turkey and Syria’s border, causing something like $160 billion in damage.

The fourth costliest natural disaster hit China in 2008, causing around $130 billion in damage, which is about $184 billion in today’s money.

These disasters also caused a lot of casualties and deaths; about 20,000 people died in that most-costly, nuclear-incident-triggering quake, while nearly 88,000 were killed in that fourth-most-costly, Chinese one.

The Great Hanshin quake, in comparison, lead to somewhere around 6,000 deaths: which is still just a staggering human loss, but it’s an order of magnitude less than in those other comparable disasters; which hints at the trend we see with these sorts of events—the scale of wounded and killed doesn’t necessarily correlate with the scale of costs associated with damaged and destroyed infrastructure and other assets.

The costliest natural disaster in US history, as of the first week of 2025, at least, was Hurricane Katrina back in 2005, which all but destroyed the city of New Orleans and much of the surrounding area, causing around $125 billion in damage, which is equivalent to about $195 billion, today, but it only led to around 1,400 deaths: again, all of those deaths absolute tragedies, and any disaster that causes that many deaths is an historical event. But looking at the raw numbers, that’s a shockingly low figure compared to the sum of the monetary damages tallied; it’s actually remarkable as few people died as they did, looking at this storm and it’s impacts through that lens.

What I’d like to talk about today is another natural disaster, this one ongoing as I record this, that looks primed to take the record of most-costly, in terms of money, US natural disaster from Katrina, and some of the implications of this disaster.

—

Part of why disasters in the US, natural or otherwise, tend to result in fewer fatalities than those that occur elsewhere is that the US is a very wealthy country with relatively high-quality and widely dispersed infrastructure.

There are quibbles to be voiced about that claim, as many recent reports indicate that said infrastructure isn’t terribly well maintained, and that the country’s healthcare setup and relatively low pay and support for the sorts of people who save lives and rescue victims in the midst of such disasters raise questions about how long this will continue to be the case; some of these high-quality systems are somewhat fragile, in other words, and won’t always perform at the level they arguably should.

That said, in general, when need be, US government institutions—federal and regional—are capable of throwing money at issues until they mostly go away, and they have a lot of decent resources to leverage when need-be, as well. Americans in general also have reasonable amounts of resources to call upon, on average at least, when they need to flee town and stay elsewhere for a while until a storm subsides, for instance.

This is all on average, and we tend to see the gaps in that generality when disasters hit, and Katrina is a perfect example of this disaster illuminated dichotomy, as a lot of the country’s least well off people, who have arguably been let down by the system and their government in various ways, were unable to do what everyone else was capable of doing, and were thus stuck in ramshackle and dangerous accommodations, and in some cases weren’t rescued because of the nature of the infrastructure that was meant to help protect them, but which was ultimately incapable of doing so. Other people were shuttled by those entities to other parts of the country while the disaster was being handled, and some were never brought back—it was all a pretty big scandal.

Looking at the averages, though, the US tends to experience disasters that are more expensive in terms of money than lives because there’s more costly infrastructure in place, more valuable assets owned by pretty much everyone, compared to many other nations around the world, at least, and folks are generally capable of getting out of the way of stuff that might kill them—at least when we’re talking about things like storms and fires.

Case in point is the ongoing, as of the day I’m recording this, jumble of wildfires that are menacing, and in some cases demolishing, parts of the Greater Los Angeles area in Southern California.

As of the day I’m recording this, a day before this episode goes live, there are two primary fires still spreading, designated as the Eaton and Palisades fires, those names based on the regions in which they started to flare out of control, and several smaller ones called the Kenneth, Hurst, and Lidia fires.

The Palisades fire is currently the largest, having burned about 24,000 acres, followed by the Eaton, which has consumed around 14,000 acres. The Kenneth, Hurst, and Lidia fires have burned around 1,000, 800, and 400 acres, respectively.

That’s…not huge. Tens of thousands of acres is a decent sized plot of land, definitely, but for comparison, the Smokehouse Creek Fire that burned through parts of Texas and Oklahoma in 2024, and which became the largest wildfire in Texas history, consumed more than 1,100,000 acres.

The Park Fire, which plagued Northern California in mid-2024, is the state’s largest-ever arson-caused fire, and it consumed nearly half a million acres.

So a total of just of 40,000 acres or so for this new collection of fires is piddly, within that context.

The difference here is that both of those other fires consumed mostly, though not entirely, undeveloped land. And such land, while not value-less, is not the same kind of asset, in terms of dollars and cents, as heavily developed, with homes and businesses and electrical cables and roads and other such infrastructure, land tends to be.

These new, Southern California fires are smaller than those other, big-name wildfires, then, but they’re also consuming some of the most expensive real estate, and the properties and other assets build atop that real estate, in the world.

As of right now, the Kenneth and Lidia fires are completely contained, and the Hurst is getting there. The Eaton and Palisades fires, the two largest of the group, are still mostly uncontained, however, due in part to wild and dangerous winds that are making containment efforts difficult, in some cases preventing aerial efforts, and in others making conditions extra risky for people on the ground, due to the dynamic and quick-moving nature of things.

Given all of this, and again, given that these fires are burning homes worth tens of millions of dollars, located on coastal land that’s in some case worth around the same, it’s perhaps no surprise that analysts are already projecting that these fires could cause something like $50 to $150 billion in economic losses; and for comparison, the aforementioned Camp Fire in Northern California, which also consumed some fairly expensive homes and real estate, in addition to the undeveloped park land it consumed, only tallied about $30 billion in damage, all told, while the fires that hit Hawaii in 2023 added up to just $5.7 billion.

Of that $50-150 billion total, it’s estimated that around $20 billion will be covered by insurance, which represents a staggering loss for those without any, or without the proper insurance, but also potentially represents a huge loss for residents of California, as the state has an insurance of last resort scheme called the FAIR Plan, which is a privately run, but state-created entity that serves those who can’t find insurance via conventional, private insurers. And often, though not always this means those customers are in areas that are too expensive or too risky for traditional insurance companies to operate in.

In practice, that usually means insurers of last resort have a portfolio full of risky bets, and the plans they offer are more expensive than usual, and tend to provide less coverage and benefits than the conventional stuff.

In these sorts of situations, though, we have a whole lot of risky bets than have suddenly come up snake eyes, this FAIR Plan suddenly having to pay out billions of dollars to their customers in these risky areas. And between 2023 and 2024, the number of homes in the very expensive Pacific Palisades area, which is high-risk for wildfires, nearly doubled to around $6 billion of covered assets in that zip code, alone. It’s been estimated that the plan could have something like $24 billion in total losses from this cluster of ongoing fires.

The FAIR Plan isn’t government-funded: instead, if it runs out of money because of high levels of payouts, private insurance companies foot the bill, which will place further strain on those insurance companies, which are already expected to be staggered by losses across the region, but also then raises insurance prices for everyone in that area, moving forward, which could further inflate expenses for the state’s tens of millions of residents, while also possibly incentivizing businesses to move elsewhere, which would reduce taxflows to state coffers, and over time cause even more financial problems.

Reinsurance claims could muddle some of this math—reinsurance being basically insurance plans for insurance companies, bought from other, specialized insurance companies—as sufficient reinsurance coverage could help the FAIR Plan, and other insurers operating in these areas, weather the storm without being forced to raise prices excessively. But those companies, too, might then raise their reinsurance rates substantially, and those increases would then ripple across this same economic landscape.

Lots of potential long-term financial damage, either way, on top of the assets lost and damage caused directly, and of course, the human losses, which as of the day I’m recording this, totals 24 people confirmed killed, dozens of people missing, and a still unquantified number of injuries and lives completely, perhaps permanently disrupted or upended.

This whole situation—these fires—are complicated by many factors.

The climate is one, as 2024 was the hottest year on record, the first one we’ve experienced, as a species, above that now-famous 1.5 degrees celsius-beyond-pre-industrial-levels milestone. That figure will fluctuate day to day and even year to year due to all sorts of variables, but the big picture here is that the global water cycle has changed because global average temperatures have been nudged upward, and that’s causing a lot of upsets to local infrastructure and ecosystems that have always, since we’ve been here, at least, relied on that cycle functioning in a certain way, within a certain spectrum of operation.

Now that we’ve defied that spectrum, we’re finding ourselves with more extreme disasters of all kinds, but also more extreme and dangerous and damaging and deadly repercussions from those disasters, because the things we did to ameliorate them previously no longer work the same way, either.

So California, especially this part of California, has been even drier than usual, and the way the state used to prevent the spread of wildfires no longer works the way it used to work; a climactic issue compounded by issues with the systems we’ve clung to, despite the problems they’re meant to address having evolved substantially since they were originally developed and deployed.

This situation is also complicated by the fact that southern California, and especially the LA area, is a hotbed for global entertainment, and that means a lot of wealth concentration.

Lots of people scrambling to buy and build homes with beautiful coastal views, and the fact that these areas are high-risk for wildfires and increasingly other disasters, as well, doesn’t really matter, because rich people want to be in this area, around all this activity and wealth, and it’s generally understood that wealth can make you immune to these sorts of things, at least most of the time.

That immunity is no longer such a given, and that high concentration of expensive assets means that even a relatively small fire can cause a heck of a lot of damage in a relatively short time.

The same general collection of properties also means this region has a lot of landmarks that are at high-risk of destruction, and which are increasingly expensive to maintain and protect and repair, and it means the world is watching, to a certain degree—as celebrities flee their homes and influencers report the beat-by-beat of their evacuations—which in turn means there’s plenty of incentive to spread misinformation, either out of a desire to participate in the situation, or because of honest ignorance, or for political and ideological reasons: wanting to paint the local governance as incompetent, for instance.

At the moment, folks in the area are suffering from periodic power outages, largely due to local utilities shutting down some of their service areas in order to avoid starting new fires, their power cables and high winds sometimes sparking such things even in less pressure-cooker-like moments. And the air quality is absolutely abysmal, leading to localized health issues.

Some areas have run out of water, apparently due to issues with reservoir infrastructure, and one of the two firefighting planes the local authorities have been using to douse the fires when the wind conditions allow has been grounded for repairs, after colliding with an illegally flown drone, the operator of which was apparently a paparazzi trying to capture photos of celebrity homes, either being consumed by fire or somehow avoiding such a fate.

Again, this is a fast-moving story, and a lot is changing day by day, but at the moment it’s looking like this could become the most expensive natural disaster in US history, and while local authorities are making progress in halting these fires’ spread, the damage that’s been done has already been substantial, and could have a lot of knock-on effects, for individuals and for the state’s and country’s economy, for years to come.

Show Notes

https://en.wikipedia.org/wiki/Park_Fire

https://en.wikipedia.org/wiki/Smokehouse_Creek_Fire

https://www.washingtonpost.com/business/2025/01/09/los-angeles-wildfire-economic-losses/

https://en.wikipedia.org/wiki/California_FAIR_Plan

https://www.nytimes.com/2025/01/08/climate/california-homeowners-insurance-fires.html

https://www.sfchronicle.com/california-wildfires/article/fair-plan-insurance-losses-20025263.php

https://www.nytimes.com/interactive/2025/01/08/weather/los-angeles-fire-maps-california.html

https://www.wsj.com/finance/wildfire-insurance-homeowners-costs-3889531f

https://www.newyorker.com/news/the-lede/the-insurance-crisis-that-will-follow-the-california-fires

https://archive.ph/Inso5

https://www.npr.org/2025/01/09/nx-s1-5252837/will-there-be-enough-money-to-pay-out-insurance-claims-from-the-la-wildfires

https://www.washingtonpost.com/climate-environment/2025/01/09/california-wildfire-palisades-homeowners-insurance/

https://arstechnica.com/health/2025/01/public-health-emergency-declared-amid-las-devastating-wildfires/

https://apnews.com/article/los-angeles-wildfires-southern-california-c5826e0ab8db965cb2814132ff54ee6f

https://apnews.com/video/fires-wildfires-los-angeles-los-angeles-area-wildfires-california-574351467d2142ad958c212a0413ad96

https://www.reuters.com/world/us/san-fernando-valley-under-threat-los-angeles-fire-rages-2025-01-12/

https://www.wsj.com/us-news/los-angeles-wildfires-social-media-rumors-44d224b4

https://www.wsj.com/style/los-angeles-hollywood-fires-celebrities-homes-paris-hilton-d1e3a7de

https://www.vulture.com/article/hollywood-paparazzi-los-angeles-fire.html

https://www.theguardian.com/us-news/live/2025/jan/12/california-fires-death-toll-expected-rise-ucla-threatened-winds-latest-updates

https://www.reuters.com/business/environment/2024-was-first-year-above-15c-global-warming-scientists-say-2025-01-10/

https://www.nytimes.com/2025/01/09/us/los-angeles-fire-water-hydrant-failure.html?unlocked_article_code=1.oE4.OUQs.lcdCoSSeQBtL

https://www.axios.com/2025/01/11/los-angeles-fire-insurance-losses-billions

https://www.latimes.com/california/story/2025-01-08/palisades-fire-devastation-scope

https://www.washingtonpost.com/weather/2025/01/11/los-angeles-fires-california-updates-palisades-eaton-kenneth/

https://www.latimes.com/california/story/2025-01-09/drone-collides-with-firefighting-aircraft-over-palisades-fire-faa-says

https://www.nytimes.com/2025/01/11/us/los-angeles-calfire-firefighters.html

https://www.axios.com/2025/01/12/la-fires-climate-change-drought-extreme-weather

https://www.axios.com/2025/01/12/california-wildfires-loss-mental-health

https://www.nytimes.com/live/2025/01/12/us/los-angeles-fires-california

https://www.nytimes.com/2025/01/12/us/trump-los-angeles-fire-newsom-bass.html

https://en.wikipedia.org/wiki/Hurricane_Katrina

https://en.wikipedia.org/wiki/2008_Sichuan_earthquake

https://en.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_earthquakes

https://en.wikipedia.org/wiki/Great_Hanshin_earthquake

https://en.wikipedia.org/wiki/2011_T%C5%8Dhoku_earthquake_and_tsunami

https://en.wikipedia.org/wiki/List_of_disasters_by_cost

We also discuss stochastic violence, terrorism, and Cybertrucks.

Recommended Book: Some Desperate Glory by Emily Tesh

Transcript

The terms “Lone Wolf,” “Lone Wolf Actor,” and “Lone Wolf Killer” are interchangeably used in many countries—though most commonly and prominently in the United States—to describe someone who commits a mass-killing or other mass-casualty event, but who is not part of an organization like a terrorist group or other criminal network like a gang.

The term is hotly contested in the scholarly world, as it’s applied loosely and inconsistently, and the definition varies somewhat by location, government, law enforcement entity investigating said killings, and the press reporting upon it. But in general, to be defined as a mass-casualty event or mass-killing, a collection of murders must occur in public—so it can’t be a person killing their family at home, for instance—it must involve at least four victims—so someone killing or injuring three strangers in a public place will typically not be categorized in this way—and it must not occur as part of another crime, like a robbery gone wrong, or as part of a larger conflict between two rival gangs.

Within this context of mass-killings and mass-casualty attacks, a lone wolf is someone who acts solo, the term originating with the concept of a wolf that has been separated from, or perhaps outcast from its pack.

Someone who kills a bunch of people at the instruction of a terrorist organization like ISIS, then, would not be considered a lone wolf, even if they committed the act without any direct aid from that group; though this definition is wobbly even in that regard, as someone who takes inspiration from a group like ISIS, committing a mass-killing to support that group’s cause, but not directly connected to the group, might be labeled a lone wolf, or not. And there’s no hard-set rule as to which definition is correct.

This was a somewhat common issue back in the late-20th century, when many so-called lone wolf terrorists were committing acts of violence in support of anarchist ends, but the anarchist groups from which they derived their inspiration, and in some cases with which they collaborated, were leaderless by nature—so it couldn’t really be said that they were instructed to carry out these acts, they were just inspired by these fellow ideological travelers, and that made determining whether they acted on their own behest or not a tricky and perhaps impossible undertaking; a lot of it is semantics.

Also confounding the simple categorization of such killers and attacks is the concept of stochastic terrorism, which is a type of violence that is almost always political or ideological in nature, as opposed to being revenge-driven or otherwise personal, and it’s generally incited by someone with a public persona—a politician or other leader—who creates an environment in which violence is more likely to occur, that violence seemingly random, but on average directed in a specific direction.

So a politician who says something like “Man, people from the opposing party really believe some horrible stuff, I wouldn’t be surprised if something happened to them, considering how evil they are,” while at the same time stoking the flames of potential violence throughout the population by increasing animosity between political parties and maybe even religious groups, might be aiming to spark stochastic terror that would benefit them and their ambitions.

By riling up their base in this way, by sowing the seeds for potential attacks against their perceived enemies, violence in their favor, aimed at those enemies, is more likely to happen, but in a way that’s deniable for them—just a random act of ideological murder that they can denounce, despite arguably having asymmetrically instigated it.

Is stochastic terror an example of planting seeds for violence that makes the resultant killings something more like directed attacks, and therefore not lone wolf in nature, then? Or are all lone wolves arguably inspired by something they’ve learned or experienced or been told, and thus arguably stochastic in nature—no direct guidance or instruction, but still inspired by someone or something, somewhere along the way?

What I’d like to talk about today are three instances of recent supposedly lone wolf attacks, and why some experts are predicting we’ll see more such attacks, especially but not exclusively in the US, in the coming years.

—

There were nearly 500 officially recognized mass-shootings in the US in 2024—and again, that means 4 or more people injured or killed in public, and not as part of another crime being committed.

That’s down from previous years, the preceding four of which have each had more than 600 mass shootings, and on average a little less than 10 people are killed in these shootings—though that figure is nudged upward by the largest of these mass killings, like one in Las Vegas in 2017 that saw 60 people killed and more than 800 wounded, many in the resulting stampede, by a 64-year-old seemingly lone wolf gunman who fired on an open-air music festival from the 32nd floor window of a nearby hotel.

Gun homicides in the US are rampant beyond mass-killings: there were about 21,000 murders committed with guns in the country in 2021, alone—and notably, self-inflicted gun deaths, suicides using these weapons, eclipse that number, tallying more than 26,000 that same year.

That means more than 50 people are killed by guns in the US every single day, and about 4 out of every 5 murders are committed using guns in the country; which makes sense, as guns are very effective at what they’re meant to do, which is killing something, and there are a lot of guns in the US: about 120 of them per 100 people, as of 2018.

And to be clear, that doesn’t mean everyone owns a gun: that average is driven sky-high by the gun-enthusiasts who tend to buy a lot of the things, though gun ownership has continued to increase in scope in recent years, as political and economic uncertainty, especially in areas where perception of crime levels, if not always actual elevated crime levels, increases, tends to drive more widespread gun sales.

Given all of that, it’s maybe not a huge surprise that many apparent lone wolf attacks in the United States are committed using firearms; sometimes assault rifles, sometimes guns that have been augmented using bump-stocks or similar add-ons to make a normal gun into basically an assault rifle, and sometimes just using a pistol, which can be easily pocketed and carried around pretty much everywhere in this country.

On December 4, 2024, the CEO of UnitedHealthcare, which is part of the largest health insurance company in the United States, UnitedHealth Group, Brian Thompson, was gunned down in front of the Midtown Manhattan Hilton Hotel.

The alleged killer, who was later identified by law enforcement officials as Luigi Mangione, was captured on nearby CCTV cameras, was wearing a hoodie and an expensive backpack while shooting Thompson, and used a pistol with a suppressor—a silencer—to shoot him multiple times, the bullet casings left behind inscribed with the words Delay, Deny, and Depose; terms that have been associated with the US health insurance industry for legal tactics they lean on in order to pocket more money, allegedly at the expense of their customers who have their claims denied or long-term delayed, in some cases leaving them without the care they require, and in some cases leaving them in crippling debt following a necessary medical procedure that the insurance company says they won’t pay for.

The response to killings of any kind, even in a gun-happy country like the US, tends to be fairly grim and sad; the endless mutterings of “thoughts and prayers” by politicians and other public figures has become so common and toothless as to be near-satire at this point, but generally the tone is antagonistic toward whomever committed the killing, before then swinging toward calls for more security and policing if you’re on the political right, and more gun regulation if you’re on the political left. And that’s generally where we leave things until the next headlines-capturing shooting; and we typically, unfortunately, don’t have long to wait.

Thompson’s murder, though, was almost immediately met with celebration across the political spectrum; working class folks, Democrats and Republicans and everyone in between and on the furthest political extremes basically muttering about how it serves him right, before realizing everyone else was muttering the same thing, and that led to outright enthusiasm, especially online, and even calls for more of the same across the social media landscape—many normal people doing the politician and ideologue thing by basically posting their hopes that someone will knock off other CEOs as well, seemingly aiming to spark more stochastic violence in their favored direction.

The wealthy and especially the CEO class were horrified at this response, perhaps understandably, and there was pushback from mainstream journalistic and political entities across the board, with lots of tut-tutting and finger-wagging at anyone who dared celebrate what looked to be the cold-blooded murder of another human being.

But the nature of American healthcare and especially health insurance being what it is—massively imperfect at least, and by some assessments borderline abusive or even outright evil—this was seen by many as just desserts for someone who himself had committed millions of dollars worth of fraud and gotten away with it, and who was running UnitedHealthcare in such a way that it denies more claims than any of its peers, which in turn has allowed itself to massively enrich itself and its shareholders at the expense of its customers.

There were many cries of “serves him right,” then, alongside some requests that other CEOs be next; many of these requests couched in memes and jokes, but also seemingly earnest.

The nature of the alleged killer, who was eventually shown to be a good-looking young man of privilege who had maybe suffered under the auspices of the American healthcare system, due to chronic ailments and an insurance system that didn’t even serve someone like him, who grew up with substantial advantages, further fanned those flames, and as of the day I’m recording this he’s in custody, has pleaded not guilty, and is facing eleven state and four federal charges, including first-degree murder and a terrorism charge, the former of which could lead to the death penalty.

Just shy of a month later, in the early morning hours of January 1, 2025, a new year’s celebration on the well-know and well-traversed, and on that night, incredibly crowded Bourbon Street in New Orleans was attacked by a man in a large pickup truck, who plowed the vehicle into a crowd of revelers, driving at high-speed across three blocks that were partitioned-off for the celebration.

The driver was apparently trying to hit as many people as possible, and then, after crashing into a utility vehicle, he stepped out of the truck and started firing a gun into the crowd.

Police fired back at him, but he was wearing body armor, and two of them were injured before they managed to kill him, recovering an assault rifle and a semi-automatic pistol from his body. They also found a pair of explosive devices in coolers he had planted around the area before the attack, and further investigation led to the discovery of more bomb-making materials where he was staying in New Orleans.

At least 35 people were injured and 14 people were killed in the attack, alongside the killer, who was later identified as 42-year-old Shamsud-Din Jabbar: an American-born Army veteran and Texas resident who had apparently been recently radicalized, possibly by online content posted by ISIS, and who had posted videos pledging his allegiance to the group mere hours before he drove into the crowd, an ISIS flag adorning the vehicle.

More guns in this attack, then, but much of the damage was caused by the truck, and similar so-called “vehicle as a weapon,” or VAW attacks have been committed around the world in recent years, raising concerns especially in places where firearms are harder to come by, though also at large, open-air events where vehicles might cause more deaths and injuries in a short period of time than even an assault rifle, as seemed to be the case here.

This attacker seemed to be self-radicalized, based on testimony from his friends and family, who were shocked at the change in his personality and expressed beliefs. The FBI has said they’re pretty confident he acted alone, though they’re looking into recent trips he took to Egypt and Canada, in case he met up with someone from ISIS or a similar group, while traveling.

And apparently while he initially planned to kill his family—he’s had several divorces that led to financial problems, due to many child support payments that exceeded his means—he didn’t believe killing his family would have provoked enough of a response to spark a “war between the believers and the disbelievers.” Jabbar was brought up Muslim but left the faith for years, before apparently adopting a more intense and violent reinterpretation of it just recently, and that seemingly helped him justify and perhaps even inspired these acts.

This has been called a lone wolf attack, then, but it was apparently heavily influenced by ISIS ideology, despite Jabbar possibly never having been in contact with anyone from that group.

Just a handful of hours later, that same morning, at 8:49 January 1, 2025, a Tesla Cybertruck that was parked outside the front lobby of the Trump International Hotel in Las Vegas exploded—its occupant apparently having died from a self-inflicted gunshot wound to the head right before a bunch of fireworks and gas canisters placed in the trunk were detonated.

That occupant was Matthew Alan Livelsberger, who was also American-born, and like Jabbar, had been in the US military, though Livelsberger was an active-duty Special Forces soldier from Colorado who was on leave at the time.

The blast didn’t kill anyone, and while it hurt a few bystanders, no one was seriously injured. But the intention, according to two letters recovered from his phone by the FBI, was apparently to make a political statement related to alleged clandestine US military operations, and advanced technologies the US and China allegedly secretly possess; though he was also apparently in the midst of a serious mental health crisis, including significant PTSD episodes and what might have been paranoid delusions.

The vehicle also contained an assault rifle and two pistols, though none of these weapons were used, as while Livelsberger was seemingly intent on escaping across the Mexican border following the attack, based on what he said in those aforementioned letters, he seemingly decided to kill himself instead—which may support the assertion that this was primarily, if not exclusively, a mental health crisis issue.

Livelsberger also apparently had family issues, due in large part to his support of president-elect Trump and his family’s opposition to that support, and he was apparently suffering from untreated depression, that lack of treatment possibly the result of stigma toward such things within the military, which sometimes results in people not getting treatment that they might benefit from, because they worry doing so will see them sidelined by their superiors.

A manifesto penned by Livelsberger that was sent to a retired Army Intelligence officer claims that he was being monitored by the military because of his knowledge of war crimes and those aforementioned military advanced technologies, and that he didn’t intend to self-harm, the divulgence of which has led to some conspiracy theories about this not having been a suicide.

That said, this attack is being investigated as potential terrorism, and while it was initially being explored as part of a larger wave of such actions, since that attack in New Orleans happened just hours earlier, and both attackers used the same online car rental service to procure the vehicles they were driving, investigators have since indicated they don’t believe these attacks were connected.

Interestingly, Livelsberger’s letters also criticized income inequality, though with a politically conservative bent, basically saying that the country had become too liberal and effeminate, and that Trump, Elon Musk, and Robert Kennedy Jr needed to take control and make the US more masculine so that it could compete against entities like China, Russia, and Iran.

Experts on ideological violence and political fracturing have warned that we may see more lone wolf and lone wolf-esque violence in a more polarized society, in which people are less likely to consider those on the opposite side of the aisle to be people they disagree with, and more likely to think of them as bad or evil or even subhuman, which makes violence more thinkable.

That’s not ideal, as these sorts of attacks are difficult to prevent, their solo nature meaning there’s no network to track and pluck apart, nothing to infiltrate and fewer easily accessible data points to aggregate and in which to recognize a pattern. Lone wolf attackers tend to cause less damage than groups can, then, but they’re often almost invisible, to the organizations that hope to stop them, anyway, right up till the moment they start killing and injury people.

We’re also entering an era in which trust in authority has degraded substantially, new technologies have made the research, hardware procurement, and implementation of such attacks a lot more attainable to more people, which means folks suffering from different sorts of psychological or physical torments, or those who simply have strong opinions and a lot of perceived enemies, are more likely to be able to act on that confusion or those hatreds, in some cases at a moment’s notice, and in many cases without anyone beyond their immediate friends and family recognizing that something might be up.

We may be entering a period of heightened threat, then, in the US especially, because of the number and wide distribution of highly effective weapons throughout the population, and because of the period of political polarization and animosity we seem to be wading through, but also throughout the rest of the world, to some degree at least, because of those same political and ideological factors, and because of how big and weapon-like vehicles have become, and how relatively easy it is to get one’s hands on information that allows for the construction of things like bombs and the technologies required to 3D-print and otherwise manufacture deadly implements of all shapes and sizes.

Show Notes

https://en.wikipedia.org/wiki/Luigi_Mangione

https://www.vox.com/politics/390438/luigi-mangione-healthcare-shooting-ghost-gun

https://en.wikipedia.org/wiki/Killing_of_Brian_Thompson

https://en.wikipedia.org/wiki/2017_Las_Vegas_shooting

https://www.bbc.com/news/world-us-canada-41488081

https://en.wikipedia.org/wiki/2025_New_Orleans_truck_attack

https://www.bbc.com/news/articles/c205ek63433o

https://www.nytimes.com/2025/01/03/us/new-orleans-victims-truck-attack.html

https://en.wikipedia.org/wiki/Trump_International_Hotel_Las_Vegas_Tesla_Cybertruck_explosion

https://www.nytimes.com/2025/01/04/us/matthew-livelsberger-las-vegas-cybertruck.html

https://www.nytimes.com/2025/01/05/us/new-orleans-attack-travel.html

https://www.nytimes.com/2025/01/04/us/new-orleans-attack-shamsud-din-jabbar-isis.html

https://scholarlycommons.law.northwestern.edu/cgi/viewcontent.cgi?article=1257&context=nulr_online&preview_mode=1&z=1519320539

https://en.wikipedia.org/wiki/Stochastic_terrorism

https://en.wikipedia.org/wiki/Lone_wolf_attack

https://www.ojp.gov/ncjrs/virtual-library/abstracts/lone-wolf-terrorism-america

https://journals.sagepub.com/doi/10.1177/1088767917736797

We also discuss the PPP, chaebol, and dictators.

Recommended Book: Starter Villain by John Scalzi

Transcript

In the wake of WWII, Korea—which was previously held by the recently-defeated Japanese Empire—was split into two countries, the north backed by the Soviet Union and the south backed by the United States and its allies.

North Korea had a guerrilla fighter and staunch Soviet-style communism activist, Kim Il Sung, placed at the head of its new government, while South Korea was to be led by a longtime local politician named Syngman Rhee, who had run the country earlier, from 1919 until 1925, at which point he was impeached, and then again in 1947-1948, as head of the country’s post-war provisional government.

Rhee was a hardcore Korean independence activist during a period when the Japanese were clamping down on their mainland holdings and doing away with anyone who caused trouble or sparked anti-colonial protests, so he spent some time in exile, in China, returned to the US, where he was educated, for a bit, and then the US military returned him to Korea to run that provisional government once the dust had settled and the Japanese had been ousted from the area.

Rhee was an ideal representative in the region by American standards, in some ways, as he was vehemently anti-communist, even to the point of killing and supporting the killing of something like 100,000 communist sympathizers during an uprising on South Korea’s Jeju Island. He was president when North Korea invaded, sparking the Korean War, and then refused to sign the armistice that would have formally ended the conflict in 1953, because he believed the only solution to the conflict between these nations was a military one, and he held out hope that the South would someday conquer the North and unify Korea as a nation, once more.

Rhee then won reelection in 1956, and changed the country’s constitution to allow him to remain in office, getting rid of the two-term limit—which was not a popular move, but it worked, and he was able to run uncontested in 1960, because his opponent died of cancer in the lead-up to the election—though his opposition protested the results, claiming a rigged voting process, and this led to a huge movement by students in the country, which became known as the April Revolution; students were shot by police while protesting during this period, and that ultimately led to Rhee stepping down that same year, 1960.

So Rhee was a western-educated, christian conservative who was vehemently anti-communist, though also living in a part of the world in which an aggressive communist dictatorship recently invaded, and was threatening to do so again—so it could be argued his paranoia was more justified than in other parts of the world that had similar frenzied moments and governments during the cold war, though of course the violence against innocent citizens was impossible to justify even for him and his government; his authoritarian rule was brought to an end following that shooting of student protestors, and that left a power vacuum in the country, and South Korea saw 13 months of infighting and instability before a General named Park Chung Hee launched a coup that put him in charge.

Park positioned himself as president, and he did pretty well in terms of economic growth and overall national development—at this point the South was way behind the North in pretty much every regard—but he was also an out-and-out dictator who ruled with an iron fist, and in 1972 he put an entirely new constitution into effect that allowed him to keep running for president every six years, in perpetuity, no term limits, and which gave the president, so himself, basically unlimited, unchecked powers.

The presence of a seemingly pretty capable, newly empowered dictator helped South Korea’s economy, manufacturing base, and infrastructure develop at an even more rapid pace than before, though his nearly 18-year presidency was also defined by the oppression he was able to leverage against anyone who said anything he didn’t like, who challenged him in any way, and who spoke out of turn against the things he wanted to do, or the constitution that allowed him to do all those things.

In 1979, he was assassinated, and there’s still a lot of speculation as to the why of the killing—the assassin was in Park’s orbit, and was seemingly doing okay as part of that all-powerful government entity—but alongside speculation that it might have been planned by the US, in order to keep South Korea from developing a nuclear weapon, that it might have been the result of political jealousy, and that if might have been just an impulsive act by someone who was done being pushed around by a bully, it’s also possible that the perpetrator was a democracy activist who wanted to get a successful and long-ruling dictator out of the way.

Whatever the actual catalyst was, the outcome was more political upheaval, which by the end of the year, we’re still in 1979, led to yet another military coup.

This new coup leader was General Chun Doo-hwan, and he implemented martial law across the whole of the country by mid-year, as he ascended to the role of president, and he cracked down on democracy movements that erupted across the country pretty violently.

Chun held onto power for nearly 8 years, ruling as a dictator, like his predecessor, until 1987, when a student democracy activist was tortured to death by his security forces.

This torture was revealed to the country by a group of pro-democracy catholic priests in June of that year, and that sparked what became known as the June Democratic Struggle, which led to the June 29 Declaration, which was an announcement by the head of the ruling party—so the head of the party the dictatorial president belonged to, the Democratic Justice Party—that the next presidential vote would allow for the direct election of the president.

That party leader, Roh Tae-woo, very narrowly won the election, and his term lasted from 1988 until 1993; and during his tenure, the country entered the UN, that was in 1991, and his presidency is generally considered to be a pivotal moment for the country, as while he was technically from the same party as the previous ruler, a dictator, he distanced himself and his administration from his precursor during the election, and he abided by that previously enforced two-term limit.

By 1996, things had changed a lot in the country, the government fully recalibrating toward democratic values, and those previous rulers—the dictator Chun and his ally-turned-democratic reformer, Roh—were convicted for their corruption during the Chun administration, and for their mass-killings of pro-democracy protestors during that period, as well. Both were pardoned by the new president, but both were also quite old, so this was seen as a somewhat expedient political maneuver without a lot of downsides, as neither was really involved in politics or capable of causing much damage at that point in their lives.

In the years since, especially since the turn of the century, South Korea has become one of the world’s most successful economies, but also a flourishing example of democratic values; there are still some remnants of those previous setups, including the government’s tight ties with the so-called chaebol, or “rich family” companies, which were business entities propped up by government support, which were often given monopoly rights that other businesses didn’t enjoy, as part of a government effort to pull the country out of agrarianism back in the mid-20th century; companies like Hyundai, Samsung, and LG thus enjoy outsized economic power, to this day, alongside a whole lot of political influence in the country, as a result of this setup, which is a holdover from those earlier, dictatorial times.

But South Korea has generally erred toward rule of law since the late-1990s, even to the point of punishing their most powerful elected leaders, like President Park, who was accused of corruption, bribery, and influence-peddling, by removing her from office, then sentencing her to 24 years in jail.

What I’d like to talk about today, though, is a recent seeming abuse of power at a pretty staggering level in South Korean governance, and the consequences of that abuse for the country and for the abuser.

—

In March of 2022, Yoon Suk Yeol, a conservative candidate of the People Power Party, who was hoping to oust the incumbent Democratic Party from office, won the narrowest victory in South Korea history.

In his previous role as the chief of the Seoul Central District Prosecutor’s Office, Yoon was partly responsible for convicting former President Park for her abuses of power, and his public disagreements with President Moon, who appointed him as Prosecutor General of the country in 2019, led to his popularity in conservative circles, in turn leading to his ascension as a candidate in 2021.

Yoon ran on a conservative platform that’s become familiar in elections around the world in recent decades; basically deregulation paired with culture-war issues, like doing away with government support for gender equality and other often politically liberal efforts of that nature.

He won the election by less than a percentage point, and his tenure is office has not been favorably reviewed by democratic watchdogs, which have noted various sorts of corruption and democratic backsliding under his watch, and economic and policy analysts consider his administration to have been a somewhat ineffectual one.

Yoon’s tenure, like his candidacy, was also plagued by gaffes and seeming missteps.

He tried to raise the country’s maximum weekly working hours from 52 to 69, though he pulled back on this idea after a huge wave of backlash from young people.

He was also criticized for having just three women in his government, and two among his vice-ministerial level officials. He added two more after those criticisms, but one of them quit about a month after being appointed, following her attempt to implement massively unpopular school system revisions—and the entire government’s approval rating collapsed around this time, due to that proposed revision, which was criticized as being half-baked and nonsensical, but it was also partly the result of her ascension to the government in the first place, as she had a record of drunk driving and academic plagiarism; the president brought in a woman to placate the masses, basically, despite that woman being just a really, really bad choice for the position, which by some estimates further demonstrated his disdain for and ignorance about the whole conversation about women in government.

Yoon also tried to create an agency that would provide more oversight of the country’s police force, but this led to protests by police, who saw it as an attempt to take control of law enforcement and use it against the president’s enemies; the president’s office then worsened matters threatened to punish protesting officers.

By 2024, leading into the country’s parliamentary elections, Yoon’s government was incredibly unpopular with just about everyone, because of those and other decisions and statements and gaffes. Even his wife has been under investigation for accepting bribes and having undo influence on who takes positions of power, alongside comments she’s made about seeking revenge against people who say not nice things about her, including journalists.

The opposition swept that 2024 parliamentary election, which had the practical impact of making Yoon’s government something of a lame duck, unable to get anything done, because his party only controlled 36% of the National Assembly. He then boycotted the inaugural session of this new National Assembly, seemingly because he didn’t like the outcome, becoming the first President to do so since democracy returned to the country in 1988.

All of which leads us to what happened on December 3, 2024.

Late that night, President Yoon declared martial law, which would give him, as president, wartime powers to do all sorts of dictator-like things.

He said he declared martial law to unfreeze a frozen government that was paralyzed by his opposition: Assemblymembers had stymied a lot of his efforts to pass laws favored by his party and constituents, and had tallied a large number of impeachment efforts against people in his administration, while he, in turn, used more vetos than any other democratically elected president in the country’s history—so the executive and legislative branches were at a standoff, and this was freezing the government, so he says he declared martial law to basically get things done.

The opposition, in contrast, says his move was unconstitutional, and that he tried to launch a coup.

That latter claim seems to be backed by the fact that Yoon accused his political competition of collaborating with North Korean communists and engaging in anti-state activities, which he said were intended to destroy the country—this seems to be based, again, on the fact that they didn’t approve the stuff he wanted to get approved.

As part of this martial law declaration, he also declared a prohibition on all political activities and all gatherings of the National Assembly and local representatives, and he suspended the freedom of the press.

He apparently also ordered the arrest of many of his political opponents, alongside some people within his own party who might oppose him and his seeming power-grab.

Both parties, his own included, opposed this proclamation, and there were some dramatic standoffs following his announcement at 10:30pm local time, as protestors took to the streets and legislators gathered at the National Assembly Proceeding Hall, where they do their job, because members of the military were ordered to stop them; there are videos of these soldiers standing in the way of these politicians, trying to keep them from entering the building where they could vote to do away with the martial law declaration, and in some cases pointing assault rifles at them. The legislators didn’t backing down, and in a few cases wrestled with the soldiers while thousands of citizens protested behind them against the military action.

Eventually, the Assembly members made it inside and voted to lift martial law; this happened at 4:30am that morning. And over the next few days they began impeachment proceedings against the president, saying they would keep doing so until he resigned.

A bunch of people resigned from Yoon’s administration following his seeming attempt at a coup and, and on December 7, a few days later, he issued a public apology, saying that he wouldn’t try to do that again, though on the 12th he backtracked and defended his declaration of martial law, saying that he had to protect the country from these anti-state forces, accusing his opponents, once more, of being on North Korea’s side.

On December 14, Yoon was impeached and booted from office, following another, failed vote; his party sticking with him for a while, though seemingly distancing themselves from him, following his doubling-down on the “my political opponents are communists” stance.

The leader of his party the PPP, stepped down shortly after that successful vote, having changed his vote from being against impeachment to supporting it, saying basically that there was no other way to remove Yoon from office, and Yoon’s Supreme Councilmembers all stepped down, as well.

South Korea’s Constitutional Court will now have to decide, within the next six months, whether Yoon will be formally and permanently removed from office, or if he’ll be reinstated.

In the two previous instances of a president being impeached, the court has taken 2 and 3 months to make their decision, and they reinstated one president, while allowing the impeachment to stand for the other.

If Yoon is removed by the court, the country will have to elect a new leader within two months, and in the interim, the country’s Prime Minister, the number 2 person in the government, is serving as president; Yoon has been stripped of his powers.

Yoon has a broad swathe of immunity against criminal charges due to his position as president, but that doesn’t apply to rebellion or treason, which could apply in this case.

He’s been banned from leaving the country, but there’s a good chance if he tries, he won’t be stopped, due to a potential conflict between state security forces and presidential security forces—it would be a bad look to have them fight and maybe kill each other.

Yoon’s presence was requested by prosecutors over the weekend, but he didn’t show up to be questioned, and there’s a chance that if this happens again, him deciding not to show up and ignoring these requests, he’ll be arrested—though that same issue with presidential security fighting with police forces applies here, too, so it’s an open question what will happen if he just ignores the whole process and keeps claiming he did nothing wrong.

A preliminary court hearing date has been set for December 27, and though the court only has six of its total nine members at the moment, it has said it’s fine to move forward with an incomplete court, though the government has said they’ll likely be able to get another three judges approved by the end of December.

So things are complicated in South Korea right now, the former president disempowered, but seemingly refusing to participate in the proceedings that will help a new government form, if his dismissal is upheld by the court, that is, and that means the interim government is even more of a lame duck than he was, at a moment in which the world is very dynamic, both in the sense of geopolitics and North Korea becoming more active and antagonistic, and in the sense that economics and tech and everything else is roiling and evolving pretty rapidly right now; a new paradigm seems to be emerging in a lot of different spaces, and South Korea is in a terrible spot to make any moves in any direction, based on that—and that seems likely to remain the case for at least a few more months, but possibly longer than that, too, depending on how the court case plays out, and how the potential next-step election turns out, following that court case.

Show Notes

https://en.wikipedia.org/wiki/2024_South_Korean_martial_law_crisis

https://www.nytimes.com/2024/12/03/world/asia/south-korea-martial-law.html

https://www.yahoo.com/news/heres-whats-going-south-korea-213322966.html

https://www.washingtonpost.com/world/2024/12/03/martial-law-south-korea-explained/

https://apnews.com/article/south-korea-protesters-photo-gallery-yoon-b17f96063a2635ebc87f35ed9ab5ac5b

https://www.nytimes.com/2024/12/14/world/asia/south-korea-president-impeached-martial-law.html

https://www.nytimes.com/interactive/2024/12/04/world/asia/south-korea-impeachment-vote-president-yoon.html

https://www.nytimes.com/2024/12/13/world/asia/south-korea-protest-feliz-navidad.html

https://www.nytimes.com/interactive/2024/12/14/world/asia/skorea-yoon-timeline.html

https://apnews.com/article/south-korea-martial-law-yoon-impeach-6432768aafc8b55be26215667e3c19d0

https://www.reuters.com/world/asia-pacific/south-koreas-yoon-faces-second-impeachment-vote-over-martial-law-bid-2024-12-14/

https://www.theguardian.com/world/2024/dec/14/south-korea-president-yoon-suk-yeol-downfall-analysis

https://www.wsj.com/world/asia/south-korea-president-yoon-suk-yeol-impeached-49b0779c

https://www.washingtonpost.com/world/2024/12/14/south-korea-yoon-impeachment-vote/

https://english.hani.co.kr/arti/english_edition/e_national/1054103.html

https://en.wikipedia.org/wiki/Yoon_Suk_Yeol

https://www.nytimes.com/2024/02/01/world/asia/south-korea-first-lady-dior.html

https://www.economist.com/europe/2024/12/12/why-romania-cancelled-a-pro-russian-presidential-candidate

https://www.koreaherald.com/view.php?ud=20241215050041

https://www.bbc.com/news/articles/cx2pl4edk13o

https://www.cnn.com/2024/12/14/world/video/south-korea-yoon-second-impeachment-watson-cnntm-digvid

https://www.theguardian.com/world/2024/dec/15/south-korea-president-yoon-suk-yeol-reportedly-defies-summons-in-martial-law-inquiry

https://apnews.com/article/south-korea-yoon-martial-law-investigation-constitutional-court-8ec38d61f0ea5c48b3bd1f683b5e9c8d

https://en.wikipedia.org/wiki/Syngman_Rhee

https://en.wikipedia.org/wiki/South_Korea

https://en.wikipedia.org/wiki/Assassination_of_Park_Chung_Hee

https://en.wikipedia.org/wiki/Coup_d%27%C3%A9tat_of_December_Twelfth

https://en.wikipedia.org/wiki/Chaebol

We also discuss militias, Al Qaeda, and Iran.

Recommended Book: The Algebraist by Iain M. Banks

Transcript

In the early 2010s, a series of uprisings against unpopular, authoritarian governments spread across the Middle East—a wave of action that became known as the Arab Spring.

Tunisia was where it started, a man setting himself on fire in protest against the nation’s brazenly corrupt government and all that he’d suffered under that government, and the spreading of this final gesture on social media, which was burgeoning at the time, amplified by the still relatively newfound availability and popularity of smartphones, the mobile internet, and the common capacity to share images and videos of things as they happen to folks around the world via social media, led to a bunch of protests and riots and uprisings in Jordan, Egypt, Yemen, and Algeria, initially, before then spreading to other, mostly Arab majority, mostly authoritarian-led nations.

The impact of this cascade of unrest in this region was immediately felt; within just two years, by early 2012, those ruling Tunisia, Egypt, Libya, and Yemen had been toppled, there were attempts to topple the Bahraini and Syrian governments, there were massive protests in Iraq, Jordan, Kuwait, Morocco, Oman, Algeria, and Sudan, and relatively minor protests, which were still meaningful because of the potential punishments for folks who rocked the boat in these countries, smaller protests erupted in Djibouti, Western Sahara, Saudi Arabia, Palestine, and Mauritania.

Several rulers and their ruling parties committed to stepping down soon, or to not run for reelection—some of them actually stuck with that commitment, though others rode out this period of tumult and then quietly backtracked.

Some nations saw long-lasting periods of unrest following this eruption; Jordan had trouble keeping a government in office for years, for instance, while Yemen overthrew its government in 2012 and 2015, and that spun-out into a civil war between the official government and the Iran-backed Houthis, which continues today, gumming up the Red Sea and significantly disrupting global shipping as a consequence.

What I’d like to talk about today, though, is another seriously disruptive sequence of events that have shaped the region, and a lot of things globally, as well, since the first sparks of what became the Arab Spring—namely, the Syrian Civil war—and some movement we’ve seen in this conflict over the past week that could result in a dramatically new state of affairs across the region.

—

In 1963, inspired by their brethren’s successful coup in nearby Iraq, the military wing of the Arab nationalist Ba’ath party of Syria launched a coup against the country’s post-colonial democratic government, installing in its stead a totalitarian party-run government.

One of the leaders of this coup, Hafez al-Assad, became the country’s president in 1971, which basically meant he was the all-powerful leader of a military dictatorship, and he used those powers to even further consolidate his influence over the mechanisms of state, which meant he also had the ability to name his own successor.

He initially planned to install his brother as leader when he stepped down or died, but that brother attempted to overthrow him when he was ill in 1983 and 1984, so when he got better, he exiled said brother and chose his eldest son, Bassel al-Assad, instead.

Bassel died in a car accident in 1994, though, so Hafez was left with his third choice, Bashar al-Assad, which wasn’t a popular choice, in part because it was considered not ideal for him to choose a family member, rather than someone else from the leading party, but also because Bashar had no political experience at the time, so this was straight-up nepotism: the only reason he was selected was that he was family.

In mid-2000, Hafez died, and Bashar stepped into the role of president. The next few years were tumultuous for the new leader, who faced heightened calls for more transparency in the government, and a return to democracy, or some form of it at least, in Syria.

This, added to Bashar’s lack of influence with his fellow party members, led to a wave of retirements and purgings amongst the government and military higher-ups—those veteran politicians and generals replaced by loyalists with less experience and credibility.

He then made a series of economic decisions that were really good for the Assad family and their allies, but really bad for pretty much everyone else in the country, which made him and his government even less popular with much of the Syrian population, even amongst those who formerly supported his ascension and ambitions.

All of this pushback from the people nudged Bashar al-Assad into implementing an increasingly stern police state, which pitted various ethnic and religious groups against each other in order to keep them from unifying against the government, and which used terror and repression to slap down or kill anyone who stood up to the abuse.

When the Arab Spring, which I mentioned in the intro, rippled across the Arab world beginning in 2011, protestors in Syria were treated horribly by the Assad government—the crackdown incredibly violent and punitive, even compared to that of other repressive, totalitarian governments in the region.

This led to more pushback from Syrian citizens, who began to demand, with increasing intensity, that the Assad-run government step down, and that the Ba’athists running the dictatorship be replaced by democratically elected officials.

This didn’t go over well with Assad, who launched a campaign of even more brutal, violent crackdowns, mass arrests, and the torture and execution of people who spoke out on this subject—leading to thousands of confirmed deaths, and tens of thousands of people wounded by government forces.

This response didn’t go over super well with the people, and these protests and the pushback against them spiraled into a full-on civil uprising later in 2011, a bunch of people leaving the Syrian military to join the rebels, and the country breaking up into pieces, each chunk of land controlled by a different militia, some of these militias working well together, unifying against the government, while others also fought other militias—a remnant of the military government’s efforts to keep their potential opposition fighting each other, rather than them.

This conflict was officially declared a civil war by the UN in mid-2012, and the UN and other such organizations have been fretting and speaking out about the human rights violations and other atrocities committed during this conflict ever since, though little has been done by external forces, practically, to end it—instead it’s become one of many proxy conflicts, various sides supported, mostly with weapons and other resources, though sometimes with training, and in rare instances with actual soldiers on the ground, by the US, Turkey, Russia, Iran, the Iran-backed group Hezbollah, Saudi Arabia, Qatar, Britain, France, Israel, and the Netherlands.

This conflict has demanded the country’s full attention for more than a decade, then, and it’s had influence even beyond Syria’s borders, as groups like the Islamic State, or ISIS has been able to grow and flourish within Syria, due to all the chaos and lack of stability, refugees from Syria have flooded across borders, fleeing the violence and causing all sorts of unintended disruptions in neighboring and even some further-afield countries where, in some cases, millions of these refugees have had to be taken care of, which in turn has influenced immigration-related politics even as far away as the European Union. Also due to that lack of internal control, crime has flourished in Syria, including drug-related crime. And that’s lets to a huge production and distribution network for an illegal, almost everywhere, amphetamine called Captagon, which is addictive, and the pills often contain dangerous filler chemicals that are cheaper to produce.

This has increased drug crime throughout the region, and the Syrian government derives a substantial amount of revenue from these illicit activities—it’s responsible for about 80% of global Captagon production, as of early 2024.

All of which brings us to late-2024.

By this point, Syria had been broken up into about seven or eight pieces, each controlled by some militia group or government, while other portions—which make up a substantial volume of the country’s total landmass—are considered to be up in the air, no dominant factions able to claim them.

Al-Assad’s government has received a fair bit of support, both in terms of resources, and in terms of boots on the ground, from Iran and Russia, over the years, especially in the mid-20-teens. And due in large part to that assistance, his forces were able to retake most of the opposition’s strongholds by late 2018.

There was a significant ceasefire at the tail-end of 2019, which lasted until March of 2020. This ceasefire stemmed from a successful operation launched by the Syrian government and its allies, especially Iran, Russia, and Hezbollah, against the main opposition and some of their allies—basically a group of different rebel factions that were working together against Assad, and this included groups backed by the Turkish government.

On March 5, 2020, Turkish President Erdogan and Russian President Putin, which were backing opposite sides of this portion of the Syrian civil war, agreed on a ceasefire that began the following day, which among other things included a safety corridor along a major highway, separating the groups from each other, that corridor patrolled by soldiers from Turkey and Russia.

This served to end most frontline fighting, as these groups didn’t want to start fighting these much larger, more powerful nations—Russia and Turkey—while trying to strike their enemies, though there were still smaller scuffles and attacks, when either side could hurt their opponent without being caught.

In November of 2024, though, a coalition of anti-Assad militias launched a new offensive against the Syrian government’s forces, which was ostensibly sparked by heavily shelling by those forces against civilians in rural areas outside Aleppo, the country’s second-largest city.

On the 29th of November, those forces captured most of Aleppo, and then plowed their way through previously government-held towns and cities at a fairly rapid clip, capturing another regional capitol, Hama on December 5, and securing Damascus, the capitol of the country, on December 8.

This ended the 13-year civil war that’s plagued Syria since all the way back in 2011; Bashar al-Assad fled to Russia, according to Russian and Iranian officials, and he resigned before he hopped on that flight; Russian state media is saying that Assad and his family have been granted asylum by the Russian government.

This is a rapidly developing story, and we’ll know more over the next few weeks, as the dust settles, but right now it looks like the Syrian government has been toppled by rebel forces led by a man named Abu Mohammad al-Jolani, a 42-year-old child of Syrian exiles who was born in Saudi Arabia, and who spent the early 2000s fighting against US occupation forces in Iraq as part of Al Qaeda.

He apparently spent a few years in an Iraqi prison, then led an Al Qaeda affiliate group, which evolved into its own thing when he broke ties with Al Qaeda’s leadership.

This new group that he formed, Hayat Tahrir al-Sham, tried to differentiate itself from groups like Al Qaeda by saying they didn’t want to play a role in the global jihad, they just wanted to reform the government in Syria. As part of that pivot, they started governing and building infrastructure across the chunk of Syria they claimed, even to the point of collecting taxes and providing civilians with identity cards; though throughout this period they were also known for ruling with an iron fist, and for being hardcore authoritarians, dedicated to implementing a hard-line version of Islamist ideological law.

In the midst of their blitz-like capture of Syria, though, representatives from this group have said they’ll implement a religiously tolerant representative government, and they won’t tell women in the country how to dress.

Following the capture of Damascus, Syria’s Prime Minister said that he would remain in the country, and that he was ready to work with whomever takes the reins as things settle down, happy to make the transition a smooth and peaceful one, essentially, whatever that might mean in practice.

The US military has taken this opportunity to strike dozens of Islamic State facilities and leaders across the country, marking one of the biggest such actions in recent months, and military leaders have said they would continue to strike terrorist groups on Syrian soil—probably as part of an effort to keep the new Syrian government, whatever its composition, from working with IS and its allies.

Russia has requested a closed-door meeting with the United Nations Security Council to discuss Syria’s collapse, and it’s been reported that they failed to come to Assad’s aid because they’re too tied up in Ukraine, and they weren’t able to move forces from North Africa rapidly enough to do much good; though there’s a chance they’ll still shift whatever chess pieces they can to the area in order to influence the composition of the new government, as it’s forming.

Iran has said they welcome whatever type of government the Syrian people decide to establish, though it’s likely they’ll try to nudge that formation in their favor, as Syria has long been an ally and client state of theirs, and they are no doubt keen to maintain that reality as much as possible, and bare-minimum to avoid the establishment of an enemy along their border.

And Israel has entered what’s supposed to be a demilitarized buffer zone in the Golan Heights because this zone is on the Syrian border; they’ve also captured a buffer zone within Syria itself. They’ve launched airstrikes on suspected chemical weapon sites in Syria, to prevent them from falling into extremist hands, they’ve said, and Israeli leaders said they want to keep any issues in their neighbor from impacting Israeli citizens. And Iraq’s government has announced that they’re doing the same along their shared border with Syria, so the whole region is bulwarking their potential weak points, just in case something goes wrong and violence spreads, rather than being tamped down by all this change.

Israel’s prime minister, and other higher ups in the government, have also claimed responsibility for Assad’s toppling, saying it was their efforts against Iran and its proxy forces, like Hezbollah, that set the stage for the rebels to do what they did—as otherwise these forces would have been too strong and too united for it to work.

Notably, the now-in-charge rebel group has been a longtime enemy of Iran and Hezbollah, so while there’s still a lot of uncertainty surrounding all of this, Israel’s government is no doubt generally happy with how things have progressed, so far, as this could mean Syria is no longer a reliable corridor for them, especially for the purposes of getting weapons to Hezbollah in southern Lebanon, along Israel’s northern border.

That said, this same group isn’t exactly a fan of Israel, and is backed by Turkey, which has been highly critical of Israel’s actions in Gaza and Lebanon.

So it’s an incredibly tumultuous moment in Syria, right now, and in this region, as a whole, because the conflict in Syria has been super impactful on everyone thereabouts, to varying degrees, and this ending to this long-lasting civil war could lead to some positive outcomes, like Syrian refugees who have been scattered across neighboring countries being able to return home without facing the threat of violence, and the release of political prisoners from infamous facilities, some of which have already been emptied by the rebels—but especially in the short-term there’s a lot of uncertainty, and it’ll likely be a while before that uncertainty solidifies into something more knowable and predictable, as at the moment, much of the country is still controlled by various militia groups backed by different international actors, including Kurdish-led forces backed by the US, and forces allied with Turkey in the north.

So this change of official governance may shuffle the deck, but rather than stabilizing things, it could result in a new conflict catalyzed by the power vacuum left by the Assad government and its allies, if rebel forces—many of which have been labeled terrorists by governments around the world, which is another wrinkle in all this—if they fail to rally behind one group or individual, and instead start fighting each other for the opportunity to become the country’s new dominant force.

Show Notes

https://www.nytimes.com/2024/12/08/world/middleeast/syria-hts-jolani.html

https://www.nytimes.com/2024/12/06/briefing/syria-civil-war-assad.html

https://www.wsj.com/world/middle-east/assads-rule-collapses-in-syria-raising-concerns-of-a-vacuum-95568f13

https://www.nytimes.com/2024/12/02/world/middleeast/syria-rebels-hts-who-what.html

https://www.washingtonpost.com/national-security/2024/12/07/syria-rebels-biden-intelligence-islamists/

https://apnews.com/article/turkey-syria-insurgents-explainer-kurds-ypg-refugees-f60dc859c7843569124282ea750f1477

https://apnews.com/article/israel-hamas-war-gaza-lebanon-news-7-december-2024-53419e23991cfc14a7857c82f49eb26f

https://apnews.com/article/syria-assad-sweida-daraa-homs-hts-qatar-816e538565d1ae47e016b5765b044d31

https://www.nytimes.com/2024/12/08/world/middleeast/syria-damascus-eyewitness-assad.html

https://www.nytimes.com/article/syria-civil-war-rebels.html

https://www.nytimes.com/live/2024/12/08/world/syria-war-damascus

https://en.wikipedia.org/wiki/Ba%27ath_Party

https://en.wikipedia.org/wiki/1963_Syrian_coup_d%27%C3%A9tat

https://en.wikipedia.org/wiki/Hafez_al-Assad

https://en.wikipedia.org/wiki/Syrian_revolution

https://www.cfr.org/article/syrias-civil-war

https://en.wikipedia.org/wiki/Syrian_civil_war

https://en.wikipedia.org/wiki/Bashar_al-Assad

https://en.wikipedia.org/wiki/Fenethylline

https://carnegieendowment.org/research/2024/07/border-traffic-how-syria-uses-captagon-to-gain-leverage-over-saudi-arabia?lang=en

https://en.wikipedia.org/wiki/Northwestern_Syria_offensive_(December_2019_%E2%80%93_March_2020)

https://en.wikipedia.org/wiki/2024_Syrian_opposition_offensives

https://www.bbc.com/news/articles/c8j99447gj1o

https://apnews.com/article/syria-assad-rebels-war-israel-a8ecceee72a66f4d7e6168d6a21b8dc9

https://www.nytimes.com/live/2024/12/09/world/syria-assad-rebels

https://www.nytimes.com/2024/12/09/world/middleeast/israel-assad-syria.html

https://apnews.com/article/iran-mideast-proxy-forces-syria-analysis-c853bf613a6d6af7f6aa99b2e60984f8

https://www.nytimes.com/2024/12/09/briefing/irans-very-bad-year.html

https://apnews.com/article/syria-hts-assad-aleppo-fighting-2be43ee530b7932b123a0f26b158ac22

https://apnews.com/article/syria-insurgents-aleppo-iran-russia-turkey-abff93e4f415ebfd827d49b1a90818e8

https://www.nytimes.com/2024/12/06/world/middleeast/syria-rebels-hama-homs.html

https://en.wikipedia.org/wiki/Syrian_civil_war

https://en.wikipedia.org/wiki/Arab_Spring

We also discuss Baku, COP meetings, and petrostates.

Recommended Book: The Struggle for Taiwan by Sulmaan Wasif Khan

Transcript

In 2016, a group of 195 nations signed the Paris Agreement under the United Nations Framework Convention on Climate Change, usually just called the Paris Agreement, which was negotiated the previous year, and which, among other things, formalized the idea of attempting to keep the global average temperature from increasing by 1.5 C, which is about 2.7 F, above pre-industrial levels.

The really bad stuff, climate-wise, was expected to happen at around 2 degrees C above that pre-industrial level, so the 1.5 degrees cutoff made sense as sort of a breakwater meant to protect humanity and the natural world from the most devastating consequences of human-amplified climate change.

This has served decently well as a call-to-arms for renewable energy projects and other efforts meant to reduce greenhouse gas emissions, and many nations have actually made really solid strides in that direction since this agreement was formalized, dramatically truncating their emissions in a variety of ways, while also laying the groundwork for long-term reductions by installing a whole lot of solar and wind, reviving old and building new nuclear power facilities, reinforcing and expanding their grids, including adding all sorts of large-scale battery storage, and figuring out ways to reduce energy consumption, which has allowed for the shut-down of coal and oil plants.

Shorter-term solutions, like replacing more polluting and emitting sources of energy, like coal, with gas, have also put a big dent in overall global emissions, especially for entities like the US and Europe; this isn’t ideal as a permanent measure, because there are still a lot of emissions associated with gas, especially its transport, because of leakage, and gas itself, in the atmosphere, has really significant greenhouse properties, but in the short-term this has proven to be one of the most impactful solutions for some nations and large corporations, and it’s increasingly being seen as a transitionary measure, even by those who oppose the use of any fossil fuels long-term.

Things have been going decently well, then, even if progress is still far short of where it needs to be for most countries to meet their Paris Agreement commitments, and far slower than many people who are watching this space, and analyzing whether we’ll be able to avoid triggering those much-worse climate outcomes, would prefer.

One issue we’re running into, now, is that those original commitments were a little fuzzy, as the phrase “preindustrial period” could mean many different periods, even if it’s commonly assumed to be something like 1850 to 1900, in the lead-up to humanity’s full-on exploitation of fossil fuels and the emergence of what we might call the modern era—society empowered by things like coal and oil and gas, alongside the full deployment of electrical grids.

Throughout this period, though, from the mid-19th century to today, the climate has experienced huge swings year to year, and decade to decade. The evidence showing that we humans are throwing natural systems way off their equilibrium are very clear at this point, and it isn’t a question of whether we’re changing the climate—it’s more a question of how much, how quickly, and compared to what; what baseline are we actually using, because even during that commonly used 1850 to 1900 span of time, the climate fluctuated a fair bit, so it’s possible to pick and choose baseline numbers from a range of them depending on what sort of picture you want to paint.

Research from the World Meteorological Organization in 2022 found that, as of that year, we were probably already something like 1.15 degrees C above preindustrial levels, but that it was hard to tell because La Niña, a weather phenomenon that arises periodically, alongside its opposite, El Niño, had been cooling things down and dampening the earth-warming impacts of human civilization for about three years.

They estimated, taking La Niña’s impact into consideration, that the world would probably bypass that breakwater 1.5 degrees C milestone sometime in the next four years—though this bypassing might be temporary, as global temperatures would increase for a few years because of the emergence of El Niño.

Adding to the complexity of this calculation is that aforementioned variability in the climate, region to region, and globally. The WMO estimated that through 2027, the world is likely to fluctuate between 1.1 and 1.8 degrees C above preindustrial levels—and that at that higher range, El Niño might tip things into the especially dangerous 2 degree C territory the Paris Agreement was supposed to help us avoid.

By late-2024, it was becoming increasingly obvious that the world had stepped past the 1.5 degrees threshold into unfamiliar climactic terrain.

Three of the five leading research groups that keep tabs on this matter have said that in addition to 2024 being the warmest year on record, it will also be the first year we’ve ever surpassed that 1.5 degree level.

Notably, simply popping up above 1.5 degrees doesn’t suggest we’re now permanently living in that long worried about climate nightmarish world: there are significant, normal fluctuations in this kind of thing, alongside those associated with the El Niño/La Niña patterns; there are a lot of variables acting upon our climate, in other words, in addition to the human variables that are pushing those averages and fluctuating ranges up, over time.

The concern here, though, even if we drop back down below 1.5 degrees C for a while is that this temperature band opens up a whole new spectrum of weather-related consequences, ranging from substantial, persistent, crop-killing, barely survivable heat and drought in some parts of the world, to things like larger, more frequent, and more difficult to predict storm systems, like the ones we’ve already seen in abundance this and last year, but bigger and wilder and in more areas that don’t typically see such storms.

What I’d like to talk about today is what happened at a recent climate-policy focused meeting, COP29, and the international response to that meeting.

—

The United Nations Conference of the Parties of the UN Climate Change Conference, or COP meetings, are held every year in a different host country, and they’re meant to serve as a formal space where governments can present their goals and boast of their climate-related accomplishments. They also serve as a platform for negotiations related to things like emissions standards and goal-setting, like that aforementioned 1.5 degrees C temperature level we’ve been trying to avoid hitting.

The most recent of these meetings, COP29, was held in Baku, the capitol of Azerbaijan, in mid- to late-November of 2024. And that location was pretty controversial from the get-go because Azerbaijan is a petro-state: its authoritarian government basically funded and sustained by the sale of oil and gas, all of which flows through a state-owned, corruption-laden, local elite-profiting energy company.

This isn’t the first time a full-on petro-state has hosted a COP meeting, as COP28 was held in Dubai, in the UAE, which was also controversial.

But this one was seen as a step even further toward what might read as the appropriation or capture of the COP meetings for the benefit of fossil fuel entities, as the meeting was partly hosted by so-called official partners, which were fossil fuel business interests directly owned by the country’s president, while others weren’t directly owned, but were connected to his family’s other businesses, all of them thus linked to both authoritarian corruption, and the wealth associated with fossil fuel focused economics.

As a result, there were allegations that this whole meeting was premised on providing a notorious source of greenhouse gas emissions, which has every reason to try to keep those emitting products available for as long as possible, a venue for greenwashing their efforts, while also giving them the power to moderate discussions related to global emissions targets and other climate change-oriented issues; a major conflict of interest, basically.

The Azerbaijani president, leading up to the meeting, countered that critiques of his country’s government and human rights record and prominence as a fossil fuel exporter were all part of a smear campaign, and that these unwarranted, preemptive criticisms wouldn’t stop those running COP29 from achieving their goal of helping the world “cope with the negative impacts of climate change.”

That statement, too, was criticized, as it implies fossil fuel are more interested in pushing the world to adapt to a climate change and its impacts, rather than attempting to halt the emissions that are causing said climate change; many such companies seem keen to keep pumping oil and burning coal and gas forever, in other words, and their efforts in this regard thus tend to orient around figuring out what the new, warmer, more chaotic world looks like, rather than entertaining the idea of changing their business model in any substantial way.

So leading up to this meeting, expectations were low, and by some estimates and according to some analysis, those low expectations were met.

Article 6 of the Paris Agreement was a big topic of discussion, for instance, as this article outlines how countries can cooperate with each other to reach their climate targets—and this collaboration is predicated on a carbon credit system.

So if County A reduces their emissions by more than the targets set by this group, they can sell the gap, the amount of carbon equivalents not emitted into the atmosphere, to Country B, which failed to reach its targets, but which can bring its emissions into accord by acquiring those credits, which according to such a system count as emissions reductions.

This same general concept applies to companies, like airlines and even fossil fuel producing energy companies, as well.

But while the agreement reached at COP29 does establish a UN-backed carbon credit trading body, which has been heralded as a key step on the way toward concluding Article 6 negotiations that could open up a bunch of new finance for smaller and poorer countries in particular—as they could sell their carbon credits to their wealthier, more emitting fellow COP members—despite that progress, the scaffolding that exists now is generally considered to be leaky and rife with abuse potential, as the UN body doesn’t really have the teeth to enforce anything or do much checking into claims made by governments and corporations. A lot of this system is basically on the honor system, and that means just like the stated goals presented by governments and corporations as to when they’re be net-zero and when they’ll reach the even further-off goal of zero emissions, these claims are often worth little or nothing because there’s no mechanism for punishing entities that fail to live up to their boasts and ambitions.

A company or government could say they plan to hit net-zero by 2035, then, but if they don’t do anything that would allow them to hit that goal in that lead-up to that year, they get to keep claiming to be part of the solution, without having to do any of the work to actually achieve anything. This grants them the veil of sustainability, and without any real consequence.

Also notable here is that this meeting’s progress on Article 6, establishing that UN body, was pushed through using a questionable procedural move that disallowed negotiation, despite this same proposal having been dismissed after negotiation at previous COP meetings.

So while it’s arguably good to see progress of any kind on these matters, that this component of Article 6 was voted down previously, but then forced through using what amounts to a technicality early on at COP29 is being side-eyed by a lot of COP watchers who worry about these meetings being coopted by forces that are keen to see this carbon system formalized not because it will help the world reduce emissions, but because it will create a new asset class worth hundreds of billions of dollars, which many of them hope to profit from.

It’s worth noting, too, that all of the carbon credit markets that have been tried, so far, have either collapsed or served as mechanisms for greenwashing emitting activities; less than 16% of carbon credits issued up till this point represent actual, provable emissions reductions, and most of them are basically just dressed-up money grabs. This new move, despite representing progress of a sort, isn’t being seen as substantial enough to change the current carbon credit paradigm, as those issues have not been addressed, yet.

All that said, the big news out of COP29 was a deal that requires wealthier nations make a big payout to poorer nations in the form of climate finance; so paying for renewable energy infrastructure, paying for flood walls, things like that, so that poorer countries can leap-frog the fossil fuel era, and so they can deal with and survive the consequences of climate change, which is something they bear a lot less responsibility for than wealthier, far more emitting countries.

Those on the receiving end, representing the nations that will receive payments via this plan, were aiming for a minimum of $500 billion, payable in full by 2035, and they were pushing for a lot more than that: something like $1.3 trillion.

The final sum was lower than the minimum target, though, weighing in at just $300 billion; which isn’t great in contrast to those hoped-for figures, though on the upside, it is three-times what was promised as part of a previously negotiated deal from 2009.

Representatives from poorer nations have expressed their discontentment with this agreement, saying that the sum is paltry compared to the challenges they face in trying to shift to renewables while also scrambling to defend against increasingly dangerous temperatures and weather patterns.

They’ve also criticized the meeting’s leadership for basically gaveling this version of the agreement through before it could be commented upon by those on the receiving end of these payouts.

Summing up the consequences of this meeting, then, a lot of money matters were discussed, which is important, and more money was promised to poorer nations by wealthy nations than at earlier meetings, which is also generally considered to be vital to this transition, and to overall fairness within this context—since again, these nations have contributed very little to the issue of climate change, compared to wealthier nations, and they bear a disproportionate amount of the negative consequences of climate change, as well.

There are serious concerns that some of these things were passed without the usual level of democratic consideration, and that some of the money talk, especially related to carbon credits, could represent basically a cash-grab by entities that aren’t super-interested in actually changing the status quo, but are very interested in making potentially tens or hundreds of billions of dollars from what amounts to a fabricated asset class that they can spin-up out of nothing.

There’s a chance that some of this, even the stuff that’s sparking the most concern at the moment, and which seems to be a cynical appropriation of this group and this whole process, could actually lead to more substantial agreements at future COP meetings.

COP30 will be based in Brazil, and Brazil’s current leadership at least has shown itself to be decently concerned with actual climate issues, as opposed to just the money associated with them. And previous meetings have tended to build upon the agreements of their precursors—so the establishment of a UN body for carbon credits could clear the way for an actually empowered, punishment-capable institution that holds companies and countries to their word on things, rather than simply serving as a symbolic institution that watches over a made-up asset class, which seems to be the case, currently. That asset class could become less prone to abuse and manipulation, and could help with this energy transition as it’s ostensibly meant to; but that’ll be determined in large part by what happens at the next couple meetings.

However this policymaking plays out, we’ve stepped into a world in which 1.5 C is no longer a far off concern, but a lived reality, at least periodically, and that could nudge things more in the direction of practical outcomes, rather than aspirations and fuzzy goals from this and similar bodies; though the consequences of this and the last few COP meetings have arguably led to luke-warm progress in that direction, at best.

Show Notes

https://www.wsj.com/articles/u-n-negotiators-take-key-step-to-global-carbon-deal-1e23433e

https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism

https://en.wikipedia.org/wiki/Petroleum_industry_in_Azerbaijan

https://en.wikipedia.org/wiki/United_Nations_Climate_Change_Conference

https://www.semafor.com/article/11/24/2024/the-cop29-deal-is-even-more-disappointing-than-it-looks

https://apnews.com/article/united-nations-climate-talks-baku-azerbaijan-finance-8ab629945660ee97d58cdbef10136f35

https://www.theguardian.com/environment/2024/nov/24/cop29s-new-carbon-market-rules-offer-hope-after-scandal-and-deadlock

https://www.businessgreen.com/blog-post/4382153/cop29-baku-breakthrough-disappoints-trigger-fresh-wave-climate-finance

https://news.mit.edu/2023/explained-climate-benchmark-rising-temperatures-0827

https://www.theguardian.com/environment/2024/nov/18/climate-crisis-world-temperature-target

https://grist.org/economics/how-the-world-gave-up-on-1-5-degrees-overshoot/

https://www.washingtonpost.com/climate-environment/2024/11/27/global-warming-fight-paris-agreement-future/

https://en.wikipedia.org/wiki/Paris_Agreement

We also discuss social platform clones, user exoduses, and communication fractures.

Recommended Book: Invisible Rulers by Renée DiResta

Transcript

In 2006, a prototype of a software project called twttr, t-w-t-t-r, was developed by Jack Dorsey and Florian Weber, that name used because the full twitter.com domain, the word with all its vowels, was already owned and in use, and because the vowel-less version of the word only had five letters, which aligned with SMS short codes for the US, which were basically shorthand versions of telephone numbers that were used in lieu of such numbers by mobile network operators at the time.

Going without vowels was also super trendy in Silicon Valley back then, due to the flourishing of online success stories like Flickr.

Twitter, in that early incarnation, was meant to be a one-to-many SMS service, which means sending text messages from one phone to multiple phones, rather than one to one, which was the default.

This early prototype was used internally at Odeo, which was an early-2000s web-based media directory, founded by some of the same people who eventually founded Twitter as a company, and random fun fact, Kevin Systrom who eventually cofounded Instagram, was an intern at Odeo one summer, back in 2005, before the company was sold in 2007.

Twitter was spun out as its own company the same year Odeo was sold, and by 2009 it had become the hot new thing in the burgeoning world of the web—folks were sending tens of thousands of tweets, messages that were shared one-to-many, though online, on the web, instead of via SMS, by the end of 2007, and that was up to 50 million a day by early 2010.

The whole concept of Twitter, then, from its name, which was initially predicated on SMS short codes, to its famous 140-character limit, was based on earlier technology, that of text messages, and that sort of limitation—which has in the years since been messed with a bit, the company slowly adding more capabilities, including the sharing of images and videos and other media types—but those limitations have in part helped define this platform from its peers, as while Facebook expanded and expanded and expanded to gobble up all of its general-purpose social networking competitors, Instagram dominated the photo-posting space, and YouTube has locked down the long-form video world for more than a decade, twitter held its own as a less-sprawling, less successful by most metrics, but arguably more influential network because it was a place that was optimized for concision and up-to-the-minute conversation, as opposed to every other possible thing it could be.

This meant that while it didn’t have the same billion-plus user base, and it didn’t have the ever-growing ad-revenue that Meta’s platforms could claim, it was almost always the more culturally relevant network, its users sharing more up-to-date information, its communities generating more memes, which were then spread to other networks days or weeks later, and it became a hotbed of debate and exclusive information from journalists, politicians, and business owners.

A lot changed when Tesla and SpaceX owner Elon Musk bought the network in October of 2022, changing the name to X in mid-2023, and pivoting the company dramatically in basically every way: removing a lot of those earlier limitations, cutting the number of employees by something like 80%, and losing a lot of advertisers because of his many ideological statements and political stances—including his backing of former president and now president-elect Donald Trump in the 2024 election.

What I’d like to talk about today are the twitter clones that have popped up in recent years, and one in particular that, despite its still-small size and arguable underdog status, is being heralded as the possible successor of Twitter—in that original, influential and scrappy sense—and what makes this network, Bluesky, different from other would-be successors in this space.

—

The leadership at X, including owner Musk, recently promoted a new feature on the app that refocuses attention away from buttons like likes and shares in favor of views—a metric of engagement that some analysts have claimed is meant to conceal the fact that the network is seeing a lot less actual, human engagement, and because it feeds people posts it wants them to see, this change allows them to artificially inflate the seeming activity on these posts for advertising purposes: they can say, hey look how much attention these posts are getting, please buy some ads, and that allows them to charge a higher price than if they were using those more conventional engagement metrics, which are apparently collapsing.

As a company, X has been hemorrhaging money since Musk took over, its ad revenue, which makes up the majority of its income, dropping by nearly half from 2022 to 2023, and it lost another 24% from the first half of 2023 to the first half of 2024.

One estimate released in November of 2024 suggests that X may have missed out on nearly $6 billion in lost ad revenue since Musk took over in 2022, mostly because of all the decisions he’s made—including basically going to war with many of the company’s top advertisers, publicly criticizing and threatening them for not paying more and buying more ads—but also his many foot-in-mouth statements and, at times, support of extremist causes and characters.

He’s attempted to bring some of those advertisers back, with mixed success, as the ones that have returned after boycotts have usually invested far less than in the past, and most of the ad-buyers that have filled the gaps are paying a lot less per ad unit than before, and are generally of a lower quality: a lot of cheaply products from low-grade Chinese factories, scams of various sorts, and/or products sold by companies that are politically conservative culture-warriors, aimed at the network’s increasingly right-leaning and far-right audience; a bit like what we’ve seen on Fox News over the past decade or so, following waves of sexual assault and other scandals on that network, which led to similar advertiser exoduses.

It’s also been estimated that the network lost a substantial portion of its total user-base following Musk’s takeover, including something like a third of all users in the UK and around a fifth in the United States, all just in 2024, up till the month of September.

That loss of revenue and users was enough to cause Fidelity, which owns a multi-million-dollar stake in X, to write down the value of its investment by more than 75%; in July of 2024, it estimated the company, which was purchased for about $44 billion by Musk was only worth about $9.4 billion; a substantial loss for them and their investment, but also for all other shareholders.

All of which leads up to what happened in the wake of the US’s most recent presidential election, during which Musk shelled out more than $100 million to support Trump’s campaign, while also pulling out all the stops to promote the former president on X—something that many users weren’t too keen on, as the owners of other social networks have been criticized and threatened in the past for showing any hint of political bias in their business decisions or personal life, and this was incredibly overt.

This heavy-handed biasing of the network toward Trump, and that very public support of the candidate by X’s owner, sparked a new exodus from the platform, some people simply quitting social media entirely, at least for a while, but others looking for something of the same, and thus checking out the twitter-clones that have popped up over the past handful of years; the majority of which only actually gained real momentum in the wake of Musk’s takeover and rebranding of the network a few years ago.

One of those twitter-alternatives, Mastodon, attracted a lot of early attention because of what it offered that twitter, and other mainstream social networks, did not: an open source platform based on the ActivityPub protocol, which means it can connected to other ActivityPub-capable social networks.

So in theory at least, you can have a profile on a Mastodon instance—which a self-hosted Mastodon network, a social platform island of sorts that is connected to other such islands, the totality of the social network made up of a huge number of such instances, all interconnected in various ways, and each offering different rules and focuses—you can have that profile on that island function on other networks beyond Mastodon, as well.

And that’s interesting because it means your work, your posts and conversations, are all more portable, allowing you to move to different networks if you choose, without losing your history and connections and credibility, because it’s all compatible with other networks.

So it’s almost like having a Facebook profile that you can also use on Twitter and Instagram and YouTube, if all those networks played well together and shared information and post types between each other; that’s the promise of a protocol like ActivityPub and a network like Mastodon.

Mastodon was made public in 2016 as a nonprofit, has basically the same feature-set as pre-Musk twitter, and while it had already gained a steady stream of users from previous upsets at networks like Twitter, Facebook, and Tumblr, among other more mainstream networks, it attained a huge number of new users in 2022 on the news that Musk would be taking over Twitter, hitting around 2.5 million monthly active users by the end of that year.

That number has since dropped to just under a million as of September 2024, suggesting that the initial wave of enthusiasm has crested; though the platform continues to see a lot of support within some online communities, and its interactivity with other networks, including Meta’s Threads, which has also added ActivityPub functionality, means that its numbers will always be a little weird, as folks can read Mastodon content and interact with Mastodon users from other, connected networks.

Speaking of which, Threads is a twitter-clone that was released by Facebook and Instagram parent-company Meta in July of 2023, and it attained more than 100 million users in just five days, which set a new record for the rate of user-attainment.

It took a little while for the network to be released beyond the US, especially in the EU, due to regulatory concerns, and an earlier version of the app was more of a Snapchat-clone, but that one did badly enough with users that the company pulled it from app stores and reused the brand for this new app a few years after that failed experiment.

Threads was able to achieve that high adoption rate in part because it promoted the app heavily on Instagram and Facebook, and in part because of Musk’s takeover of, and changes to Twitter. Folks looking for a Twitter-alternative, but who didn’t want to deal with the comparable complexity of something like Mastodon flooded into this new network, and Meta’s decision to push politics and other serious discussions to the algorithmic back-burner made it a friendly space for brands and influencers who didn’t want to be associated with the chaotic forces that were swirling around the newly rebranded X.

So Threads is similar to Twitter, but it supports ActivityPub, like Mastodon, and has similar community guidelines to other Meta products—which means there’s a lot less nudity, and fewer references to illegal things, like drugs.

It was recently announced that Threads has surpassed 275 million monthly active users, which puts it within spitting distance of independent assessments of X’s monthly active user figure, which Musk recently said was around 600 million, but Sensor Tower says is closer to 318 million, as of October of 2024.

There’s been some hubbub about the possibility that Threads might be seeing losses in activity on the network, though, including a drop in how much time users spend on it. This is potentially the result of that decision to keep controversial stuff more or less hidden, and to heavy handedly, compared to other networks, at least, curate the feeds of users, who have very limited power over what they see in their feeds.

The company announced they would be adjusting the algorithm significantly in the near-future, in order to allow more breaking news and other such posts to rise to the forefront, and it’s thought that this might be a response to the recent success of another twitter-clone called Bluesky.

Bluesky was founded in 2021, and it was originally, back in 2019, an initiative by Twitter to see if decentralizing the network might be possible—making Twitter just one network in a fediverse of networks, basically. As a result, it’s perched atop an open communication protocol it developed called the AT Protocol, which is distinct from, but similar in utility to ActivityPub, in that it allows social platforms to link up and interact with each other, despite being different networks.

Bluesky is superficially similar to pre-Musk twitter, but one of its killer apps, one of the things that distinguishes it from most other options in this space right now, alongside the AT Protocol, is the ability to choose your own algorithm, so that rather than having Meta decide what you see in your feed, and rather than just seeing a chronological list of posts from people you follow, you can also choose to follow curated lists of people, to tweak the word and content filters you use, the way posts are arranged, and an abundance of other options; it’s pretty versatile, and you can easily flip between different filters to peruse different sorts of content filtered in different ways.

The network launched on an invite-only basis in 2023, and was fully opened to the public in February of 2024, at which point it had already attracted more than 3 million users.

Shortly after that launch, Jack Dorsey—the co-founder of Twitter and Bluesky—left Bluesky’s board, saying that the company was making all the mistakes Twitter made and that he was stepping aside to focus on another decentralized social network he founded, Nostr, instead.

Bluesky continued to gain users though, relatively slowly most of the time, though whenever Musk did something controversial they would typically see a larger influx, as was the case for all twitter-clones.

In October of 2024, several changes to Twitter, including one that basically rendered its block feature useless, and another that said the company could use all posted content for AI training purposes, led to a surge in Bluesky adoption, bringing in more than 1.2 million users in just two days.

That paled in comparison to what happened in November, following the election, though, when Bluesky started to grow by about a million users a day, catapulting its user base to more than 20 people million as of November 20—a surge that rocketed the app to the top of the app charts. And for context, the company only has about 20 employees, as of late-November, so that’s a huge employee-to-user ratio.

Bluesky is not without controversy, as the company’s leadership has already been criticized for taking investment money from Blockchain Capitol, which could change its incentives, and though it’s approaching 25 million users as of the day I’m recording this, up from a small fraction of that just a month ago, that’s less than 10% of what Threads and X have, and that growth is almost certain to slow sometime soon, once the post-election flight from X has subsided; so it’s possible this surge could be similar to what Mastodon saw not too long ago—a big surge in users, followed by a ebb in activity as people stop using the network for various reasons.

The company has also been experiencing growing pains, in terms of tech, because of that sudden, much larger scale, but also in terms of culture.

All those newbies joining the network all at once are changing the platform’s makeup, accidentally trampling Bluesky’s traditions and folkways, while also changing the conversational mores and topics and trends from how they were, pre-user-flood.

Bluesky is currently the one the beat in terms of growth rate, in other words, and it seems to have achieved significant cultural resonance following the election, especially for people on the left of the political spectrum who no longer feel welcome or comfortable on X.

But both Mastodon and Threads have represented the same in recent years, too, though their growth largely the consequence of X’s failure, not necessarily the result of their own accolades and advantages.

It’s possible what we’re seeing here, then, is not a struggle to become the next Twitter, but rather the emergence of a fractured text-based social media ecosystem, each platform offering something the others don’t, or favoring some groups and their needs over those of others, and that, in turn, leading to a more fractured communication ecosystem, and maybe reinforced filter bubbles, as well.

Show Notes

https://www.fastcompany.com/91230935/the-website-tracks-how-fast-bluesky-is-growing-in-near-real-time

https://techcrunch.com/2024/10/18/bluesky-surges-into-the-top-5-as-x-changes-blocks-permits-ai-training-on-its-data/

https://en.wikipedia.org/wiki/Threads_(social_network)

https://news.sky.com/story/the-x-exodus-could-bluesky-spike-spark-end-of-elon-musks-social-media-platform-13254722

https://www.newsweek.com/elon-musk-hides-x-engagement-figures-user-exodus-1990065

https://www.cnbc.com/2024/10/31/metas-threads-app-now-has-275-million-users-zuckerberg-says.html

https://www.odwyerpr.com/story/public/21747/2024-08-27/ad-revenue-freefall-continues-at-x.html

https://www.warc.com/content/paywall/article/warc-curated-datapoints/counting-the-cost-xs-59bn-in-lost-ad-revenue-since-its-2022-takeover/en-gb/157583

https://www.euronews.com/my-europe/2024/11/21/are-users-leaving-elon-musks-x-en-masse-and-where-are-they-heading

https://www.euronews.com/next/2024/10/01/x-has-lost-75-of-its-value-since-elon-musk-took-over

https://www.cnn.com/2024/11/06/business/elon-musk-election-bet/index.html

https://anderegg.ca/2024/11/15/maybe-bluesky-has-won

https://www.nytimes.com/2024/11/17/technology/bluesky-growing-pains.html

https://thenextweb.com/twitter/2011/07/15/5-years-ago-today-twitter-launched-to-the-public/

https://www.businessinsider.com/how-twitter-was-founded-2011-4?op=1

https://www.nytimes.com/2010/10/31/technology/31ev.html

https://en.wikipedia.org/wiki/Twitter

https://en.wikipedia.org/wiki/X_Corp.

We also discuss training data, user acquisition, and energy consumption.

Recommended Book: Through the Grapevine by Taylor N. Carlson

Transcript

Depending on whose numbers you use, and which industries and types of investment those numbers include, the global AI industry—that is, the industry focused on producing and selling artificial intelligence-based tools—is valued at something like a fifth to a quarter of a trillion dollars, as of halfway through 2024, and is expected to grow to several times that over the next handful of years, that estimate ranging from two or three times, to upward of ten or twenty-times the current value—again, depending on what numbers you track and how you extrapolate outward from those numbers.

That existing valuation, and that projected (or in some cases, hoped-for growth) is predicated in part on the explosive success of this industry, already.

It went from around $10 billion in global annual revenue in 2018 to nearly $100 billion in global revenue in 2024, and the big players in this space—among them OpenAI, which kicked off the most recent AI-related race, the one focusing on large-language models, or LLMs, when it released its ChatGPT tool at the tail-end of 2022—have been attracting customers at a remarkable rate, OpenAI hitting a million users in just five days, and pulling in more than 100 million monthly users by early 2023; a rate of customer acquisition that broke all sorts of records.

This industry’s compound annual growth rate is approaching 40%, and is expected to maintain a rate of something like 37% through 2030, which basically means it has a highly desirable rate of return on investment, especially compared to other potential investment targets.

And the market itself, separate from the income derived from that market, is expected to grow astonishingly fast due to the wide variety of applications that’re being found for AI tools; that market expanded by something like 50% year over year for the past five years, and is anticipated to continue growing by about 25% for at least the next several years, as more entities incorporate these tools into their setups, and as more, and more powerful tools are developed.

All of which paints a pretty flowery picture for AI-based tools, which justifies, in the minds of some analysts, at least, the high valuations many AI companies are receiving: just like many other types of tech companies, like social networks, crypto startups, and until recently at least, metaverse-oriented entities, AI companies are valued primarily based on their future potential outcomes, not what they’re doing today.

So while many such companies are already showing impressive numbers, their numbers five and ten years from now could be even higher, perhaps ridiculously so, if some predictions about their utility and use come to fruition, and that’s a big part of why their valuations are so astronomical compared to their current performance metrics.

The idea, then, is that basically every company on the planet, not to mention governments and militaries and other agencies and organizations will be able to amp-up their offerings, and deploy entirely new ones, saving all kinds of money while producing more of whatever it is they produce, by using these AI tools. And that could mean this becomes the industry to replace all other industries, or bare-minimum upon which all other industries become reliant; a bit like power companies, or increasingly, those that build and operate data centers.

There’s a burgeoning counter-narrative to this narrative, though, that suggests we might soon run into a wall with all of this, and that, consequently, some of these expectations, and thus, these future-facing valuations, might not be as solid as many players in this space hope or expect.

And that’s what I’d like to talk about today: AI scaling walls—what they are, and what they might mean for this industry, and all those other industries and entities that it touches.

—

In the world of artificial intelligence, artificial general intelligence, or AGI, is considered by many to be the ultimate end-goal of all the investment and application in and of these systems that we’re doing today.

The specifics of what AGI means varies based on who you talk to, but the idea is that an artificial general intelligence would be “generally” smart and capable in the same, or in a similar way, to human beings: not just great at doing math and not just great at folding proteins, or folding clothes, but pretty solid at most things, and trainable to be decent, or better than decent at potentially everything.

If you could develop such a model, that would allow you, in theory, to push humans out of the loop for just about every job: an AI bot could work the cash register at the grocery store, could drive all the taxis, and could do all of our astronomy research, to name just a few of the great many jobs these systems could take on, subbing in for human beings who would almost always be more expensive, but who—this AI being a generalist and pretty good at everything—wouldn’t necessarily do any better than these snazzy new AI systems.

So AGI is a big deal because of what it would represent in terms of us suddenly having a potentially equivalent intelligence, an equivalent non-human intelligence, to deal with and theorize over, but it would also be a big deal because it could more or less put everyone out of work, which would no doubt be immensely disruptive, but it would also be really, really great for the pocketbooks of all the companies that are currently burdened with all those paychecks they have to sign each month.

The general theory of neural network-based AI systems, which basically means software that is based in some way on the neural networks that biological entities, like mice and fruit flies and humans have in our brains and throughout our bodies, is that these networks should continue to scale as the number of factors that go into making them scale: and usually those factors include the size of the model—which in the case of most of these systems means the number of parameters it includes—the size of the dataset it trains on—which is the amount of data, written, visual, audio, and otherwise, that it’s fed as it’s being trained—and the amount of time and resources invested in its training—which is a variable sort of thing, as there are faster and slower methods for training, and there are more efficient ways to train that use less energy—but in general, more time and more resources will equal a more girthy, capable AI system.

So scale those things up and you’ll tend to get a bigger, up-scaled AI on the other side, which will tend to be more capable in a variety of ways; this is similar, in a way, to biological neural networks gaining more neurons, more connections between those neurons, and more life experience training those neurons and connections to help us understand the world, and be more capable of operating within it.

That’s been the theory for a long while, but the results from recent training sessions seem to be pouring cold water on that assumption, at least a bit, and at least in some circles.

One existing scaling concern in this space is that we, as a civilization, will simply run out of novel data to train these things on within a couple of years.

The pace at which modern models are being trained is extraordinary, and this is a big part of why the larger players, here, don’t even seriously talk about compensating the people and entities that created the writings and TV shows and music they scrape from the web and other archives of such things to train their systems: they are using basically all of it, and even the smallest payout would represent a significant portion of their total resources and future revenues; this might not be fair or even legal, then, but that’s a necessary sacrifice to build these models, according to the logic of this industry at the moment.

The concern that is emerging, here, is that because they’ve already basically scooped up all of the stuff we’ve ever made as a species, we’re on the verge of running out of new stuff, and that means future models won’t have more music and writing and whatnot to use—it’ll have to rely on more of the same, or, and this could be even worse, it’ll have to rely on the increasing volume of AI-generated content for future iterations, which could result in what’s sometimes called a “Habsburg AI,” referring to the consequences of inbreeding over the course of generations: and future models using AI-generated content as their source materials may produce distorted end-products that are less and less useful (and even intelligible) to humans, which in turn will make them less useful overall, despite technically being more powerful.

Another concern is related to the issue of physical infrastructure.

In short, global data centers, which run the internet, but also AI systems, are already using something like 1.5-2% of all the energy produced, globally, and AI, which use an estimated 33% more power to generate a paragraph of writing or an image, than task-specific software would consume to do the same, is expected to double that figure by 2025, due in part to the energetic costs of training new models, and in part to the cost of delivering results, like those produced by the ChatGPTs of the world, and those increasingly generated in lieu of traditional search results, like by Google’s AI offerings that’re often plastered at the top of their search results pages, these days.

There’s a chance that AI could also be used to reduce overall energy consumption in a variety of ways, and to increase the efficiency of energy grids and energy production facilities, by figuring out the optimal locations for solar panels and coming up with new materials that will increase the efficiency of energy transmission. But those are currently speculative benefits, and the current impact of AI on the energy grid is depletionary, not additive.

There’s a chance, then that we’ll simply run out of energy, especially on a local basis, where the training hubs are built, to train the newest and greatest and biggest models in the coming years. But we could also run out of other necessary resources, like the ginormous data centers required to do said training, and even the specific chips that are optimized for this purpose that are in increasingly short supply because of how vital this task has become for so many tech companies, globally.

The newest concern in this space, related to future growth, though, is related to what are called scaling laws, which refer to a variety of theories—some tested, some not yet fully tested—about how much growth you can expect if you use the same general AI system structure, and just keep pumping it up with more resources, training data, and training time.

The current batch of most powerful and, for many use-cases, most useful AI systems are the result of scaling basically the same AI system structure so that it becomes more powerful and capable over time. There’s delay between new generations because tweaks are made, all that training and feeding has to be done, but also because there are adjustments required afterward to optimize the system for different purposes and for stability.

But a slew of industry experts have been raising the alarm about a possible bubble in this space, not because it’s impossible to build more powerful AI, but because the majority of resources that have been pumped into the AI industry in recent years are basically just inflating a giant balloon predicated on scaling the same things over and over again, every company doing this scaling hoping to reach AGI or something close to AGI before their competitors, in order to justify those investments and their sprawling valuations.

In other words, it’s a race to a destination that they might not be able to reach, in the near-future, or ever, using the current batch of technologies and commonly exploited approaches, but they can’t afford to dabble in too many alternatives, at least not thoroughly, because there’s a chance if they take their eyes off the race they’re running, right now, one of their many also-super-well-funded opponents will get there first, and they’ll be able to make history, while also claiming the lion’s share of the profits, which could be as substantial as the entire economy, if you think of those aforementioned benefits of being able to replace a huge chunk of the world’s total employee base with equally capable bots.

The most common version of this argument, that the current generation of AI systems are hitting a point of diminishing returns—still growing and becoming more powerful as they scale, but not as much as anticipated, less growth and power per unit of resource, training time, size of dataset, and so on, compared to previous generations—and that diminishment means, according to this argument, we’ll continue to see a lot of impressive improvements, but should not longer expect the doubling of capability every 5 to 14 months that we’ve seen these past few years.

We’ve picked the low-hanging fruit, in other words, and everything from this point forward will be more expensive, less certain, and thus, less appealing to investors—while also potentially being less profitable, and thus, the money that’s been plowed into these businesses, thus far, might not payout, and we could see some large-scale collapses due to the disappearance of those resources that are currently funding this wave of AI-scaling, as a consequence.

If true, this would be very bad in a lot of ways, in part because these are resources that could have been invested in other things, and in part because a lot of hardware and know-how and governmental heft have been biased toward these systems for years now; so the black hole left behind, should all of that disappear or prove to be less than many people assumed, would be substantial, and could lead to larger-scale economic issues; that gaping void, that gravity well made worse because of those aforementioned sky-high valuations, which are predicated mostly on what these companies are expected to do in the future, not what they’re doing, today—so that would represent a lot of waste, and a lot of unrealized, but maybe never feasible in the first place, potential.

This space is maybe propped up by hype and outlandish expectations, in other words, and the most recent results from OpenAI and their upcoming model seem to lend this argument at least some credibility: the publicly divulged numbers only show a relatively moderate improvement over their previous core model, GPT4, and it’s been suggested, including by folks who previously ran OpenAI, that more optimizing after the fact, post-training, will be necessary to get the improvements the market and customers are expecting—which comes with its own unknowns and additional costs, alongside a lack of seemingly reliable, predictable scaling laws.

For their part, the folks currently at the top of the major AI companies have either ignored this line of theorizing, or said there are no walls, nothing to see here, folks, everything is going fine. 

Which could be true, but they’re also heavily motivated not to panic the market, so there’s no way to really know at this point how legit their counter-claims might be; there could be new developments we’re not currently, publicly aware of, but it could also be that they’re already working those post-training augmentations into their model of scaling, and just not mentioning that for financial reasons.

AI remains a truly remarkable component of the tech world, right now, in part because of what these systems have already shown themselves capable of, but also because of those potential, mostly theorized, at this point, benefits they could enable, across the economy, across the energy grid, and so on.

The near-future outcomes, though, will be interesting to watch, as it could be we’ll see a lot of fluffed-up models that roughly align with anticipated scaling-laws, but which didn’t get there by the expected, training-focused paths, which would continue to draw questions from investors who had specific ideas about how much it would cost to get what sorts of outcomes, which in turn would curse this segment of the economy and technological development with more precarious footing than it currently enjoys.

We might also see a renewed focus on how these systems are made available to users: a rethinking of the interfaces used, and the use-cases they’re optimized for, which could make the existing (and near-future) models ever more useful, despite not becoming as powerful as anticipated, and despite probably not getting meaningfully closer to AGI, in the process.

Show Notes

https://arxiv.org/abs/2311.16863

https://www.weforum.org/stories/2024/07/generative-ai-energy-emissions/

https://epochai.org/blog/will-we-run-out-of-ml-data-evidence-from-projecting-dataset

https://www.semafor.com/article/11/13/2024/tiktoks-new-trademark-filings-suggest-its-doubling-down-on-its-us-business

https://arxiv.org/abs/2001.08361

https://archive.ph/d24pA

https://www.fastcompany.com/91228329/a-funny-thing-happened-on-the-way-to-agi-model-supersizing-has-hit-a-wall

https://futurism.com/the-byte/openai-research-best-models-wrong-answers

https://en.wikipedia.org/wiki/Neural_network_(machine_learning)

https://en.wikipedia.org/wiki/Neural_scaling_law

https://futurism.com/the-byte/openai-research-best-models-wrong-answers

https://futurism.com/the-byte/ai-expert-crash-imminent

https://www.theverge.com/2024/10/25/24279600/google-next-gemini-ai-model-openai-december

https://ourworldindata.org/artificial-intelligence?insight=ai-hardware-production-especially-cpus-and-gpus-is-concentrated-in-a-few-key-countries

https://blogs.idc.com/2024/08/21/idcs-worldwide-ai-and-generative-ai-spending-industry-outlook/

https://explodingtopics.com/blog/chatgpt-users

https://explodingtopics.com/blog/ai-statistics

https://www.aiprm.com/ai-statistics/

https://www.forbes.com/advisor/business/ai-statistics/

https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai

https://www.researchgate.net/profile/Gissel-Velarde-2/publication/358028059_Artificial_Intelligence_Trends_and_Future_Scenarios_Relations_Between_Statistics_and_Opinions/links/61ec01748d338833e3895f80/Artificial-Intelligence-Trends-and-Future-Scenarios-Relations-Between-Statistics-and-Opinions.pdf

https://www.statista.com/outlook/tmo/artificial-intelligence/worldwide

https://en.wikipedia.org/wiki/Artificial_intelligence#Applications

We also discuss GPTs, cheating, and disruption.

Recommended Book: Autocracy, Inc by Anne Applebaum

Transcript

In July of 2021, the Chinese government implemented a new education rule called the Double Reduction Policy.

This Policy was meant, among other things, to reduce the stress students in the country felt related to their educational attainment, while also imposing sterner regulations on businesses operating in education and education-adjacent industries.

Chinese students spend a lot of time studying—nearly 10 hours per day for kids ages 12-14—and the average weekly study time for students is tallied at 55 hours, which is substantially higher than in most other countries, and quite a lot higher than the international average of 45 hours per week.

This fixation on education is partly cultural, but it’s also partly the result of China’s education system, which has long served to train children to take very high-stakes tests, those tests then determining what sorts of educational and, ultimately, employment futures they can expect. 

These tests are the pathway to a better life, essentially, so the kids face a whole lot of pressure from society and their families to do well, because if they don’t, they’ve sentenced themselves to low-paying jobs and concomitantly low-status lives; it’s a fairly brutal setup, looked at from elsewhere around the world, but it’s something that’s kind of taken for granted in modern China.

On top of all that in-class schoolwork, there’s abundant homework, and that’s led to a thriving private tutoring industry. Families invest heavily in ensuring their kids have a leg-up over everyone else, and that often means paying people to prepare them for those tests, even beyond school hours and well into the weekend.

Because of all this, kids in China suffer abnormally high levels of physical and mental health issues, many of them directly linked to stress, including a chronic lack of sleep, high levels of anxiety, rampant obesity and everything that comes with that, and high levels of suicide, as well; suicide is actually the most common cause of death amongst Chinese teenagers, and the majority of these suicides occur in the lead-up to the gaokao, or National College Entrance Exam, which is the biggest of big important exams that determine how teens will be economically and socially sorted basically for the rest of their lives.

This recent Double Reduction Policy, then, was intended to help temper some of those negative, education-related consequences, reducing the volume of homework kids had to tackle each week, freeing up time for sleep and relaxation, while also putting a cap on the ability of private tutoring companies to influence parents into paying for a bunch of tutoring services; something they’d long done via finger-wagging marketing messages, shaming parents who failed to invest heavily in their child’s educational future, making them feel like they aren’t being good parents because they’re not spending enough on these offerings.

This policy pursued these ends, first, by putting a cap on how much homework could be sent home with students, limiting it to 60 minutes for youngsters, and 90 minutes for middle schoolers.

It also provided resources and rules for non-homework-related after-school services, did away with bad rankings due to poor test performance that might stigmatize students in the future, and killed off some of those fear-inducing, ever-so-important exams altogether.

It also provided some new resources and frameworks for pilot programs that could help their school system evolve in the future, allowing them to try some new things, which could, in theory, then be disseminated to the nation’s larger network of schools if these experiments go well.

And then on the tutoring front, they went nuclear on those private tutoring businesses that were shaming parents into paying large sums of money to train their children beyond school hours.

The government instituted a new system of regulators for this industry, ceased offering new business licenses for tutoring companies, and forced all existing for-profit businesses in this space to become non-profits.

This market was worth about $100 billion when this new policy came into effect, which is a simply staggering sum, but the government basically said you’re not businesses anymore, you can’t operate if you try to make a profit.

This is just one of many industries the current Chinese leadership has clamped-down on over the past handful of years, often on cultural grounds, as was the case with limiting the amount of time children can play video games each day. But like that video game ban, which has apparently shown mixed results, the tutoring ban seems to have led to the creation of a flourishing black market for tutoring services, forcing these sorts of business dealings underground, and thus increasing the fee parents pay for them each month.

In late-October of 2024, the Chinese government, while not formally acknowledging any change to this policy, eased pressure on private tutoring services—the regulators in charge of keeping them operating in accordance with nonprofit structures apparently giving them a nudge and a wink, telling them surreptitiously that they’re allowed to expand again—possibly because China has been suffering a wave of economic issues over the past several years, and the truncation of the tutoring industry led to a lot of mass-firings, tens of thousands of people suddenly without jobs, and a substantial drop in tax revenue, as well, as the country’s stock market lost billions of dollars worth of value basically overnight.

It’s also worth noting here that China’s youth unemployment rate recently hit 18.8%, which is a bogglingly high number, and something that’s not great for stability, in the sense that a lot of young people, even very well educated young people, can’t find a job, which means they have to occupy themselves with other, perhaps less productive things.

But high youth unemployment is also not great for the country’s economic future, as that means these are people who aren’t attaining new skills and experience—and they can’t do that because the companies that might otherwise hire them can’t afford to pay more employees because folks aren’t spending enough on their offerings.

So while it was determined that this industry was hurting children and their families who had to pay these near-compulsory tutoring fees, they also seemed to realize that lacking this industry, their unemployment and broader economic woes would be further inflamed—and allowing for this gray area in the rules seems to be an attempt to have the best of both worlds, though it may leave them burdened with the worst of both worlds, as well.

What I’d like to talk about today is another facet of the global tutoring industry, and how new technologies seem to be flooding into this zone even more rapidly than in other spaces, killing off some of the biggest players and potentially portending the sort of collapse we might also see in other industries in the coming years.

—

Chegg, spelled c-h-e-g-g, is a US-based, education-focused tech company that has provided all sorts of learning-related services to customers since 2006.

It went public on the NYSE in 2013, and in 2021 it was called the “most valuable edtech company in America” by Forbes, due in part to the boom in long-distance education services in the early days of the Covid-19 pandemic; like Peloton and Zoom, Chegg was considered to be a great investment for a future in which more stuff is done remotely, as seemed likely to be the case for a good long while, considering all the distancing and shut-downs we were doing at the time.

In early 2020, before that boom, the company was already reporting that it had 2.9 million subscribers to its Chegg Services offering, which gave users access to all sorts of school-related benefits, including help with homework, access to Q&As with experts, and a huge database of solutions for tests and assignments.

The company then released a sort of social-publishing platform called Uversity in mid-2021, giving educators a place to share their own content, and they acquired a language-learning software company called Busuu, which is a bit like Duolingo, that same year for $436 million.

In May of 2023, though, the company’s CEO said, on an earnings call, that ChatGPT—the incredibly popular, basically overnight-popular large-language-model-powered AI chatbot created by OpenAI—might hinder Chegg’s near-future growth.

The day after that call, Chegg’s stock price dropped by about 48%, cutting the company’s market value nearly in half, and though later that same month he announced that Chegg would partner with OpenAI to launch its own AI platform called Cheggmate, which was launched as a beta in June, by early November the following year, 2024, the company had lost about 99% of its market valuation, dropping from a 2021 high of nearly $100 per share, down to less than $2 per share as of early November.

This isn’t a unique story: LLM-based AI tools, those made by OpenAI but also its competitors, including big tech companies like Google and Microsoft, which have really leaned into this seeming transition, have been messing with market valuations left and right, as this collection of tools and technologies have been evolving really fast—a recent five-year plan for Chegg indicated they didn’t believe something like ChatGPT would exist until 2025 at the earliest, for instance, which turned out to be way off—but they’ve also been killing off high-flying company valuations because these sorts of tools are by definition multi-purpose, and a lot of the low-hanging fruit in any industry is basically just providing information that’s already available somewhere in a more intuitive and accessible fashion; which is something a multi-purpose, bot-interfaced software tool is pretty good at doing, as it turns out.

Chegg’s services were optimized to provide school-related stuff to students—including test and homework answers those students could quickly reference if they wanted to study or cheat—and serving up these resources in a simple manner is what allowed them to pay the bills.

ChatGPT and similar AI tools, though, can do the same, and for practically or literally—for the end-user, at least—free. And it can sometimes do so in a manner that’s even more intuitive than the Cheggs of the world, even if these AI offerings are sometimes jumbled along the way; the risk-reward math is still favorable to a lot of people, because of just how valuable this kind of information provided in this way can be.

Other companies and entire industries are finding themselves in the same general circumstances, also all of a sudden, because their unique value proposition has been offering some kind of information intuitively, or in some cases they’ve provided human interfaces that would do various things for customers: they would look up deals on a particular model of car, they would write marketing copy, they would commentate on sporting events.

Some of these entities are trying to get ahead of the game, like Chegg did, by basically plugging their existing services into AI versions of the same, replacing their human commentators with bots that can manage a fair approximation of those now-unemployed humans, but at a fraction of the cost. Others are facing a huge number of new competitors, as smaller businesses or just individuals are realizing they can pay a little money for AI tokens and credits, plug an API into a website, which allows that AI to populate content on their site automatically, and they can then run the same sort of service with little or no effort, and vitally, little or no overhead.

This creates a race-to-the-bottom situation in many such cases, and often the bots are nowhere near as good as the humans they’re replacing, but especially in situations where human jobs have been optimized so that one human can be replaced with another human relatively simply, it has proven to be fairly easy to fire people and then replace them with non-humans that seem human-enough most of the time.

So blog-writing and video-making and inventory-organizing and, yes, school-tutoring and similar services are increasingly being automated in this way, and while, sure, you could pay a premium to stick with Chegg and access these AI tools via their portal for $20 a month, the bet many investors are making is that folks will probably prefer to get what amounts to the same thing cheaper, or even free, directly from the source, or via one of those other lower-end intermediaries with fewer overhead costs.

Chegg has lost about $14.5 billion in market value since early 2021, and the company is now expected to collapse under the weight of its debts sometime in the near-future; the shift in fortunes brought about by the deployment of generally capable, if not perfectly capable, chat-interface accessible AI tools has been that sudden.

None of which means this is a permanent thing, as entities in industries currently being challenged by AI equivalent or near-equivalent tools might push back with their own, difficult to replicate offerings, and there’s a chance that the small but burgeoning wave of vehemently non-AI tools—those that wave their human-made-ness, their non-AI-ness like a flag, or like an organic, cruelty-free label—might carve out their own sustainable, growable niche. That becomes their unique value proposition in place of what these AI-focused companies stole from them.

But this kind of disruption sometimes leads to an extinction-level event for the majority of operators in a formerly flourishing space.

Chegg, for their part, decided to revamp their AI offering, moving away from the Cheggmate name and working with Scale AI instead of OpenAI, to build a few dozen AI systems optimized for different academic focuses; which could prove to be a valuable differentiator for them, but it could also fall flat in the face of OpenAI’s own re-skinned versions of ChatGPT, called GPTs, which allow users to do basically the same thing, coming up with their own field focused experts and personalities, rather than using the vanilla model of the bot.

There’s a chance this will also help Chegg deal with another AI-related issue—specifically, that ChatGPT was providing better answers to some students’ questions than Chegg’s human-derived offerings; they’re trying to out-bot OpenAI, essentially, doing the homework-AI thing better than ChatGPT, and there’s a chance that offering a demonstrably higher quality of answers might also serve as a survival-enabling differentiator; though their ability to consistently provide better answers in this way is anything but certain.

It’s also worth noting that what we’re talking about here, so far, isn’t the sci-fi dream of a perfect digital tutor—something like the Young Lady’s Illustrated Primer from Neal Stephenson’s novel The Diamond Age, which is something like an AI-powered storybook that adapts its content to the reader, and which then teaches said reader everything they need to know to flourish in life, day by day. Chegg and ChatGPT serve up tools that help students cheat on tests and homework, while also helping them look up information a lot easier when they decide not to cheat, and to practice various sorts of assignments and exams beforehand.

So this is a far easier space to compete in than something more complex and actually tutor-like. It may be, then, that moving in that direction, toward tools that focus more on replacing teachers and tutors, rather than helping students navigate schoolwork, might be the killer app that allows some of these existing tutoring-ish tools to survive and thrive; though it may be that something else comes along in the meantime which fulfills that promise better—maybe ChatGPT, or maybe some new, more focused version of the same general collection of tools.

It’ll probably be a few years before we see how this and similar bets that’re being made by at-risk companies facing the AI barbarians at the gate turn out, and at that point these tools will likely be even more powerful, offering even more capabilities and thus disrupting, or threatening to disrupt, even more companies in even more industries, as a consequence.

Show Notes

https://www.wsj.com/tech/ai/how-chatgpt-brought-down-an-online-education-giant-200b4ff2

https://openai.com/index/introducing-gpts/

https://ai.wharton.upenn.edu/focus-areas/human-technology-interaction/2024-ai-adoption-report/

https://www.weforum.org/stories/2024/07/ai-tutor-china-teaching-gaps/

https://en.wikipedia.org/wiki/Double_Reduction_Policy

https://journals.sagepub.com/doi/full/10.1177/20965311241265123

https://www.sciencedirect.com/science/article/abs/pii/S0738059324000117

https://archive.ph/VKkrL

https://www.japantimes.co.jp/news/2023/07/22/asia-pacific/china-private-tutoring/

https://www.nbcnews.com/news/world/chinas-youth-unemployment-hits-fresh-high-economic-slowdown-restrictiv-rcna172183

We also discuss the Industrial Revolution, natural gas, and offshore wind turbines.

Recommended Book: Deep Utopia by Nick Bostrom

Transcript

This episode is going live on election day here in the US; and this has been quite a remarkable election season for many reasons, among them that there’s been just a boggling amount of money spent on advertisements and events and other efforts to claim attention and mindshare, and in part because the vitriol and tribalism of the past several elections—an evolved, intensified version of those things—has almost completely dominated all those messages.

And as someone who’s based in a swing-state, Wisconsin, I can tell you that it’s been a lot. It’s been a lot everywhere, as US elections also claim more than their fair-share of news reportage in other countries, but in the US, and in the relatively few states that are assumed to be the kingmakers in this election, it’s been just overwhelming for months, for basically a year, actually. So instead of doing anything on the election, or anything overtly political—there’ll no doubt be time for that in the coming weeks, once the dust has settled on all this—let’s talk about coal. And more specifically, British coal.

Coal has been used throughout the British Isles for a long time, with early groups burning unrefined lumps of the substance to heat their homes, though generally only when their local, close-enough-to-the-surface-to-be-gathered source for the stuff was pure enough to beat-out other options, like peat and wood, which was seldom the case in most of these areas.

It was also used to create lime from limestone, the lime used for construction purposes, to make mortar, and it was used for metal-shaping purposes by blacksmiths.

Beyond that, though, it was generally avoided in favor of cleaner-burning options, as coal is often accompanied by sulphur and other such substances, which means when burned in its natural form, it absolutely reeks, and it can make anyone unlucky enough to be caught in the smoke it creates tear-up, because the resulting sulfurous gas would react with their eye-moisture to create sulphuric acid; not pleasant, and even though it was generally better than peat and wood in terms of the energy it contained, it was worse in basically every other way.

Earlier groups of people had figured out the same: there were folks in China as early as 1000 BC, for instance, who used these rocks as fuel for copper smelting, and people in these same early-use areas, where coal veins were exploitable, were really leaning into the stuff by the 13th century AD, when Marco Polo visited and remarked that the locals were burning these weird black stones, which granted them wild luxuries, like being able to take “three hot baths a week.”

Groups in Roman Britain were also surface mining, using, and trading coal at a fairly reasonable level by around 200 AD, though it was still primarily used to process things like grain, which needed to be dried, and to work with iron—as with those Chinese groups, coal has long been appreciated for its smelting capabilities, because of its high energy density compared to other options.

In the British Isles, though, coal was largely imported to major cities by sea, until around the 13th century when the easily accessed deposits were used up, and shaft mining, which granted access to deeper deposits via at times long tunnels that had to be dug and reinforced, was developed and became common, including in areas that hadn’t previously had surface sources that could be exploited.

In the 16th century, this and similar innovations led to a reliable enough supply of coal that folks living in the city of London were able to largely replace their wood- and peat-burning infrastructure with coal-burning versions of the same.

It’s thought that this transition was partly the consequence of widespread deforestation that resulted from a population boom in the city—more lumber was needed to build more buildings, but they also required more burnable wood fuel—though some historians have argued that what actually pushed coal to the forefront, despite its many downsides compared to wood and peat, is the expansion of iron smelting and the increasing necessity of iron for Britain’s many wars during this period, alongside England’s burgeoning glass-making industry.

Both of these manufacturing processes, making iron and glass, required just a silly amount of fuel—making just one ton of the lowest-grade cast iron, so-called pig iron, consumed something like 28 tons of seasoned wood, and glass was similarly wood-hungry.

What’s more, that combination of city expansion and the King’s desire to massively build-out his Navy meant timber resources were continuously being strained anywhere industry popped up and flourished, so those industries would then expand to areas where wood was still cheap, over time making wood it more expensive there, too. Eventually, wood was costly pretty much everywhere, and coal thus became comparably cheap in these regions, and you could use a lot less of it to achieve the same ends.

Even if that subbing-in led to bad smells and burning eyes and clouds of dense, black smoke wherever it was burned, then, the cost differential was substantial enough to make using coal the better option in many such cases and areas.

This boom in coal usage was amplified still further by the rapid clearing of forests due to the expansion of farm- and pastureland.

It was determined, by the late 17th century, that an acre of farm- or pastureland was worth a lot more than woodland used for timber or other purposes—around three-times as valuable—so there was a large-scale deforestation effort to basically claim as much value from these forested lands as possible, dramatically changing the landscape of the British Isles over the course of just a few decades; this transition in part enabled and powered by coal.

Around the year 1700, about five-sixths of all coal that was mined, globally, was mined in Britain, and that helped power the empire’s industrial revolution later that century, beginning in something like 1760, as the majority of clever devices that arose during that period were powered by coal, and the global industrial revolution that eventually created what we might consider technological modernity arose, initially—at least in this manifestation of the concept—from coal-powered Britain.

What I’d like to talk about today is a remarkable coal-related milestone, considering that history, that Britain recently marked, and what it might mean for this and other fuel-types, moving forward.

—

In 1882, the first-ever coal-fired power station opened in London—a thermal power station that uses coal as its fuel, which basically means you refine the stuff, break it into tiny, semi-uniform pieces, and then feed those pieces into a coal-fired boiler. In that boiler the coal is burned to generate heat, and that heat boils water, the resulting steam spinning turbines which turn generators that produce electricity.

Coal-fired power stations are massively inefficient, with modern versions of the model only boasting a 34-ish% efficiency, meaning about 34% of the total energy contained in the fuel source is ultimately converted into electricity—the rest, about 66% of the energy contained in the coal that’s burned, is lost along the way.

That’s not uncommon for power plants, though other fossil fuel-burning plants are somewhat more efficient on average, with oil-powered plants weighing in at about 37% efficiency, and gas-powered versions managing something like 50-60% at their most modern and sophisticated, though simpler variations of the design only achieve about the same as coal.

All fossil fuel-powered power stations emit greenhouse gases into the atmosphere as a byproduct of their operation, which has been shown to stoke climate change, and they all have pollutant-related byproducts, as well, though there’s a spectrum: gas is relatively clean-burning compared to its kin, while coal is the absolute worst, releasing all sorts of pollutants into the air with at times severe health consequences for anyone in the general vicinity; oil plants are somewhere in between those two extremes, depending on the type of oil used and the nature of the plant.

Those downsides are part of why newer technologies like large-scale wind turbines and solar panel arrays have been replacing fossil fuel-based power plants in many locales, and quite rapidly, though the infrastructure in many areas is optimized for these older-school options, which means there are the plants themselves, which are often quite large and real-estate-spanning, but there’s also all the mines, there’s the shipping facilities, the processing capacity for the coal or oil or whatnot—it’s a nation-spanning network of buildings and machinery and businesses, not to mention all the people who work jobs related to these vital, energy-creating industries.

Coal was already beginning to decline in the UK 100 years after that first plant was built, so by the 1990s, as gas, often called natural gas as a sort of branding effort by gas companies to make it sound cleaner and more desirable, was at that point already beginning to replace coal in many electricity-generating facilities.

Gas has done the same in many countries—especially those with vast natural sources of it, and the US has opened up a lot of new markets for this fuel type in recent decades, and in the past decade in particular, as it mastered the means of compressing gas into a liquid, often called LNG, and shipping it to ports in Europe around the same time Russia’s invasion of Ukraine was fundamentally rewiring the energy mix on the continent.

So gas has played a role in disrupting coal’s hold in many previously coal-happy areas, including the US. But it was renewables that really turned the tide against coal in the UK, with a combination of solar and wind making up about 6% of Britain’s electricity in 2012—compared to 40% for coal, at the time—but just over a decade later, in 2023, renewables were making up a whopping 34% of the UK’s energy mix, mostly due to the widescale deployment and success of offshore wind farms.

This, paired with the emergence of increasingly efficient appliances and lighting, which sip energy compared to previous-generation bulbs and kettles and refrigerators, meant the UK was able to deplete its coal-usage, even as energy demand increased—because that demand was less than anticipated, due to those efficiencies, and enough new renewables and gas facilities were coming online to meet that reduced demand.

At the tail-end of September this year, 2024, the UK witnessed the shut-down of its last remaining coal power plant, which was built 57 years ago.

This was a meaningful moment, as it marked the first time in about 142 years that coal wasn’t contributing to the UK’s electrical grid, and it has global significance, as while 23 European countries have announced that they will phase out coal in the relatively near-future, and while Belgium was the first previously coal-burning European nation to go fully coal-free, back in 2016, the UK is the first G7 nation to do so—the rest of the G7 having committed to accomplishing the same by 2035.

Decommissioning the plant will take about two years, and that will include the task of reallocating the plant’s 170-or-so employees to other positions within the power network, and going through the many steps required to clean up the area after decades of voluminous pollution, while also getting the area ready for other types of development.

In many cases right now, globally, that means swapping in some other piece of energy infrastructure; in some cases coal-fired plants can be replaced with gas-fired plants, which is still not ideal in terms of emissions, but much better than coal, and in some cases it’s a more significant change, like building-out grid-scale battery arrays, which allow nearby wind turbines and solar panels to store the excess energy they generate when the wind is blowing and sun is shining, so that none of that energy goes to waste, and so it can be used when the wind and sun aren’t cooperating.

The British government is also planning to expand its nuclear power capacity, quadrupling its currently five-strong nuclear power plant holdings by 2050, which is a choice that comes with a lot of its own consequences, including, often, very high price tags on building and operating such facilities. But because of the nature of nuclear power plants—specifically, that they produce high levels of consistent, reliable, emissions-free electricity—that additional expense is often okay, because that steady consistency nicely blends with the inconsistent output of solar and wind.

It’s worth noting that coal-heavy nations elsewhere around the world, like Russia, are currently having trouble with the stuff, Russia’s coal industry reportedly experiencing its worst crisis in 30 years due in part to sanctions, in part to a lack of demand from previous customers that’re transitioning away from coal, and in part due to issues within the industry, itself.

Coal production in Russia dropped by 6.7% year on year in July of 2024, marking the lowest output since the height of the covid pandemic, and it’s estimated that they’ve lost around 27% of monthly output compared to recent peaks.

There are different types and grades of coal, so those numbers are averages, and not all coal-exporting nations are having as much trouble as Russia right now. Australia is the world’s foremost exporter of coal, for instance, and while China is going through some economic complications right now—which is an issue for Australia, because they shipped the majority of their coal to China until just recently—India has been stepping in to pick up the majority of that slack. 

Australia has still cut its coal export outlook by 6% because of those and other geopolitical ripples, and there’s a chance their sales could continue to drop due to the transition to renewables on one hand, and the move toward gas-powered plants on the other.

But some types of coal remain the cheapest form of energy production in some countries, so there’s a good chance that rising stars like India, and possibly Indonesia and other Southeast Asian booming economies, as well, could step in and grab what they can, despite all the downsides of coal, because they can get it at a discount; which won’t be great for coal companies that are used to higher prices, but it likely will allow them to keep operating at something close to their previous capacity for longer than would otherwise be the case, lacking these rising nations that need cheap fuel, whatever the consequences of using it.

In the UK, though, coal is gone, and the remnants of its use are slowly being wiped away: the land cleaned up and repurposed, more of the grid being optimized for cleaner production types.

We’ll probably see a few other big nations accomplish the same over the next decade, but because of all that aforementioned geopolitical turmoil, there’s also a chance those planned end-dates will be pushed: the cheap, dirty needs of the present overshadowing these nations’ cleaner, healthier next-step ambitions.

Show Notes

https://www.eia.gov/tools/faqs/faq.php?id=107&t=3

https://e360.yale.edu/digest/uk-last-coal-plant

https://ourworldindata.org/grapher/electricity-mix-uk?stackMode=absolute&facet=none

https://www.wsj.com/us-news/coal-ash-cancer-epa-north-carolina-b39ddf6a

https://beyondfossilfuels.org/europes-coal-exit/

https://www.npr.org/2024/09/30/nx-s1-5133426/uk-quits-coal-climate-change

https://www.theguardian.com/business/2024/sep/30/end-of-an-era-as-britains-last-coal-fired-power-plant-shuts-down

https://www.epa.gov/sites/default/files/2016-06/documents/4783_plant_decommissioning_remediation_and_redevelopment_508.pdf

https://www.gisreportsonline.com/r/peak-coal/

https://www.moscowtimes.ru/2024/10/07/samii-tyazhelii-krizis-za30-let-vrossii-nachala-rushitsya-dobicha-uglya-a144209

https://interactive.carbonbrief.org/coal-phaseout-UK/index.html

https://www.bbc.com/news/articles/c5y35qz73n8o

https://www.nytimes.com/2024/09/30/climate/britain-last-coal-power-plant.html

https://www.washingtonpost.com/climate-environment/interactive/2024/uk-coal-power-exit/

https://www.theguardian.com/business/2024/sep/30/the-deep-history-of-british-coal-from-the-romans-to-the-ratcliffe-shutdown

https://www.reuters.com/markets/commodities/uks-last-coal-plant-shutdown-bodes-well-us-lng-exports-maguire-2024-10-01/

https://www.wired.com/story/uk-no-coal-fired-power-plants-first-time-in-142-years/

https://www.statista.com/statistics/371069/employment-in-coal-mining-industry-in-the-united-kingdom-uk/

https://apnews.com/article/high-court-rejects-uk-coal-mine-whitehaven-83b9b7ceedebee1b70927667987b4dd7

https://www.bbc.com/future/article/20240927-how-coal-fired-power-stations-are-being-turned-into-batteries

https://www.reuters.com/sustainability/climate-energy/britain-become-first-g7-country-end-coal-power-last-plant-closes-2024-09-29/

https://www.nytimes.com/2024/09/30/opinion/england-coal-wind-power.html

https://en.wikipedia.org/wiki/Coal-fired_power_station

https://en.wikipedia.org/wiki/Coal_in_Australia

https://en.wikipedia.org/wiki/Industrial_Revolution

https://en.wikipedia.org/wiki/Coal

We also discuss Kamala Harris, Donald Trump, and double-haters.

Recommended Book: You Sexy Thing by Cat Rambo

Transcript

In the world of US politics, double-haters are potential voters who really just don’t like the candidate from either major political party, and thus they decide whether and how to vote based on who they dislike least—or in some cases who they would like to hurt, the most.

This isn’t a uniquely American concept, as voters in many global democracies face similar situations, but it seems to be an especially pressing issue in this year’s upcoming US Presidential election—and election day is a week away as of the day this episode goes live—because the race is just so, so close, according to most trusted polls.

In that same context, swing states are states that could swing either way, theoretically at least, in terms of who their votes go to, and because these swing states contain enough electoral college votes to allow even the candidate who doesn’t win the popular vote to win the presidency, that makes them especially vital battlegrounds.

So there’s a scramble going on right now, for both parties, to muster their existing bases, to shore-up some of the demographic groups they’re relying upon in this election, and to get their messaging in front of as many of those double-haters and other undecideds as possible so as to maybe, possibly swing this neck-and-neck race in their direction.

Toward that end, we’ve seen simply staggering sums of money pulled in and spent by both major parties’ campaigns: it’s looking likely that this will be the most expensive election season in US history, with just under $16 billion in spending across federal races, alone—which is up from just over $15 billion in 2020, according to nonpartisan group Open Secrets; that actually means this election will probably end up being just a smidgeon cheaper than 2020’s election, if you adjust for inflation, rather than comparing in absolute dollar terms, but both of these races will have been several times as expensive as previous elections, weighing in at about double 2016’s cost, and triple what these races tended to cost previously, in the early 2000s.

For perspective, too, US elections were already quite a lot more expensive than elections held in other wealthy countries.

According to a rundown by the Wall Street Journal, Canada’s 2021 election only cost something like $69 million in inflated-adjusted dollars, and US elections tend to cost about 40-times more, per person—so this is a population-scaled figure—than elections in the UK and Germany.

The cost of local elections in the US have been increasing, as well, in some cases substantially, and that’s part of why unpaid exposure and promotion is becoming increasingly valuable: it takes a lot of communications oomph to puncture the hubbub of commercial marketing messages in the US, and while pulling in a lot of money to buy ads and fund other promotional efforts is one way to do that, it’s also possible to approach the problem asymmetrically, going to people where they already are, basically, and getting some of that valuable face-time without having to spend a cent on it.

And that’s what I’d like to talk about today—specifically, efforts by candidates to get on popular podcasts, and why this medium in particular seems to be the go-to for campaigns at a moment in which the electoral stakes are historically high.

—

Podcasts, by traditional definition, are audio files delivered using an old-school, open technology called RSS.

In the years since they first emerged, beginning in the early days of the 2000s, the transmission mechanisms for these audio files have become a bit more sophisticated, despite being based on essentially the same technology. They’ve been joined, though, by utilities that allow folks to stream undownloaded audio content, to ping the servers where these audio files are stored more regularly, and to attach all kinds of interesting and useful metadata to these files, which add more context to them, while also providing the fundaments of basic micropayment schemes and the capacity to include video versions of an episode, alongside audio.

That video component has been pushed forward in part by the success of content-makers on YouTube, where for a long while podcasters have promoted their audio shows with visualized snippets, behind-the-scenes videos, and other such add-on content. Over the past handful of years, though, it has also become a hotbed of original video podcast content, some podcasters even using YouTube as their native distribution client—and that, combined with Spotify’s decision to start offering video podcasting content alongside audio podcasting content, in part to compete with YouTube, has pushed video-podders to the forefront of many charts.

Multi-person conversational and interview shows have maybe benefitted most from that shift toward video, as being able to see the people recording these shows, and to watch their body language, all the little microexpressions and other components of conversation and social dynamics that are left out of pure audio shows, has helped them attract more listeners / viewers, while also making these shows an even more potent source of parasocial camaraderie—which was especially valuable during the lockdown-heavy phase of the covid-19 pandemic, but which is also arguably a valuable thing to provide at a period in which a lot of people across all demographics are suffering from intense loneliness and a perceived lack of connection; the sense of familiarity that folks felt listening to a familiar voice in their ear on a regular basis has been emphasized still-further by the ability to see those people on their phones, TVs, and laptops in the same way, and at the same regular cadence.

The business model of podcasting has also contributed to the expansion of this type of show, as while podcasting has never been as big and spendy an industry as comparable broadcast mediums, it has been growing, with most shows leaning on some combination of ads, sponsorships, memberships, patronage models, and subscriptions to keep their operations in the black.

Some shows make use of many or all of these income-generation approaches, and many of them have varied their business models based on the boom and bust phases the industry has seen over the years; so when ad revenue plummets, formerly ad-heavy shows will pivot to memberships, and when the listener membership well grows shallow, they might shift to some kind of featured sponsor model.

As of early 2024, there are more than half a billion regular podcast listeners, globally, and ad spending in this space, globally, reached over $4 billion for the first time this year.

That aforementioned shift toward video has tilted a lot of listening in that direction, with about a third of all podcast listeners in the US also watching at least one podcast, rather than just listening to it.

That watchability component has also nudged YouTube and Spotify into the lead in terms of podcast delivery, alongside Apple, which didn’t invent the podcast, even though the medium is named after their iPod product, but they did bring it to the forefront and make it widely available—Apple’s relative lack of investment in this space, for years, left the doors open for those other competitors, and again, their decision to feature video podcast content alongside pure audio shows has shifted the landscape of this industry substantially, raising questions about what a podcast even is, if any old YouTube show could also theoretically be categorized as such; it’s a blurry distinction at this point, a bit like the debate over whether audiobooks should be considered books, or if only written, visual versions should bear that label.

Also worth noting here is that nearly half, about 47%, of all US citizens ages 12 and up listen to a podcast at least once a month, and 34% listen every week.

11% of that demographic’s daily audio-time is spent listening to podcasts, which is quadruple the figure a decade ago, in 2014, and 23% of weekly podcast listeners in the US spend 10 or more hours with these shows each week, though the average listening time each week is also pretty high, weighing in at 7.4 hours.

Podcasts have diverse audiences and hit a range of economic classes and people of varying education levels—though it leans slightly higher than the average in terms of both educational attainment and income—and interestingly, folks seem to be especially influenced by podcast recommendations, 46% of weekly podcast listeners reporting that they purchased something based on a recommendation or advertisement they heard on a show.

All of which points at why podcasts, and especially interview podcasts, and even more especially video-heavy interview podcasts, have become such highly desired media real estate in this year’s US presidential election; these sorts of shows aren’t always the most desired medium for brands, because tracking return on investment, money earned per dollar spent, is difficult with podcasts compared to, for instance, buying ads on streaming TV shows or social media, but they’re great for raising awareness and general brand-building efforts, which is exactly what these candidates and their parties are aiming for.

So more people are listening to these things, people tend to trust what they hear on podcasts more than on other types of media, and the demographics these shows reach are highly desirable, politically.

This is why, over the past few weeks, candidates Kamala Harris and Donald Trump have appeared on some of the biggest podcasts in existence, right now: Call Her Daddy for the former, and the Joe Rogan Experience for the latter.

Both of these appearances were ostensibly pretty risky, as podcast interviewers tend to color outside the lines compared to hosts on conventional television or radio shows, but the potential upsides were huge for both, as Alex Cooper, the host of Call Her Daddy, which is kind of a comedic advice show, has become a massive force in the world of women’s issues, and she recently became one of the best-paid and most influential podcasters in the world by leaving Spotify for SiriusXM, that change beginning in 2025, for a reported $100 million.

Joe Rogan, in contrast, has consistently been the number one podcast in the world for years, and his audience skews toward the people Trump wants to reach: the listening base is 80% male, more than half of those listeners are ages 18-34, more than a third identify as Independents, politically, and a little over a quarter are Democrats who might be convinced to switch sides for this election, because of Rogan’s somewhat conservative-leaning, independent stance on most things.

Trump recorded a 3-hour podcast interview with Rogan, leaning into the host’s chilled-out, but often heavy and asymmetric-question laden format, and that was blasted out to the show’s 14.5 million Spotify followers and 17.5 million YouTube subscribers.

Call Her Daddy is the second-biggest podcast on most networks after Rogan’s show, and while it has a comparably meager 5 million weekly listeners, the show’s demographics lean heavily toward women, and especially young women, which is seemingly favorable to the messaging Harris wants to megaphone at this point in her campaign; she’s rounded-out that appearance with appearances on other shows, like All The Smoke, which is hosted by a pair of NBA stars, and The Breakfast Club, which is hosted by the popular personality, Charlamagne Tha God.

Trump has appeared on quite a few podcasts of late, as well, though they’ve largely been in the same demographic vein as Joe Rogan—Trump went on YouTuber Logan Paul’s show, Impaulsive, for instance, alongside This Past Weekened with Theo Von and the Lex Fridman Podcast—all shows that lean heavily toward the young, male demographic, and which skew somewhat conservative and/or the libertarian side of independent.

Like many aspects of this election, we don’t really know if these bets will pay off for these candidates and their campaigns. There’s a lot to suggest that folks trust podcasts and podcasters, and that this industry may therefore be an excellent means of blasting a message to the right people, allowing politicians to realize a huge return on the time they invest preparing for their appearances and recording these interviews.

On the other hand, there’s a chance that, like many supposed means of reinforcing brand awareness and identity, that the numbers are kind of fuzzy and don’t necessarily reflect the reality many people think they reflect: it could be that folks tune in, listen, and then don’t do anything with what they learn; a more passive means of engagement that results few, if any, real-world conseqences.

It could also be that one or the other, or both of these parties aimed at the wrong audiences, or at the wrong influencers to help them reach those audiences, which could result in the same outcome, but with their demographic assumptions to blame, rather than the nature of the medium.

We won’t know for sure until after the election, and even then it’ll still be an open question, because it’s difficult to definitely link action to outcome when it comes to this facet of the political world.

That said, it does seem pretty likely, that for the next few elections, at least, podcasters will carry somewhat higher credibility and weight, and consequently attract even more attention, and probably ad-dollars, too, because it’s becoming more and more difficult to reach the right people, the right potential voters, and podcasts are still new and wild westy enough that they could break through the hubbub, even when other content types struggle to do so.

Show Notes

https://www.bbc.com/news/articles/cy8nn0913e8o

https://backlinko.com/podcast-stats

https://www.insideradio.com/free/candidates-embrace-podcasts-but-is-it-working-here-s-what-one-survey-shows/article_b8858d76-92a8-11ef-9063-13e0c716cedd.html

https://www.npr.org/2024/10/27/nx-s1-5162304/politics-chat-trump-gives-3-hour-joe-rogan-interview-harris-leans-on-fascist-label

https://www.aljazeera.com/news/2024/10/23/trump-harris-turn-to-podcasts-and-maybe-joe-rogan-for-us-election-boost

https://www.elle.com/uk/life-and-culture/culture/a62526922/kamala-harris-call-her-daddy/

https://www.quillpodcasting.com/blog-posts/podcast-stats-and-facts-2024

https://soundsprofitable.com/research/the-podcast-landscape-2024/

https://www.edisonresearch.com/the-podcast-consumer-2024-by-edison-research/

https://finance.yahoo.com/news/alex-cooper-lands-100-million-143000863.html

https://en.wikipedia.org/wiki/Call_Her_Daddy

https://www.edisonresearch.com/the-race-to-rogan-who-will-candidates-reach-on-americas-top-podcast/

https://www.washingtonpost.com/elections/2024/10/25/trump-joe-rogan-podcast-interview/

https://time.com/7099104/presidential-podcast-media-tour-donald-trump-kamala-harris/

https://www.hollywoodreporter.com/business/digital/alex-cooper-interview-call-her-daddy-1236023570/

https://apnews.com/article/trump-election-lies-rogan-interview-ballots-voting-c8c06eb608c1b1ae8ca0e93ec1022b02

https://www.wsj.com/politics/elections/elections-cost-us-highest-spend-b8475961

https://www.politico.com/news/magazine/2024/10/21/meet-the-worlds-double-haters-00184634

https://www.washingtonpost.com/politics/2024/10/25/wisconsin-swing-state-undecided-voters-trump-harris/

We also discuss sports betting, gambling, and PredictIt.

Recommended Book: Build, Baby, Build by Bryan Caplan

Transcript

Trump Media & Technology Group, which trades under the stock ticker DJT, has seen some wild swings since it became a publicly tradable business entity in late-March of 2024.

The Florida-based holding company for Truth Social, a Twitter-clone that was released in early 2022 following former President Donald Trump’s ousting from Twitter—that ousting the result of his denial of his loss in the 2020 presidential election—is a bit of an odd-bird in the technology and media space, as while it’s ostensibly an umbrella corporation for many possible Trump-themed business entities, Truth Social is the only one that’s gotten off the ground so far, and that platform hasn’t done well in traditional business or even aspirational tech-business terms: a financial disclosure in November of 2023 indicated that the network had tallied a cumulative loss of at least $31.5 million since it was launched, and the holding company’s numbers were even worse: when they filed their regulatory paperwork in March of 2024, they noted that Trump Media & Technology Group had lost $327.6 million, while making a mere $770,000 in revenue.

Those kinds of numbers, the company hemorrhaging money, would be a huge problem if DJT was a typical media business, or business of any kind, really. But for most people who invest in the company’s stock, this entity seems to be less a traditional stock holding, like you might buy shares of NVIDIA or Coca-Cola, hoping to earn dividends or see the value of the stock increase over time based on the performance and assumed future performance of the company in question, but instead it seems to operate as a means of betting on Trump and his political aspirations: many people who have been asked why they’re buying the stock of a clearly fumbling company say that they do it because they like Trump and what he stands for, and some have suggested they assume the stock will do much better if and when he’s back in office.

Other entities, especially those who oppose Trump and his politics, have pointed out that this publicly traded business provides foreign and US entities an easy, and easily deniable means of basically bribing Trump—or getting on his good side, if you want to use less charged language—as they could simply, and legally pick up a large number of shares, raising the price of the stock, which in turn increases the size of Trump’s fortune, which he could then, if he so chooses, cash out of at some point, but in the mean time this allows him to do the more typical rich person thing and just borrow money against the non-money, stock assets he owns.

All of which would be difficult to prove, which is part of why this would, in theory, be an excellent means of funneling money to someone who might hold the reins of power in the near-future, if one were so inclined to do so.

But at the moment that’s all speculation, and with ongoing investigations into other purported bribery schemes on the part of Trump and his campaign, it’s not clear that Trump would need DJT in order to get money into his coffers, as more direct approaches—like simply depositing ten million dollars into his campaign account from Egypt’s state-run bank, seem more straightforward, and just as unlikely to result in any kind of pushback from the US’s oversight panels, based on how they’ve addressed that particular accusation so far, at least.

Of course, some people are simply looking for points of leverage anywhere they can find it, not for political or regulatory manipulation purposes, but to earn money by gambling on assets that change value in dramatic and seemingly predictable ways.

For day traders and other arbitrage-seekers, then, a stock that goes up and down based on the perceived successes and failures of a public figure who’s constantly saying and doing things that can be construed in different ways by different people is an appealing target, even lacking a political motivation for tracking (and perhaps even influencing, to a limited degree) those numbers.

What I’d like to talk about today is another type of political betting, and how a recent court case may make politics in the US a lot more tumultuous, maybe more measurable, and possibly more profitable, for some.

—

In mid-2021, a New York-based online prediction market called Kalshi launched in the US, and this service was meant to serve as a platform through which users could place bets—in the form of trades—on all sorts of things, ranging from when the Fed would next cut interest rates, and by how much, to who would win various global awards, like the Nobel in chemistry.

Bets can only be placed on yes or no questions, which shapes the nature of said questions, and delineates the sorts of questions that can be asked, and in general the platform pays out a dollar for each winning contract—so if you buy one contract saying the Republican party will control the House after November’s election, and they do, you would win a dollar, but if they don’t, you would lose whatever money you spent to buy that contract—and these contracts can be purchased for sums that are based on how likely the event is currently expected to be: so if there’s a low chance, based on all available variables, that the Republicans will take the House, that contract might cost substantially less than a dollar to purchase, whereas if it’s likely they’ll take it, it would cost close to a dollar—so the payout is larger for events considered to be unlikely.

The original idea behind Kalshi, and similar platforms, of which there are many, operating in many different places around the world, was to provide investors with a hedge against events that are otherwise difficult to work into one’s asset portfolio.

It’s relatively simple to have a bunch of bets that will pay out big time if the US economy does well, for instance, and simple enough to buy counter-bets that will pay out decently well if it does badly—many investors buying some of each, so they’re not wiped out, no matter what happens—but there are all sorts of things that can mess with one’s otherwise well-balanced investment strategies, like the emergence of global pandemics and the surprise decision of the UK to leave the European Union.

If you can place bets that will pay out big-time when unlikely things happen, though, that can help re-balance a financial loss that arises from the occurrence of said unlikely events; if you lose a bunch of money from your stock portfolio because the UK voted for Brexit, but you also bought a bunch of contracts on this kind of market that would pay out substantially if Brexit was successful, you’ll reach a kind of equilibrium that isn’t as simple to achieve using other markets, because of how difficult it can be to directly link a stock or bond with that kind of not-directly-financial event.

So Kalshi pitched itself as that kind of alternative asset market, predicated on bets, but while they had a license from the US Commodities Futures Trading Commission, or CFTC, to function as a contract market in the States, acquired the year before they launched, their proposal to start a political prediction market, which would allow folks to bet on which party would control the US congress, was denied by the CFTC in September of 2023, the agency claiming that allowing such bets would create bad incentives in the electoral process, and that offering these sorts of contracts would violate US market regulations for derivatives.

A judge ruled in Kalshi’s favor a year later, in September of 2024, saying that the agency had exceeded its authority in banning this type of contract-issuance by Kalshi, and while the CFTC attempted to stall that component of their market’s implementation, on October 2 of this year, a federal appeals court ruled in Kalshi’s favor, and the platform was thus formally allowed to offer contracts that served as a betting market for US politics on which actual money could be lost and earned.

That last point is important, as throughout this process, and even before Kalshi was launched, other betting markets have been common, including those that have allowed bets on US political happenings.

It’s just that the majority of them, and the ones that have persisted and grown in the US in particular, haven’t allowed folks to bet actual money on these things: they’ve allowed, in some cases, the betting of on-platform tokens, which represent credibility, not money, though a few money-trading entities, like PredictIt, have been on the agency’s radar, but in PredictiIt’s case, it was granted what amounts to a “we won’t take action against you, despite what you’re doing being questionable” letter from the CFTC, which until Kalshi’s case turned out in their favor, meant PredictIt was one of the few, large-scale, reputable real-money political prediction markets available in the US.

Not all such markets have been so lucky, but that luck has been highly correlated with their approach to handling money, the structure of the company, and the degree to which they’ve been willing to play ball with the CFTC and other interested agencies.

All that said, we’ve reached an interesting point in which these markets have conceivably become more serious and useful, because rather than relying on not-real tokens that have no actual value to anyone—so you could create an account on one of these sites, bet all your tokens on a silly position that makes no sense, and suffer no consequences for that bet—we now have platforms that allow folks to put their money where their beliefs are, which in turn should theoretically make these markets more reliable in terms of showing what a certain segment of the population actually believes; how likely different candidates are to win, different parties are to hold Congress, and how likely various bills are to be passed into law.

Interestingly, though, that theory may already be destined for the dustbin, as one of the larger betting platforms, Polymarket—which allows folks to place bets on all sorts of things using a crypto asset called USDC, and which isn’t regulated by the CFTC because its operations are not based in the US—is experiencing what looks like market manipulation, possibly meant to sway poll forecasts that take these sorts of markets into account.

What that means in practice is that of the nearly $2 billion in bets that have been placed on the outcome of the upcoming US presidential election on Polymarket, as of the day I’m recording this, about $30 million seems to have been recently bet by just four accounts, all of which have behaved so similarly that a report from the Wall Street Journal posits that they might be the same person, or a collection of people operating alongside each other.

In any case, the net-impact of this investment, which landed in late-October, was to bump Trump’s odds of winning to 60% from where it was previously, at 53.3%.

There’s a chance, of course, that this is just the result of a person or some people with money wanting to earn what they consider to be an easy buck, betting on the candidate they think is most likely to win, and there’s also a chance that they’re plowing that money into this bet in order to show support for their favored candidate.

But there’s also a chance that this is the first example, at this scale at least, of betting market manipulation that’s sizable enough to shift the balance of polls that take betting market numbers into consideration.

Some of the poll predictions you in see in the news work these numbers from these betting markets into their formulae alongside the findings of more conventional polling entities, basically, so if you have tens of millions of dollars to throw into this kind of market, you can bump your favored candidate’s seeming chances significantly higher, which then in turn can make it seem like that candidate has achieved a surge in support more broadly—despite that seeming support actually just having been bought and paid for by one or a few enthused supporters on this kind of market.

So if it does turn out that this is a conscious effort on someone’s part to shift perceptions of the election—maybe big-time Trump fans, maybe someone affiliated with him or one of the PACs trying to get him elected—that could be a big deal, especially considering that Trump and his people have said that they won’t accept the outcome of the election if they don’t win, and if they can show strong expectations, or seeming expectations in the shape of favorable poll numbers that their candidate was meant to win, that could be a point of seeming evidence in favor of their argument that there was voter manipulation by their opponent; this of course wouldn’t be the case, but because of how the news, and even more so social media platforms, sometimes present superficial versions of what’s actually happening, seeing the candidate who had 60% support lose could seem like a valid argument at a highly charged post-election moment, despite all the other evidence to the contrary.

One more important point to make here is that election markets don’t actually represent probabilities—they represent a relatively small population of people’s expectations or hopes about what will happen.

It’s in the interest of these markets to imply that there’s substantial meaning and real-deal data in their numbers, but that’s mostly marketing copy to try to get more people involved; at the end of the day, these markets are often wrong, are populated by outliers who don’t represent the voting public, and in many cases they’re heavily biased in all sorts of directions—some of them more popular with folks on the left, some more popular with folks on the right, and some more popular with folks who just love making big bets that feel like gambling, and in some cases creating chaos or funny outcomes just for laughs.

On that final point, it’s worth mentioning that sports gambling has recently become legal, to some degree at least, across much of the United States, and this has already become a huge industry, representing an expected $14.3 billion in 2024, alone, with an anticipated annual growth of something like 10%, which is astonishing for something that was mostly illegal until just recently—the Supreme Court decision that paved the way for it as a nation-spanning market was only made in 2018.

So there’s a chance that these prediction markets will boom, as there’s clearly an appetite for betting on stuff in the US, as a form of entertainment, as a means to try to get ahead, and potentially as a way to put one’s money where one’s mouth is.

Though all of these incentives and purposes could potentially make these markets less valuable for political researchers hoping to better understand odds, as the incentives may or may not align with those that lead to more accurate predictions, and there’s no way to really know how those post-money-injection numbers will align with actual voting tallies, or fail to do so, until we have more data about this and other near-future elections’ outcomes.

Show Notes

https://www.wsj.com/finance/investing/how-investors-are-betting-on-the-election-from-utility-stocks-to-djt-c2b9e838

https://www.yahoo.com/news/hes-sale-trump-djt-stock-001901595.html

https://www.cnbc.com/2024/09/03/trump-egypt-democrats-letter.html

https://en.wikipedia.org/wiki/Truth_Social

https://www.axios.com/2024/09/10/prediction-markets-election

https://stanfordreview.org/kalshis-court-victory-a-turning-point-for-prediction-markets-2/

https://www.politico.com/news/2024/10/04/harris-trump-election-betting-00182432

https://en.wikipedia.org/wiki/Prediction_market

https://www.investopedia.com/terms/p/prediction-market.asp

https://www.axios.com/2024/09/16/prediction-markets-election

https://asteriskmag.com/issues/05/prediction-markets-have-an-elections-problem-jeremiah-johnson

https://www.chapman.edu/esi/wp/porter_affectingpolicymanipulatingpredictionmarkets.pdf

https://www.ft.com/content/82199ea0-9707-4d37-b4c4-b65a65d17ecb

https://worksinprogress.co/issue/why-prediction-markets-arent-popular/

https://www.wsj.com/finance/betting-election-pro-trump-ad74aa71

https://www.washingtonpost.com/technology/2024/10/19/election-betting-trump-harris-odds-polymarket-predictit/

https://www.wsj.com/finance/investing/how-investors-are-betting-on-the-election-from-utility-stocks-to-djt-c2b9e838

https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-live-10-03-2024/card/betting-markets-on-the-presidential-race-set-to-go-live-NnRne85QCyVAnc9nZy8z

https://www.wsj.com/finance/regulation/are-you-ready-to-bet-on-u-s-elections-a-judges-ruling-opens-the-door-556abc73

https://en.wikipedia.org/wiki/Kalshi

https://www.coindesk.com/policy/2024/09/13/kalshis-new-political-prediction-markets-halted-as-cftc-appeals-loss/

https://www.brookings.edu/articles/how-betting-platform-predictits-legal-struggle-could-hamper-regulators-and-hurt-regulated-firms/

https://www.wsj.com/finance/betting-election-pro-trump-ad74aa71

https://en.wikipedia.org/wiki/Polymarket

https://www.statista.com/outlook/amo/online-gambling/online-sports-betting/united-states

We also discuss augmented reality, virtual reality, and Orion.

Recommended Book: The Mountain in the Sea by Ray Nayler

Transcript

Originally released as a development device in 2016—so aimed at folks who make software, primarily, not at the general public—the HoloLens, made by Microsoft, was a fairly innovative device that looked like virtual reality headgear, but which allowed folks to interact with graphical elements overlayed on a transparent surface so that they seemed to be positioned within the real world; so-called augmented reality.

This functionality relied upon some of the tech Microsoft had developed for its earlier Kinect accessory, which allowed Xbox owners to play games using their bodies instead of more conventional controllers—it used a camera to figure out where people, and their arms, legs, and so on, were in space, and that helped this new team figure out how to map a person’s living room, for instance, in order to place graphical elements throughout that room when viewed through the HoloLens’ lenses; so stuff could appear behind your couch, pop out of a wall, or seem to be perched atop a table.

The HoloLens was not the only option in this space, as several other companies, including other tech titans, but also startups like Magic Leap, were making similar devices, but it was arguably the most successful in the sense that it both developed this augmented reality technology fairly rapidly, and in the sense that it was able to negotiate collaborations and business relationships with entities like NASA, the US Military, and Autodesk—in some cases ensuring their hardware and software would play well with the hardware and software most commonly used in offices around the world, and in some cases showcasing the device’s capabilities for potential scientific, defense, and next-step exploratory purposes.

Like many new devices, Microsoft positioned the HoloLens, early on, as a potential hub for entertainment, launching it with a bunch of games and movie-like experiences that took advantage of its ability to adapt those entertainments to the spaces in which the end-user would consumer them: having enemies pop out of a wall in the user’s kitchen, for instance, or projecting a movie screen on their ceiling.

It was also pitched as a training tool, though, giving would-be astronauts the ability to practice working with tools in space, or helping doctors-in-training go through digital surgeries with realistic-looking patients before they ever got their hands dirty in real life. And the company leaned into that market with the second edition of the headset, which was announced and made available for pre-order in early-2019, optimizing it even further for enterprise purposes with a slew of upgrades, and pricing it accordingly, at $3,500.

Among those upgrades was better overall hardware with higher-end specs, but it also did away with controllers and instead reoriented entirely toward eye- and hand-tracking options, combined with voice controls, allowing the user to speak their commands and use hand-gestures to interact with the digital things projected over the real-world spaces they inhabited.

The original model also had basic hand-tracking functionality, but the new model expanded those capabilities substantially, while also expanding upon the first edition’s fairly meager 30 degrees of augmented view: a relatively small portion of the user’s line of sight could be filled with graphics, in other words, and the new version upgraded that to 52 degrees; so still not wall to wall interact-with-able graphics, but a significant upgrade.

Unfortunately for fans of the HoloLens, Microsoft recently confirmed that they have ended production of their second generation device, and that while they will continue to issue security updates and support for their existing customers, like the US Department of Defense, they haven’t announced a replacement for it—which could mean they’re getting out of this space entirely.

Which is interesting in the sense that this is a space, the world of augmented reality, which some newer entrants are rebranding as mixed reality, that seems to be blowing up right now: two of Microsoft’s main competitors are throwing a lot of money and credibility into their own offerings, and pitching this type of hardware as the next-step in personal devices.

Some analysts have posited, though, that Microsoft maybe just got into this now-burgeoning arena just a little too early, investing in some truly compelling innovations, but doing so at a moment in which the cost was too high to justify the eventual output, and now they might be ceding the space to their competition rather than doubling-down on something they don’t think will pay off for them, or they may be approaching it from another angle entirely, going back to the drawing board and focusing on new innovations that will bypass the HoloLens brand entirely.

What I’d like to talk about today are the offerings we’re seeing from those other brands, and what seems to be happening, and may happen in the near-future, in this augmented-reality, mixed-reality segment of the tech world.

—

I did an episode on spacial computing and the Apple Vision Pro back when the device was made available for purchase in the US, in February of 2024.

This device was considered to be a pretty big deal because of who was making it, Apple, which has a fairly solid record of making new devices with unfamiliar interfaces popular and even common, and because the approach they were taking: basically throwing a lot of money at this thing, and charging accordingly, around $3,500, which is the same price the second HoloLens was being sold for, as I noted in the intro.

But because of that high price point, they were able to load this thing up with all sorts of bells and whistles, some of which were fundamental to its functionality—like super-high-density lenses that helped prevent nausea and other sorts of discord in their users—and some that were maybe just interesting experiments, like projecting a live video of the user’s eyes, which are concealed by the headset, on the front of the headset, which to me is a somewhat spooky and silly effect, but which is nonetheless technically impressive, and is something that seems aimed at making these things less anti-social, because you can wear the Vision Pro and still see people, and this projection of their eyes allows them to see you and your facial expression at the same time.

I’ve actually had the chance to use this device since that episode went live, and while there are a lot of weird little limitations and hindrances to this device going mainstream at the moment, the technology works surprisingly well right out of the box, with the eye- and hand-tracking elements working shockingly, almost magically well for relatively early-edition tech; Apple is pretty good at making novel user-interfaces intuitive, and that component of this device, at least, seemed like a slam dunk to me—for casual use-cases, at least.

That said, the company has been criticized for that high price point and their seeming fixation on things like putting the users’ eyes on the outside of the headset, rather than, for instance, investing in more content and figuring out how to make the thing more comfortable for long periods of time—a common complaint with basically every virtual reality or mixed-reality headset ever developed, because of the sheer amount of hardware that has to be crammed into a finite, head-and-face-mounted space, that space also needing to be properly balanced, and it can’t get too hot, for perhaps obvious reasons.

Those criticisms related to price are the result not of comparison to HoloLens, as again, the pricing is basically the same between these two devices, but instead the result of what Meta has done with their mixed-reality offerings, which are based on products and technology they acquired when they bought Oculus Labs; they’ve leaned into providing virtual reality devices for the low- and mid-market consumer, and their newest model, the Meta Quest 3S is a stand-alone device that costs between about $300 and $400, and it has mixed-reality functionality, similar to the Vision Pro and HoloLens.

While Meta’s Quest line doesn’t have anywhere near the specs and polish of the Vision Pro, then, and while it didn’t arrive as early as the HoloLens, only hitting shelves quite recently, it does provide enough functionality and serves enough peoples’ purposes, and at a far lower price point, that it, along with its other Quest-line kin, has managed to gobble up a lot of market share, especially in the consumer mixed-reality arena, because far more people are willing to take a bet on a newer technology with questionable utility that costs $300 compared to one that costs them more than ten-times as much.

Interestingly, though, while Meta’s Reality Labs sub-brand seems to be doing decently well with their Quest line of headsets, a product that they made in collaboration with glasses and sunglasses company EssilorLuxottica, which owns a huge chunk of the total glasses and sunglasses global market, via their many sub-brands, may end up being the more popular and widely used device, at least for the foreseeable future.

The Ray-Ban Meta Smartglasses looks almost exactly like traditional, Ray-Ban sunglasses, but with slightly bulkier arms and with camera lenses built into the frames near where the arms connect to them.

If you’re not looking carefully, then, these things can be easily mistaken for just normal old Ray-Bans, but they are smartglasses in that they contain those two cameras on the front, alongside open-air speakers, a microphone, and a touchpad, all of which allow the wearer to interact with and use them in various ways, including listening to music and talking on the phone, but also taking photos of what they’re looking at, recording video of the same, and asking an AI chatbot questions like, what type of flower is this, and getting an audible answer.

These things cost around what you would pay for a Quest headset: something like $300-400, but their functionality is very different: they don’t project graphics to overlay the user’s view, in that regard they function like normal sunglasses or prescription glasses, but if you want to snap a photo, livestream whatever it is you’re seeing, or ask a question, you can do that using a combination of vocal commands and interacting with the built-in touchpad.

And while this isn’t the mixed-reality that many of us might think of when we hear that term, it’s still the same general concept, as it allows the user to engage with technology in real-life, in the real-world, overlaying the real world with digital, easily accessed, internet-derived information and other utilities. And it manages to do so without looking super obtrusive, like earlier versions of the same concept—Google’s Google Glass smartglasses come to mind, which were earlier versions of basically the same idea, but with some limited graphical overlay options, and in a form factor that made the wearer look like an awkward, somewhat creepy cyborg.

Snap, the parent company of Snapchat, has a similar offering which originally leaned into the same “these look just like glasses, but have little camera lenses in them” strategy, though with their newest iteration, their Spectacles smartglasses product has reoriented toward a look that’s more akin to a larger, clunkier version of the free 3d glasses you might use at the movie theater—not exactly inconspicuous, though offering much of the same functionality as Meta’s Raybans, alongside some basic graphical overlay functions: a lightweight version of what the Vision Pro and Quest offer, basically, and in a much small package.

These new Spectacles are only available for folks who sign up for the company’s developer program at the moment, however, and are purchased not as a one-off, but for $99/month, with a minimum commitment of 12 months—so the price tag is quite a bit higher than those Quests and Raybans, as well.

Interestingly, Meta’s Reality Labs recently held an event in which they showed off an arguably more advanced version of Snap’s Spectacles, called Orion.

These things are being pitched as the be-all, end-all mixed-reality solution that every company is trying to develop, but which they can’t develop yet, at least not at scale. They look like giant, cartoony glasses—they’re shaped like glasses, but comically oversized ones—and they provide many of the same benefits as today’s Quest headset, but without the large, heavy headset component; so these could theoretically be used in the real-world, not just in one’s living room or office.

The company announced this product along with the caveat that they cannot make it on scale, yet, because cramming that much functionality into such a small device is really stressing the capacity of current manufacturing technologies, and while they can build one of these glasses, with its accompanying wristband and a little controller, both of which help the glasses do what they do, in terms of compute and the user interface, for about $10,000 per unit, they could not, today, build enough of them to make it a real, sellable product, much less do so at a profit.

So this was a look at what they hope to be doing within the next decade, and basically gives them credibility as the company that’s already building what’s next—now it’s just a matter of bringing down costs, scaling up production, and making all the components smaller and more energy efficient; which is a lot of work that will take years, but is also something they should theoretically at least be able to do.

To be clear, most other big tech companies should be capable of build really snazzy, futuristic one-offs like the Orion, as well, especially if they, like Meta, offload some of the device’s functionality into accessory hardware—the Vision Pro has offloaded its battery into a somewhat clunky, pocketable appendage, for instance, and most of these devices make use of some kind of external controller, to make the user interface snappier and more accurate.

But Meta is attempting to show that this is the direction they see wearable technology going, and maybe our engagement with the digital world more holistically, as well. It’s easy to imagine a world in which we all have these sorts of capabilities built into our glasses and wristbands and other wearables, rather than having to work with flat, not-mixed-reality screens all the time, especially once you see the tech in action, even if only as a not-for-sale example.

One aspect of this potential future that Meta is forecasting is already leading to some soul-searching, though.

Some students at Harvard modified a pair of Meta Ray-Bans to use facial recognition and reverse-image search technology so they could basically look at a stranger, then learn a bunch of stuff about them really quickly, to the point that these students were able to do this, then pretend to know the that stranger, talk about their work, find their spouse’s phone number—a bunch of details that made it seem like they knew this person they’d only just met.

All of which is pretty wild and interesting, but also potentially frightening, considering that this is basically doxing someone on demand, in public, and it could be used—like many other tech innovations, granted—to enable and augment stalking or kidnapping or other such crimes.

None of which is destiny, of course. Nor is the success of this product type.

But there does seem to be a lot of interest in what these gadgets seem like they might offer, especially as the prices drop, and as more entrants carve out space in that relatively lower-cost space—which is a space Apple is reportedly planning to enter soon, too, with a new edition of their Vision Pro that would cost maybe something like half as much as the first one, and possibly smart glasses and maybe even Airpods with cameras meant for release over the next couple of years.

So it may be that the early divulgence of these next-step devices, showing us where these things might go with these higher-priced, smaller audience initial editions, could allow us to predict and prepare for some of their negative externalities before they go completely mainstream, so that when they finally arrive in their finished form, we’re a bit more prepared to enjoy the benefits while suffering fewer (though almost certainly not zero) of their potential downsides.

Show Notes

https://en.wikipedia.org/wiki/Spatial_computing

https://en.wikipedia.org/wiki/Apple_Vision_Pro

https://en.wikipedia.org/wiki/Meta_Quest_3S

https://en.wikipedia.org/wiki/Meta_Platforms

https://www.reddit.com/r/RayBanStories/comments/1e3frhc/my_honest_review_of_the_rayban_metas_as_everyday/

https://en.wikipedia.org/wiki/Ray-Ban_Meta

https://www.spectacles.com/spectacles-24?lang=en-US

https://en.wikipedia.org/wiki/Spectacles_(product)

https://forums.macrumors.com/threads/students-add-facial-recognition-to-meta-smart-glasses-to-identify-strangers-in-real-time.2438942/

https://archive.ph/6TqgF

https://www.theverge.com/24253908/meta-orion-ar-glasses-demo-mark-zuckerberg-interview

https://about.fb.com/news/2024/09/introducing-orion-our-first-true-augmented-reality-glasses/

https://www.reddit.com/r/augmentedreality/comments/1frdjt2/meta_orion_ar_glasses_the_first_deep_dive_into/

https://appleinsider.com/articles/24/10/13/cheaper-apple-vision-headset-rumored-to-cost-2000-arriving-in-2026

https://www.uploadvr.com/microsoft-discontinuing-hololens-2/

https://www.theverge.com/2024/10/1/24259369/microsoft-hololens-2-discontinuation-support

https://www.theverge.com/2022/6/7/23159049/microsoft-hololens-boss-alex-kipman-leaves-resigns-misconduct-allegations

https://en.wikipedia.org/wiki/Microsoft_HoloLens

We also discuss Martin Sellner, Herbert Kickl, and racialism.

Recommended Book: The Ministry of Time by Kaliane Bradley

Transcript

Racialism, sometimes called scientific racism, is the pseudoscientific belief that groups of human beings are inherently, biologically different from each other based on different evolutionary paths that have carved up the species into different races that are distinct enough from each other to make interbreeding undesirable, and cultural exchange a dangerous hazard.

Said another way, racialism posits, using all sorts of outdated and misinterpreted scientific understandings—like determining intelligence based on the shape of a person’s skull—that black people and white Europeans and folks from Asia are different enough (which is an idea also called polygenesis) that they should stay in their own parts of the world, and that by separating everyone out according to presumed racial background, we would all be able to do as we like, based on our own alleged cultural guide rails, and in accordance with our own, alleged biological destinies; which in some cases would mean invading and killing and maybe enslaving the other, inferior, in our minds at least, races, but in the polite, political telling, usually means something like putting up walls to keep out the racially inferior riffraff, so they don’t pollute our good and pure and obvious superior bloodlines.

Important to note is that different people with genetic lineages in different parts of the world do tend to have distinct collections of biological traits, ranging from skin tone to height to propensities to, or defenses against various sorts of disease.

There’s actual no clean line between groups of people the way this theory says, though: race, the way the word is used today, references a collection of qualities that tend to be found within different groups of people, but every person is a unique collection of genetic mutations and variations, and the old-school concept of biological race has not held up to modern scientific scrutiny—it’s mostly a cultural concept at this point, and even then it’s a fairly fuzzy one.

That said, a lot of very smart people used to believe in the racialism concept back in the Enlightment era, from around the mid-1600s to the late-1700s, as science back then was helping us delineate between all sorts of species, and giving us a hint of the more complete evolutionary understandings that would arrive the following century; but as with many fields of inquiry, this initial glimpse granted us as much new confusion, masquerading as insight, as it did actual, novel understandings.

Today, this concept is almost exclusively cleaved to by folks belonging to various racial supremacist groups, including but not limited to those who are part of the so-called Identitarian Movement, which is a far-right, European nationalist ideology that spans many countries and political organizations, and which aims, among other things, to significantly truncate or end globalization, to do away with multiculturalism in all its forms, to combat what this group sees as the spread and influence of Islam across Europe, and to significantly limit or even completely end immigration of people from outside Europe into European nations.

Folks and parties that subscribe to this ideology are often considered to be ultra-conservative, but also xenophobic and racist—racism being distinct from racialism, as racialism posits there are different, hard-coded biological racial realities that cleanly delineate one group of humans from another, while racism tends to be the belief that one group of people is superior to another, with folks who are racist at times acting on that belief in various ways.

The Identitarian Movement is officially categorized as a right-ring extremist group by the German intelligence agency, and the Southern Poverty Law Center considers a slew of groups that align with this movement to be hate groups.

Though based on the writings and principles of earlier thinkers and politicians, this group is actually fairly modern, only coming into being in its current form in the early 2000s—though the collection of ideas and efforts that informed this movement arose in France in the 1960s as part of a neo-fascist effort to inject out-of-vogue, extremist ideas into respectable, post-WWII political debate.

This was essentially an effort to rebrand Nazi ideology so as to make it seem smart and with-it in the still-stunned, but rebuilding European idea marketplace, and its primary innovation was taking some of those fascist concepts and hiding them under the more palatable label of nationalism—which was experiencing a resurgence following the wave of multiculturalism that began to flourish after the war, though not without imperfections and conflict.

One of the most popular elements of this ideology, though, was introduced a fair bit later, in the early 2000s and 2010s.

Remigration refers to the idea that liberals, people on the left of the political spectrum, want to replace good, hard-working, morally correct, white French people—and later this idea was expanded to encompass all white Europeans—with folks from other countries, especially Muslim-majority countries, but also other places where folks don’t tend to be white.

These lefties are keen to do this for a variety of reasons, apparently, but one of the most popular claims is that they want to give handouts to these new arrivals, and thus get their votes, capturing the government forever by slowly reducing the overall population of the good, wholesome white locals, in order to out-populate them with new arrivals, whose votes will forever be captured by the politicians who gave them all these handouts.

Sometimes called The Great Replacement Theory, this idea serves as justification for the aforementioned, increasingly popular concept of remigration, which basically means rounding up everyone who’s living in Europe, but not originally from Europe, and shipping them elsewhere—even if they are citizens, and even if they aren’t citizens of the countries they’re being shipped to.

Some versions of this idea also say that the descendants of immigrants, folks who were born in their European homes, not elsewhere, should nonetheless be shipped back to where their grandparents came from, due to a lack of sufficient assimilation—which means taking up the culture of the place you’ve moved to, but in this case usually serves as a stand in for “has a different faith, likes different food, adheres to different norms,” and other multiculturalism-linked, distinctions.

This rounding up and shipping would be based on the person’s supposed racial identity, not on their national identity—so in a way, this concept is a means of smuggling racialism into politics, by making it seems as if the modern way of organizing the world and its people—that of nation states, and those nation states granting an identity, a national origin—is not inherent or ideal, and that we should instead force people to stay where we believe other people like them, according to our beliefs about such things, originally came from, and thus, belong.

That underlying concept isn’t one that’s taken seriously by most scientists, philosophers, demographers, or anyone else who’s profession is linked to this collection of ideas, but it’s proven to be a useful narrative and justification for folks who feel as if they’re becoming strangers in what they consider to be their homeland, their culture, their city, and so on. And that’s made it a useful point of leverage for traditionalist and conservative political parties across Europe; and increasingly, in recent years especially, elsewhere around the world, as well.

What I’d like to talk about today is a party in Austria that has leaned heavily into this collection of ideas, and which claimed the most votes in the country’s recent election, as a consequence.

—

The Freedom Party, or FPO, is an Austrian political party that’s a founding member of the European-scale Identity and Democracy Party, which recently merged with other, fellow traveler parties from the Czech Republic and Hungary, to become the Patriots for Europe group; though all of these entities share roughly the same ideological platforms and practical, political ambitions.

And among those ambitions is the desire to tackle the issue of immigration across the EU, reducing especially the number of people coming into the bloc from Muslim-majority nations, which large numbers of people in many European countries have complained about, usually because they feel the cultures of their hometowns and home countries are changing rapidly, and they consequently feel like they’re being elbowed out and replaced by these newcomers.

This is not a new complaint, and this isn’t only a European thing; across history, even very modern history, when a wave of immigrants arrive in a new home, that can make the people who were there before them feel like they’re under assault—and if those new arrivals have a different religion than the majority of the people in the place they’ve immigrated to, that can increase the perceived differences and threats, as can a difference in skin color, the clothing they wear, cultural customs, foods, fragrances, language, and just about anything else.

This angle of politicking has become increasingly popular with mostly but not exclusively conservative parties around the world in recent years, though, as some of those parties have gotten pretty good at spreading this message to disaffected people, including disaffected youths, in some of the most immigrated-to places in the world.

So young men in the United States have, according to recent polls, been hearing a lot about this and seem to be open to the idea that some of the, on average, at least, issues they seem to be facing in terms of educational attainment and employment options, among other things, are the fault of those new arrivals, and that’s possibly a component of the gender-skewed shift we’re seeing in the lead-up to November’s election, with young people in general leaning liberal, but more young men leaning conservative than young women.

That’s almost certainly not the only issue at play here, of course, but it’s something conservative politicians in the US seem to be leveraging, even to the point that former president and current Republican candidate Donald Trump recently mentioned the term “remigration” in a social media post: something that’s being seen by political analysts as a trial balloon to see if the concept might be picked up by folks in his political orbit, and might in turn garner him more support amongst people who feel like too many immigrants are entering the US, and that all that immigration is bad for one of several possible, and well-promoted, reasons; maybe, this trial balloon implies, we should just ship them all back from where they came from, and that may then free up housing and jobs and maybe set things back to normal, how things used to be.

It’s worth noting that the word remigration was initially used to refer to the return of European Jews to their homes after WWII, but it was adopted by French white nationalists in the mid-2010s to allude to deporting immigrants and the children of immigrants, en masse.

The term became more widely known after an investigation found that, in late-2023, members of the Alternative for Germany, or AfD party had a secret meeting with neo-nazis, at which there was a presentation by a thirty-something far-right Austrian political activist named Martin Sellner, who among other things is the leader of the Identitarian movement I mentioned in the intro, and in that talk he supported the idea of a program that would involve identifying and removing minorities of various kinds from Germany by force—remigration, basically, a topic he’s also written a book about.

Sellner later said that his words were twisted by the media and that remigration is really just a collection of policies that would slow or stop some types of immigration in the future, but he was banned from Germany because of that talk, until a German court revoked that ban last May, and he was denied entry into the UK in 2018, and into the US in 2019 because of a large donation he received from the mass-shooter who attacked two mosques in Christchurch, New Zealand in 2019, killing 51 people and injuring 89.

Sellner himself has said that until 2011 he was a neo-nazi, and his wife, an American pro-Trump online influencer—who was a big proponent of the so-called Pizzagate conspiracy theory among other notable, and demonstrably untrue narratives that became popular in the lead up to previous elections—she spreads a lot of the same content, but with a US bent, rather than a European one.

Both Sellners, and other members of the Identitarian movement, have been accused of parroting Nazi talking points, promoting things like Holocaust denial, and calling for minorities to be mass-executed, but they generally contend that they’re simply proud nationalists who love their countries and don’t want to see them changed or ruined by a bunch of people from other places with different ideas, beliefs, and priorities coming in and taking all the jobs, and tweaking everything to suit their wants and needs, against the desires of those who were there first.

The concept of remigration has attained popularity at a more rapid rate in some places than others, and it seems to have done especially well in Austria—the country’s Freedom Party won 29% of the vote in the country’s last election in late-September of this year, and that was the highest tally of all the parties that participated; which is notable in part because of what the Freedom Party believes now, in remigration and adjacent policies, but also because this is a party that was founded in the 1950s by a former SS officer and Nazi politician.

It’s expected that the Freedom Party won’t be able to form a government, because every other party has said they won’t form a coalition with them—the currently governing conservative People’s Party has said they might be open to it, but not with Herbert Kickl, the group’s current leader, involved in the resultant government.

Kickl is an ardent ally of Russian president Putin and has been accused of attempting to meld right-wing populism with nazi-valenced, fascist extremism—a common accusation against folks in this corner of the political spectrum, though in some cases an accusation that is also seemingly true.

Like Sellner and other folks with this ideological orientation, Kickl promotes the idea of Remigration, which in the context of Austrian politics, in his mind at least, would help reinforce the strength of a Fortress Austria with completely closed borders and which is run by an all-powerful security state apparatus, that is capable of managing those borders, and keeping the peace inside the nation’s impermeable walls.

Kickl has said, in the wake of the election in which his party was victorious, that Austrian politicians are making a decision, by excluding his party, and him specifically from government, that is a slap in the face to the electorate—though he’s continued to make overtures to other conservative parties in the hope that they might be willing to work with the Freedom Party to form a functioning government; this seems unlikely, at this point, though it’s not impossible.

Even without a functioning coalition, though, Kickl and his party’s win at the polls, bringing in the most support of any party, speaks volumes about the popularity of this general collection of concepts and ideas; and the same seems to be true in many other countries where these ideas are being spread: despite a few let-downs for European far-right parties in recent years, this collection of political entities and personalities have done pretty well over the past decade, making substantial gains in France, Germany, and the Netherlands, in particular.

That these parties often align themselves with fascist governments and subscribe to easily disproven conspiracy theories doesn’t necessarily outweigh their support of increasingly popular anti-immigration policies, it would seem, and that popularity seems to be the result of their success in tying immigration to all manners of social and economic ills.

Much of Europe is still experiencing economic downswings, high levels of inflation, and overall underperformance compared to their peers, post-pandemic peak, so this sort of messaging may be decently well-received even by folks who wouldn’t typically agree with much of the rest of their platform or narrative, but who are currently looking for anything that defies the current status quo, and anyone who provides something that seems like it might be an explanation for those many and varied downswings and other perceived ills.

Show Notes

https://www.infomigrants.net/en/post/56618/italyalbania-asylumseeker-deal-to-cost-%E2%82%AC653-million-report-finds

https://archive.ph/PFWhk

https://www.nytimes.com/2024/09/29/world/europe/austria-election-freedom-party-kickl.html

https://www.reuters.com/world/europe/austrian-far-right-head-urges-rivals-let-him-govern-after-election-win-2024-10-05/

https://www.reuters.com/world/europe/austria-holds-tight-election-with-far-right-bidding-historic-win-2024-09-28/

https://en.wikipedia.org/wiki/Remigration

https://en.wikipedia.org/wiki/Race_(human_categorization)

https://en.wikipedia.org/wiki/Identitarian_movement

https://en.wikipedia.org/wiki/Great_Replacement

https://en.wikipedia.org/wiki/European_New_Right

https://en.wikipedia.org/wiki/Scientific_racism

https://en.wikipedia.org/wiki/Martin_Sellner

https://en.wikipedia.org/wiki/Brittany_Sellner

https://en.wikipedia.org/wiki/Herbert_Kickl

We also discuss cooling economies, the Federal Funds Rate, and the CPI.

Recommended Book: Dirty Laundry by Richard Pink and Roxanne Emery

Transcript

I’ve done a few episodes on this general topic over the past several years, so I won’t get super in-depth about many of the specifics, but the US Federal Reserve has a dual-mandate to keep prices stable and to maximize employment in the country—though that core responsibility has been expanded in recent years to also include regulatory control over banks, providing a variety of services to banks and other savings associations, and doing what it can to moderate long-term inflation rates.

A lot of these responsibilities are intertwined, in the sense that, for instance, if you increase interest rates, that can lead to less spending by corporations that might otherwise borrow and spend liberally, creating more jobs; so adjusting one lever often tweaks seemingly disconnected outcomes—which is part of why this agency’s activities often fly below the radar of non-regulation, non-monetary-world people and publications; they’re super-careful with their powers, because one wrong move can cause ripples of discomfort throughout the US and global economy.

When one of those metrics they’re meant to moderate goes haywire, on the other hand, they’re all over the news; their every action, even the seemingly unimportant ones, tracked in great details, and breathlessly reported-upon.

For a variety of reasons, including the large-scale shut-down of various aspects of society and the global economy, and the consequent disruption of global supply chains, inflation—as measured by CPI, or the Consumer Price Index—shot through the roof, pretty much everywhere on the planet, beginning in 2020.

Leading up to that moment, many wealthy countries had been doing pretty well in terms of moderated inflation levels, and the US was no different: year-over-year inflation growth was down to sub-1% levels in 2014 and 2015, and it was close to the Fed’s 2% target level from 2010, when the worst of the 2007-2008 economic crisis had receded, until 2020, when it was down to 1.4%.

That year, the Federal Funds Rate, which is the lever the Fed uses to adjust interest rate levels throughout the US government and economy, setting the interest rate banks charge to lend each other money short-term, basically, that number eventually influencing everything from savings account interest payments to mortgage rates to what you can expect to pay for a car loan—that Federal Funds Rate was down to .25% in 2020 and 2021, which is very low, which meant that debt was very cheap and easy to acquire, corporations happily borrowing as much money as they wanted, as it would cost them very little to do so, and that meant expansion across the economy, that expansion further aided by low interest paid on savings accounts and similar, safe-havens for money, which made investing in startups, stocks, and similar, risky investment vehicles more appealing—because the safe stuff didn’t pay much of anything.

All of which meant a spending bonanza—right up to the point that COVID-19 started rippling outward from China, and the world’s governments responded with lockdowns and similar, economy-stifling measures.

By the end of 2021, year-over-year inflation in the US was up to 7%, from 1.4% the previous year, and it was 6.5% the following year.

In 2022, the Fed bumped the Federal Funds Rate from that incredible low of .25% up to 4.5%—a huge jump, and a staggering blow for an economy that was experiencing a dramatic surge in prices; the goal being to slow things down, and consequently, hopefully, also slow that inflation rate.

Other factors likewise influenced inflation around the world during this period, including Russia’s invasion of Ukraine, which massively complicated the global energy market, alongside other disruptions, and the weirdening of politics, which have become increasingly tribal and extreme over the past decade or so in many governments around the world, have made it trickier to legislate, and have carried a wave of unserious and obstructive lawmakers into office.

That hiking of the Federal Funds Rate ended what’s been called the US’s ZIRP era: a period in which zero interest-rate policy, or so close to zero that it’s essentially zero interest rate policy, defined the shape of the economy, what professions everyone chose to pursue, which players became dominant in their industries, and what sorts of bets made financial and reputational sense.

The US, and much of the world, especially the wealthy world, was thus suddenly plunged into a very different financial and regulatory environment, changing its posture and the politics of money and spending, while also queueing things up for a potential future in which inflation might be tackled and the Fed might start adjusting the dial downward once more, tipping the economy back into something more spendy and risk-taking, after a handful of years in which the name of the game has been cutting costs, laying off as many people as possible, and recalibrating toward today’s profits over investing in tomorrow’s potential gamechanging outcomes.

What I’d like to talk about today is the Fed’s recent decision to do exactly that, adjust their interest rate dial, and how the way they did it is being received by those who are the most affected by this choice.

—

The mechanism of the Federal Funds Rate is fairly straightforward: make it more expensive to borrow money and you tend to cool the economy.

Do this at the wrong time—when the economy is already cool—and you hurt the businesses that make up the production side of things, but also consumers, as there likely won’t be enough jobs, and enough jobs paying enough for folks to earn a living, buy things, and keep those businesses operating at nominal capacity.

Don’t do it when you need to, though, and the economy can get out of hand, running too hot, expanding wildly, and possibly also pumping up inflation at a rate that makes everything pricier, which can lead to similar consequences: folks not able to afford as much because the price of things is going up, despite their pay being decent and the job market being on fire.

This rate has to be used like a scalpel, not a chainsaw, then, lest you tip things one way or the other, in either case resulting in some type of economic truncation and various types of suffering for the citizenry of the country in question.

In this context, a “soft landing” is a semi-mythical accomplishment involving the just-right application of the Federal Funds Rate so that you increase interest rates, maybe dramatically, to stifle high inflation, but then pull those interest rates back at just the right moment so that the economy is cooled, but not damaged, and you’re thus able to put things back on a nice growth trajectory, but with something like a 2% inflation rate, rather than something much higher, or just as bad in some ways, much lower than that.

It’s been speculated that a soft landing might be attainable by this Fed’s current leadership because they seemed to be acting prudently and objectively, despite the politics surrounding their efforts, and they also seemed willing to hold off on lowering the rate even when much of the business world and parts of the government were losing its mind over worry that they would keep it high for too long.

In late September 2024, the Fed announced that they’d decided to finally cut this rate, from a target range of 5.25-5.5%, down to a target range of 4.75-5%.

That’s a drop of .5%, which is unusual except in emergency circumstances, and while it wasn’t totally out of the blue—many analysts and betting markets had given a high probability to this potentiality, as opposed to the usual .25% cut—it was still quite a big event, as it makes pretty clear that the Fed sees their job as being mostly done, at least in the sense that they need to cut inflation quickly and dramatically.

That decision was made on the basis that US inflation rates, using the Fed’s preferred index, had dropped for the fifth consecutive month in August of this year, down to 2.2%, which marked the lowest level since February of 2021; that’s down from 2.9% in July, and is tantalizingly close to their target rate of 2%.

The implications of this double-the-usual drop in the Federal Funds Rate are many, and the specifics and claims vary depending on who you ask.

One perspective of why this did this how they did it is that the Fed sees that it’s work is done on this matter, and they’re keen to get interest rate levels back to something more moderated as quickly as possible so that the economy can keep its solid momentum going apace. They also recognize that there’s a delay on these sorts of decisions and their impact, so getting close to 2% and then pulling back is more likely to ultimately land them somewhere close to 2%, while waiting for reports that show 2% before pulling back would be likely to lead to an overshoot, which could be really bad for economic outcomes.

Another view is that the Fed accidentally held on a little too long and maybe should have cut rates by .25% at their previous meeting, and now, to make up for that, they doubled the cut; but  because of that accidental delay, the economy could suffer a bit, the Fed overshooting after all, which again, wouldn’t be ideal, but is a possibility because of that aforementioned delay in cause and effect.

Some prognosticators in this space, however, are seeing this as a panicky indication that we’re actually careening toward a recession, as some of the economic indicators folks watch to predict such things are flashing red, and while a successful soft landing could theoretically help the US avoid such a path, the current wave of relief and optimistic anticipation could also be an illusion that’s concealing structural weaknesses in the US economy that are about to rupture.

The most popular version of that more pessimistic prediction is that the US will experience a recession in 2025, maybe 2026 at the latest, and it will have to make it through that trough before it can start climbing up the peak, again—which would be bad news for investors and businesses, and would mean basically resetting to a standing start, in terms of growth, as opposed to perpetuating the momentum of the economy as it exists, today, which is doing pretty well by most metrics.

That could also be quite bad for burgeoning industries like those connected to AI systems, renewable energy, and microchips, as these are all investment-intensive corners of the economy, and a recession would almost certainly significantly truncate the amount of money sloshing around in investors’ bank accounts, waiting to be injected into businesses operating in such spaces.

All that said, at the individual level, while inflation has been moderated by many measures, prices dropping substantially from where they were even a few months ago, what’s been called the “vibecession” seems to still be hampering the everyday person’s sense of how things are going economically in the US—the numbers look pretty good, but the average person reports that they think things are going catastrophically.

It’s thought that this is at least partly the consequence of economic ignorance—folks only remembering the many negative headlines they see, and not realizing how historically low unemployment is, and how historically high the stock market has climbed, alongside other positive measures.

But the more potent ingredient, almost certainly, is that while inflation has moderated for many common goods and expenses, others, like food, are still quite high, and that’s an expense that we don’t just see periodically, like when we buy new shoes or a new car, but every week or even every day, which is a far more regular punch to the gut that hits not just our pocketbooks, but also our perception of how far our money goes, and how well off we feel as a consequence.

There’s already a great deal of speculation as to what the Fed will do at its next meeting in November, and bets on popular futures markets indicate there’s a 54% chance of another half-point cut, as opposed to a 46% chance of a quarter-point cut.

That latter potentiality would arguably support the assertion that the Fed is scrambling to make up for lost time, hoping to avoid an inflation reduction overshoot—or from a more positive perspective, maybe just wanting to get back to a more neutral interest rate stance sooner rather than later, to help keep the economy chugging along, without any periods of sluggishness, while the former potentiality, a quarter-point cut in November, would ostensibly seem to be a more confident stance from the Fed, but could also worry investors, as it might mean it’ll take a bit longer to fully return to that neutral stance.

Whatever speed the Fed ends up opting for in dropping interest rates, though, most analysts see the rate falling to something like the 3-3.25% range by the middle of 2025, which is at the top end of what’s generally see as a neutral rate for such things—a rate that won’t add fuel to a hot economy, but also won’t cool things artificially.

By that point, we’ll probably also know if the Fed has managed to nail a soft landing; it seems like they might have, but at this point there is still reason to suspect they didn’t, and that this is just the silence before the storm.

Show Notes

https://www.washingtonpost.com/opinions/interactive/2024/john-lanchester-consumer-price-index-who-is-government/

https://en.wikipedia.org/wiki/Consumer_price_index

https://en.wikipedia.org/wiki/Misery_index_(economics)

https://apnews.com/article/federal-reserve-barkin-interest-rates-inflation-bba49b528649cf866e391a783033c067

https://www.cnn.com/2024/09/23/economy/rate-cut-what-next/index.html

https://www.wsj.com/business/entrepreneurship/fed-interest-rate-cut-small-business-spending-abfed941

https://www.forbes.com/sites/georgecalhoun/2024/09/26/the-feds-rate-cut--a-soft-landing--or-fake-news/

https://www.reuters.com/markets/us/fed-is-aligned-rate-cuts-upcoming-data-will-shape-pace-2024-09-27/

https://apnews.com/article/interest-rates-inflation-prices-federal-reserve-economy-0283bc6f92e9f9920094b78d821df227

https://www.cbsnews.com/news/federal-reserve-rate-cut-credit-cards-mortgages-already-lowering-rates/

https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm

https://www.investopedia.com/will-fed-rate-cuts-save-commercial-real-estate-cre-loans-banks-8719181

https://finance.yahoo.com/news/new-pce-reading-supports-case-for-smaller-fed-rate-cut-in-november-143349577.html?guccounter=1

https://www.bloomberg.com/news/articles/2024-09-28/powell-speech-and-jobs-data-to-help-clarify-fed-rate-path?embedded-checkout=true

https://www.reuters.com/markets/us/traders-bet-second-straight-50-bps-fed-rate-cut-november-2024-09-27/

https://en.wikipedia.org/wiki/Federal_funds_rate

https://en.wikipedia.org/wiki/Zero_interest-rate_policy

https://www.investopedia.com/terms/s/softlanding.asp

https://www.cbsnews.com/news/federal-reserve-rate-cut-credit-cards-mortgages-already-lowering-rates/

https://www.theguardian.com/business/2024/sep/27/stock-markets-hit-record-highs-after-news-of-a-fall-in-us-inflation

We also discuss exploding pagers, targeted strikes, and paramilitary organizations.

Recommended Book: Uncertainty in Games by Greg Costikyan

Transcript

In the world of technology, and especially computers—or anything with microchips and thus, some computing capabilities—a “backdoor” is a bit of code or piece of hardware that allows someone (or a group of someones) to get inside that computer or compute-capable device after it’s been delivered and put into use.

At times the installation of backdoors is done beneficently, allowing tech support to tap into a computer after it’s been sold so they can help the end-user with problems they encounter.

But in most cases, this term is applied to the surreptitious installation of this kind of hardware or software, and generally it’s meant to allow those doing the installing to surveil the activities of whomever is using the product in question, or maybe even to lock them out and/or hijack its use at some point in the future, should they so desire.

There are potential downsides to the use of backdoors even when they’re installed with the best of intentions, as they can allow malicious actors, like hackers, working independently or for agencies or nation states, to tap into these devices or networks or whatever else with less effort than would have otherwise been required; in theory such a backdoor would give them one target to work on, rather than a bunch of them, which would mean attempting to access each and every device individually; a backdoor in an operating system would allow hackers who hacked that backdoor system access to every device that uses said OS, for instance.

Backdoor efforts undertaken by the US National Security Agency, the NSA, were famously divulged by whistleblower Edward Snowden, revealing all sorts of—to many people outside the intelligence world, at least—unsavory activities being conducted by this agency, among them efforts to install backdoors in software like Linux, but also hardware like routers and servers, at times opening these devices up and installing what’s called a Cottonmouth, which allows the NSA to gain remote access to anything plugged into that device.

This sort of interdiction, which is basically the interception of something before it reaches its intended destination—so intercepting a modem that’s been ordered by a big company, opening it up, installing a backdoor, then repackaging it and sending it on its way to the company that ordered it as if nothing has happened—is not uncommon in the intelligence world, but the scope of the NSA’s activities in this regard were alarming to pretty much everyone when they were divulged, with leaks and reporting showing, basically, that the NSA had figured out ways to put hardware and software backdoors in just about everything, in some cases resulting in the mass collection of data from American citizens, which goes beyond their legal remit, but also the surveillance of American allies, like the chancellor of Germany.

What I’d like to talk about today is another, recent high-visibility example of an intelligence agency messing with devices ordered by a surveillance target, and what consequences we might expect to see now that this manipulation has come to light.

—

In the world of covert operations—spy stuff, basically—a “hand of God” operation is one that is almost immaculately targeted to the point where it might almost seem as if those who are struck did something to piss off a deity; those who the targeters want to hit are hit, and everyone else is safe or relatively safe.

In 2020, a hand of God operation was launched against an Iranian general named Qassem Solaimani while he was near the Baghdad airport, an American Reaper drone hitting Solaimani and his escorts’ cars with several missiles, killing the general and nine other people who were with him, but leaving everyone else in the area largely unscathed—not an easy thing to do.

Hamas’s leader, Ismail Haniyeh, was assassinated in July of 2024 by Israel, which blew up his bedroom in a military-run guesthouse in Iran’s capital city, Tehran, either using a well-targeted missile or a bomb that they somehow managed to hide in that room ahead of time—either way, it was a very precise attack that made use of a lot of intelligence data and assets in order to hit the target and just the target, avoiding other casualties as much as possible—which again, can make this sort of strike, though still massively destructive, seem like an act of god because of how highly specific it is.

On September 17 of 2024, at around 3:30 in the afternoon, local time, thousands of pagers, which were purchased and used by the militant group Hezbollah, which governs the southern part of Lebanon, and which is locked in a seemingly perpetual tit-for-tat with Israel, mostly using rockets and drones across their shared border, these pagers began to buzz, indicating there was a new message from Hezbollah leadership, and then seconds later they exploded—some in their owners’ pockets or on their hips, some in their hands, if they lifted them to their faces to see what the message contained.

These sorts of devices were subbed-in for smartphones by the organization’s leadership in recent years, especially following the early October attacks on Israel by Hamas in 2023, due to fears that Israel’s notorious intelligence agency, Mossad, would be able to tap their communications if they used more sophisticated tools.

The pagers in question were a bit more modern than those that were common a few decades ago, allowing users to basically text each other, and it was thought that they were simple enough that they would reduce the number of software backdoors that Mossad could use to intercept their messages, while still allowing those in the higher-levels of the organization to communicate with each other quickly and efficiently.

Instead, it looks like Hezbollah acquired these pagers from an Israeli shell company—maybe several shell companies—operating out of Hungary which licensed the device schematics and branding of a Taiwanese company in order to make it seem legit.

This company or companies were set up in mid-2022, and the tangled web of activities surrounding them is still being unspooled by journalists and intelligence agencies, but pretty much everyone, from the pager brand’s parent company to the Hungarian government deny any connection to any of this, the US and Israel’s other allies deny having any foreknowledge of the operation, and Israel’s Mossad is of course not divulging their secrets, so it could be a little while before we know all the details, if we ever do, but it seems like this larger operation, the infrastructure for it, anyway, may have been in the works for a decade or more.

The way it played out, though, is that those thousands of pagers seem to have been filled with a few ounces of explosives and rigged with software that would detonate said explosives when a specific message was received by them. These pagers, then, were delivered to Hezbollah, distributed to their higher-ups, their inner-circle, basically, and then on September 17 thousands of them received the detonate message, blew up, and killed at least 12 people and injured nearly 3,000.

Lebanon’s hospitals were filled with the dead and grievously injured, shutting down a significant chunk of their overall medical capacity, and the following day a wave of radios—the kind used to communicate, not the kind used to listen to music, so basically walkie-talkies—alongside a few mobile phones, laptops, and some solar power cells, all owned and used by Hezbollah officials and operatives, blew up, killing at least 25 people and injuring about 450.

Then, a few days later, Israel launched an airstrike on a suburb in Beirut—the capital city of Lebanon—killing two senior Hezbollah officials and something like 36 other people with the 140 or so rockets it launched during the operation.

Anonymous officials from the US and Israel have told reporters that the explosives hidden in those pagers and other devices, were originally meant to be used as an opening salvo of an all-out attack against Hezbollah, which by definition would probably mean an invasion of Lebanon, since Hezbollah controls a fair portion of the country, but they were growing concerned that Hezbollah might have been on to them and their explosives-hiding efforts, so they decided to move sooner than planned and detonate these devices without having that immediate full-bore followup ready to go.

This might be part of why the attack is generally being seen, in analytical and intelligence circles, at least, as a tactical success but a strategic question mark, as the end-goal isn’t really clear, especially since Israel is still partly tied-up in Gaza and increasingly the West Bank, as well, and thus not super well-prepared for a potential real-deal war with Lebanon, to its north. This operation’s culmination would have made a lot more sense several months in the future, when they would theoretically have been in a better spot to detonate these devices, launch a bunch of missiles, and then move in with soldiers on the ground to capture or kill the rest of Hezbollah’s leadership.

It has been posited that this effort still serves a few important purposes for Israel’s military and intelligence agencies, though. For the latter, it serves as a reinvigoration of the “don’t mess with us” reputation they held up until the successful sneak-attack by Hamas last October; Mossad has been heavily criticized for ignoring the signals they were receiving about that attack, and this could have been partly meant to show their government and the world that they still have plenty of gas in the tank; it was a highly sophisticated operation, and it’s fairly terrifying to think that the devices we all carry in our pockets might be weaponized in this way; Iran’s military is reportedly disallowing the use of such devices for the time being, and local airlines are not allowing folks to bring these sorts of things aboard, either, so the scare-factor has definitely worked, and it will likely make it a lot more difficult for Hezbollah and similar organizations in the area to function, since they won’t know for certain which of their communication channels have been compromised and potentially weaponized against them.

The Israeli military, too, would seem to benefit from what amounts to a decapitation attack on an organization that has declared its intention to wipe Israel off the face of the map.

Hezbollah and similar organizations are more fluid than typical government organizations by necessity, but Hezbollah is a lot more established and entrenched than other Iran-backed entities, like Hamas in Gaza and the Houthis in Yemen, which means they have more infrastructure, a larger military force, and a more concrete leadership structure—the latter of which was hit hard by these strikes and hand of God operations, and the former of which has been hit hard over the past year or so, airstrikes targeting Hezbollah’s rocket, drone, and missile capabilities in particular having become more common since Hamas attacked Israel.

There are several interesting, and in a few cases alarming, possible implications of this operation and its accompanying airstrikes.

First is that it could represent a time-delayed unofficial declaration of war by Israel against the Hezbollah-controlled portion of Lebanon.

There have been very clear red-lines honored by both militaries for the past several years, both of them generally sticking to hitting targets within a few miles of their shared border, and both sides generally avoiding hitting major cities or higher-ups from the opposing side with their strikes; a lot of rockets and missiles and drones flying, but few of them hitting anything meaningful, other than the sites from which those projectiles were launched.

Israel seems to be indicating that the rules have changed, though, and while Hezbollah has made similar gestures in recent days, aiming at and hitting a few Israeli targets beyond the typical projectile launch-sites and military installations close to the border, including towns dozens of miles from that border, they’re still proving to be less brazen than Israel in this regard, so far at least.

So it could be that Israel is leaving Hezbollah some space to back off, giving them a taste of what’s to come if they don’t accept that ultimatum, and it could be that Hezbollah is gesturing at hitting back, but avoiding doing anything they can’t step back from in order to give themselves time to either tone things down on what feels like their own terms, or to prepare for a more formal conflict; this could change at any moment, of course, but that seems like the most likely resting stance for Hezbollah at the moment—though in recent days both sides have indicated they’re not just prepared, but actually keen for a more formal conflict, including an Israeli invasion of Lebanon, which would allow the Israelis to do more capturing and disassembling of Hezbollah’s infrastructure, but could also bog them down in street combat, which would make them less effective in Gaza, while also probably requiring the summoning of thousands of new soldiers, or already active, but exhausted soldiers—which wouldn’t be a popular move on the Israeli homefront.

This also raises all sorts of questions about the safety, or lack thereof, of international supply chains.

Some of these supply chains have already suffered as a consequence of their tangling and breaking during the height of the COVID-19 pandemic, but others are beginning to shrink or even wither as a result of concerns about, for instance, China integrating itself in global communications systems via its 5G technology and mobile devices, which has led to all sorts of sanctions and import bans by countries like the US and their allies.

Could iPhones built in China be messed with before they’re shipped to their end-users in other countries? It’s not impossible, and the same is true of just about anything that’s made in one place and exported to another. That doesn’t mean it will happen, but the knowledge that it could—and the line that’s been crossed by Israel in blowing up seemingly safe personal devices in this way—could lead to more such bans, or at least concerns and posturing by political figures about these fears. That, in turn, could expedite the truncating and culling of some of these supply chains, further curtailing the expansiveness, range, and openness of global trade.

And finally, this raises more concerns about the possibility of Israel’s invasion and occupation of Gaza sparking a larger, regional conflict, as Hezbollah is backed by Iran, which also backs an array of other non-government interests in the region, including several paramilitary groups. And the Israeli government seems keen to take down as many of the threats it’s surrounded by as possible before any peace treaties are signed; which perhaps understandable when you’re running a country that’s been invaded by all of its neighbors simultaneously as many times as Israel has in its relatively short history as a sovereign nation, but it’s also pretty alarming as Israel is a hugely potent military force in the region, and it’s backed by many of the world’s most globally potent military forces, which means it could wreak a whole lot of havoc if it wants to, and if such an effort increases in scope, that could pull other regional powers, like Iran, more formally and overtly into the conflict.

There are other forces at play, here, too, like the political machinations of Israeli Prime Minister Netanyahu, who’s walking a fine line attempting to stay in office in the midst of large and seemingly endless protests by Israelis who oppose his seeming kowtowing to the country’s far-right political establishment, and who’s scrambling to stay in office, in part to avoid facing ongoing corruption charges against him.

There are also external factors that could influence the region’s next steps, like Russia, which would love to see this conflict expand because that would take resources and attention away from its invasion of Ukraine, while other nations, like Saudi Arabia, would likely prefer to continue along a previous course of regional stabilization and normalization—of more trade enabled by more peace, basically—though it now seems inclined to put those efforts on pause because of the unpopularity of dealing directly with Israel until and unless it recognizes a Palestinian state, which doesn’t seem likely in the immediate future, given everything that’s happened in the past year.

Lots going on, then, and this most recent wave of attacks would seem to stir the pot more than it settles much of anything for everyone involved; which means, most immediately, and this is true whether or not Israel and Lebanon more formally go to war with each other, the ongoing peace talks that many of Israel’s neighbors and allies have been hoping for have been essentially back-burnered for the time being.

Show Notes

https://en.wikipedia.org/wiki/Assassination_of_Qasem_Soleimani

https://en.wikipedia.org/wiki/Assassination_of_Ismail_Haniyeh

https://archive.ph/OqfPt

https://www.nbcnews.com/news/world/israel-strikes-lebanon-hezbollah-revenge-device-blasts-nasrallah-rcna171946

https://www.nbcnews.com/news/world/hezbollah-commanders-killed-israel-strike-beirut-device-blasts-rcna172085

https://www.washingtonpost.com/world/2024/09/21/israel-lebanon-hezbollah-exploding-pagers/

https://www.bbc.com/news/articles/cz04m913m49o

https://www.nytimes.com/2024/09/21/business/dealbook/exploding-pagers-deliver-supply-chain-warning.html

https://www.wsj.com/world/middle-east/hezbollah-exploding-pagers-israel-supply-chain-a4937b48

https://www.wsj.com/world/middle-east/israels-ultimatum-to-hezbollah-back-off-or-go-to-war-f1b99924

https://www.washingtonpost.com/national-security/2024/09/21/israel-lebanon-pager-explosions-hezbollah-warfare/

https://www.axios.com/2024/09/21/hezbollah-launches-medium-range-rockets-israel

https://www.nytimes.com/live/2024/09/22/world/gaza-israel-hamas-hezbollah

https://apnews.com/article/israel-palestinians-gaza-755733f50ad52c5af05a2ea7ef082e26

https://www.nytimes.com/2024/09/21/world/middleeast/israel-hezbollah-lebanon.html

https://www.nytimes.com/2024/09/20/world/middleeast/gaza-cease-fire-talks-hezbollah-lebanon.html

https://www.msn.com/en-us/news/world/israel-s-hand-of-god-operation/ar-AA1qMval

https://www.nytimes.com/2024/09/17/world/middleeast/israel-hezbollah-pagers-explosives.html

https://www.nytimes.com/2024/09/17/world/middleeast/hezbollah-pager-explosions-lebanon.html

https://www.axios.com/2024/09/18/hezbollah-pager-explosions-supply-chain-terror

https://apnews.com/article/lebanon-israel-hezbollah-pager-explosion-e9493409a0648b846fdcadffdb02d71e

https://www.nytimes.com/2024/09/22/world/middleeast/mideast-diplomacy-hezbollah-israel.html

https://www.nytimes.com/live/2024/09/22/world/gaza-israel-hamas-hezbollah

https://www.nytimes.com/2024/09/23/world/middleeast/israel-hezbollah-escalating.html

https://www.reuters.com/world/middle-east/irans-guards-ban-communications-devices-after-strike-hezbollah-security-2024-09-23/

https://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-upgrade-factory-show-cisco-router-getting-implant/

https://www.reuters.com/article/world/spy-agency-ducks-questions-about-back-doors-in-tech-products-idUSKBN27D1DO/

https://www.extremetech.com/defense/173721-the-nsa-regularly-intercepts-laptop-shipments-to-implant-malware-report-says

https://en.wikipedia.org/wiki/National_Security_Agency

https://en.wikipedia.org/wiki/Hardware_backdoor

We also discuss the used EV market, plug-in hybrids, and the Tesla Model 3.

Recommended Book: Not the End of the World by Hannah Ritchie

Transcript

In late-2021, car rental giant Hertz announced that it would purchase 100,000 Tesla Model 3 sedans for its fleet, giving customers the opportunity to drive what had recently, in 2019, become the best-selling plug-in electric car in US history, beating out the Chevy Volt, and then in 2020 become the bestselling plug-in in the world, bypassing the Nissan Leaf.

This was announced about six months after the company went through a massive restructuring, triggered by a bankruptcy filing in May of 2020, which landed Hertz in the hands of a pair of investment firms that purchased a majority stake in the company for about $4.2 billion.

Part of the goal in making such a huge electric vehicle purchase was that it would ostensibly set Hertz up with some of the snazziest, most future-facing vehicles on the road, and it should—if everything went according to plan—also provide them with some advantages, as full-bore EVs have far fewer parts than traditional internal-combustion vehicles, which means a lot less that can go wrong, and fewer moving pieces that need maintenance; which is pretty vital for vehicles that will be driven pretty much continuously.

So the single largest purchase of electric vehicles in history would represent a massive up-front investment, but the hope was that it would both pay off in dollars and cents, maintenance-wise, and help differentiate a brand that had recently been through some very rough patches, business and competition-wise.

Unfortunately for Hertz, that’s not what happened.

Initially, this announcement bumped the company’s stock up by about 40% over the course of just two weeks, but the Model 3s they purchased weren’t as popular as they thought they would be, and though EVs should in theory be easier to maintain than their ICE peers, the relatively low number of specialized repair shops and high cost of relatively scarce spare parts meant that the cars were actually more expensive to maintain than more common and less flashy alternatives.

The company was also dinged by Tesla’s decision to raise its prices around the same time Hertz was making the majority of its purchases, and Hertz decided to start offloading some of the Model 3s it had bought—which only ended up being about 30,000, rather than the originally announced 100,000—selling the cars at a fire-sale discount, in some cases as low as $25,000, which could drop to about $21,000 in areas where EV tax credits applied to used vehicles.

Unfortunately for those who bought them, many of these used Teslas were hobbled by the same issues Hertz was scrambling to address, but couldn’t make work for their business model.

Many initially happy used-Tesla purchasers found that their car’s battery pack was fundamentally damaged in some way, in some cases costing half, or nearly the same as the price they paid for the car, to repair or replace.

This fire sale arrived at around the same time as an overall drop in used EV prices across the market, too, which meant that Hertz’s prices—though at times falling to about half of what a new Model 3 would cost—weren’t as great as they could have been, especially for cars with so many potentially costly problems.

In other words, at this moment the whole of the EV industry was experiencing a bit of a price shock, as most automobile companies selling in the US were introducing new EV models, and they were finding that supply had surged beyond demand, leaving some of them with lots full of cars—especially in parts of the country where EV charging infrastructure still hasn’t been fleshed out, dramatically diminishing the appeal of EVs in those regions.

In early 2024, Hertz’s CEO resigned, mostly because his bet on Teslas and other EVs, hoping to making about a fifth of the company’s fleet electric, didn’t go as planned, and that’s left the company’s stock trading at around 11% of its 2021 high price point as of early September 2024.

To replace him, the company brought in a former executive from Cruise, which is an autonomous car technology company that’s owned by General Motors; another company that’s been trying to figure out the proper balance between investing in where the automobile market in the US is, today, and where it will be in the coming years.

What I’d like to talk about today is another facet of the automobile industry that’s changing pretty rapidly, and a new take on a third option, straddling the internal combustion engine and EV worlds, that seems to be evolving in a compelling—to those running these companies, at least—manner.

—

In January of 2023, the CEO of Toyota, who was the 66-year-old grandson of the company’s founder and who had been running the company since the early 2000s, stepped down from his position following a wave of criticism about his outspoken focus on hybrids over electric vehicles.

This company, which in some ways has been defined in recent years by its gamble to release the very well-received Prius, an early hybrid that really leaned into the concept of using a battery to support the activities of the car’s conventional fuel-burning engine, which resulted in a bunch of energy-efficiency benefits, the company had lagged behind its competitors in developing, announcing, and releasing new electric vehicle models to compete with the likes of Tesla—a company that was eating everyone else’s lunch in the EV department, and which was seeing sky-high valuations as a consequence.

Toyota was also being criticized by environmentalist groups for failing to move toward fully electric, zero-emissions vehicles, as while it did have a few EV models on the market, they were seemingly afterthoughts, accounting for less than 1% of the company’s US sales, and the main model, the cumbersomely named bZ4X, experienced a significant safety recall that upended its rollout plans.

Toyota’s new CEO leaned a bit more into EVs, announcing 10 new models in 2023, alongside plans to sell 1.5 million of them per year by 2026. But the company was still selling more cars than any other automaker on the planet, and the vast, vast majority of them were some kind of fuel-burning vehicle.

Despite the change in leadership, then, and the slight tack toward EVs the new CEO made soon after ascending to his new position, the company was still being criticized by environmentalist groups for not doing enough or moving fast enough, and the market seemed to think Toyota was setting itself up for a pretty grim next decade, since it was falling so far behind its competition in terms of supply chains and manufacturing know-how, related to EVs.

This general storyline, though, seems to have changed over the past year.

Yes, it’s still generally assumed that EVs are the future, that the electrification of everything is where we’re headed as a globe-spanning civilization, not just our transportation, but everything moving toward renewables—and that’s for climate-related reasons, but also the economics of renewables, which, once installed and connected, tend to be a lot more favorable, economically, than fossil fuel-based alternatives, almost always.

That said, the aforementioned disconnect between EV availability and investment, and EV demand in the United States has increased over the past year. EV sales are continuing to increase overall, but the huge spike in sales we saw over the past handful of years has tempered into a slower ascension, and many automakers have found themselves with car lots filled with models that aren’t the ones people want—at least not in the requisite numbers to keep lot turnover happening at the rate they like, and in some ways need, to see.

This is not the case in many other countries, I should note.

In China, EVs already made up something like 37% of the country’s total automobile marketshare, the share of new cars sold, in 2023, and across Europe, about 24% of all new cars sold were plug-in electric vehicles that same year.

In the US, the number is still in the single-digits, something like 8% as of Q2 2024, which is a lot bigger than the 5% or so in early 2022, but again, not the kind of rampant growth carmakers were planning for.

Another component of the automobile industry in the US has continued to grow a fair bit faster, though, up more than 30% year-over-year, accounting for up to 9.6% of the country’s total light-duty car marketshare in the second quarter of 2024.

And that slice of the market is the world of hybrids—the component of the car industry that Toyota has bet heavily on, despite antagonism from all sides, over the past several years, and which other automakers like Ford, are pivoting toward, as well; Ford recently announced that it would no longer be releasing a full electric, large SUV in the near-future, and will instead be releasing hybrid models, possibly including plug-in hybrid models.

Plug-in hybrids are like traditional hybrid vehicles, except they have a larger on-board battery pack that can be plugged into an electrical outlet, which allows them to be even more efficient than their traditional hybrid kin; so they're like a traditional ICE vehicle, but with a big, plug-innable battery that helps that engine be more efficient, giving it much better gas mileage.

Another recent development in this space, though—one that’s already pretty well-known in China, but still foreign enough in the US that the CEO of Ford said, after being exposed to the idea for the first time earlier this year, that he thinks it might be the right variation of existing approaches to help the US make the transition to electric vehicles—is called an extended-range electric vehicle, or EREV, and rather than being a hybrid with a suped-up battery, it’s an EV with a built-in, smaller internal combustion engine that serves as an onboard generator, allowing the car to burn fuel to generate electricity, which then charges the car’s giant battery, giving it more range when it’s needed.

The CEO of Ford thought this lined up well with how the American market works, and could help temper the range-anxiety many Americans feels, worrying that the battery packs in their EVs won’t allow them to take road trips, or might run out of juice when they’re partway through their homeward-bound commute at the end of the day; recharging an EVs battery still takes a fair bit longer than filling up a tank of gas, and there are way more gas stations than EVs plug in points around the country, as of 2024.

So if there were a little engine inside their EV capable of giving it a backup charge when necessary, and if that little generator could be fueled using gas that’s widely and relatively inexpensively available across the US, that could in theory help people transition to driving with electricity—which can be generated cleanly, using renewables—most of the time, while having that backup system in place, for when it’s needed, which might be rarely or never.

In late-2023, car-maker Stellantis unveiled their Ram 1500 Ramcharger, which is an EREV that can drive up to 690 miles on its battery pack, but it also includes a 3.6-liter V6 engine that activates when the main 92kW battery is running low on juice; a little generator that burns fuel to recharge the main battery.

One of the big, market-defining questions related to that new Ram and similar models, though, is whether US government regulators will categorize EREVs as zero-emissions vehicles, because, in theory at least, they will at times not be zero-emissions, even though for many people they would probably run on just their batteries most of the time.

This judgement call could impact sales substantially, though, as such determinations help define what would-be customers pay up front, what sorts of tax benefits, if any, they can expect on their purchases, and what sorts of taxes and other fees they’ll pay along the way, for the life of the vehicle.

Whether this topsy-turvy version of the hybrid—the traditional version having a conventional engine with battery backup, and this new riff on the theme defined by a massive main battery with a conventional engine backup—whether it will do well on the market anywhere outside of China has yet to be seen, and there’s still the question of whether other automakers will be able to spin up their own versions of the concept before the market moves again, trends realigning, and more plug-in electricity infrastructure maybe making vanilla EVs more desirable and useable in more parts of the country.

In the meantime, though, we seem to be seeing—rather than the clean transition from ICE vehicles to EVs that some people had hoped for and expected—something more akin to a Cambrian Explosion, where new pressures and innovations are sparking all kinds of interesting offshoot evolutions, and rather than just two options, one supposedly the future and the other supposedly on its way out, we have a half-dozen core themes around which most new vehicles are being built, some of them interchangeable, some not so much, and that suggests we could see more large recalibrations and broad market shifts, alongside a slew of new combinations and innovations, before the previous paradigm fully gives way to whatever ultimately replaces it.

Show Notes

https://electrek.co/2023/01/26/toyota-ceo-steps-down-amid-electric-vehicle-movement/

https://caredge.com/guides/electric-vehicle-market-share-and-sales

https://en.wikipedia.org/wiki/Electric_car_use_by_country

https://cleantechnica.com/2024/08/28/u-s-share-of-electric-hybrid-vehicle-sales-increased-in-2nd-quarter-of-2024/

https://electrek.co/2023/04/07/toyotas-new-ceo-adjusts-ev-plans-but-sticks-to-a-hybrid-approach/

https://www.thestreet.com/electric-vehicles/ford-ceo-says-this-type-of-vehicle-can-be-the-bridge-for-electrification

https://www.wsj.com/business/autos/the-plug-in-hybrid-car-starts-to-win-over-buyers-2155e054

https://en.wikipedia.org/wiki/Plug-in_hybrid

https://fortune.com/2024/06/07/buy-used-tesla-hertz-fire-sale/

https://en.wikipedia.org/wiki/Tesla_Model_3

https://www.roadandtrack.com/news/a60232041/hertz-ceo-resigns-after-big-bet-on-evs-fails-to-pay-off/

https://www.roadandtrack.com/news/a35698039/hertz-potentially-saved-from-bankruptcy/

https://www.roadandtrack.com/news/a38053117/hertz-buying-100000-teslas/

https://qz.com/tesla-hertz-used-electric-cars-evs-damage-glitches-1851482632

https://archive.ph/364dj

https://www.cnbc.com/2023/10/26/hertz-pulls-back-on-ev-plans-citing-tesla-price-cuts-repair-costs.html

https://en.wikipedia.org/wiki/Cruise_(autonomous_vehicle)

We also discuss pig pancreases, beneficial side-effects, and shortages.

Recommended Book: The Death Café Movement by Jack Fong

Transcript

In the 1970s, a pair of researchers looking into possible ways to address duodenal ulcer disease were studying the way we secrete different hormones while eating, and that led to an experiment in which they pumped a hormone called glucagon-like peptide 1, or GLP-1, extracted from pigs, into pig pancreases to see what effect that would have.

As it turned out, this hormone stimulated the secretion of insulin while inhibiting the secretion of glucagon, and that was notable to these researchers because folks with diabetes have too much glucagon in their bodies, which is what causes high blood sugar.

The idea, then, was that by stoking the production of more insulin and limiting the amount of glucagon being produced, you might be able to help folks with type 2 diabetes control their symptoms.

These researchers shopped around the idea of building a treatment based on this hormone a little bit in subsequent years, but didn’t get much interest from the major drug companies. In 1993, though, they were able to do a study that showed that infusing folks who have type 2 diabetes with GLP-1, they could reset their blood glucose levels back to normal within just four hours, which was a pretty big deal—a lot better than most other options at the time.

A drug based on this hormone was approved by the FDA for medical use in the US in 2017 under the name Semaglutide, and by 2021 it had become one of the top 100 most-prescribed drugs in the country—which is saying something, as the US is awash in pharmaceutical options, these days.

Even before that approval, though, there were signs that GLP-1 receptor agonists, which is what Semaglutide and other drugs based on this concept are called, might have also had some other uses.

In some of the clinical trials in which they were trying to gauge how well folks with type 2 diabetes faired while using the drug, for instance, they found that many of their subjects had trouble finishing the meals they were supposed to eat, which was a problem, as having that meal was part of the process, and after they ate it, ideally the whole thing, researchers would measure their blood insulin—so keeping that controlled was kind of important for their results, but the subjects consistently just weren’t as hungry as they typically would have been.

Interestingly, this realization led to a proposal by one of those original researchers to the drug company Novo Nordisk, the company that brought Semaglutide to market, for another drug that would help people control their appetite and consequently limit food intake, perhaps serving as a means of remediating obesity, which at the time, in 1998, was already becoming a big health issue of significant global concern and widespread impact.

The company didn’t end up doing anything with the patent they went in on with that researcher, but they did pursue something along those lines a little bit later, which approached the issue with a similar underlying substance, but via a different route.

And in March of 2021, the company started clinical trials for that drug, which eventually became Wegovy, using basically the same substance as Semaglutide, but in a different volume, and the adult subjects in that trial lost a significant amount of weight.

A few months later, in June of 2021, Wegovy was approved for use in the US to treat adults with obesity, and then in December the following year it was approved for use by obese teens, as well.

Now, Wegovy and its effects were in some ways forecasted in those trials for Semaglutide when test subjects were eating less than usual while on the drug, and something similar happened here, as subjects who were being given Wegovy for weight loss purposes were showing other, unanticipated positive effects, as well.

Among those effects were positive cardiovascular outcomes, which Novo Nordisk then tested for specifically, noting that the drug reduces the risk of major adverse cardiovascular events like heart attacks and stroke by about 20% in obese adults. The FDA approved the drug for this purpose in March of 2024, and another study that looked into Semaglutide’s effect on folks with liver disease resulting from HIV found that it meaningfully reduces the severity of that disease—another unexpected win.

Several earlier studies that showed positive results, and which are now being looked into on larger scales and with human subjects, include those looking into its impact on depression and suicidal ideation, its potential to reduce alcohol consumption, and the possibility that it might also help with gambling addiction and other non-substance-related addictions, alongside substance-based ones like nicotine.

Semaglutide seems to help with eating disorders and may help with infertility issues. It may also help with persistent inflammation, enhance autophagic activity, meaning it could help the body break down the cells that don’t work anymore so new ones can grow, and it might help prevent the buildup of what’s called alpha-synuclein in our brains, which is thought to maybe be a cause of or contributor to Alzheimer’s and Parkinson’s.

There’s even early evidence that GLP-1-based drugs might reduce our risk of developing some types of cancer, and maybe the worst, long-term sorts of COVID outcomes, as well.

It’s a very interesting time in this space, in other words, as the more we test these things, and the more people who take them, the more we learn about their effects and potential other use-cases.

And a lot of people are using this class of drug right now: up to 12% of the US adult population has used a GLP-1 drug at some point, as of early 2024, according to research from KFF, and Novo Nordisk has been struggling to make enough of the stuff in its different manifestations, branded for different purposes, as have its competitors who have launched their own copy-cat products, and in some cases products that up the ante with even more impressive clinical results than what the first wave of GLP-1 drugs can boast.

Novo Nordisk has become Europe’s most valuable company on the strength of this drug class, growing by about 230% since 2021 when it first launched Wegovy; it’s now hovering at something like $500 billion in market cap.

But the company has suffered a few recent stock value hits due to the one-two punch of patients not being able to afford the drug, which can cost more than $1000 per month, and a dearth of production capacity, which means they’ve been unable to meet this drug class’s perhaps understandably significant demand.

What I’d like to talk about today is an aspect of the pharmaceutical industry in the US that has generally operated under-the-radar, but which has recently stepped into the limelight because of this rush to get GLP-1 drugs to market and in the hands of those who want them.

—

In the world of pharmaceuticals, especially in the US, but also in a few other countries, “compounding” refers to the practice of creating a drug on-demand for a patient, usually because they need a dosage or specific composition that isn’t manufactured in bulk, or which isn’t readily available in its mass-manufactured form.

So while the majority of drugs in the US and similar wealthy countries are produced on scale, these days, and in a variety of common portions or doses, in some cases you might need an exact dosage that’s somewhere between two doses that are manufactured on scale by the company that makes the drug, and a pharmacist will make that specific you-sized dose for you, maybe by measuring out the right amount of drug powder into a gel-cal pill, maybe by blending two substances into a single liquid that you can take all at once.

These days, the most common compounding tasks revolve around removing non-active ingredients from a drug—something in the gel-capsule, for instance, or a binding agent that allows a drug to be delivered in liquid form—for folks who need that drug, but who are allergic or otherwise sensitive to something in the final, mass-produced form; a color additive, a suspension, a flavoring, something like that.

This is often referred to as “traditional compounding,” and it can only be done by a licensed pharmacist; and while all licensed pharmacists will have at least a rudimentary understanding of how to compound custom medications, much of this kind of work is done in facilities that have compounding-specific equipment on hand; some that can do sterile work, and some that can only be used for non-sterile final products.

Many pharmacies have some basic tools that allow them to do things like mix flavorings into a gross substance to make it more palatable to kids or pets, or to weigh and mix and divvy-up medicinal powders into properly sized capsules, but some pharmacies are a lot more specialized and have far fancier tools that allow them to output more elaborate concoctions for their customers.

Another role these compounding pharmacies can play, though—and in this case I’m referring to that latter type, the ones with specialized tools and machines that allow them to compound on a larger and more specialized scale, if they need to do so—is that the FDA, the Food and Drug Administration which regulates the US drug market, can allow them to make drugs that are experiencing a shortage on the market; when those who have the patent for a drug are unable to scale-up fast enough and meet market demand, in other words, these compounding pharmacies can be given the legal go-ahead by the FDA to make and sell that drug.

To be clear, these pharmacies aren’t allowed to make the exact drug: they can make a drug with the same active ingredients, and sometimes they’ll be quite similar and sometimes they’ll be in a different form (an injectable rather than a powder, a capsule rather than a tablet, etc). These things are also not FDA approved, so while the FDA says it’s okay for them to make and sell them in those limited circumstances, it’s not meant to be equivalent to the real-deal, market-approved product; it’s a temporary, emergency measure meant to help people who would be in a lot of pain or discomfort or even danger if they don’t get a drug they need on a regular basis because of a shortage.

And that brings us to what’s happening now: Novo Nordisk is experiencing a shortage of its GLP-1 inhibitor-based drugs, and the FDA gave these compounding pharmacies legal permission to make GLP-1 inhibitor based drugs, with the same active ingredients, usually in the same dosage, while this shortage persists.

Consequently, there are a bunch of drugs made by compounding pharmacies being marketed all over the place, produced by existing companies like HIMS and 23andMe, alongside brands like Mochi and Eden and HenryMeds—most of them selling doses equivalent to those that are sold by Novo Nordisk for something like $1,000 to $1,300 a month, but those sold by the compounding pharmacies are usually going for closer to $250-300 per month.

It’s been estimated, by the way, that it probably costs only about $5 to produce each of those doses—so even the compounding pharmacies selling at that dramatic cut to the sticker price are likely making money hand over fist on each of these doses, which is probably why ads for these alternative branded versions of the drug are plastered all over the internet, TV, billboards, and magazines, at the moment.

The FDA does keep tabs on these compounded pharmacies, and they can shut down them down if they sell unsafe products, and they can threaten to do so if they don’t toe various lines—which is something the FDA has already done, as a version of the drug that was being delivered attached to salt, which would be dissolved in water before injecting, wasn’t considered to be as safe as the free base version of the drug, so the FDA put out a warning and all the folks who were making the salt version converted over to the free base version, lest they lose their legal ability to sell this product type.

Even with that regulatory pseudo-oversight, there have been reports of people ordering these cheaper versions and getting shoddy products.

One study found that those reports are probably of a kind with reports about side effects experienced by people who take the Novo Nordisk version, as folks taking any version of this drug can experience some pretty uncomfortable side effects, but it’s hard to say right about that right now, as the drug is still relatively new and this aspect of the pharmaceutical industry is, again, approved but not as well-regulated.

So it’s a buy with caution and at your own risk sort of situation, though the cost savings very well might be worth it for many people, regardless of the potential risks.

All of which is interesting, in part because this category of drug-maker is becoming more brazen with its flogging of products, probably at least in part because this particular drug is such a cash-cow and very popular right now, and in part because it will be a little while before the patent-holding drug-makers like Novo Nordisk and Eli Lilly can scale-up their manufacturing capacity appropriately. So investments they make in marketing will pay off longer than they might have, had this shortage been a brief one.

But it’s also interesting because of what this implies about the market, as, conceivably at least, a lot of potential customers for this drug will become accustomed to paying just a few hundred dollars per month for it, rather than more than $1,000, and while that lower price is doable for the compound pharmacies, there’s a chance the Novo Nordisk’s of the world won’t consider that reduced profit margin to be worth their time and up-front investment in developing this drug, which could lead to some weird market effects and a potential whipcrack in the other direction, especially if national insurance plans don’t get on board with adding this type of drug to their acceptable list; a higher sticker price paired with a lack of support from insurance companies would mean this drug remains out of reach for the majority of people who might otherwise benefit from it, and that, in turn, could mean a rough couple of years for Novo, until they can recalibrate their expectations and/or their product catalog, accordingly.

That said, Novo Nordisk competitor Eli Lilly recently announced that they will be selling a version of their Wegovy competitor, Zepbound, which will be sold in vials instead of in auto-injector pens, reducing their packaging costs and requiring that customers load the syringes themselves, that will have a shelf price as low as $399 per month.

That’s a staggering undercut of Novo’s offerings. And while this is partially an attempt to address the shortage of this drug, as this lower priced version will also be available in smaller doses, it will almost certainly also help them compete with Novo and the many compounded pharmacy offerings that are still cheaper, but not as dramatically cheaper as this name-brand offering, as before.

There’s a good chance this move by Eli Lilly is just the first of many reworks to a drug type that will permanently shift the average price, allowing the fully FDA-backed versions to compete with the compound versions, remaining a little pricier, but not much, which should help them maintain market share until they can get their new manufacturing capacity online, knocking those compounding competitors out of the game entirely.

Of course, there’s a chance that within months or just a few years, this whole industry could shift once more, as what’s generally considered to be the “holy grail” in this space—a pill-delivered drug that accomplishes the same or better outcomes as the injectables—is in development by pretty much everyone, and some of them already have pills in phase 2 trials.

For the moment, though, the name of the game seems to be discovering new benefits of this drug type, opening it up for more use-cases and, thus, customers, and repackaging it in different ways so that the price can go lower without fully depleting the massive profits those who are producing it—big pharma and compounding pharmacies, alike—are enjoying.

Show Notes

https://qz.com/ozempic-shortage-ema-novo-nordisk-1851638383

https://en.wiktionary.org/wiki/compounding_pharmacy

https://www.pharmacist.com/Practice/Patient-Care-Services/Compounding/Compounding-FAQs

https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2816824

https://en.wikipedia.org/wiki/Compounding

https://www.goodrx.com/classes/glp-1-agonists/compounded-semaglutide

https://www.fda.gov/drugs/human-drug-compounding/drug-compounding-and-drug-shortages

https://archive.ph/Czn0t

https://qz.com/viking-therapeutics-weight-loss-drugs-amazing-1851631337

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11227080/

https://en.wikipedia.org/wiki/Semaglutide

https://www.wired.com/story/obesity-drugs-researcher-interview-ozempic-wegovy/

https://www.drugs.com/history/wegovy.html

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC11011817/

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9417299/

https://www.cnn.com/2024/07/30/health/liraglutide-alzheimers-trial/index.html

https://sci-hub.st/https://pubmed.ncbi.nlm.nih.gov/16529340/

https://www.jci.org/articles/view/72434

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7606641/

https://www.biorxiv.org/content/10.1101/2023.10.31.564990v1.full.pdf

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5711387/

https://www.mdpi.com/2076-3425/14/6/617

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3700649/

https://pubmed.ncbi.nlm.nih.gov/24133407/

https://www.science.org/doi/10.1126/science.adn4128

https://www.reuters.com/business/healthcare-pharmaceuticals/most-patients-stop-using-wegovy-ozempic-weight-loss-within-two-years-analysis-2024-07-10/

https://jamanetwork.com/journals/jama/article-abstract/2819949

https://www.reuters.com/business/healthcare-pharmaceuticals/obesity-drugmaker-novo-nordisk-misses-q2-profit-forecast-2024-08-07/

https://www.nytimes.com/2024/08/30/health/wegovy-covid-deaths.html

It looks like Covid got me (my girlfriend is just getting over her own Covid-y week, and we live together—so despite our best efforts this was maybe unavoidable).

In accordance with my policy of aggressively resting when I get sick, I’ll be taking the week off to sleep, feel generally sore and uncomfortable, and consume alarming quantities of ibuprofen.

Sorry about the gap in programming, but unless something unexpected and worrying happens I’ll be back to my usual publishing schedule beginning next week, on the 10th.

We also discuss Boeing’s mishaps, the Scout system, and the Zenit 2.

Recommended Book: What’s Our Problem? by Tim Urban

Transcript

In 1961, the cost to launch a kilogram of something into low Earth orbit—and a kilogram is about 2.2 pounds, and this figure is adjusted for inflation—was about $118,500, using the Scout, or Solid Controlled Orbital Utility Test system of rockets, which were developed by the US government in collaboration with LTV Aerospace.

This price tag dropped substantially just a handful of years later in 1967 with the launch of the Saturn V, which was a staggeringly large launch vehicle, for the time but also to this day, with a carrying capacity of more than 300,000 pounds, which is more than 136,000 kg, and a height of 363 feet, which is around 111 meters and is about as tall as a 36-story building and 60 feet taller than the Statue of Liberty.

Because of that size, the Saturn V was able to get stuff, and people, into orbit and beyond—this was the vehicle that got humans to the Moon—at a dramatically reduced cost, compared to other options at the time, typically weighing in at something like $5,400 per kg; and again, that’s compared to $118,500 per kg just 6 years earlier, with the Scout platform.

So one of the key approaches to reducing the cost of lifting stuff out of Earth’s gravity well so it could be shuffled around in space, in some rare cases beyond Earth orbit, but usually to somewhere within that orbit, as is the case with satellites and space stations, has been to just lift more stuff all at once. And in this context, using the currently available and time-tested methods for chucking things into space, at least, that means using larger rockets, or big rocket arrays composed of many smaller rockets, which then boost a huge vehicle out of Earth’s gravity well, usually by utilizing several stages which can burn up some volume of fuel before breaking off the spacecraft, which reduces the amount of weight it’s carrying and allows secondary and in some cases tertiary boosters to then kick in and burn their own fuel.

The Soviet Union briefly managed to usurp the Saturn V’s record for being the cheapest rocket platform in the mid-1980s with its Zenit 2 medium-sized rocket, but the Zenit 2 was notoriously fault-ridden and it suffered a large number of errors and explosions, which made it less than ideal for most use-cases.

The Long March 3B, built by the Chinese in the mid-1990s got close to the Saturn V’s cost-efficiency record, managing about $6,200 per kg, but it wasn’t until 2010 that a true usurper to that cost-efficiency crown arrived on the scene in the shape of the Falcon 9, built by US-based private space company SpaceX.

The Falcon 9 was also notable, in part, because it was partially reusable from the beginning: it had a somewhat rocky start, and if the US government hadn’t been there to keep giving SpaceX contracts as it worked through its early glitches, the Falcon 9 may not have survived to become the industry-changing product that it eventually became, but once it got its legs under it and stopped blowing up all the time, the Falcon 9 showed itself capable of carrying payloads of around 15,000 pounds, which is just over 7000 kgs into orbit using a two-stage setup, and remarkably, and this also took a little while to master, but SpaceX did eventually make it common enough to be an everyday thing, the Falcon 9’s booster, which decouples from the rocket after the first stage of the launch, can land, vertically, intact and ready for refurbishment.

That means these components, which are incredibly expensive, could be reused rather than discarded, as had been the case with every other rocket throughout history. And again, while it took SpaceX some time to figure out how to make that work, they’ve reached a point, today, where at least one booster has been used 22 times, which represents an astonishing savings for the company, which it’s then able to pass on to its customers, which in turn allows it to outcompete pretty much everyone else operating in the private space industry, as of the second-half of 2024.

The cost to lift stuff into orbit using a Falcon 9 is consequently something like $2,700 per kg, about half of what the Saturn V could claim for the same.

SpaceX is not the only company using reusable spacecraft, though.

Probably the most well-known reusable spacecraft was NASA’s Space Shuttle, which was built by Rockwell International and flown from the early 1980s until 2011, when the last shuttle was retired.

These craft were just orbiters, not really capable of sending anyone or anything beyond low Earth orbit, and many space industry experts and researchers consider them to be a failure, the consequence of bureaucratic expediency and NASA budget cuts, rather than solid engineering or made-for-purpose utility—but they did come to symbolize the post-Space Race era in many ways, as while the Soviet, and then the successor Russian space program continued to launch rockets in a more conventional fashion, we didn’t really see much innovation in this industry until SpaceX came along and started making their reusable components, dramatically cutting costs and demonstrating that rockets capable of carrying a lot of stuff and people could be made and flown at a relatively low cost, and we thus might be standing at the precipice of a new space race sparked by private companies and cash-strapped government agencies that can, despite that relatively lack of resources, compared to the first space race, at least, can still get quite a bit done because of those plummeting expenses.

What I’d like to talk about today is a reusable spacecraft being made by another well-known aerospace company, but one that has had a really bad decade or so, and which is now suffering the consequences of what seems to have been a generation of bad decisions.

—

Boeing is a storied, sprawling corporation that builds everything from passenger jets to missiles and satellites.

It’s one of the US government’s primary defense contractors, and it makes about half of all the commercial airliners on the planet.

Boeing has also, in recent years, been at the center of a series of scandals, most of them tied to products that don’t work as anticipated, and in some cases which have failed to work in truly alarming, dangerous, and even deadly ways.

I did a bonus episode on Boeing back in January of this year, so I won’t go too deep into the company’s history or wave of recent problems, but the short version is that although Boeing has worked cheek-to-jowl with the US and its allies’ militaries since around WWII, and was already dominating aspects of the burgeoning airline industry several decades before that, it merged with a defense contractor called McDonnell Douglas in the late-1990s, and in the early 2000s it began to reorganize its corporate setup in such a way that financial incentives began to influence its decision-making more than engineering necessities.

In other words, the folks in charge of Boeing made a lot of money for themselves and for many of their shareholders, but those same decisions led to a lot of inefficiencies and a drop in effectiveness and reliability throughout their project portfolio, optimizing for the size of their bank account and market cap, rather than the quality of their products, basically.

Consequently, their renowned jetliners, weapons offerings, and space products began to experience small and irregular, but then more sizable and damaging flaws and disruptions, probably the most public of which was the collection of issues built into their 737 MAX line of jets, two of which crashed in 2018 and 2019, killing 346 people and resulting in the grounding of 387 of their aircraft.

A slew of defects were identified across the MAX line by 2020, and an investigation by the US House found that employee concerns, reported to upper-management, went ignored or unaddressed, reinforcing the sense that the corporate higher-ups were disconnected from the engineering component of the company, and that they were fixated almost entirely on profits and their own compensation, rather than the quality of what they were making.

All of which helps explain what’s happening with one of Boeing’s key new offerings, a partially reusable spacecraft platform called the Starliner.

The Starliner went into early development in 2010, when NASA asked companies like Boeing to submit proposals for a Commercial Crew Program that would allow the agency to offload some of its human spaceflight responsibilities to private companies in the coming decades.

One of the contract winners was SpaceX’s Crew Dragon platform, but Boeing also won a contract with its Starliner offering in 2014, which it planned to start testing in 2017, though that plan was delayed, the first unmanned Orbital Flight Test arriving nearly 3 years later, at the tail-end of 2019, and even then, the craft experienced all sorts of technical issues along the way, including weak parachute systems, flammable tape, and valves that kept getting stuck.

It was two more years before the company launched the second test flight, and there were more delays leading up to the Starliner’s first Crew Flight Test, during which it would carry actual humans for the first time.

That human-carrying flight launched on June 5 of 2024, and it carried two astronauts to the International Space Station—though it experienced thruster malfunctions on the way up, as it approached the ISS, and after several months of investigation, the Starliner capsule still attached to the Station all that time, it was determined that it was too risky for those two astronauts to return to Earth in the Starliner.

That brings us to where we are now, a situation in which there are two astronauts aboard the ISS, in low Earth orbit, who were meant to stay for just over a week, but who will now remain there, stranded in space, for a total of around eight months, as NASA decided that it wasn’t worth the risk putting them on the Starliner again until they could figure out what went wrong, so they’ll be bringing Starliner back to earth, remotely, unmanned, and the stranded astronauts will return to Earth on a SpaceX Crew Dragon craft that is scheduled to arrived in September of this year, and which will return to Earth six months in the future; that craft was originally intended to have four astronauts aboard when it docks with the ISS, but two of those astronauts will be bumped so there will be room for the two who are stranded when it returns, next year.

All of which is incredibly embarrassing for Boeing, which again, has already had a truly horrible double-handful of years, reputationally, and which now has stranded astronauts in space because of flaws in its multi-billion-dollar spacecraft, and those astronauts will now need to be rescued, by a proven and reliable craft built by its main in-space competitor, SpaceX.

One of the key criticisms of NASA and the way it’s operated over the past several decades, from the shuttle era onward, essentially, is that it’s really great at creating jobs and honorable-sounding positions for bureaucrats, and for getting government money into parts of the country that otherwise wouldn’t have such money, because that spending can be funneled to manufacturing hubs that otherwise don’t have much to manufacture, but it’s not great at doing space stuff, and hasn’t been for a while; that’s the general sense amongst many in this industry and connected industries, at least.

This general state of affairs allowed SpaceX to become a huge player in the global launch industry—the dominant player, arguably, by many metrics—because it invested a bunch of money to make reusable spacecraft components, and has used that advantage to claim a bunch of customers from less-reliable and more expensive competitors, and then it used that money to fund increasingly efficient and effective products, and side-projects like the satellite-based internet platform, Starlink.

This has been enabled, in part, by government contracts, but while Boeing and its fellow defense contractors, which have long been tight-knit with the US and other governments, have used such money to keep their stock prices high and to invest in lobbyists and similar relationship-reinforcing assets, SpaceX and a few similar companies have been stepping in, doing pretty much everything better, and have thus gobbled up not just the client base of these older entities, but also significantly degraded their reputations by showing how things could be done if they were to invest differently and focus on engineering quality over financial machinations; Boeing arguably should have been the one to develop the Falcon 9 system, but instead an outsider had to step in and make that happen, because of how the incentives in the space launch world work.

One of the big concerns, now, is that Boeing will retreat from its contract with NASA, leaving the agency with fewer options in terms of ISS resupply and astronaut trips, but also in terms of longer-term plans like returning to the Moon and exploring the rest of the solar system.

Lacking industry competition, NASA could become more and more reliant on just one player, or just a few, and that’s arguably what led to the current situation with Boeing—its higher-ups knew they would get billions from the government on a regular basis whatever they did, no matter how flawed their products and delayed their timelines, and that led to a slow accretion of bad habits and perverse incentives.

There’s a chance the same could happen to SpaceX and other such entities, over time, if they’re able to kill off enough of their competition so that they become the de facto, go to option, rather than the best among many choices, which they arguably are for most such purposes at the moment.

And because Boeing seems unlikely to be able to fulfill its contract with NASA, which will necessitate flying six more Starliner missions to the ISS, before the International Space Station is retired in 2030, this raises the question of whether the company will move forward with the reportedly expensive investments that will be necessary to get its Starliner program up to snuff.

It’s already on the hook for about $1.6 billion just to pay for various delays and cost overruns the project has accrued up till this point, and that doesn’t include all the other investments that might need to be made to fulfill that contract, so they could look at the short-term money side of this and say, basically, we’re ceding this aspect of the aerospace world to younger, hungrier companies, and we’ll just keep on collecting the reliable dollars we know we’ll get from the US military each year, no questions asked.

We could then see Boeing leave the race for what looks to be the next space-related government contract bonanza, which will probably be related to NASA’s smaller, more modular space station ambitions; the ISS may get a second-wind and be maintained past 2030, but either way NASA is keen to hire private companies to launch larger craft into low Earth orbit for long-term habitation, supplies and crew for these mini space-stations shuttled back and forth by companies like SpaceX and Blue Origin, the latter of which is a direct competitor to SpaceX owned by Amazon founder Jeff Bezos.

Boeing has been tapped by Blue Origin to help keep their in-orbit assets supplied under that new paradigm, but it could be that they show themselves incapable of safely and reliably doing so, and that could open up more opportunities for other, smaller entities in this space, if they can figure out how to compete with the increasingly dominant SpaceX, but it could, again, also result in a new monopoly or monopsony controlled by just a few companies, which then over time will have to fight the urge to succumb to the save perverse incentives that seem to be weighing on Boeing.

Show Notes

https://www.npr.org/2024/03/20/1239132703/boeing-timeline-737-max-9-controversy-door-plug

https://en.wikipedia.org/wiki/Boeing_Starliner

https://en.wikipedia.org/wiki/Boeing

https://arstechnica.com/space/2024/08/after-latest-starliner-setback-will-boeing-ever-deliver-on-its-crew-contract/

https://www.nytimes.com/2024/08/24/science/nasa-boeing-starliner-astronauts.html

https://en.wikipedia.org/wiki/Scout_(rocket_family)

https://en.wikipedia.org/wiki/Saturn_V

https://en.wikipedia.org/wiki/Zenit-2

https://en.wikipedia.org/wiki/Long_March_3B

https://ourworldindata.org/grapher/cost-space-launches-low-earth-orbit

https://www.cradleofaviation.org/history/history/saturn-v-rocket.html

https://en.wikipedia.org/wiki/Space_Shuttle_orbiter

https://en.wikipedia.org/wiki/Reusable_spacecraft

https://en.wikipedia.org/wiki/Spaceplane

https://en.wikipedia.org/wiki/Falcon_9

We also discuss HIMARS, supply lines, and Kyiv.

Recommended Book: The Disappearance of Rituals by Byung-Chul Han

Transcript

About two and a half years ago, on February 24, 2022, Russia invaded neighboring Ukraine.

This invasion had been forecasted for a while, as Russian forces had at times surreptitiously, at times more overtly supported separatist factions in the eastern and southeastern portion of Ukraine for about a decade, eventually invading and them annexing the Crimean Peninsula back in March of 2014 using what became known as the "little green men" strategy because the invading soldiers had their flags, patches, and other insignia removed, which gave the Russian government deniability, saying basically some patriotic members of their military might be inclined to help their fellow travelers in parts of Ukraine that are being repressed for their Russian heritage, and who crave freedom from an oppressive central government; how these patriotic soldiers acting on their own behalf, without support from the Russian government, supposedly, were able to bring so much heavy artillery and tanks with them was never formally addressed.

So Russia had been chipping away at Ukraine for a long while leading up to this more conventional attack in 2022, grabbing an important port when they took Crimea and leaving the Ukrainian government, which had been tilting toward Europe and away from Russia's sphere of influence—which is part of what triggered that pseudo-invasion of Crimea—and all of this left Ukraine fighting those separatist groups on their eastern flank pretty much continuously for the decade leading up to that bigger invasion a few years ago.

When that invasion was launched, Russia was expected by pretty much everyone to basically waltz right into Kyiv with little opposition, as it was this huge, powerful country with nukes and a massive conventional military apparatus, so it stood to reason it should easily defeat its weaker, former supplicant neighbor.

But that's not how things played out.

Ukraine managed to hold off an initial, ill-planned but large invasion force, and for the past two and a half years they've continued to hold those lines, despite huge drafts of soldiers and new investments in wartime materials, including drones and missiles that have been near-continuously lobbed at Ukrainian cities and towns, by the Russian government.

For the past year or so, following some back-and-forth pushes by Russian and Ukrainian forces in mostly the eastern part of Ukraine, at least following that initial unsuccessful incursion toward the capitol, Ukraine's efforts to reclaim its captured territory have been fraught.

It launched a successful counterattack a little while back, retaking some earlier captured territory, but after plowing through Russian forces and arriving in the eastern portion of the country, it's next-stage offensives basically collapsed as soon as they were launched.

The Ukrainian government is still making fresh attempts in this regard, as any stagnation and seeming lack of progress could serve as justification by its allies to stop sending money and weapons to bolster their war effort, but these have been relatively small and haven't accomplished much—not for the last year, at least.

The same was generally true for Russia up until recently, it's troops on the ground exhausted and undersupplied, their pushes deeper into Ukrainian met with stern-enough resistance that they've had to pull back, or they've persisted in shouldering their way through a meat-grinder defense, capturing little tiny bits of territory, but with huge costs in terms of lives and military hardware.

This past year they've seen some decent gains, though, as freshly drafted and trained troops have subbed-in for exhausted and wounded ones, and as Ukraine's forces have suffered the consequences of delayed support from the US in particular, and as their own forces have been unable to tap-out, rest, and recover, because of the difference in the size of the two countries' populations, but also because of the nature of the conflict, Ukraine being invaded, while Russia has remained a safe-haven for the most part.

As of the day I'm recording this in late-August 2024, Russia's military controls about 20% of Ukraine's total territory—and that includes Crimea and other chunks that were taken in 2014—around 8.2 million of Ukraine's 41 million population before the invasion had already fled the country by mid-2023, some having returned in the year or so since, but millions of people are still scattered throughout Europe and the rest of the world, making this the continent's largest refugee crisis since WWII.

About 8 million Ukrainians are now considered to be internally displaced, which means they're homeless within their own country, often because their cities or towns have been captured or destroyed.

Estimates on casualties and fatalities in this conflict vary widely, as official numbers are often incomplete and filtered for public consumption and propaganda purposes, but some fairly strict and consequently probably low estimates from outside groups suggest a few hundred thousand people may have died in this conflict, so far, with hundreds of thousands more having been wounded, in some cases grievously, with some more biased figures—like those provided by Ukraine's Ministry of Defense—suggesting that well over half a million people may have been wounded on Russia's side, alone, since the 2022 invasion began.

Again, this war has been uneven but surprising from the get go, Russia taking a lot of territory, but Ukraine holding its own and performing well beyond most expectations.

But over the last year, since battle lines in the east were more firmly drawn and both sides had the opportunity to carve out defenses, lay mines, things like that, this has been a story of slow attritional conflict, which has tended to mean an advantage for Russia: they've ever-so-slowly been claimed more of Ukraine—grabbing just over 400 square miles of territory over the course of the past twelve months, including a few dozens cities and towns along those well-entrenched emplacements.

What I'd like to talk about today is a recent move by Ukraine that has seemingly surprised just about everyone, and which, depending on who you ask, is the desperate act of a flailing military, or an inspired bit of asymmetrical warfare that could help turn the tides in their favor.

—

Part of why many well-informed analysts assumed Russia's invasion of Ukraine would be a quick thing, several days-long, maybe a week or two at most, is that Russia's military is big and backed by the largest arsenal of nukes in the world. Russia's economy is also decently large, even if it is significantly dependent on fossil fuel and mineral wealth.

So Russia's military should be capable of stomping in to a smaller country's territory, especially a neighboring country, and then killing and threatening everyone into submission, and menacing them with nukes if they do anything threatening in return.

That's the ostensible promise of a nuclear arsenal: you have the whammy on everyone else if they do anything that really scares you or threatens you, no matter what you do to them, first.

That expectation didn't pan out, but the threat of nukes has hovered over this conflict from day one, and Russia's government has happily reinforced the sense that if Ukraine does anything to threaten them in return, even as they invade and gobble up Ukraine's territory, killing and kidnapping their people, Russia might use nukes, because why wouldn't they?

And they've often signaled this by saying, basically, that if the Fatherland is threatened, if anyone menaces Russia in return, that could serve as a spark that turns this invasion into a nuclear conflict.

This threat has ensured Russia's invasion of Ukraine, thus far, has been a fairly one-sided undertaking in which Russia can do basically anything they want, stomping all around Ukraine and launching endless drones and missiles at their densely populated cities, but Ukraine is not allowed to do anything like that to Russia in return.

And this nuclear threat has been taken seriously enough by Ukraine's allies that they've said, from the get-go, we'll give you money and weapons, but you have to promise not to use them on targets within Russia, because we don't want to kick off a nuclear war, or even a broader conflict between nuclear-armed nations, if Russia were to consider attacks by Ukrainians wielding American weapons against Russian civilian targets to be an attack by the US—which was always a theoretical possibility that, again, Russia was happy to reinforce.

As a result, some of the weapons provided to Ukraine by its allies were artificially limited, including the 20 HIMARS long-range rocket systems the US supplied back in late-2022, which were altered before being sent so they couldn't be used against targets within Russia territory.

The US and other allies have also been incredibly hesitant to provide Ukraine weapons with greater range, like ATMS, Army Tactical Missile System rockets, that can strike targets up to 186 miles away, and fighter jets that could be used to take out targets deep within Russian territory, if used correctly.

From the beginning, though, Ukrainian forces figured out ways to hit targets within Russia, generally using asymmetrical methods, like covert infiltrations and loose alliances with anti-government entities operating within Russia, rather than launching aerial or artillery strikes from within their own borders.

In 2022, they struck dozens of air bases, fuel depots, and similar targets across the border, though they almost always denied involvement, officially, due to fears that overtly launching such attacks could lead to significant reprisals, and could cause their allies to step back from supporting Ukraine over fears of an expanding conflict.

Several bits of manufacturing and shipping infrastructure in Russia were damaged or destroyed by Ukrainian missiles and drones in 2023, which were again, often denied, though a bit more overt than their earlier efforts, and military and civilian buildings in Russian towns along their shared borders were damaged by drones and saboteurs from the beginning of the invasion.

Artillery shelling has also incidentally or accidentally hit civilian targets across these borders, though almost all of these attacks, up until 2024, caused little damage and few deaths and injuries; they were more symbolically than practically important.

Beginning in early 2024, though, mostly drone attacks on Russia energy infrastructure seemed to impact Russia's economy, several important oil and gas terminals damaged to the point that they required a lot of time and investment to get them operational again, not to mention the further investment that would be required to protect these small, numerous, and important weak-points that Ukraine had shown a willingness to attack.

There were also a few drone attacks on major cities, like St. Petersburg, but these seemed to be mostly symbolic strikes, and were generally not claimed by Ukraine—they could have been false flag attacks, or launched by Ukraine's anti-Russian-government allies operating within Russia's borders, or attacks by ISIS or similar terrorist organizations—but whoever launched them, they seem to have caused more fear and consternation than actual, physical damage.

Causing fear, though, is still important in this conflict, because, as far as many Russian civilians have understood for years now, the war has been going fine, or fine enough, and they haven't felt they've had much to worry about, because although a lot of their people have been drafted and sent to the frontlines, the conflict itself hasn't really impacted them beyond some brands having disappeared from shelves due to international sanctions, and a general sense that the government has clamped down on several freedoms they previously enjoyed, using the invasion—which has been pitched internally as an effort to liberate Ukrainians from a tyrannical, Nazi government—as justification.

That's part of what makes a recent move by Ukraine's military so interesting.

On August 6, 2024, the Ukrainian military launched an attack across their border with Russia into the Kursk oblast, which is an administrative district of about a million people located in western Russia.

This assault included at least 1,000 troops, alongside armored personnel carriers and tanks, and they plowed more than 6 miles into Russian territory within two days, apparently wiping out local defensive positions without too much trouble.

They reportedly drove right past many defensive emplacements and came at the relatively few defenders from unexpected angles, behind rather than in front of them, and that allowed them to rapidly capture territory and prisoners.

As a result of this blitz into Kursk, more than 100,000 Russian citizens, closer to 200,000 by some estimates, have had to flee their homes, a state of emergency has been triggered in this and surrounding regions, and the Ukrainian military has captured just under 400 square miles, or around 1,000 square km of Russian territory—which is about what Russian forces have managed to capture of Ukraine over the whole of the past year. Within that held territory, they also hold 82 towns and villages, and they've captured an estimated 2,000 or so prisoners.

This rapid assault into Russian territory was unexpected, catching even Ukraine's allies by surprise, reportedly, and it struck an area that was apparently under-defended, which is part of why they were able to break through so easily, hundreds of Russian soldiers surrendering almost immediately, none of them having expected anything like this so far from what has become the front lines of the conflict all the way on the other side of the country.

In the weeks since this assault was launched, Ukrainian forces have taken out a couple of important bridges, which serves the double-purpose of making a counterattack by Russian forces more difficult, while also hobbling some of their supply lines that are fueling the Russian invasion of Ukraine further south and east.

The Ukrainian force that invaded Russia is relatively small, but because of the nature of this sort of thing, it's estimated that Russia will need something like 3 to 5-times as many soldiers as Ukraine has if they want to successfully dislodge them, which will likely mean having to pull troops and military hardware from the frontlines, or other spots along their border, which would leave those other spots less defended, in order to muster that kind of counterattack.

This spot is also reportedly somewhat protected from existing Russian artillery installations, and any attacks they launch against the occupying Ukrainian forces will be attacks against their own cities and towns—something that is arguably inevitable when you're invaded and trying to boot the invaders, but also not something that's super politically popular, because, again, as many as a few hundred thousand people have fled their homes, and if their own government bombs their homes and other infrastructure into smithereens in order to recapture it, that probably won't make all those people too happy, in addition to making them an additional burden in a way, suddenly needing more government support just to keep them fed, housed, and so on.

This is also tricky for Russia because, as I just mentioned, pulling troops from elsewhere will require weakening either some other border area, or their front lines in eastern Ukraine, meaning they either open themselves up to another incursion, or they slow the progress they're making with their own invasion, and that component of the conflict is currently going pretty well for them, so it's a tough sell, the idea of slowing that momentum in order to take back territory they didn't think was under any real threat, up till just now.

Of course, this assault also makes clear that other parts of Russia's extensive shared border with Ukraine might be under threat if they leave any gaps or weak spots, which will likely mean having to shuffle things around a bit, either way. Attacking and capturing this part of Kursk, then, would seem to be a means of forcing Russia into a two-front conflict, while also demonstrating parts of their territory they thought were well-fortified-enough possibly aren't, which could further distract their leaders and spread their forces out over a wider area.

The political aspect of this might prove to be important, too, as while Russia's economy has been doing pretty well, considering all the sanctions, because the government has been flooding the economy with war-time investment and dropping all kinds of regulations to keep businesses afloat and flourishing, authoritarian regimes are often bulwarked by certainty and the projection of strength, and anything that seems to weaken that supposed inevitability and invulnerability can lead to cracks in the facade that ultimately lead to the people up top no longer being up top.

That doesn't seem to be a major threat here at the moment, but if we're looking at the long-term, this could be one more dent in what's meant to be an impervious, pristine visage of power, which could over time lead to something more substantial, in terms of who's in charge in Russia.

All that said, most analysts seem to think this invasion of Kursk won't be terribly maintainable because it stretches Ukraine's supply lines in such a way that those who did the invading can be relatively easily cut off from the rest of their military, and because it forces Ukraine into a two-front conflict, as well, and while Russia can muddle through something like that, even if it would prefer not to, Ukraine will struggle to do the same because of the nature of their population and infrastructure at the moment.

Ukrainian forces are also already struggling on their eastern front, losing territory in small bits, but continuously, to Russian forces, and the grinding nature of the invasion has really taken a toll on those who have been fighting without a break for in some cases years at this point.

This successful and surprising move does seem to have served as a morale boost for Ukrainian troops, though, as this is the first time a rival military has taken and held Russian territory since WWII, marking a huge symbolic victory, and one that may keep Ukraine's allies optimistic as well, which is important, as many politicians in those allied countries have shown themselves to be more than willing to stop the ready flow of money and weapons into Ukraine any time it seems like the conflict might not be going their way, even momentarily.

Some reports have suggested that this assault might be part of a larger effort by Ukraine's leadership to prepare itself for what seems to be, to some at least, inevitable near-future peace talks, as holding this chunk of Russian land and all these prisoners would give Ukraine more leverage to get some of their land and prisoners back in such negotiations.

Others have suggested that the key purpose might have been to humiliate Russian President Putin, while also making everyday Russians feel the war the way everyday Ukrainians have, as that can help tip public opinion enough to, eventually, sway governmental action, even within authoritarian states like Russia.

If that's the case, Ukraine may well achieve the opposite, as while Putin has seemingly been slow to respond, focusing his public statements on the Russian military's continuing success in eastern Ukraine, he's reportedly, behind the scenes, plotting revenge, and telling his people to step back from back-room negotiations that have been focused on agreements related to not targeting energy infrastructure on either side; this is pretty speculative and there are a lot of anonymous sources on this narrative, so take it with a grain of salt, but there's a chance that Putin is playing down how bad this is for him and his forces in public, but is planning some kind of significant and devastating counterattack for sometime in the near-future, to deter future attacks on Russian soil.

Russian officials have described this attack as an escalation, which is exactly the language you would use if you were preparing your own escalation, so we maybe have that to watch out for in the coming weeks.

Simultaneous to all this, though, Russia is on the brink of capturing all of Donesk in eastern Ukraine, which it illegally annexed a little while back, but which Ukraine has partially held all this time—so we may see some kind of change to the conflict once that capture is completed, as it could prove to be a suitable moment, strategically, for Russia to walk back to the peace talks table, happy to take the land it says it owns, before stepping back from active conflict and arming itself for some later, potentially less-direct effort to claim the rest; another little green men attack, perhaps.

There's a chance that this attack will force Putin to make politically expedient, but militarily non-ideal decisions over the next few months, though.

It would arguably be smartest for the Russian military to keep at it in the east, claim what they need to claim and reinforce their holdings, there, before then going and addressing the Ukrainians in Kursk, but he may feel pressured to send forces to Kursk sooner rather than later, because of embarrassment if nothing else, but also possibly pressure from other Russian leaders, which would spread out his forces and the military's attention, while also slowing their advances in the east, which could in turn give Ukraine a chance to shore up some of their positions, and possibly even launch more small attacks into Russian territory, further complexifying the state of play and the number of emergencies the Russian military needs to address simultaneously.

Each of these attacks could be small and strategic, causing outsized damage and requiring an outsized response force: a bit like how irregular militaries, like Hamas and Hezbollah, use cheap rockets that they know will almost always be knocked out of the sky with countermeasures, but those rockets cost maybe ten thousands dollars, while the countermeasures cost ten or twenty times that.

Over time, you can deplete the enemy's reserves of money, hardware, and people by forcing them to commit a lot more than you do to a given area or attack; in this way, the outgunned and out-populated Ukrainian military could tie-up a lot of Russia's forces by making them worry about maintaining the bare-bones status quo back home.

There's also a chance, though, that Russia will play the long game, ignore opinion polls and protests by people who are forced to flee their homes, and wait to address these asymmetric incursions until later, at which point they'd be in a much stronger position within Ukraine, and that leaves them in a good spot to keep pushing forward, militarily, or to have peace talks that heavily favor them, even more than such talks would, today.

Show Notes

https://thehill.com/policy/defense/3762042-us-secretly-modified-himars-for-ukraine-to-prevent-kyiv-from-shooting-long-range-missiles-into-russia/

https://www.wsj.com/world/behind-ukraines-russia-invasion-secrecy-speed-and-electronic-jamming-188fcc22

https://www.reuters.com/world/europe/how-russia-looked-wrong-way-ukraine-invaded-2024-08-17/

https://www.reuters.com/world/europe/belarus-lukashenko-says-nearly-third-army-sent-ukraine-border-belta-reports-2024-08-18/

https://www.news24.com/news24/world/news/most-likely-used-north-korean-ballistic-missiles-russia-strikes-with-for-the-third-time-ukraine-20240818

https://ca.news.yahoo.com/now-even-north-korea-weighed-103312164.html

https://apnews.com/article/russia-ukraine-war-kursk-incursion-bridge-invasion-43d6579c82c24ffc5cfabd99d07c66db

https://www.nytimes.com/2024/08/17/world/europe/ukraine-russia-bridge.html

https://www.nytimes.com/2024/08/17/world/europe/ukraines-incursion-russian-conscripts.html

https://www.politico.eu/article/ukraines-raid-kursk-russia-shift-tactical-narrative/

https://thehill.com/opinion/international/4829506-how-ukraines-surprise-offensive-into-russia-has-changed-the-war/

https://en.wikipedia.org/wiki/August_2024_Kursk_Oblast_incursion

https://www.nytimes.com/2024/08/19/world/europe/ukraine-russia-zelensky-putin-ceasefire.html

https://www.theguardian.com/world/article/2024/aug/17/safety-at-ukraines-zaporizhzhia-nuclear-plant-deteriorating-iaea-warns

https://www.washingtonpost.com/world/2024/08/18/vladimir-putin-kursk-crisis-reponse/

https://www.abc.net.au/news/2024-08-17/ukraine-military-incursion-into-russia-maps-satellite-images/104233912

https://www.barrons.com/news/russia-says-captured-another-village-near-ukraine-s-pokrovsk-6dc20994

https://www.nytimes.com/2024/08/18/world/europe/kursk-russia-ukraine-incursion.html

https://www.nytimes.com/2024/08/16/world/europe/russia-ukraine-pokrovsk-kursk.html

https://en.wikipedia.org/wiki/August_2024_Kursk_Oblast_incursion

https://www.bbc.com/news/articles/cy0ngzg9754o

https://www.aljazeera.com/news/2024/8/10/ukraine-braces-for-reprisals-as-russia-to-send-more-troops-to-kursk

https://en.wikipedia.org/wiki/Attacks_in_Russia_during_the_Russian_invasion_of_Ukraine

https://en.wikipedia.org/wiki/Russian_invasion_of_Ukraine

https://understandingwar.org/backgrounder/russian-offensive-campaign-assessment-august-16-2024

https://apnews.com/article/russia-ukraine-war-incursion-kursk-afa42b9613323901bef07800ac2cae9e

https://en.wikipedia.org/wiki/Annexation_of_Crimea_by_the_Russian_Federation

We also discuss immigration rationales, riffraff, and terrorist plots.

Recommended Book: AI 2041 by Kai-Fu Lee and Chen Qiufan

Transcript

American musician, singer, and songwriter Taylor Swift, at age 34, recently became the world's first music industry billionaire who's primary source of income is their music—as opposed to side-businesses, work, and royalties in adjacent or completely disconnected industries.

A lot of that wealth has stemmed from her incredibly successful, and ongoing—as of the day I'm recording this at least—Eras tour, which began in March of 2023 and which is her sixth tour, and by far the biggest in scope, scale, and success.

The Eras Tour, by itself, has surpassed a billion dollars in revenue—the first tour to ever hit that milestone—and it's had all sorts of interesting direct ramifications and repercussions, like bolstering Swift's music sales and streams, but also indirect ones, like creating a sort of economic weather system wherever these tour stops are planned: it's been estimated, for instance, that the Eras Tour contributed something like $4.3 billion to the GDP of the United States, and the WSJ dubbed these economic impacts "Taylornomics," as the combination of travel, food, entertainment, and other spending surrounding her tour dates, folks coming from all the around the world to visit the relevant cities, attend the concert, and spend on those sorts of things while in town, has all had a meaningful impact legible in even the huge-scale numbers of national income figures.

Swift, then, has been having quite the moment, following the several decades of work in this industry leading up to this tour.

And the swirl of activity—economic and cultural, especially—around her Eras Tour stops have made these events central to the collective consciousness, grabbing lots of airtime and watercooler talk wherever she shows up, because of how much of an event each of these stops are; and notably, they have been very well reviewed, in terms of the performance, the sets, the planning, everything—so it would seem that the attention being focused on these shows isn't superficial and reflexive, it's the result of having put together something pretty special for people who are willing to spend to attend that kind of event.

It maybe shouldn't come as a surprise, then, that there may be people out there looking to garner attention for themselves and their causes who see these events as an opportunity to do exactly that.

Three sold-out shows in Vienna, Austria were cancelled in early August due to a plot by what seems to have been several teenagers looking to kill as many people as possible outside the tour's local concert venue.

An investigation into this plot is ongoing, so there's still a fair bit we don't know, but what's been divulged so far is that three people have been connected to the plot and detained, the main suspect is a 19-year-old who planned to use knives and/or explosives to kill as many of the 30,000 or so onlookers who gather outside the show venues each night as possible—and another 65,000 people would have been inside the venue, so that's a lot of people, and a lot of potential for stampede-related injuries and deaths, alongside those that could be caused with knives and bombs—and that he, alongside two other suspects, a 17-year-old and an 18-year-old, was inspired by the Islamic State group and al-Qaida—the 18-year-old, who is an Iraqi citizen, apparently having pledged himself to the Islamic State.

Propaganda materials from both terrorist organizations were found at the 17-year-old's home, alongside bomb-making materials, and he was hired just a few days before being caught by a company that provides some type of service to the concert venue; specifics about what said company provides haven't been officially divulged yet, but the theory is that this job was meant to give him and his accomplices some kind of access, allowing them to do what they intended to do more effectively.

There were a lot of disappointed Swift fans in Vienna who in some cases spent thousands of dollars just getting and staying there for the concert, only to be told that it was cancelled; most of the response from those affected in this way seems to be relatively upbeat, though, considering the circumstances, pretty much everyone breathing a sigh of relief that this plot wasn't pulled off successfully, which could have resulted in something like what happened at Manchester Arena in 2017, when an Ariana Grande concert was attacked by an Islamic extremist with a bomb who killed 22 people and injured more than 1,000.

Swift's representatives have said that her next concert, scheduled for between August 15 and the 20th, are still on the books and ready to go, at London's Wembley Stadium, which will close-out the European leg of this record-setting tour.

London's mayor has said that local authorities are prepared for whatever might happen, having learned a lot from that aforementioned Ariana Grande concert in 2017.

What I'd like to talk about today is a bout of violent rioting that broke out in the UK recently, which is loosely connected to Swift and her music, though only adjacently, and is primarily focused on the roiling topic of immigration and its British discontents.

—

At the tail-end of July, 2024, there was a knife attack in Southport, a town in northwestern England, in which three young girls were killed and ten other people, eight of whom were also children, were injured—some very badly injured.

This attack targeted a Taylor Swift-themed yoga and dance workshop that catered to children ages 6 to 11, twenty-five of whom were in attendance—hence that large number of young victims. And the adults who tried to stop the attacker were all themselves injured, in some cases critically, and the assailant was only ultimately halted when a pair of police officers managed to subdue him.

The person behind this attack, and those murders, is a 17-year-old British citizen who was arrested at the scene, and whose identity was initially concealed from the public because of how privacy laws work in the UK, related to minors; they tend not to divulge identifying details when crimes are committed by people who are legally children, though in this case they ultimately decided to do so, for reasons I'll get into in a moment.

Thus far, there isn't a clear motive behind this attack—the attacker has been diagnosed with autism spectrum disorder and was apparently deep in the midst of some kind of self-imposed isolation leading up to his apparent decision to take a taxi to this workshop and kill a bunch of children.

He's been charged with possession of a bladed article, ten counts of attempted murder, and three counts of murder, and his trial date is currently set for the end of January in 2025.

This attack is currently not being treated as a terrorist incident, though again, no clear motive has been established, and there's a lot that's not known, and likely quite a bit that hasn't been publicly divulged yet.

This knife attack, unto itself, led to a lot of headlines and attention because of how just brutal and horrible it was.

But in the aftermath of the attack, possibly because the attacker wasn't named, again, because he was a minor, rumors and then outright misinformation began to spread around less-than-legitimate news entities in the UK, and across social media platforms and messaging apps like Telegram, many of them suggesting or directly alleging that the attacker was someone he was not—a false name was given to him by some of those spreading these rumors—and even in cases when a name wasn't misattributed or fabricated, he was alleged to be an immigrant seeking asylum—which is also incorrect; his parents are from Rwanda, but he was born in Cardiff, and is thus a British citizen.

Within days these rumors and this mis- and dis-information, this accidental and purposeful spreading of mistruths, began to reach a fever-pitch, the zone flooded with patently untrue claims and narratives, which is why the police decided to release the attacker's name publicly on August 1; it was going to happen within a week or so, anyway, because he was turning 18 on the 7th, so the idea was to get ahead of that impending forced divulgence, and to try to temper some of that false information spread within facets of British society in the meantime.

Most of the false stories, though, hung on, even after officials made this information public, and to understand why, it's important to understand what a political force anti-immigration sentiment has become in Britain over the past few decades.

The British aren't alone in this, of course: especially in wealthier countries, mostly but not exclusively conservative politicians and parties have been making hay with claims about folks from other countries coming into their territory, taking their jobs, gobbling up their social services, and changing their culture into something those who came before feel they no longer recognize.

Part of this is just the consequence of societies changing being reframed into something devilish and wrong, part of it is the reframing of stagnating economic conditions as something that's being done to their societies by outside forces, not by uncontrollable macro variables like pandemics, and controllable variables that are being mismanaged by those in power.

Part of it, though, is related to real-deal demographic shifts, as folks flee from repression, violence, economic deterioration, and dangerous climactic happenings in less-wealthy parts of the world to those that are currently not suffering from these things, or not to the same degree.

Thus, we see waves of people show up to the US's southern border, all hoping to get into the country, legally or otherwise, and the same is true of European nations with Mediterranean coasts, and, as is the case here, people arriving legally, by ship and plane and train into England, but also illegally, often in makeshift boats crossing the channel, the people who arrive in this way arrested and filtered into a system that often moves sluggishly and puts these new arrivals up in hotels or other housings for the duration of their processing at government expense.

From the perspective of someone in a smaller British town, then, where the economic conditions are not much better than those in a similarly sized town in a much poorer country—since London is the only city in Britain doing really well in that regard, right now—this looks like a bunch of people from elsewhere, who don't belong, taking resources that should go to them, should be spend on their housing and healthcare, should be making jobs for them, and the ones that are allowed to stay continue to take those resources, leaving a lot less to go around, again, in circumstances in which it already feels like there's not anywhere near enough—no chance for growth, few opportunities, and diminishing value in the social services they've been promised.

These are potent political topics, then, because in some cases these are real-deal issues already, and in others it can be useful and effective to stoke fears that this could happen in the future, if we allow these foreigners to keep flooding across our borders, legally or illegally.

In the UK, the Conservatives, the Tories, have used this issue as a very effective lever, and at the height of fervor about this topic, they seemingly accidentally led the country to a successful Brexit referendum in 2016, leading to the UK leaving the European Union, in large part because this would allow them to set their own immigration policies separate from those of the EU, which are much more open in terms of movement between member nations.

All of which, I think, helps explain what happened next, following that knife attack, and the torrent of false information that flooded the zone following the attack, which included all sorts of claims that the attacker was an illegal immigrant, that he was a Muslim, and that if nothing else, he was a black teenager who had brutally murdered several young, British girls.

On July 30, a crowd in Southport gathered outside a local mosque and started causing trouble and making threats. The police showed up to keep the peace, and the protestors attacked them, set fire to a police van, and damaged the mosque—in the process injuring more than 50 police officers and three police dogs.

This initial group of protestors was formed around a nucleus of people belonging to the English Defense League, which is a far-right, anti-Muslim organization, and members of Patriotic Alternative, which is a neo-Nazi group.

Similar protests that became riots popped up in cities across the country in subsequent days, and amidst all the resulting tumult, a police station was set on fire in Sunderland, and more mosques, alongside businesses and homes owned by people who were purported to be, often incorrectly, immigrants, were also damaged or destroyed.

Hotels housing asylum seekers were attacked, and something like 750 of these anti-immigration rioters have been arrested, thus far.

The nature of these riots changed on August 7, when a protest, populated by the same sorts of people as were seen at the other ones, mostly anti-immigrant, neo-Nazi, and far-right folks, was met by a group of anti-racist counter-protestors that dramatically outnumbered them. The police helped support the peaceful anti-racist protestors, and since that day, most of these would-be riots have been quelled by oversized groups of counter-protestors augmented by a police presence.

Before that tactic arose, though, several cities saw a handful of nights in a row of rioting by those far-right groups, many of them pillaging and burning shops, and attacking strangers and the police, and the government has gone out of its way to really throw the book at folks they've arrested, handing down significant punishments to some of the instigators of these riots, in particular, while also publishing their names and faces, in an attempt to embarrass and make examples of them.

As of the second week of August, we're still seeing periodic attacks on mosques and attempted protests and riots by far-right activists pop up here and there, though they're happening a lot less frequently than in previous weeks, and peaceful anti-fascist, anti-racist protests have become a lot more common, in response to attempted riots, but also unto themselves.

There are several ways of looking at what has happened here, in response to that attack, and in response to the riots that followed.

One narrative of all this is that far-right politicians and ideologues int the country have attempted to convert a truly horrible event into something it wasn't for the purpose of regaining some of the power they lost with the last round of parliamentary elections.

It's been alleged by the new British Prime Minister, Kier Starmer, that these riots were instigated by far-right troublemakers like Nigel Farage, who was one of the key proponents of Brexit, and who has recently reemerged in British politics as the leader of a vehemently anti-immigrant, further-right than the Conservatives party in the country.

Farage and similar anti-immigrant leaders flooded the informational zone with disinformation and nudge-nudge-wink-wink innuendo that implied this was one of the consequences of allowing immigrants into the UK, and that, according to Starmer and other government leaders, led to some of this violence and destruction—they've even hinted that it might be prudent to clamp down on those sorts of posts and false claims, because of the real-world consequences that can follow; though that hint has been met with skepticism and worry from free-speech advocates.

It's also been alleged that foreign agencies, like those in Russia, have been helping amplify these false claims, as part of their larger effort to sow discord and to augment the potency of reactionary groups in countries they want to influence, and folks who have aligned themselves with global conservative movements, like Tesla CEO Elon Musk, have been accused of doing the same, Musk himself sharing a lot of misinformation related to this attack and the riots that followed on the social network he bought, formerly Twitter, now X, clashing with the new Labour government on the network while saying that he believes a civil war is inevitable in the UK.

So we could look at all this through the political-leverage lens, as there's a lot of power to be gained by successfully attaching reins to this sort of movement, and amplifying trouble for those in power, if those in power are your political rivals.

We might also look at this through the lens of actual on-the-ground issues, though.

There was a piece in the Financial Times, recently, in which it was posited that how we perceive these riots, and the people sparking and perpetuating them, will tend to depend on whether we subscribe to the "rational actor" or "riffraff" models of riot interpretation.

The rational actor model says people who riot are doing what they do because of real-deal grievances that they can't seem to get addressed in any other way, while the riffraff model says rioters are basically low-lifes who have nothing better to do, and/or who like to mindlessly give in to the animalistic urge to belittle, attack, and maybe even kill those who seem different from them and theirs, and all they're looking for is an excuse to do so.

Most social scientists, today, support the rational actor model, suggesting that even people who lean toward violence will keep those behaviors tamped-down most of the time, and only allow them out at moments in which they feel like there's no other way to get themselves and their grievances heard and addressed; and that's true whether we're talking about people of color rioting because they feel like they're being unfairly and violently targeted by police, or when it's mostly white, British Christians who feel like they're being elbowed out of society by Muslim immigrants and various other people of color.

That folks like Farage might step in and try to ride this kind of wave, then, might ultimately be less important than identifying a pressure-valve that'll allow these sorts of grievances to be worked out and addressed in socially positive, legal ways.

Government healthcare infrastructure in many of these areas is stretched to the breaking point, social safety nets are unraveling, and years of Conservative-instigated austerity measures have left these and other social baselines way below where they were in recent memory—and the messaging from the Conservative Party has been that immigrants are to blame, not their good and logical and responsible monetary policies.

Starmer, as the head of the new Labour government, which won the last election in a landslide, booting the Conservatives from their perch for the first time in a long time, has the opportunity to address these issues, then, but it's likely he'll have to do so in such a way that the actual problems are addressed—providing better funding for these services, helping stimulate more economic activity so there are enough, and high-quality enough jobs for everyone, and ensuring there's enough immigration so that systems that rely on folks coming in from elsewhere (which is especially true of the nation's healthcare system and its construction industries) can function properly—while also addressing some of the seeming issues, like cracking down on illegal immigration; which probably isn't the core problem it's been promoted as by the Conservatives and those to their political right, but is an issue, and is something Starmer has said he will crack down on.

It currently seems like he might aim to grease the wheels of the immigration system, so that folks applying for citizenship are processed faster, which will mean fewer resources expended putting them up in the country while they're waiting to see if they can stay—which would possibly help free up government resources, while also representing a kinder model for those who are otherwise left in limbo for long periods of time.

Whether this can be framed and communicated correctly by the Labour government so that it appeals to those who are worried about immigration is an open question, though, as it's possible that anything other than a hardcore lockdown of the borders and a denial of new immigration requests—which would cause even more chaos in the country's healthcare and other immigration-related systems—might seem like non-solutions, even if they technically solve some of the underlying problems the rioters have been complaining about.

Show Notes

https://en.wikipedia.org/wiki/2024_Southport_stabbing

https://www.cnn.com/2024/07/30/uk/taylor-swift-southport-stabbing-reaction-gbr-intl/index.html

https://www.thetimes.com/article/e87b09fb-b8fe-408d-a961-c89e6ae0f098?shareToken=620a021a38d86ed3af11587c36a52afd

https://www.bbc.com/news/articles/c5y38gjp4ygo

https://apnews.com/article/britain-unrest-riot-southport-police-response-ec348340c7d223f0117ae8c62638dd6f

https://newrepublic.com/article/184691/day-riots-stopped-uk

https://www.reuters.com/world/uk/uk-examines-foreign-states-role-sowing-discord-leading-riots-2024-08-05/

https://www.bbc.com/news/articles/cp35w0kj2y4o

https://www.aljazeera.com/news/2024/8/8/why-is-elon-musk-clashing-with-the-uk-government-over-far-right-riots

https://archive.ph/vKdeu

https://www.bbc.com/news/articles/clyg7dzr8wko

https://www.newstatesman.com/comment/2024/08/is-cocaine-driving-the-british-riots

https://www.lrb.co.uk/blog/2024/august/this-time-it-s-worse

https://www.bristolpost.co.uk/news/bristol-news/amid-chaos-far-right-protests-9459421

https://www.cnn.com/2024/07/29/uk/northern-england-stabbing-intl/index.html

https://apnews.com/article/uk-southport-children-stabbed-dance-class-8a9c7d7ed01441ce96332cd3d1250e43

https://en.wikipedia.org/wiki/2024_United_Kingdom_riots

https://en.wikipedia.org/wiki/English_Defence_League

https://en.wikipedia.org/wiki/Patriotic_Alternative

https://www.independent.co.uk/news/uk/politics/southport-far-right-disinformation-russia-b2589041.html

https://www.theguardian.com/uk-news/article/2024/jul/30/misinformation-southport-attack-suspect-social-media-conspiracy-theories

https://en.wikipedia.org/wiki/Brexit

https://www.ft.com/content/a0a4fb08-40cc-4627-a58f-b3a8d2d0e009?accessToken=zwAGH1UwRNrgkdOgpPsIQMxGJ9Olj7Oo0tDgCQ.MEYCIQChxhfA2SBamOb_Y_c0vQwPJmzXo0fHfucpW2v_dBGr2gIhANMcXEtBzZqY7R0Z9RkAZMkEoGMSy5P49MRnprFYWvAH&sharetype=gift&token=75895b79-b6c8-4e1f-a3ab-dc4d87161131

https://www.nbcnews.com/news/world/taylor-swift-concert-terror-plot-austria-foiled-2-men-arrested-shows-w-rcna165591

https://en.wikipedia.org/wiki/Manchester_Arena_bombing

https://en.wikipedia.org/wiki/Taylor_Swift

https://www.investopedia.com/swiftonomics-definition-8601178

https://en.wikipedia.org/wiki/Impact_of_the_Eras_Tour

https://apnews.com/article/austria-taylor-swift-concerts-canceled-extremism-arrests-17b494f1a164b205128d7faeb607e731

https://www.billboard.com/music/music-news/taylor-swift-vienna-terror-plot-third-person-detained-1235750067/

https://apnews.com/article/austria-taylor-swift-concerts-canceled-extremism-arrests-feff9108d0a14d9941c4bc416c0eb05f

We also discuss authoritarianism, Potemkin elections, and the Venezuelan refugee crisis.

Recommended Book: Nuclear War by Annie Jacobsen

Transcript

Venezuela, a country with a population of about 30.5 million people, has lost something like 7 to 9 million people, depending on which numbers you use, to a refugee crisis that began about a decade ago, in 2014, and which has since become the largest ever in the Americas, and one of the top ten all-time biggest outflows of people from a region in recorded history—just under the outpouring of people from Bangladesh into mostly India, which I mentioned in last week's episode, during the country's war of independence from Pakistan, and just above the number of people who have fled Syria over the course of its now 13-year-long civil war.

That means Venezuela has lost around a quarter of its total population in the span of just ten years.

The spark that lit the fire of Venezuela's refugee crisis wasn't a civil war, but a political movement called the Bolivarian Revolution, which is named after Simón Bolívar, who is renowned and respected throughout the region for leading the area's independence movement against Spain.

This revolution was kicked-off by a soldier-turned-polician named Hugo Chávez who has long worked to implement what he calls Bolivarianism across the Americas, which calls for a nationalistic, socialistic state of affairs in which hispanic governments would work together, these governments would own most vital aspects of industry and the economy, according to a social model, it calls for self-sufficiency driven by that state-owned nature—the government reining in the purported excesses of capitalism-oriented competition, basically, and it calls for the elimination of corruption and the expulsion and exclusion of what it calls colonialist forces, alongside the equitable distribution of resources to the people.

It's a riff on other socialist and communist models that have been tried, basically, with a South American twist, but it has many of the same implications for day-to-day realities, including the supposition that everything is owned and run by The People, though generally what that means in practice is a pseudo- or full-on police state, meant to keep those outside, enemy forces—which are blamed for anything that goes wrong—from meddling in local affairs, and it also tends to mean a lot of self-enrichment at the top, those in charge of the police state apparatus, and all the state-owned businesses giving a lot of handouts to their friends and family, and generally becoming quite wealthy while the rest of the population becomes increasingly disempowered and impoverished.

This isn't the way these sorts of models necessarily have to go, of course, and it's not the way they're meant to go according to their own ideals and tenets, but historically this combination of claimed goals seems to lead in that direction, and in Venezuela's case we've seen that same trend play out once more, the Bolivarian Revolution putting Chávez at the top of a system predicated largely on oil wealth, which allowed Chávez to reinforce his hold on power, the reinforcement including the jailing, threatening, and harassing of political opponents, and keeping the main opposition party mostly out of power, despite their widespread popularity.

In 2013, Chávez's Vice President, Nicolás Maduro, stepped into the role of acting president when Chávez had to step aside due to cancer complications. He then won an election that was triggered by Chávez's death by less than 1.5% of the vote, though his opponent claims there were irregularities. The National Election Council carried out an investigation and said that the vote was legit, and Maduro became president later that year.

The seeming illegitimacy of that election, though, remains a huge point of contention between the political forces in Venezuela, and in the years since, the government has engaged in what's often euphemistically called "democratic backsliding," which means those in charge are implementing increasingly authoritarian policies in order to maintain control and keep themselves at the top, at the expense of democratic norms and values, like fair and free elections.

All of which has been bad for morale and for locals' sense of power within their own governmental system, but this has all been maintainable to a certain degree because Venezuela is sitting on the world's largest known oil reserves, and has thus able to just keep pumping oil, and expanding their own pumping capabilities, and that has allowed them to fail across a lot of other metrics of success, but still keep things afloat, the average person doing just well enough that they had something to lose if they stepped too far out of line—challenging the government in some way, for instance.

This increasing mono-focus on oil and similar raw materials, like gold, though, became a huge issue when a series of what are generally considered to be hamfisted policy decisions—including abundant and generous fuel subsidies for citizens and local businesses—that left them with wild levels of inflation that led to an intentional devaluation of the country's currency, as part of an effort to address that inflation, but which ultimately just ended up making things worse.

The government also took out a bunch of debt to help increase their oil-pumping capacity, and that combination of debt, a weak currency, and a local economy that had done away with basically everything else except oil left them without everyday fundamentals, including food, alongside issues like burgeoning disease rates, child mortality rates, high levels of crime and corruption, and a whole lot of violence, politically motivated and otherwise.

As of mid-2024, nearly 82% of Venezuela's population lives in poverty, and 53% of the population lives in extreme poverty, unable to afford enough food, and slowly starving to death.

Maduro seems to have won another election in 2018, though that vote is even more widely considered to be a farce than the one in 2013, and though outside governments like the US supported the ascension of opposition candidate Juan Guaidó, who seems to have actually won, that support didn't lead to any real change within Venezuela—though it did lead to more sanctions by the US and its allies against the Venezuelan government and many higher-ups within that government, of which there were already quite a few, and the weight of these sanctions on their oil industry in particular have made it very difficult to Venezuela to openly sell their oil on the international market at full price, which has further deteriorated their economic situation.

There was some hubbub within the Trump administration in 2020 that a military option, like a full-on naval blockade, to keep under-the-table oil deals that dodge US sanctions from occurring, might be on the table, as Maduro was proving resilient to other, less forceful attempts to dethrone him, like the aforementioned sanctions.

But nothing came of that, and a few years later the Biden administration offered to ease sanctions on Maduro's government, and to begin the process of normalizing relations between the two countries, if Maduro agreed to have a fair and free election, letting Venezuelans decide whether to keep him or not, but in an actual election, not rigged election, this time.

What I'd like to talk about today is how that election played out, and the local and international response to its results.

—

Some of that promised loosening of sanctions began well before the election, which took place at the tail-end of July 2024—and that allowed Venezuela to reap some profits from selling oil, gas, and gold that would have otherwise been tricky to get onto the global market.

But while Maduro made a few gestures at allowing things to be free and fair, and released some political prisoners, as demanded, he figured out a way to justify keeping his main opposition, a woman named María Corina Machado, who has been incredibly popular with Venezuelans, from being on the ballot. So she picked someone to basically serve as a stand-in for her and her party, a man named Edmundo González.

Official numbers released by the government indicate that Maduro won about 52% of the vote, and will thus remain in office.

According to data and analysis from outside watchdog groups, however, the voter numbers released by the government are highly suspect, the numbers giving every indication that they were falsified.

Evidence, including two-thirds of the tally sheets that the electronic voting machines printed out after polls closed on Election Day, provided by González's opposition alliance to some of those watchdog groups and to journalistic entities like the New York Times and Associated Press, suggest that Maduro probably only got something like 31% of the vote, while González, and through him, Machado and her party, received around 66%—a landslide victory, if those numbers are even close to accurate, and there's additional evidence that they are, as that's very similar to the results tallied by an independent exit poll on Election Day.

Despite that evidence, the Venezuelan election authority has confirmed Maduro's reelection, saying that González only garnered 43% of the vote, and the governments of Venezuela's allies, like Russia, China, and Iran, have also recognized the results as valid—though to be clear, China, Russia, and Iran are all renowned for their Potempkin elections that have all the trappings of a democratic act, but which are largely ceremonial and always predetermined to some degree, even if they claim to take the will of the people into account. So this is a group of governments that regularly run invalid elections who are vouching for the legitimacy, the apparent validity, of an election that keeps their preferred, authoritarian ally, in power. Do with that information what you will.

On the other side, we have a slew of mostly Western nations that have come out against the results, saying, with varying degrees of certitude, that there's abundant evidence these election results were faked, and that González is the actual winner.

The US government is included on that list, and many of Venezuela's neighbors—some of whom have recently publicly spoken about their concerns related to Maduro's belligerence in the region, and seeming intention of rigging the vote in his favor—like Brazil, Mexico, and Colombia, they've said they want the Venezuelan government to release the full details of the vote, so everyone can see and analyze the totality of data the government is supposedly working from.

Some of Maduro's allies and former allies, and some hardcore supporters of his predecessor, Chávez, have likewise told Maduro he needs to release the baseline voter data, to clear things up.

Maduro has said, instead, he'll have the country's Supreme Court audit the results, but this is being seen as a sidestep move by Maduro, as the court was recently packed with Maduro loyalists, and is therefore not capable of undertaking an independent review of the data—like other aspects of the country's government, the high court is basically in Maduro's pocket.

Maduro is also saying that the US and other long-time enemies of his government are trying to rig the election against him, and that he can't release detailed vote counts because the National Electoral Council is under attack, including cyberattacks, and they're not able to provide those numbers right now because of that aggression—though he's provided no evidence to support this supposed reason he can't make any of this information public.

So while it's still not 100% certain what has happened here, it's looking a lot like what happened in the last election, Maduro pulling out all the stops to muddle what information is being released, looking like he's playing ball whenever possible, but within a context in which he can make it look that way without facing any real risk of being challenged, and it would seem that he's leveraged the powers of state, once more, to lock in his position at the top for another six years, minimum.

In addition to those international governments and groups calling foul on his actions, we're seeing widespread protests against the government and these alleged results, and in a few cases these protests have become violent—the government supports groups of loyalists called colectivos, giving them weapons and telling them to go attack peaceful protestors, which can spark such violence, though formal police and military forces have also seemingly triggered pushback in some cases.

The government is accusing foreign nations like the US, and immigrant groups of causing this violence, saying these are special covert ops to make the government look bad and attack good loyal citizens basically—which is a common authoritarian move in such circumstances—and police and military forces have been rounding up protestors, and hunting them down afterward, arresting thousands of people for what they're calling anti-government or terrorist activities.

This has led to a situation in which there are still protests, and the opposition is still pushing hard against these supposed results, but many people involved have been pulling down their social media profiles and not posting photos or videos, because they're worried the government will send people to their homes to black-bag them and take them away, which is apparently happening around the country right now, to folks from the opposition party, but also everyday people who went to a rally or protest.

The question, now, is whether the outcome this time around will be any different than it was in 2013, and then again in 2018, when Maduro first stepped into power and when he retook power.

Something the opposition has this time, but which it didn't have in those previous elections is Maria Corina Machado—the candidate who was booted from the ballot and who had to select González to run in her stead.

Machado has become a public figure of almost religious significance in the country, and her star has arguably only gotten brighter the more Maduro has pushed back against her ability to participate in the formal processes of state.

She won 90% of the vote to become the head of the opposition coalition last October, and she's been in politics since 2004, when she promoted a referendum to recall then-President Chávez, and that effort earned her a conspiracy charge.

In later years, as she continued to hold various political roles, she was accused of corruption, disqualified from holding public office, accused of being involved in a plot to assassinate Maduro—all of these accusations seemingly false, and only applied to keep her from causing trouble, by the way—and then, after nearly a decade staying out of the spotlight, she became a candidate in that party primary that she won so handedly, which in turn led to her being banned from running for office for 15 years—all of which just seems to have further empowered her with everyday Venezuelans.

She seems to be a lot more popular and to hold a lot more sway than Guaidó, the candidate who was held up as the actual victor of the 2018 election, and treated as such by several other governments in subsequent years.

Die-hard fans of Machado also seem to have a bit more zeal than Guaidó's followers did, which could mean if the government acts against her or González, as they've threatened to do, and which both candidates seem to be daring the government to do, having shown up in public a few times despite those threats to lock them up or worse, since the election—if something like that happens, that could result in even bigger and potentially more destructive and violent protests, despite her calls for nonviolent opposition against what seems to have been a grave injustice.

The world has also changed quite a lot since 2018, and many of Venezuela's neighbors, even those that would have previously stayed carefully neutral in this election, have outright recognized González as the winner, including Uruguay, Argentina, and Peru, among others.

This changed world could also bring more support for Maduro, though, as their global allies, the Russias, Chinas, and Irans of the world, in particular, are busily building a collection of relationships with governments that oppose the de facto hegemony of the US and Europe, and that's manifesting in all sorts of ways, including providing resources, trade, and misinformation and military support to other fellow travelers who are holding the authoritarian line against pushback from their democratic and close-enough-to-democratic peer states.

There's a good chance there will be more tumult in neighboring nations as a result of all this—most immediately Colombia, as that's where the majority of Venezuelans who have left the country as part of that larger, decade-long exodus, have been going, and there's abundant indication that many people who held out, hoping this election would change something in the country and sticking around on that possibility, are planning to leave, now that Maduro has apparently managed to cling to power.

There's a chance this could trickle into other nations' politics, too, as many of those Venezuelan migrants who don't stay in Colombia end up heading north to US borders, and those borders have been at the center of the past several elections, and the new Democratic nominee for president this November, Kamala Harris, was tasked with handling border issues in the country at a truly tumultuous moment for the border. So a surge in new migrants could lead to more criticism of her on that front, as her performance in that role is generally considered to have been not great.

The Venezuelan military seems to be standing with Maduro, so far, which means it's unlikely the citizenry will have much of a chance of forcing the government to take them seriously and do anything about this seemingly rigged election, beyond protesting at such a scale and regularity that it messes with their ability to get anything else done, which could, at some point, nudge those in positions of power within the military to take the citizenry's side.

This is considered to be unlikely at this point, as Maduro has made sure to tie those leaders to him, giving them all sorts of monetary and business benefits, and arranging the country's military and intelligence apparatuses so that all the agencies and people running them are tasked with watching each other, as much as the other elements they're meant to defend against—again, a common authoritarian tactic, as this can help stave off the potential for coups, no one willing to risk losing their own power to oust the person up top.

The most likely outcome, based on how things have gone previously, at least, and how this has played out so far, is probably that this will remain a talking point internationally for a while, protests will continue to bubble up and be tamped-down, periodically becoming violent enough to warrant international news, but then in a handful of months, Maduro will have reinforced his position in power, still further, neighboring governments will be forced to reckon with his staying power and will figure out ways to deal with him, even if not happily, and the exodus of citizens from the country will continue as the economy continues to get worse in most ways, though perhaps bolstered a bit by support from the Russia/China/Iran alliance.

All of which will reshape the population and demographics of the region, while causing all sorts of economic ripples globally, as well.

Show Notes

https://www.nytimes.com/2024/07/28/world/americas/venezuela-election-results.html

https://www.nytimes.com/2024/07/29/world/americas/venezuela-election-takeaways.html

https://www.nytimes.com/2024/07/31/world/americas/venezuela-maduro-election-results.html

https://www.bbc.com/news/articles/cd1d10453zno

https://www.wsj.com/articles/i-can-prove-maduro-got-trounced-venezuela-election-stolen-772d66a0

https://statmodeling.stat.columbia.edu/2024/07/31/suspicious-data-pattern-in-recent-venezuelan-election/

https://www.washingtonpost.com/national/health-science/trump-administration-announces-sanctions-targeting-venezuelas-oil-industry/2019/01/28/4f4470c2-233a-11e9-90cd-dedb0c92dc17_story.html

https://www.axios.com/2024/07/30/venezuela-election-biden-trump-response

https://theintercept.com/2024/08/02/venezuela-election-maduro-us-sanctions-democracy/

https://www.barrons.com/news/venezuela-election-body-ratifies-maduro-s-poll-win-official-39010070

https://archive.ph/izdLU

https://apnews.com/article/colombia-president-maduro-vote-count-venezuela-election-00d399b74300b6d1ed010bed9539a166

https://english.elpais.com/international/2024-08-05/venezuelas-political-crisis-enters-uncharted-territory.html

https://crsreports.congress.gov/product/pdf/IF/IF10715

https://en.wikipedia.org/wiki/List_of_largest_refugee_crises

https://en.wikipedia.org/wiki/Sim%C3%B3n_Bol%C3%ADvar

https://en.wikipedia.org/wiki/Bolivarianism

https://en.wikipedia.org/wiki/Bolivarian_Revolution

https://en.wikipedia.org/wiki/Crisis_in_Venezuela

https://en.wikipedia.org/wiki/2013_Venezuelan_presidential_election

https://dialogue.earth/en/business/8768-fuel-subsidies-have-contributed-to-venezuela-s-economic-crisis/

https://www.cbc.ca/news/world/venezuela-election-preview-1.7274864

https://en.wikipedia.org/wiki/Venezuela

https://archive.ph/20240726145913/https://www.r4v.info/en/refugeeandmigrants

https://en.wikipedia.org/wiki/Sanctions_during_the_Venezuelan_crisis

https://apnews.com/article/venezuela-maduro-machado-biden-gonzalez-elections-protests-d6e70bd88ee9511298a4850c224a12e2

We also discuss Sheikh Hasina, Myanmar, and authoritarians.

Recommended Book: The Identity Trap by Yascha Mounk

Transcript

Bangladesh is a country of about 170 million people, those people living in an area a little smaller than the US state of Illinois, a hair over 57,000 square miles.

It shares a smallish southeastern border with Myanmar, and its entire southern border runs up against the Bay of Bengal, which is part of the Indian Ocean, but it's surrounded to the west, north, and most of its eastern border by India, which nearly entirely encompasses Bangladesh due to the nature of its historical formation.

Back in 1905, a previously somewhat sprawling administrative region called Bengal, which has a lot history of human occupation and development, and which for the past several hundred years leading up to that point had been colonized by various Europeans, was carved-out by the British as a separate province, newly designated Eastern Bengal and Assam, at the urging of local Muslim aristocrats who were playing ball with then-governing British leaders, the lot of them having worked together to make the region one of the most profitable in British India, boasting the highest gross domestic product, and the highest per-capita income on the subcontinent, at the time.

This division separated Bengal from its Hindu-dominated neighboring provinces, including nearby, and booming Calcutta, which was pissed at this development because it allowed the British to invest more directly and lavishly in an area that was already doing pretty well for itself, without risking some of that money overflowing into nearby, Hindu areas, like, for instance, Calcutta.

This division also allowed local Muslim leaders to attain more political power, in part because of all that investment, but also because it freed them up to form an array of political interest groups that, because of the nature of this provincial division, allowed them to focus on the needs of Muslim citizens, and to counter the influence of remaining local Hindu landowners, and other such folks who have previously wielded an outsized portion of that power; these leaders were redistributing power in the region to Muslims over Hindus, basically, in contrast to how things worked, previously.

In 1935, the British government promised to grant the Bengalese government limited provincial autonomy as part of a larger effort to set the subcontinent out on its own path, leading up to the grand decolonization effort that European nations would undergo following WWII, and though there was a significant effort to make Bengal its own country in 1946, post-war and just before the partition of British India, that effort proved futile, and those in charge of doing the carving-up instead divided the country into areas that are basically aligned with modern day India and modern day Pakistan, but two-thirds of Bengal were given to Pakistan, while one-third was given to India.

This meant that a portion of Pakistan, the most populous portion, though with a smaller land area, was separated from the remainder of the country by Indian territory, and the logic of dividing things in this way was that the British wanted to basically delineate Hindu areas from Muslim areas, and while large, spread-out groups of Muslims lived roughly within the borders of modern day Pakistan, a large, more densely crowded group of Muslims lived in Bengal, hence the otherwise nonsensical-seeming decision to break a country up into two pieces in this way.

Frictions developed between mainland Pakistan and the portion of Pakistan, formally Bengal, that was initially called East Bengal, and then renamed East Pakistan in 1955, almost immediately. 

There was a movement to get the Bengali language officially recognized as a state language, alongside Urdu, which was promoted as the exclusive federal language of Pakistan, early on, and a list of six demands were presented to the Pakistani government by East Pakistan-based politicians, all of which aimed to get the region equal representation in what they felt was a West Pakistan-biased system, despite the fact that, again, East Pakistan, formally Bengal, was the most populous part of the country, and they had the most thriving economy, as well, bringing in most of the country's income.

These demands led to what's become known as the Six Points Movement, which in turn, just a few years later, kicked off the Bangladesh War of Independence, which was exactly what it sounds like: an effort by folks in East Pakistan to achieve independence from the larger government of Pakistan, which had in recent years been taken over by a military junta which, like the previous government, didn't give as much political power to Easy Pakistanis.

That junta, in late March of 1971, launched a military operation called Operation Searchlight that was meant to take out separatists in East Pakistan—but in practice this meant they swooped in and started targeting academics, members of the local intelligentsia, and people of Hindu faith, alongside members of the rabble-rousing groups that were petitioning for more power in this smaller-by-landmass, but larger by population and income, segment of the country.

Operation Searchlight sparked the aforementioned Bangladesh War of Independence, and nine months later, the military government's efforts during this conflict were deemed to be genocidal because of how they targeted ethnic Bengalis, killing somewhere between 300,000 and 3 million of them, while also intentionally and systematically raping hundreds of thousands of Bengali women, the soldiers who committed these acts doing so with the formal go-ahead from their government—they were told to do so, basically.

These atrocities eventually pulled India into the conflict, in part because millions of Bengalis were fleeing across their border to escape the genocide, and in part because the genocide was occurring, to begin with, and that sparked the 1971 Indo-Pakistani War, which eventually led to an end to that genocide when Pakistan's government surrendered at the tail-end of 1971.

That victory led to, formerly Bengal, then East Pakistan, now Bangladesh's independence from Pakistan. It also concretized India's military dominance in the region, and Pakistan, what remained of it, lost more than half its population, much of its economic base, and suffered a long period of embarrassment that left it questioning the basis of its militant, braggadocios approach to both nationalism and foreign policy; it was previously a well-respected and feared military force, but it became a somewhat eyes-downcast entity in the region for a while, lots of reforms eventually helping it shore-up its economy, but remnants of this period still percolate in its internal politics and government operation, to this day, including its antagonism toward India, and its support of local jihadist groups, which the government uses as a counterbalance against India and other local power structures, which it can no longer face head-on.

What I'd like to talk about today is a swirl of new tumult in modern day Bangladesh, and what this moderate uproar might mean for the country's future.

—

Modern Bangladesh is surrounded by conflict.

Myanmar's military government is in the midst of a civil war, following the recent overthrow of its democratically elected civilian government, and the subsequent rise and loose collaboration between rebel groups in various parts of the country.

India is booming, and is broadly considered to be the next big power player on the world stage, though it's already a regional titan. It also continues to scuffle with Pakistan to its northwest, and with China along its shared borders, which are located just a short distance north of Bangladesh.

Bangladesh's coast, along the Bay of Bengal, has long underperformed economically, despite being surrounded by some of the most impactful producers of goods in the world, and this coastline, including the one occupied by Bangladesh, has become incredibly unpredictable in recent years: regularly flooding, entire villages being swept out to sea, and freshwater sources increasingly tainted by those incursions of salt water.

This area already has a lot going on, in other words, and many of those goings on seem primed for amplification in the coming years, as global power structures and economic tangles continue to flex and break and rearrange, and as the climate continues to behave in increasingly distressing ways; there's a political and military realignment happening in this part of the world, but geopolitics and global economics are also swirling and rearranging in all sorts of unpredictable ways.

All of which serves as context for a recent series of protests that arose around Bangladesh beginning in July of 2024.

These protests were held by mostly students who were not fans of a quota scheme that was originally implemented by the government in the wake of that 1971 war with Pakistan, this system abolished in 2018, but which was reimplemented by the country's High Court shortly before the protests began.

And this system basically promised that 30% of all government jobs would go to the descendants of people who fought in that war against Pakistan, for independence, alongside some jobs for minority groups, folks from traditionally underrepresented districts, and people who are disabled—though mostly it was meant to honor the descendants of those veterans.

The protesting students were pissed about this reimplementation because the country's economy isn't great at the moment, and unemployment is rife; the jobs that are available are not paying much, and are not terribly secure. About 18 million young people are currently unemployed in Bangladesh.

Government jobs, in contrast, tend to provide some level of consistency and predictability, pay relatively well, and tend to stick around—folks in such jobs aren't worried about being fired or their jobs disappearing, because of their very nature. So the best jobs, by that standard, are government jobs, and nearly a third of those jobs have been promised to people who, in many cases, just happened to be born to the right parents or grandparents; and notably, the majority of folks with families who fought in that conflict, are also supporters of the current, authoritarian Bangladeshi government—so part of the criticism here is that these quotas offer a means of giving cushy, reliable jobs to supporters of the current regime, without seeming like that's what they're doing.

These peaceful student protests were met with heavy resistance and violence by the government, which deployed police and soldiers who shot at protestors and shut down universities and the internet in the country, and that led to more protests, including by non-students, who were also met with at times deadly force.

About 150 people have been confirmed killed, so far, though that's the government's figure, and other, independent counts have tallied more than 200 dead. Hundreds of protestors were also arrested and curfews were implemented.

The Supreme Court responded to the initial protests by reducing the quota in late July, to the point that about 5% of government jobs would go to descendants of those veterans, which in practice meant about 93% of all government jobs would be divvied-out in a normal way, hiring people based on who's the best candidate.

Protests largely ceased after that announcement, and the government restored internet services 11 days after shutting it down across the country. Social media platforms like WhatsApp and TikTok remain restricted, however, as these services were used to promote and organize protests.

Curfews have also been relaxed somewhat, though police are reportedly sweeping through schools and cities, grabbing people who were recorded at protests, arresting thousands of them, including at least half a dozen students who led the initial protests that kicked everything off.

Protest leaders are now demanding that the remaining curfews be lifted, that those who were arrested are released, charges against them dropped, and that the leaders responsible for the heavy-handed response should resign.

Some protestors have also called for the country's Prime Minister, Sheikh Hasina, to step down, as she initially called the students traitors, though she later backtracked and said she didn't want them to be harmed.

Hasina is the longest-serving Prime Minister in Bangladeshi history, having initially stepped into the position in 1996, then stepping back into the role in 2009—she's held the office ever since.

She's generally considered to be an authoritarian, and has been accused of fixing elections, extrajudicial killings, and the imprisonment, or worse, of politicians and journalists who challenge her in any way.

She is, given all that, then, perhaps not surprisingly blaming these protests not on the students—not any longer, at least—but instead on opposition political parties who she says are attempting to challenge her rule, and thus, the wellbeing of the country as a whole.

Given that this is a relatively well-established authoritarian regime, there's a nonzero chance those who are in charge of these protests will take the win with the quota system, even though it wasn't fully removed, and step back from these other, more substantial demands that are unlikely to be met, short of perhaps a token resignation here and there by lower-run government officials who take the bullet for those higher up.

Outside demands for impartial investigations into who caused what are likewise unlikely to move forward, and the government has made it pretty clear it intends to double-down on the "it's the political opposition doing this to us, and you" narrative, which could help them justify further clamping-down on these groups, even to the point of more imprisonments and killings, but bare-minimum, in such a way that it makes dislodging the current ruling party even more difficult in the future.

It's possible that tumult elsewhere around the world, including in Bangladesh's own backyard, might encourage overreaction, not under reaction, from those in charge, as Myanmar's military government is having a lot of trouble with rebels, these days, and while it's not impossible that the prime minister will give in to more moderate demands, publicly apologizing for the violent response and firing some of her higher-level ministers, her government's history hints that things are more likely to tilt in the other direction, at least for the foreseeable future, and at least if the protestors fail to scale-up their operations to incorporate more of the country's population than they have, thus far.

At the moment, then, things have calmed a bit in terms of protests and government responses to those protests in Bangladesh. But there are elements to this story that have made things even more volatile than they already were, and because of how uncertain so many variables in the region are right now, there's a chance we'll see this, or connected movements and storylines, bubble back up at some point in the near-future.

Show Notes

https://www.washingtonpost.com/world/interactive/2024/bay-of-bengal-climate-change/

https://en.wikipedia.org/wiki/Sheikh_Hasina

https://www.reuters.com/world/asia-pacific/bangladesh-protests-quelled-anger-discontent-remain-2024-07-26/

https://www.theguardian.com/world/article/2024/jul/26/bangladesh-student-protests-mass-movement-against-dictator

https://apnews.com/article/bangladesh-campus-violence-hasina-bc513b6d68cf5b94cfd898f3c7f153d2

https://www.thehindu.com/news/international/bangladesh-student-group-vows-to-resume-protests-if-demands-not-met/article68456310.ece

https://www.aljazeera.com/news/2024/7/25/bangladesh-minister-defends-govt-response-to-protests-amid-calls-for-probe

https://www.aljazeera.com/program/newsfeed/2024/7/24/bangladeshs-deadly-protests-explained

https://www.britannica.com/topic/largest-U-S-state-by-area

https://en.wikipedia.org/wiki/Bangladesh

https://en.wikipedia.org/wiki/Indo-Pakistani_war_of_1971

We also discuss election narratives, the frictions of age, and brief attempts at unity messaging.

Recommended Book: The Day the World Stops Shopping by JB MacKinnon

Transcript

On October 7 of 2016, The Washington Post released a video from 2005 in which Presidential Candidate Donald Trump bragged about how you can get away with sexually assaulting women if you're famous.

That same day, Wikileaks released transcripts of three paid speeches given by Presidential Candidate Hillary Clinton to banking giant Goldman Sachs as part of a larger bundle of divulgences from the hacked personal Gmail account of her campaign chairman, John Podesta—these speeches were pretty controversial as they were very well paid—she earned $675,000 in speaking fees from Goldman for the appearances, and fellow Democratic candidate Bernie Sanders lambasted her for the apparent conflict of interest this payout implied.

Also on October 7, 2016, mere hours before that tape was released and those talks were leaked, Trump publicly claimed that the Central Park Five—a group of black men who were wrongly convicted of assault and rape in 1989, and who were later exonerated by DNA evidence and a confession from the actual perpetrator—Trump claimed they were guilty, which was a silly and to some, quite offensive thing to say, but it also seemed to gesture at the candidate's ignorance, at minimum, and according to some responses to this statement, at least, his possible racism, as well.

So October 7 of 2016 was a pretty big day in terms of political divulgences, and it's considered to be one of the most prominent modern aggregations of what are, in US politics, often called October Surprises.

The term October Surprise was coined by former President Ronald Reagan's campaign manager during the run-up to the 1980 presidential election in reference to fears that a last-minute deal negotiated by incumbent president, and Reagan's competitor in the race, Jimmy Carter, to get American hostages in Iran freed could net Carter enough votes to win re-election, despite many other variables operating against him.

News reports were abuzz over these negotiations, so the narrative leaning in the President's favor could tilt things against Reagan, and his campaign manager was thus concerned that this bit of news, which was outside of his control, part of a spiral of larger events, would drop like a bomb on his campaign maneuverings, upending everything and completely changing the nature of the race, if it were to happen.

That ended up not being the case, as Iran's leaders eventually notified their counterparts in the US that they wouldn't be releasing anyone until after the election, but this sort of last-minute narrative change-up had occurred in US elections before, including then-National Security Advisor Henry Kissinger saying, at a press conference, that he believed the Vietnam War would end soon, just twelve days before the 1972 election, which is thought to have helped Nixon win another term in office, and—also on October 7, but in 1964—one of then-President Johnson's top aides was arrested for engaging in homosexual acts with another man at a DC YMCA, which seemed likely to tip the scales against his campaign, as that was a big no-no at the time, but then, just a week later, hardliners in the Soviet Union booted Nikita Khrushchev from power, the Labour Party narrowly took over the UK government, and China conducted its first nuclear weapons test; all of which pushed that YMCA incident from the news and rebalanced the election in various ways.

These sorts of last-minute surprises—last-minute because US presidential elections occur in early November, and these things seem to land like clockwork sometime in October, give or take a week—abound throughout US history, and though they usually only have a small or moderate impact on the final vote, in some cases they've been so dramatic, surprising, or paradigm-shifting they've completely upended expectations and seemingly changed the course of history.

What I'd like to talk about today are two recent narrative change-ups in the ongoing US election, which will culminate with a vote this November, both of which have the potential to dramatically influence the outcome of the election, and who ultimately occupies the White House early next year.

—

It feels like I've been doing a lot of US-centric news lately, and though that's not intentional, and a trend I intend to defy in the coming weeks, there have been two potentially historic storylines playing out in US politics in recent weeks that I believe justify explanation and analysis; in part because they are so historic and unusual, and in part because they seem likely to define the narrative of the presidential race over the next 100 days or so between now and the November 5 vote.

Of course, I say that knowing full well I could end up eating crow, acting, today, as if these are defining moments, when in reality either more dramatic and seemingly historic stuff could happen in the next three months-ish, or they moments could be set aside and largely forgotten in mere weeks, voter attention refocused on other things, like the actual policies being proposed by the two major parties in this race.

There are good arguments for both eventualities, as the communication environment in which this election is playing out is novel in many ways, and the people involved and the things they stand for, and the larger global context in which they're operating, are also quite bizarre by historical standards.

So these two stories are, I think, important to understand, as they could shape the path the rest of the race takes, and the moves both Republicans and Democrats, up and down the ballot, make in the coming months, which in turn will influence happenings globally in all sorts of important ways.

But it could also be that life takes over, other stuff takes precedent, and folks mostly just vote along party lines as has tended to be increasingly the case these past handful of elections—we'll see how that goes.

In the meantime, though, let's talk about the apparent attempted assassination of former President and current Presidential Candidate Donald Trump, and the seeming deterioration of current President Joe Biden's mental and physical health, the resultant calls from within his own party for him to step aside and let someone else run in his stead, and the decision he announced just a few days ago to step aside and let his party select a new candidate.

On July 13 of this year, 2024, Trump was at a campaign tour stop in Butler, Pennsylvania, up on stage, presenting his speech, when a 20-year-old man named Thomas Crooks shot at him, firing eight rounds from an AR-15-style semi-automatic rifle from a rooftop about 400 feet, which is about 120 meters, away from the stage.

One of the bullets seemed to clip Trump's ear, and others hit members of the audience, one of whom was killed, and two others were critically wounded.

A Secret Service sniper killed Crooks right after he took those shots, and Trump was surrounded by Secret Service agents moments after he was hit, briefly emerging from their huddle to raise his fist and shout "fight, fight, fight," before being hustled away from the stage.

Some of the photos of the shooting and the aftermath quickly became famous, and a few of them are already considered to be historic, including several that show Trump, still bloody, pumping his fist, seemingly defiant and even victorious, from within the protective embrace of his Secret Service team, an American flag waving in the background—even commentators who don't like Trump have publicly said he looks pretty badass in these photos.

And that general sense of badassery has been played up by the Trump campaign since the shooting. The Republican National Convention was just days after that campaign stop, and several attendees wore fake ear bandages, mimicking the one worn by the former-President, and many political analysts went ahead and called the election for Trump, citing the significance of surviving an assassination attempt, especially during a race between two elderly men, both of whom have been struggling to demonstrate their youthful vigor and favorably contrast themselves to their opponent.

In the wake of the shooting, several big name donors committed money to Trump's campaign, including Tesla and SpaceX CEO Elon Musk, and an array of Silicon Valley bigwigs, like the founders of Andreessen Horowitz, which is the most prominent venture capital firm in California.

This wave of new support, from big donors and small, allowed Trump to out-raise Biden for the month for the first time in this election cycle.

The campaign also signaled it may lean into a unity message, rather than what's become Trump's more combative, aggressive tact, which seemed likely to help him scoop up some on-the-fence voters, and possibly even some centrist Democrats who were increasingly concerned about Biden as the face of their party—though at the RNC event, Trump named further-right Ohio Senator, and author of bestselling book, Hillbilly Elegy, JD Vance as his VP, which is being seen as a doubling-down on aggression, not a balancing, moderating move, on Trump's part, and the scripted unity speech he gave, which used a lot of religious, "Jesus rising from the dead" language, alongside some gestures at the country coming together in the wake of violence, pretty quickly derailed into a somewhat rambling series of attacks against Trump's perceived enemies—so that approach, at least for the moment, is not being seen as a serious path for Trump and his team.

On the other side of the political fence, current President Biden has long faced calls to step down, mostly because of his advanced age and what that age portends: he's already 81 years old, and he'll be 82 in late November, shortly after the upcoming election.

People are living longer these days, and enjoying more of those years healthfully and productively, but Biden has had a speech impediment his entire life, which, as an older man, has at times made it seem like he's not as with-it as his fellow candidates—fairly or unfairly—and the frictions and scars of simply having lived a long, long time seem to be catching up with him, as well, and some fairly high-profile stumbles and mis-speakings, alongside caught-on-camera missteps and other signs of age and possible not-wellness, have amplified calls for him to step aside and allow someone younger to lead the Democrat's ticket in November.

These calls were a not insignificant component of his opponents' campaign in the 2020 election, but they ticked up several notches following what's generally considered to be a disastrous debate, for Biden, in late-June of this year.

The debate rules were in some ways stacked in Biden's favor, as there wouldn't be a studio audience for Trump to play off of, which is considered to be a strength of his debate style, and the candidates' microphones would be muted when it wasn't their turn to speak, which was meant to help temper Trump's tendency to go way over time, and speak over his opponent.

Despite those seeming advantages, though, from the moment he walked onto the debate stage, Biden looked and seemed...unwell. His face was kind of drooping, his eyes looked uncanny and surprised, his words seems to tumble over each other, not in his typical fashion, influenced by his speech impediment, but in a confused, rambling, at times disjointed and not-well-seeming way.

Even die-hard supporters of Biden began to question his ability to serve another term following that debate, and while most analysts pointed out that Trump's statements were riddled with lies, he did present those lies mostly intelligibly, while Biden, though mostly sticking to the truth, had trouble communicating much of anything, his delivery and overall visage suggesting that he's not okay, and if that's where he is now, where will he be in another several months, much less several years, if he were to take office for another four?

Those long-simmering concerns about his age surged into a full-on rolling boil from that point forward, and higher-ups in the Democratic Party started to call for Biden to step aside, some of them probably due to concerns about their own races, his unpopularity—which is ticking upward, according to recent polls—impacting their electoral outlook, and others because they worried about Trump being elected, not on his own strengths necessarily, but because Biden had become toxic due to his stumbles, and the general, and seemingly growing sense that he's just not up to the job anymore, because of the impacts of age.

As of the morning of Sunday, July 21, 39 Democratic congresspeople had overtly called for Biden to drop out, 23 had publicly expressed concerns about Biden, which is a lighter-weight way to say the same, basically, and 7 had said it's Biden's choice—though to be clear, Biden had said he's not dropping out, over and over again, so the folks who said it's his choice, following that clear declaration, seemed to be, in some cases at least, playing both sides, as they stating their support for him while leaving the door open for him to change his mind at some point in the future.

57 congresspeople, in contrast, were saying Biden should stay in the race, which is fewer than had said he should drop out, overtly or subtly; though a lot of people were apparently expressing concerns behind closed doors, and the wave of anonymous sources talking to reporters on the matter, telling stories about his various fumbles and their election-related worries, reinforced the supposition that there are more people hoping he steps back than not, including a lot of top-tier donors, it's just that many of them are concerned about their role within the party if they express those concerns publicly.

Then, in the early afternoon that same day, Biden's team released a statement from the President saying that he would be withdrawing from the 2024 election, followed shortly thereafter by a message indicating he was endorsing Vice President Kamala Harris to replace him.

Biden is apparently sick with COVID at the moment and is expected to speak on the matter sometime this week, once he's able to do so without coughing and rasping, but it's possible this news was released in this way, in writing rather than live and on camera, because it was just a truly difficult decision for someone who—according to his political career and bio, or the public-facing version of those things presented by his campaign, at least—tended to focus on sticking it out and persevering when faced with doubters, which in this case would have meant holding out and remaining the Democratic candidate, despite all the factors working against him.

This represents an historic shift in the election, though, as no US presidential candidate has ever dropped out this close to the vote, and he's the first to ever drop out after winning his party's primaries.

What happens now is thus up in the air, but the outline being shared by Democratic leaders as of the day I'm recording this seems to be that they'll hold some kind of lightning-fast election to see who replaces Biden on the ticket—possibly as part of an effort to avoid the mistake they made with Hillary Clinton, party higher-ups pushing too hard to favor one of their own who's turn it was, basically, over the candidates the voters actually wanted—though there's only about a month in which to figure out what that looks like, set it up, allow folks to decide to run and figure out campaign strategies, and then actually hold a vote; which is a lot, and that process could be chaotic, and it could result in fracturing within the Democratic Party, as folks might go negative against each other, despite guidelines telling them not to, and voters might not like it if their chosen person doesn't win, and they're then told to cast their lot in the actual presidential election with someone they voted against in this mini-, lightning-fast primary.

At the moment, current VP Harris seems to have the lion's share of her party's support: as of the day I'm recording this, 179 democratic leaders, out of 286 congresspeople and governors, have publicly endorsed her candidacy, alongside other big names in the party like the Clintons, and prominent former presidential candidates, like current transportation secretary Pete Buttigieg.

Right now, though, it's a big unknown who will ultimately take up the mantle of the Democratic party's presidential electee, and that makes things more difficult for the Democrats, because of those aforementioned potential issues with unity and clarity, but it also makes things trickier for the Trump campaign, as they can't be certain who they're running against, and some reports suggest the whole campaign has been optimized to compete against Biden, whereas now Trump is the oldest-ever presidential candidate for a major US political party, and many of the criticisms they were planning to level against Biden can be leveled against him, instead.

The assassination attempt on Trump is still a variable here, too, as it seems to have rallied Republicans around him in a big way, but whether or not that will translate to larger support beyond existing die-hards is a big question mark.

Important to note, too, is that while assassination attempts of presidents in the US are rare in modern history, thankfully, so we don't have tons of data as to how they influence election outcomes, the assumed consequence of this one, namely, supporting Trump's election bid, might not be the one we actually get.

The attempted killing of President Reagan in 1981 seems to have bumped his numbers about 8% in the months that followed, but earlier assassination attempts of former-President Teddy Roosevelt and George Wallace didn't win them their bids for the office, and the larger context of the election and would-be electee seem to matter more, statistically, than the attempt, itself, when it comes to polling changes.

Similarly, it may be that the Democrats are able to leverage Biden's decision to drop out, and the elevation of someone else from their party to the position of would-be president, could help drive a new, exciting narrative: that of a veteran statesman stepping down for the good of his party and the country, and new, younger blood taking up that mantle, fighting against another member of the old guard who himself would never consider stepping down.

It's also important to remember, though, as I mentioned earlier, that this is all happening months before the election, and there's a chance these won't be the most important and dramatic stories shaping the narrative by the time we reach November; these July surprises could be replaced by October surprises, which upend the table once more, leaving everything chaotic and confusing right before votes are cast.

So while these seem like very big deals right now, and they're dominating headlines, and will almost certainly be historically relevant, we may be in for a lot more planned and unplanned election-impacting divulgences and happenings in the months to come.

Show Notes

https://www.abc.net.au/news/2024-07-17/trump-shooting-3d-model-of-showground-rally-site/104104418

https://www.nytimes.com/2024/07/20/us/politics/trump-vance-michigan.html

https://www.nytimes.com/2024/07/20/us/politics/secret-service-trump-shooting.html

https://www.nytimes.com/2024/05/21/us/politics/trump-biden-fundraising.html

https://www.nytimes.com/2024/07/18/us/politics/elon-musk-trump.html

https://www.theguardian.com/us-news/article/2024/jul/17/co-founders-of-silicon-valley-venture-capital-firm-back-trump-presidential-bid

https://www.newyorker.com/science/medical-dispatch/doctors-are-increasingly-worried-about-biden

https://www.nytimes.com/2024/07/20/us/politics/trump-harris-strategy.html

https://www.nytimes.com/2024/07/21/us/politics/biden-harris-nomination.html

https://elections2024.thehill.com/projects/biden-drop-out/

https://www.nbcnews.com/politics/joe-biden/steve-kornacki-biden-pressure-party-can-get-wrong-rcna162783

https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F7982f2a0-42af-40a3-938e-8512c2ce8689_1338x755.png

https://www.nbcnews.com/politics/2024-election/democrats-are-gaming-post-biden-options-remains-insistent-remain-race-rcna162857

https://www.nytimes.com/2024/07/21/us/politics/biden-replace-harris.html

https://www.npr.org/2016/10/15/498085611/wikileaks-claims-to-release-hillary-clintons-goldman-sachs-transcripts

https://www.smithsonianmag.com/history/history-october-surprise-180960741/

https://theintercept.com/2016/10/07/excerpts-of-hillary-clintons-paid-speeches-to-goldman-sachs-finally-leaked/

https://en.wikipedia.org/wiki/October_surprise

https://www.nytimes.com/live/2024/07/22/us/biden-harris-trump-news-election

We also discuss Chinese business investment, EVs, and extreme weather events.

Recommended Book: Meet Me By the Fountain by Alexandra Lange

Transcript

The Great Green Wall—the one in China, not the one meant to span the Sahel region, straddling the upper portion of Africa—is officially called the Three-North Shelter Forest Program, and was initially implemented by the Chinese government in 1978.

This program is scheduled to be completed sometime mid-century, around 2050, and its purpose is to keep the Gobi Desert, which spans the lower portion of Mongolia and part of China's northern border, from expanding, which is something large deserts otherwise tend to do through a collection of natural, but often human-amplified processes called aeolian desertification.

The Gobi currently gobbles up about 1,400 square miles, which is around 3,600 square km, of Chinese grassland every year, as dust storms that roll through the area blow away topsoil that allows grasses and other plants to survive. And those storms become more powerful as the climate shifts, and as more grassland is turned to desert, giving the winds more leeway, fewer things keeping them from blowing hard and scooping up more soil, and as the roots of the plants on the fringes of the desert dry up, which usually keep the soil in place, become newly exposed to these influences, withering, their roots holding things together less tight than before, the process continuing to move ever outward.

Around a quarter of China's total landmass is already desert, and while there are a number of other causes of the country's desertification, including coastal erosion and the incursion of salty water into otherwise freshwater areas, this type, aeolian desertification, is one that they can tackle somewhat directly, if still at great expense and with muddled levels of success.

So the Great Green Wall of China is meant to stop that desertification, it is a potential means of tackling this issue, and it does this by keeping those winds from blowing away the topsoil, and over time is meant to help reclaim areas that have been turned into desert by this collection of processes.

And those in charge of this program do this by basically planting a huge number of trees, creating sturdier root systems to keep soil from blowing away, blocking the winds, and over time, the trees are meant to help new ecosystems grow in areas that have been previously diminished; holding everything together, soil-wise, but also adding nutrients to the ground as their leaves fall; those natural processes slowly reestablishing new layers of productive soil.

The area they're attempting to swathe with newly planted trees is huge, and by that 2050 end date, it's anticipated that they'll need to plant something like 88 million acres of forests across a belt of land that's about 3,000 miles wide and nearly 900 miles deep in some areas.

Local governments that have been largely tasked with making all this happen in their jurisdictions have claimed some successes in this ambition over the years, though one of the biggest criticisms leveled against those same governments is that they often spend a lot of time and money planting large swathes of trees, stabilizing some areas for a time, but then they fail to maintain those forests, so they more or less disappear within just a few years.

This can actually leave some of the afflicted areas worse off than they would have otherwise been, as some of these trees are essentially invasive species, not optimized for the local conditions, and they consume more water than is available, gobbling up resources other plants need to spring up around them, and they thus blight the areas they're meant to enrich, killing off the smaller plantlife, not supporting and expanding it, and then they die because they're undernourished, themselves.

While China plants more trees than the rest of the world, combined, due to this and similar projects, then, the system underpinning all of this planting isn't typically optimized for long-term success, and it often succumbs to the needs of local politicians, not the desired outcomes of the program, overall.

Also, in the cases where the forests are sustained longer-term, they often to create monocultures that are more akin to plantations than forests, which makes them more susceptible to disease—like the one that killed more than a billion poplar trees that were planted in Northwestern China in 2000, leading to a 20-year-or-so setback in the program—and that also makes them faster-growing, but less effective as carbon sinks than slower-growth versions of the same; they get big faster, but they don't absorb and store as much CO2 as other trees options would.

The forests they've planted that have sustained for more than a few years have periodically served as giant carbon sinks, though, pulling down as much as 5% of the country's total industrial CO2 emissions from 1978 to 2017, which is a pretty big deal for a country with such a huge volume of such emissions.

That said, it's still an open question as to whether this Great Green Wall will do what it's meant to do, by 2050 or ever, as while the concept is solid by some estimations, its implementation has been uneven at best, and it seems to be plagued by short-term thinking and metrics of success that don't line up with the stated purpose of the program.

What I'd like to talk about today is the implementation of what's being called, in some economic circles at least, a new Great Green Wall, this one around China and its exports, especially renewable energy exports, by the US and its allies, at a moment in which those sorts of exports are both highly desirable, and arguably, highly necessary.

—

The International Energy Agency recently said it expects to see about $2 trillion-worth of clean energy investments, globally, in 2024 alone.

This spending is partly the consequence of the $13 billion in damage China sustained from natural disasters in January to June of this year, and the something like $37.9 billion in damages the US suffered from just the 15 most damaging storms it saw during the same period, not inclusive of all the other ones.

Nations around the world are paying out gobs of money in the aftermath of increasingly brutal weather disasters, and that's on top of the slower-moving devastation that's being caused by the impacts of the climate shifting, messing with everything from crops to water cycles to where people can afford to live, because insurance companies are wholesale pulling out of some areas, and the cost of rebuilding over and over again in the same, previously habitable areas, just isn't worth it any more.

While there's still some political and ideological opposition to the concept of climate change, then, even some of the folks who are vehemently against the concept, publicly, are privately investing huge sums of money in infrastructure meant to help them survive and thrive in a future in which the climate has changed, and that includes things like sea walls and buildings that are cooler, passively, allowing more airflow and reflecting sunlight rather than absorbing it, but we're also seeing surges of investment in renewable energy sources, as they don't further contribute to the issue of climate change, but also because they come with a slew of advantages over fossil fuel based versions of the same; hence, that $2 trillion clean energy spending in 2024, compared to the estimated $1 trillion for fossil fuel-based energy sources the same year.

In May of 2024, US President Biden announced a near-future wave of tariff increases on a slew of Chinese goods, especially those related to the renewable energy transition.

For those aforementioned reasons, alongside a bunch of economic ones, as renewables are cheaper over time than fossil fuels, it's expected by essentially everyone that the planet will largely shift to renewable energy sources this century, with many governments hoping to make the transition entirely or almost entirely by 2050, with some nations that are moving more slowly, because of issues related to existing infrastructure, population, or poverty, arriving sometime in the 2070s or 2080s.

Thus, whomever owns the industries that will be relevant in that future—electric vehicles, batteries, solar panels, wind turbines, and so on—they will be something like the new oil giants of the latter-half of the century, and beyond, massively enriched because they're the ones that allow everyone to generate energy in this new reality.

Making those sorts of investments now, then, in terms of manufacturing capacity, but also the knowledge and trade secrets and brands and supply chains that get those products to the world, may yield incredible dividends for those willing to make them.

And at the moment, as of mid-2024, China is by far the king of the hill when it comes to pretty much every component of this transition, dominating the world's output of solar panels, EVs, wind turbine blades, batteries, and rare earth metals that are currently fundamental to the making of basically all of those things, while also owning some of the most valuable intellectual property, developing some of the most vital innovations, and controlling the most active, resilient, and competitive supply chains that make them available, globally.

The push by the Chinese government to own these spaces began in earnest in 2009, when it started providing subsidies to companies that were willing to invest in and start producing electric vehicles and accompanying technologies, and that successful effort has allowed the country to leapfrog other countries, like the US, which by some measures had a leading advantage up till that point because of other capacities and investments, and which has long served as the home bases of traditional car companies, and exciting new brands like Tesla and other startups that were beginning to gobble up global market share.

The Chinese government poured tens of billions of dollars into tax breaks and subsidies, though, and that helped stoke a highly competitive market that's led to the development of ultra-cheap electric vehicles, which are now outselling rivals in almost every market they've entered.

This effect is perhaps even more pronounced when we look at solar panels and batteries.

Chinese exports of these goods have easily outpaced and outcompeted rival producers overseas, and that's, combined with demand on the local, Chinese market, has pulled the price of solar panels from about $126 per watt in 1975 all the way down to about 26 cents per watt in 2022.

Over that period, these panels have become more efficient and effective, more resilient, and more useful—reshapable to fit more use-cases.

And the concomitant drop in lithium-ion battery prices, down about 97% since 1991 due to similar economic variables, has made solar even more useful and in demand, as solar setups are usually, these days, connected to battery backup systems that allow the panels to capture sunlight during the day and to stockpile that energy for later, when the sun isn't shining, ameliorating one of the biggest and most common concerns about solar power at the individual home scale, but also at the utility, city-sized scale; that it's an intermittent source. Attaching a battery, though, makes it a consistent source of power, that's also incredibly, and increasingly, inexpensive compared to other options offering similar levels of power.

That's been a major contributor to the expansion of solar installations, and recent innovations in the development of alternative, non-lithium-based batteries could do the same, as some novel battery types, like sodium-ion batteries, use a similar setup as their lithium counterparts, but without the issues associated with mining lithium, and with a better power-to-weight ratio, much lower fire risk, and lower theoretical expense, and flow batteries, made from iron, salt, and water, which are a lot worse than lithium ion batteries in essentially every practical regard, are just silly cheap and incredibly resilient, and thus could be built and deployed essentially everywhere—into the walls of homes and other buildings, into driveways and roads, everywhere—providing widespread, low-grade energy backup to whole cities at a very low cost.

So all of these products are already in high demand, and that demand is just expected to grow as these things continue to get better and cheaper.

China owns the majority of the best companies in these spaces, and makes the best, cheapest versions of these products.

Biden's recently announced tariff increases are an example of what're called protectionist monetary policy, the idea being to make competing products from elsewhere, like China, more expensive, by requiring folks pay another 25-100% of the product's price in tariffs, which in practice can double the price of these goods, which in turn makes locally produced goods, or those produced in allied countries, like in Europe, more competitive, despite not actually being competitive 1-on-1, without these policies in place.

The argument for this type of policy is that while on some level it could be beneficial to have these high quality, cheap Chinese solar panels and batteries flooding into the US market in the short-term, as it would help companies shift to clean energy sources faster than would otherwise be possible, in the long-term it would allow China to own those spaces, killing off all US-based competition in these industries, which would make the US economy, and by association all US businesses and people, and the US government, reliant on China, and a constant flow of such goods.

That would mean China would have a permanent whammy on the US because if they ever wanted to invade Taiwan, for instance, and keep the US off their back, they could just say, hey, let us do what we want to do, or we'll stop sending you solar panels and batteries, and we'll stop providing support for the ones you already have, which would devastate the US, because that would be equivalent to what happened when OPEC stopped exporting oil to the US in the 1970s—it was brutal, and we've only become more reliant on cheap, abundant energy in the decades since.

And that's on top of concerns that China, if it owned all the infrastructure related to these technologies top to bottom, which they kind of do, they would also conceivably have all sorts of potential backdoors into the US electrical grid, giving them the ability to shut things down or cause other sorts of havoc in the event of a conflict.

So while these are kind of just theoretical concerns at the moment, the risks associated of becoming reliant on one country, and one run by an authoritarian government that isn't the biggest fan of the US and its allies, controlling all aspects of a nations energy capacity in that way are substantial enough that the US government seems to think it's worth taking a hit in the short-term to avoid that potential future.

This situation in which short-term loss is necessary to avoid long-term energy dominance by China is arguably a problem of the US and other wealthy governments' own making, as again, China started wholeheartedly investing in these technologies back in 2009, and the US and Europe and other entities that are trying to play catch up, now, didn't make the same bet at the same scale, and that's a big part of why they're so far behind, scrambling to figure out how to catch up, and how to avoid having all their own solar and battery and EV companies killed off in the meantime.

Some of these governments are doing what they can, now, to pick up the pace, Biden's Inflation Reduction Act and Infrastructure Act, for instance, shoring up these sorts of businesses and seeding potential next-step technologies—but again, these and similar efforts are more than a decade behind the same in China, and the Chinese government often entangles itself more directly with Chinese businesses than Western governments are conformable attempting with their own versions of the same, so Chinese businesses have that additional entanglemented-related leg-up, as well.

There's an argument to be made, then, that while these tariffs—in the US and otherwise—are almost certainly at least a little bit performative, for political purposes, and at least a little bit reactive, in the sense that they attempt to reframe Chinese superiority within these spaces as unfair, rather than the winnings associated with making different, and ultimately better bets than other governments back in the day, there's an argument to be made that this is one of the only ways to prevent Chinese companies from killing off all their foreign competition, locking themselves in as the makers of solar panels and wind turbines and battery backup systems and electric vehicles, and more or less owning that component of the future, which—because of how fundamental electricity is already, and how much more fundamental it's becoming as more nations segue away from fossil fuels as primary energy sources—means they have a slew of adjacent industries in an economic headlock, as well. Arguably the whole of every economy on the planet.

Attempts to label one side good and pure and the other a malicious economic actor may be just set dressing, then, and the real story is how one side managed to lock-in a true advantage for themselves, while their competitors are scrambling at the 11th hour to figure out a way to dilute that advantage, and maybe grab something of the same for themselves.

Biden's attempt, here, and similar policies elsewhere—especially Europe, but we're seeing some protectionist ideas flutter to the surface in other nations, as well, most of them aimed specifically at China—is meant to give competitors time to catch up. And many of them use a stick approach, increasing the price of these goods on foreign markets, while others are carrots, offering subsidies for locally made panels and EVs, for instance, but only if their key components are made in friendly countries; so Chinese-made vehicles don't benefit from those subsidies, but those manufactured elsewhere often do.

Some businesses in tariffed areas are bypassing, or attempting to bypass these concerns by making licensing deals with, for instance, Chinese battery giant CATL, which makes the world's best and cheapest batteries, and which US-based Ford and Tesla have been dealing with in ways that they all claim still work, legally, under the new policy system.

Other countries, like Brazil and Chile in South America, and Hungary and Germany in Europe, have been making deals to attract Chinese foreign direct investment within their borders, basically having Chinese companies build offshoots in their territory so they can benefit from the additional job creation and local know-how, and in both cases the idea is to dodge these policies, still benefitting from relationships with Chinese companies but in ways that allow them to avoid the worst of those sticks, even if they don't always benefit from the carrots.

China, for its part, has been investing in reinforcing its global supply chains against these sorts of tariffs for years, especially following former US President Trump's decision to begin disentangling the US and China when he was in office, which caught a lot of businesses and governments off guard at the time.

In the years since, Chinese officials have been moving things around so that many of their supply chains end in third countries before headed to US and European markets, giving them backdoor access to those markets without suffering the full impact of those amplified tariffs.

This is just a riff on an existing strategy, as China did the same with their solar panels back in the industry's relatively early days of the 2010s, rerouting their panels through Southeast Asian countries like Vietnam and Cambodia to avoid tariffs, which is part of why something like 80% of the US's solar panels still come from these countries, today: they're Chinese panels, in most of the ways that matter, but those buying and selling them can claim otherwise for tariff purposes.

Now, China is developing the capacity to build their EVs in Mexico, before then shipping them to tariff-defended countries around the world, including the US to the north, and Chinese-mined and refined rare earths, which are necessary components for batteries and other such technologies, are being mined in and diverted through a variety of different countries, their origins visible but still obfuscated for legal, tariff-related purposes.

The US and its allies are beginning to insist that other trade partners implement similar tariffs against China when it comes to these sorts of products, but results have been hit and miss on that front so far, and it could be that, even though this sort of trade war stance has been ongoing for nearly a decade at this point, policies related to these increasingly vital goods will be what finally fractures the global economy into rival collections of supply chains and viable markets, smaller countries forced to choose between dealing with the US and other Western nations on one hand, and China and its allies on the other.

Of course, again, intensifying weather events and the changing climate is stressing a lot of infrastructure and causing a lot of damage, globally, which is making the shift to renewables an increasingly pressing need.

At some point that need could strain or break existing relationships, depending on who ends up wielding the most leverage in this regard, and that in turn could contribute to the ongoing and substantial realignment we're seeing in the global world order that has determined how things work, economically and legally and militarily, for the better part of the past century.

Show Notes

https://ourworldindata.org/grapher/solar-pv-prices

https://ourworldindata.org/battery-price-decline

https://www.technologyreview.com/2023/02/21/1068880/how-did-china-dominate-electric-cars-policy

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/us-trade-representative-katherine-tai-take-further-action-china-tariffs-after-releasing-statutory

https://www.phenomenalworld.org/analysis/great-green-wall/

https://archive.ph/MxOTZ

https://www.trade.gov/commerce-initiates-antidumping-and-countervailing-duty-investigations-crystalline-silicon

https://www.reuters.com/world/china/natural-disasters-china-caused-13-bln-economic-loss-january-june-2024-07-12/

https://knowablemagazine.org/content/article/society/2023/abandon-idea-great-green-walls

https://www.wsj.com/world/china/china-us-fusion-race-4452d3be

https://asiatimes.com/2024/07/chinas-subsidies-create-not-destroy-value/

https://www.washingtonpost.com/world/2024/07/09/china-floods-climate-change/

https://www.reuters.com/sustainability/climate-energy/iea-expects-global-clean-energy-investment-hit-2-trillion-2024-2024-06-06/

https://en.wikipedia.org/wiki/Great_Green_Wall_(China)

https://phys.org/news/2023-10-china-great-green-wall-boosts.html

https://earth.org/what-is-the-great-green-wall-in-china/

We also discuss Christian Nationalism, France’s surprising election outcome, and authoritarianism.

Recommended Book: Filterworld by Kyle Chayka

Transcript

The world is awash with interesting elections this year—there are a record number of people participating in democratic activities, from Indonesia to the EU's 27 governments—and we've just seen the UK's citizenry topple their long-governing Conservative Party in favor their Labour Party, while in France, the far-right party, which was previously relegated to the outskirts, has taken a huge number of parliamentary seats—not dominating the government as some had anticipated, but grabbing a convincing third place, after the first place far-left party, and the current government's second-place, none of which has a majority, which will likely make it difficult for anyone to get anything done in the country until some of these groups figure out a way to work together with each other, which isn't something they've had to do in recent history.

The US election, which arrives later this year, in November, is being especially closely watched by pretty much everyone, even those in far-flung, barely connected to the US, in a practical sense, portions of the world, because the stakes are very high—the US remains the most powerful nation on the planet according to most metrics, and it sets the tone for a lot of geopolitical happenings, as a consequence. It's also being watched because the visions of the two leading contenders, and their respective parties, couldn't be more different.

We've also seen a recent wave of pushback against current President Biden, who's 81 years old, currently, and who has been showcasing some of the consequences of age in a very public manner in recent weeks: perhaps most notably during a debate with his opponent, former President Trump, in late June.

Biden seemed visibly not well during that debate, stumbled and mumbled and lost his train of thought near-constantly, and this brought to the forefront a till-then simmering discontent with his advanced years, and all the potential ramifications of those advanced years, when it comes to running a country like the US, from supporters within his own party.

At the moment, as of the day I'm recording this at least, Biden is saying he'll remain the Democratic candidate and that those murmurings will die down, because that was just a bad night, and he's committed to regaining everyone's confidence.

But there are folks within his loyalty base, including those on the editorial board of the New York Times, and some of his most prominent campaign funders, who have called for him to step aside to make way for someone younger who can continue to carry the torch for the things he's done while in office.

It's time to allow someone like his VP, Kamala Harris, or possibly someone else from within the party, though Harris seems like the obvious choice for many reasons right now, to step in while there's still time to shift the narrative and get people used to the idea of someone else leading the ticket—that's the dominant argument right now, at least.

It's anyone's guess as to whether that'll happen—some prediction markets indicate the odds are something like 33-50% that the Dems will oust Biden somehow, or that he'll step aside willingly, but that would be a significant and historical decision, and it's likely that if it happens, up until the very last moment he'll continue to say he's running, because there would be no upside to doing otherwise.

Interestingly, though, while Biden-related drama has dominated a lot of headlines and airwaves in recent weeks, Trump has had his own, currently smaller, but possibly growing drama to deal with, this one related to a manifesto of sorts written by a collection of some of his most powerful and influential backers.

And that's what I'd like to talk about today: the Project 2025 plan, what's in it, and why Trump has been going out of his way to distance himself from it.

—

Donald Trump's official proposal package—the jumble of policy ideas most campaigns put together and publish as a sort of "here's what we believe and what we'd like to do" document that they can point while running for office—is called Agenda 47, and as tends to be the case with these sorts of documents it contains all sorts of ideas about all sorts of things, including but not limited to implementing universal tariffs on all imported foreign products while lowering taxes on all American people and businesses, cutting federal funding for any school or educational program that teaches Critical Race Theory, increasing the President's ability to fire whomever they want, and negotiating an end to Russia's invasion of Ukraine within the first 24 hours of Trump stepping into office.

Some of these policies were met with general, widespread favor, like implementing term limits on Congresspeople and keeping federal employees from taking jobs with the companies they regulated while working for the government, both of which could tamp down on various sorts of corruption and regulatory capture by business entities.

Others were met with general happiness with folks on the right side of the US political spectrum, like cutting federal expenses, killing off policies that allow gender affirming care, and labeling news entities that don't toe the political line, saying anything that goes against what Trump's people say, basically, as misinformation or disinformation.

Still other policies have been criticized even by some people on the right because they basically seem to serve Trump's desires, but don't necessarily align with the broader movement's ambitions—giving Trump the ability to investigate and potentially imprison his political enemies and folks in the press who say things he doesn't like, for instance.

Agenda 47 was getting a lot of promotion from Trump and his campaign up to the early months of 2023, when they were still releasing video clips of Trump talking about specific aspects of these policies, but following that last push, they seemed to step away from it, apparently deciding it was better to keep their specific policy ideas vague—as otherwise their opponents, and the press, could call them out on specifics, and in some cases because their own people wouldn't like something they were proposing, and keeping things fuzzy allowed them to talk around those ideas in the moment: it's much more difficult to criticize and critique if a campaign doesn't say anything concrete, and seems like they're willing to bend on just about everything they do say, depending on who they're talking to.

That pivot toward a blurrier vision of the future of the country seems to be part of why Trump's campaign has been trying to distance itself from another policy document—this one called Project 2025, and penned by folks working with the conservative think-tank, the Heritage Foundation.

Trump even went so far as to say, unprompted, that he didn't know anything about it, the former President posting on the Twitter-clone he partially owns, Truth Social, "I know nothing about Project 2025. I have no idea who is behind it. I disagree with some of the things they're saying and some of the things they're saying are absolutely ridiculous and abysmal. Anything they do, I wish them luck, but I have nothing to do with them."

This statement—as has been pointed out by numerous in-the-know political analysts—is riddled with let's call them fabrications.

More than 200 of Trump's former officials and current campaign employees and allies have worked on elements of Project 2025, and the Heritage Foundation, and many of the people who run or are otherwise aligned with it, are his biggest donors: he knows these people, hangs out with them, relies upon them for campaign funds and to rally his base, and many of his policies from when he was in office, including some of his statements and other specific details, were proposed and even written by folks at the Heritage Foundation.

So while there's a chance that Trump genuinely doesn't know anything about this document or the people who wrote it, that would imply he's either so far disconnected from his campaign and the administration he ran while in office that he can barely be said to have been in office at all, or he's so far gone mentally that he actually can't remember, in which case his state of mind would arguably be the bigger scandal here.

Assuming that he does know about this document and who's pushing it, though, it makes sense that he might want to distance himself from it, in part because of that aforementioned strategy of keeping things blurry enough that everything's deniable, and in part because of what it is: 900-plus pages of plans for installing what most independent analysts are calling some version of an authoritarian regime, or a Christian Nationalist kingdom, in the United States.

It proposes doing this rapidly, providing instructions for how Trump could whip into office following a 2024 election victory, and within 180 days or so basically restructure the whole of the government so that he would wield near-absolute power, do away with the systems of checks and balances that could prevent him from doing whatever he wants, and would thus be able to implement the Heritage Foundation's far-right, fundamentalist Christian-oriented plans.

The document doesn't mention Trump specifically, because the Heritage Foundation is technically a non-profit, and thus can't be directly, demonstrably involved in supporting one political party or another, lest it lose that tax-free status.

And in the eyes of the folks writing these policies—many of whom have been involved in past administrations, and who thus have a solid understanding of how the government works and how to get things done within that system, this isn't an instruction manual for an overthrow or gutting of the democratic system, it's a battle plan for good, Christian soldiers who want to see their country revert to its (in their minds) Christian roots, after generations of straying from path.

To most non-partisan, outside analysts though—folks who know what they're looking at with this sort of thing—Project 2025 amounts to a guide, specifically aimed at Trump and his people, for how they can enter the White House, post electoral victory, strip the system of any means it has of fighting him and his whims, and systematically wipe out all opposition, including those within the government, but also political opposition, journalists, and other outside entities that typically serve as a check on those in power.

And they've done this, seemingly at least, because they see Trump as their way into government.

Christian Nationalist political candidates, with rare exceptions, don't win many elections, and when they do, they're often successfully challenged in the next election. This approach to governance would allow them to bypass the democratic system and take control of the reins of government, and that, in turn, would allow them to work their version of fundamentalist Christianity into US federal law; to reshape law in their preferred image.

Again, this is a more than 900-page document, so there are a large number of policy proposals and plans, but they almost all orient around implementing fundamentalist Christian ideology as law, including banning all types and methods of abortion and contraception, criminalizing the production and consumption of pornography, removing protections for groups that have been traditionally discriminated against, including people of color and folks from the LGBTQ+ community, and removing the separation of church and state, making the US, formally and in a legally binding and enforceable way, a Christian nation.

These plans would allow Trump's administration to essentially get rid of the so-called "administrative state," do away with a slew of government bodies and agencies, including the Department of Education, while also allowing the Republican Party to take full, partisan control of the Department of Justice, the FBI, the FCC and FTC, and the Department of Commerce by firing everyone and replacing the whole of these agencies with people hired based on their ability to pass ideology and loyalty tests, and they would do away with the Department of Homeland Security and other bodies that have been keeping an eye on right-wing extremist militias and other groups that the Heritage Foundation considers to be freedom fighters, not terrorists.

They would use the military to round up undocumented immigrants, placing them in interment camps, while also having soldiers act as police, to keep folks from protesting as their plans are implemented, the government gutted and public servants replaced by people who are Trump and Heritage loyalists; those soldiers instructed to use violence to keep protests from arising and spreading.

The National Guard in red states, those that consistently vote Republican, would be deputized as immigration enforcement officers and deployed to blue states, those that consistently vote Democrat.

These policies advise doing away with renewable energy programs and projects, protecting the fossil fuel industry indefinitely, and incentivizing the production of more oil and gas and coal, while making the production of more wind, solar, and similar types of energy nearly impossible.

They want to restart nuclear weapons testing programs, build a lot more nukes, and only extend the US nuclear umbrella, which is the country's promise to basically use nukes to protect sovereign, allied nations from invasion and being nuked, to NATO countries, and to only respect the US's NATO responsibilities for NATO nations that spend at least 2% of their GDP on their military.

There are guidelines for how to privatize essentially everything, and for removing the government's power to influence or regulate the free market almost entirely. It would do away with most social programs, and taxes would be reformed to dramatically reduce those applied to businesses and wealthy people, while also reforming how congress works so that increasing taxes in any amount and for any reason is a lot more difficult, in the future, creating what they call a "wall of protection" for businesses and the wealthy to whom these reductions would apply.

Again, that's just a brief cross-section of what this document calls for, but I think it gets the general point across.

And the response to this document has been telling, as some sub-section of the country has been positively thrilled by it, considering most of its tenets to be obvious and wonderful, and seeing the blitzkrieg-like implementation of these policies, whipping into Washington DC alongside Trump, passing as many of these things as possible within mere weeks of his inauguration, to be one of the most beneficial things that could happen to the US—a country that they, almost universally, see as a failing, flailing state that has wandered too far to the left, been taken over by the secular and woke, and which has thus lost what made it great to begin with.

The opposite response is that of concern and even horror that something like this is being considered, and that it's being so brazenly and publicly proposed by some of the most politically powerful people in the country.

When Trump first came into office, he was seemingly unprepared for the task, and a significant portion of his time in the White House was spent just getting his government set up—something that by some estimates never really, fully happened.

And part of the idea here is that the Heritage Foundation is offering to do all that work for him, having handpicked and trained people for this task for years, giving him a pop-up government from day one, that would, in practice, make him something closer to a monarch than a President, and all he has to do is say yes, and allow them to implement their vision for America through his administration.

In doing so, in the tradeoff, he would  be empowered to take revenge on the people he believes have wronged him: and there's apparently a list of such people—his former Chief Strategist Steve Bannon recently said, on a podcast, that the former President is "dead serious" about getting revenge on his enemies, especially political opponents and members of the media he feels have mistreated him.

Former US National Security Council Adviser under Trump, Kash Patel, on the same podcast episode where Bannon made that threat, said “We will go out and find the conspirators—not just in government, but in the media. Yes, we’re going to come after the people in the media who lied about American citizens, who helped Joe Biden rig presidential elections.”

It's worth mentioning here, too, that the leader of the Heritage Foundation, on Steve Bannon's podcast, the War Room, recently said that the Supreme Court's ruling on presidential immunity, which is broadly seen as favorable to Trump's position in the various court cases he faces, will reinforce a "second American Revolution," which he says will "remain bloodless, if the left allows it to be."

The unconcealed implication being that the right, under Trump's banner and with the support of Heritage and similar groups, is launching a revolution, intending to remake the American government in their image, and if the left, their political opponents, stand in their way at the ballot box, keeping them from doing this peacefully, physical violence may be necessary.

The ruling he was alluding to, which said the US president couldn't be prosecuted for things done while in office, while working on presidential things, would allow Trump, if he returns to office, to get away with just about anything, as long as he could say he was doing it as part of his job.

So the argument is that these Project 2025 plans could be implemented relatively easily, as long as Trump is willing to do a bunch of illegal stuff, which wouldn't be illegal because he would be president, and could systematically strip the government of its ability to fight back—its authoritarian immune system—all while enjoying that legal protection.

The degree to which this will matter, in the immediate future, at least, comes down to who wins at the ballot box in November, though there's a good chance Heritage will continue to push this agenda in the future, as well, either way.

Leading up to the election, Trump may successfully convince those who don't like these policies and the movement behind them that it's nothing to do with him, and that he'll be doing his own thing if and when he returns to office.

The heat may also stay on Biden, or whomever replaces him, if someone ultimately does, stepping in for him on the Democrat's ticket.

In that latter case, the Project 2025 people have said they will hold up the election and nomination process if Biden decides to step down, flooding the zone with lawsuits and other legal challenges in order to keep the Democrats from focusing on the election and the issues they'd like to keep at the forefront of the conversation. So there's a chance this group could influence the election from that angle, as well.

It's possible, of course, that Trump will genuinely push back against this group, rather than just seeming to, as Heritage, in many ways, would become a second power loci within the government, challenging his own power even as they position him as a figurehead for their activities.

They would reinforce his position, grant him new powers, and thus allow him to pursue whatever agenda he likes—include a revenge tour, if he so chooses—and that could prove to be too compelling to ignore, but he could also resent their support, realizing that they hold a lot of cards he doesn't hold, and that could keep him from fully embracing their vision and offerings, maybe giving them a little leeway, but otherwise doing his own thing.

Again, at the moment, Trump seems to be distancing himself from a group that's pitching broadly unpopular policies that the majority of the US electorate would not support, and there's a chance he'll continue to distance right up to the moment he has the presidency again, at which point he could allow Heritage to partially or fully move forward with their plans.

All of this is very new, though, and in addition to it not being clear that Heritage's theories on how to change the government would work, it's also not clear Project 2025 would be implementable, even most of it, without a majority in both the House and Senate.

So this could turn out to be an ambitious dream and nothing more than that if a lot of things don't go really well for the Republicans in November; but it could also end up sparking a huge, anti- small-d democratic movement, as well, if enough cards turn up their way, in the coming months.

Show Notes

https://en.wikipedia.org/wiki/Agenda_47

https://en.wikipedia.org/wiki/Project_2025

https://en.wikipedia.org/wiki/The_Heritage_Foundation

https://www.axios.com/2024/07/05/trump-project-2025-heritage-foundation

https://www.washingtonpost.com/politics/2024/06/18/trump-has-unveiled-an-agenda-his-own-he-just-doesnt-mention-it-much/

https://www.nytimes.com/2024/01/21/magazine/heritage-foundation-kevin-roberts.html

https://www.nbcnews.com/politics/2024-election/donations-surged-groups-linked-conservative-project-2025-rcna125638

https://www.theguardian.com/us-news/article/2024/may/26/what-is-project-2025-trump

https://apnews.com/article/america-first-trump-biden-russia-ukraine-policy-54080728c6e549c8312c4d71150480ba

https://thehill.com/homenews/4344065-bannon-patel-trump-revenge-on-media/

https://newrepublic.com/post/182797/steve-bannon-exposes-trump-revenge-list

https://www.theguardian.com/us-news/article/2024/jul/05/donald-trump-project-2025

https://www.washingtonpost.com/politics/2024/07/05/trump-project-2025-disavowal/

https://www.washingtonpost.com/politics/2024/07/03/heritage-foundation-trump-revolution/

https://www.snopes.com/news/2024/07/03/project-2025-trump-us-government/

https://www.politico.com/news/magazine/2023/09/19/project-2025-trump-reagan-00115811

https://www.reuters.com/world/us/trump-seeks-disavow-project-2025-despite-ties-conservative-group-2024-07-05/

https://thehill.com/homenews/campaign/4757210-heritage-blowback-bloodless-revolution/

https://thehill.com/homenews/campaign/4753439-heritage-leader-second-american-revolution/

https://x.com/alaynatreene/status/1809250958251077983

https://thebulletin.org/2024/07/trump-has-a-strategic-plan-for-the-country-gearing-up-for-nuclear-war/

https://archive.ph/liWg9

We also discuss the Chevron Doctrine, government agencies, and the administrative state.

Recommended Book: A City on Mars by Kelly and Zach Weinersmith

Transcript

The Supreme Court's 1803 Marbury v. Madison decision was pivotal to US legal theory and practice because it established the concept of judicial review, which essentially said that US courts could assess laws passed through the typical legislative system, through Congress, and, if they determined those laws were unconstitutional, strike them down.

This was a huge rewiring of the US government, as it gave a substantial amount of new power to the court system, and it provided a new check on the legislative system that recentered the Constitution as the source of all law; if the judges decided new laws didn't line up with that original Constitutional intent, according to their interpretation of said intent, the new laws would be a no-go.

This is true of statutes that declare policy, as well, which are generally part of the law-making process, and also help shape regulations, guidelines, and other things of that nature—the fuzzier stuff that goes on to effect things, even when some of those fuzzy statements and implications aren't formalized in law, yet.

So any and all of this stuff that Congress decides on could, at some point, be looked into by the US court system, and that system can say, nope, that doesn't line up with what's in the Constitution—it's not Constitutional—and that means the Constitution, following Marbury v. Madison, became a lot more of a legal reality in the country, rather than just a collection of principles and ideals, which is how some legislators and legal scholars thought of it before this ruling.

Within this same entwined governmental/legal system, Congress sometimes delegates policy decision-making powers to US agencies, allowing them to make legal decisions in cases where Congress passes a law that it is some way ambiguous—saying that there need to be emissions standards on cars, for instance, but leaving the task of coming up with those standards to the Environmental Protection Agency, the EPA.

This delegation ability was reinforced by a 1984 Supreme Court decision, Chevron v. The Natural Resources Defense Council, today usually referred to as "Chevron" or the "Chevron decision," the justices unanimously deciding against the DC judicial circuit's ability to set government policy, reminding those justices that judges are unelected officials and thus shouldn't be making law, and that when Congress isn't specific enough in their lawmaking, this can represent an implicit desire for the agencies in charge of implementing the relevant laws in the real world to figure out the specifics for themselves; after all, they would probably know better how to do so than a bunch of lawmakers who are not experts on the subject matter in question.

That case also limited the US court system's ability to review an agency's interpretation of the law, which in that specific case meant that judges shouldn't have the right to look into how US agencies decide to do things, willy-nilly, just because they don't like the outcome.

Instead, they have to adhere to what has become known as the Chevron Doctrine or Chevron Deference, which says, first, the judges have to decide if Congress was clear on the matter—and if so, they go with what Congress said, no questions asked. If Congress was unclear on something, though, then they have to decide if the agency in charge of executing Congress' decision has made reasonable and permissible decisions on that implementation; and if the answer is yes in both cases, the court must accept the agency's decision on the matter.

If not, though, then the court can step in and make some kind of judgement; but it's a fairly ponderous process to get to that point, because of this doctrine, and they will almost always defer to the decision made by the relevant agency, because of that 1980s-era court case.

The Chevron decision is generally considered to be one of the most formative in modern case-law because it empowered US agencies with all sorts of responsibilities and rights they wouldn't have otherwise enjoyed.

The Chevron case, itself, was predicated on a disagreement about the 1963 Clean Air Act, which failed to specifically define what "source" meant, in terms of emitted pollutants; Congress didn't specify. And this ambiguity led to a clarification in 1981, by then-President Reagan's EPA, that allowed companies to bypass the Act's procedures by building-out new, highly polluting components to their plants and factories, as long as they also modified other aspects of those plants and factories in such a way that emissions were reduced.

An environmentalist advocacy group challenged this new definition, which amounted to a loophole that allowed companies to get around otherwise sterner emissions rules, and that's how we got the Chevron court case.

What I'd like to talk about today is a recent, successful challenge to that Chevron ruling, and what it might mean for the powerful regulatory state that emerged in the US in the wake of that decision.

—

On June 28, 2024, the Supreme Court announced their decision in a case that was originally argued in January of the same year—Loper Bright Enterprises v. Raimondo, along with a companion case on a connected matter, Relentless Inc v. Department of Commerce—the Court's decision being that the Chevron deference, which says agencies can define fuzziness left in law by Congress, conflicts with the Administrative Procedure Act, or APA, which itself says the US court system has oversight powers when it comes to all agency actions.

The long and short of this decision—which was made along what are generally considered to be ideological lines within the court, the more conservative 6 justices ruling against the Chevron doctrine, the 3 more liberal justices ruling to keeping it—is that federal agencies will now have far less wiggle-room and legally backed authority when it comes to the laws and policies they enforce.

And while the court also said this doesn't immediately strip prior judgements of their impact and consequences, it does mean—according to most experts who have responded to and analyzed to this ruling, at least—that we're likely to see a wave of lawsuits against agencies that have done things or refined regulations in a way that individuals or companies didn't like, which could amount to the same thing within the next couple of years: many such regulations being done away with, those agencies becoming husks of their former selves because their capabilities will be pruned back significantly.

This is being seen as a victory by mostly conservative activists and lawmakers who are keen to see the regulatory components of the US government shrunk, their powers and funding depleted as a much as possible, doing away with what they sometimes derisively call the "administrative state," which they consider to be a limit on the free market and in some cases their own powers within politics and the economy.

And among many other regulations, thousands of them, by some estimates, this could impact the government's ability to regulate environmental pollution, safety measures for cars and airplanes, workers' rights and health considerations, and even somewhat more wonky things like net neutrality and the legality or illegality of very specific aspects of the e-cigarette and crypto industries.

For decades, these regulations have been to greater and lesser degrees interpreted—in their specifics, at least—by regulatory bodies like the FDA, the FCC, the EPA, and other such agencies. Congress has mapped out the broad strokes, leaving the details for the relevant agencies to sort out, because they knew this ruling would give those agencies the power to do so.

So those laws passed in this way by a Congress that knew this was how things worked, legally, will suddenly find themselves incredibly challengeable, the legal basis of their specifics now based on flimsy justifications that the court no longer supports.

These policies won't immediately disappear, then, but all of them, in their details and as a whole, are now more vulnerable to lawsuits from anyone who wants to bring them, and those who bring them will likely win, because the court system has taken away the protections those agency powers formerly leaned-upon.

Consequently, there are fresh concerns from folks working in environmental spaces, those attempting to incentivize the deployment of renewable energy infrastructure, and those who are trying to protect workers' rights, that they could soon be tied up in endless court cases, many aspects of the legal understanding they've worked in accordance with other the past four decades pulled out from under them—their capacity to enforce anything not spelled out in detail by congress, which is very little because congress has gotten used to leaving that to them, in many cases, dramatically reduced.

There are parallel concerns that standards that have made the US market relatively trustworthy, compared to other global marketplaces, at least, in terms of the safety of foods and medicines and all sorts of other products, might be diminished, leading to a bunch of new safety challenges, but also a demotion of American goods on the global market, because fewer sturdy regulations, at least in the short-term, could lead to more rip-offs and fakes, lower-quality items subbed in for higher-quality ones, and a bunch of risky, and even dangerous new products and services hitting the market, because these agencies are suddenly less empowered to check them out before approving them.

One of the larger concerns, especially amongst folks on the political left in the US, is the impact this could have on health care.

The Affordable Care Act, which provides reduced-cost insurance plans to folks who make less than a set amount of income, is enabled by a huge jumble of regulations that determine how things are paid for, who can and must participate—citizens and hospitals and pharmaceutical companies and so on—and how everything fits together, ensuring Medicare, Medicaid, and the ACA can continue to function, despite relying upon often arcane methods and cost overruns.

The US Treasury and IRS, too, rely heavily on regulatory powers to draft new rules and enforce the tax code, which allows for the management of money throughout government agencies and other bodies, but which also helps the government develop and deploy sticks and carrots throughout its portfolio of laws, acts, and policy-based nudges.

The deployment of clean energy tax credits and incentives to help push solar and wind power development, and to encourage the construction of chip-making facilities on US soil, for instance, are all reliant on the ability to divvy out those credits, to decide how big they should be, and to determine who should get them, based on what criteria.

The general outline of most of these programs is still on solid ground, because Congress decides that sort of thing, even today, but so many specific details and numbers and implementation strategies are left to agencies, and though it's possible to shore those up, Congress stepping in to vote on and pass new details into law, it will take time to do that, and especially in highly competitive spaces like chip-making, and arguably time-sensitive spaces like those related to healthcare and climate change, a gap in implementation and legality could be incredibly meaningful, and even devastating to some of these projects and their outcomes.

In addition to having grown accustomed to being able to leave those sorts of details to agencies, which has impacted how they make law, the US Congress, too, has become highly polarized and at times somewhat stagnant, moving sluggishly on controversial areas, in particular, one side or the other bogging down even debate about things they don't like, rather than working with the other side to find a middle-ground they can agree upon.

So while many lawmakers may want to move fast to fill in some of these gaps that have suddenly appeared across US law and capability, that desire may be held up by the reality of US politics at the moment, and systems that are often weighed-down by the people who operate them, and the systems meant to keep them ticking along, but which sometimes do the opposite.

One way of looking at all this—through the lens of those who generally support this decision—is that this ruling could force Congress to get more specific in its laws, and in the meantime it could reduce the amount of bloat that can accumulate within any regulatory system; some of the sluggishness in getting new products to market, building-out new infrastructure, and passing new laws could actually be reduced, streamlining processes that currently, arguably, take too long, cost too much, and provide little benefit, all because these agencies have developed too many hoops to jump through and piles of paperwork to fill out.

Another way of looking at it, from the perspective of those who generally decry this outcome, is that this will lead to a huge shock, bordering on chaos, throughout the US legal and governmental system, will do away with all sorts of government supports, leaving us with fewer protections and filters that help keep people safe, and which keep businesses from abusing their positions of power, and that it puts more power in the hands of judges, who—especially at the very top, within the Supreme Court, which made this decision—are usually put into their positions by whomever happens to be in power, occupying the presidency, when one of their predecessors retires or dies. Which is why there's such a huge 6 to 3 imbalance between conservative and liberal justices in the Supreme Court at the moment, that imbalance unlikely to go away any time soon, because those unelected positions are for life; though Republicans during the Trump administration also made it a priority to fill lower rungs of the justice system with ideological fellow travelers, so the justice system in the US, broadly, is more conservative than it has historically been, at this particular moment.

There's a chance, then, that this ruling could lead to a period of reduced regulatory bloat, which could help some industries and governments cruise forward with things they've long wanted to do, but have been unable to make progress on because of all the bureaucracy standing between them and their intended goals. There's also a chance this could shake the foundations of some of the agencies that have been essentially captured by the industries they're meant to regulate, messing with those relationships in a way that's arguably better for citizens and institutions, and worse for the businesses that lobbied their way into informal regulatory power over themselves.

On the other hand, it could also be that progress on much of anything will be almost impossible until these laws can be revisited and made more specific at the Congressional level, because there will be so many court challenges to everything, from all sides, that the US justice system will have a full dance card for years just sorting out the basics, and everyone will be too afraid to proceed with anything in the meantime, lest they make investments that ultimately turn out to be illegal.

Notably, the Supreme Court decision in this case did say that Congress could still delegate decision-making powers to federal agencies: they just have to specifically say that's what they're doing, rather than leaving things fuzzy and assuming that will be implied. So we may also see a brief period of relative chaos, followed by basically more of the same, everything going back to how it is today because Congress makes sure to include a line of text in every law they pass that specifies that delegatory intent.

One more major consideration here is that the court system, and especially the Supreme Court up at the top of the pecking order, is only so big, and already often moves at a relatively sluggish pace. 

That means it could have trouble addressing all the little issues Congress fails to address, regulatorily, and that it will likely take the court system a while to weed through all the cases that are expected to pop up in the wake of this decision.

And that means we could see a somewhat slowed-down implementation of this new, anticipated reality—whichever version we get—which could also mean Congress, and the other facets of the government that will have to change the way they operate, has more time to get their ducks in a row, maybe reducing the impact of the shock the legal system is expected to experience over the next few years as a result of this decision.

Show Notes

https://en.wikipedia.org/wiki/Loper_Bright_Enterprises_v._Raimondo

https://en.wikipedia.org/wiki/Administrative_Procedure_Act

https://apnews.com/article/supreme-court-chevron-regulations-environment-4ae73d5a79cabadff4da8f7e16669929

https://www.nytimes.com/2024/06/28/us/politics/chevron-deference-decision-meaning.html

https://www.washingtonpost.com/climate-environment/2024/06/28/supreme-court-chevron-environmental-rules/

https://thehill.com/homenews/ap/ap-health/ap-what-it-means-for-the-supreme-court-to-throw-out-chevron-decision-undercutting-federal-regulators/

https://www.axios.com/2024/06/28/supreme-court-chevron-doctrine-ruling

https://www.theverge.com/2024/6/28/24180118/supreme-court-chevron-deference-decision-opinion

https://www.theverge.com/24188365/chevron-scotus-net-neutrality-dmca-visa-fcc-ftc-epa

https://www.nytimes.com/2022/06/19/climate/supreme-court-climate-epa.html

https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf

https://en.wikipedia.org/wiki/Marbury_v._Madison

https://en.wikipedia.org/wiki/Chevron_U.S.A.,_Inc._v._Natural_Resources_Defense_Council,_Inc.

We also discuss BRICS, North Korea, and the post-WWII global world order.

Recommended Book: Supercommunicators by Charles Duhigg

Transcript

The Shanghai Cooperation Organization, or SCO, is a defense and economic alliance that was started by China and Russia back in 2001, and which has since expanded to become the largest regional organization in the world in terms of both land area and population, encompassing something like 80% of Eurasia, and 40% of the global population, as of 2020.

The SCO also boasts about 20% of global GDP between its member nations, which originally included the governments of its precursor regional alliance, the Shanghai Five, which formed back in 1996: China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan.

With the evolution of that group into the SCO, though, Uzbekistan joined the club, and in 2017 it allowed India and Pakistan in, as well. Iran joined in 2023, and the list of observer and dialogue partner nations is pretty big, including Armenia, Azerbaijan, Bahrain, Belarus, Cambodia, Egypt, Kuwait, the Maldives, Mongolia, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Turkey, and the UAE.

The original purpose of the Shanghai Five, which was inherited by the SCO, was to increase trust and diplomatic relationships between these nations, which otherwise have a lot of potential enemies surrounding them on all sides—this is why the advice to never fight a land war in Asia is so well-taken: there's just a lot of land and a lot of borders and pretty much everyone who's tried, with few exceptions, has found themselves depleted by the effort.

Thus, while there are other components to the SCO, member countries' agreement to respect each others' borders, including opposition to intervention in other countries—invading them, messing with their politics, criticizing their approach to human rights, etc—the sovereignty issue is the big one here, with making sure that everyone involved is diplomatically tied-up with everyone else in a close second, so member states can focus on the borders that present the most risk, and invest less attention and resources on the borders they share with their fellow members.

That said, the SCO also includes mechanisms that allow member nations to work together on big projects, like transportation infrastructure that passes through or benefits more than one country, and fighting local terrorist organizations. It also allows them to integrate some aspects of their monetary and banking infrastructure, among other ties, so there's an economic component to these relationships.

Another intergovernmental organization that likewise encompasses a significant chunk of the global population, landmass, and economic activity is BRICS, which is an acronym that was originally coined to gesture at the economic potential of the then-burgeoning economies of Brazil, Russia, India, China, and South Africa, but which in recent years has expanded to also include Iran, Egypt, Ethiopia, and the UAE.

BRICS nations hold about 30% of the world's territory, 45% of its population, and pull in about 33% of global GDP, based on purchasing power parity.

And BRICS has long served as a sort of counterweight to global institutions that often seem to favor the world's wealthiest and most powerful nations, many of which are Western nations, like those of North America and Europe.

So while the G7's expanded iteration, the G20, brings nations like Brazil, India, and Indonesia into the conversation, the majority of the power in such institutions—and this includes institutions like the UN, because of who holds vetoes and soft power influence within those organizations—the majority of the power is still typically held by the world's currently most influential and wealthy governments.

And BRICS, from the beginning, included those nations that were assumed to become the most powerful, or at least equally powerful nations, by many metrics, in ten or twenty or thirty years, based on demographics, economic growth, and so on.

Both of these groupings, then, are attempts to lash together the governments of nations that are on favorable growth trajectories, or otherwise in interesting, upward-moving positions by various metrics, or which are located in areas that would benefit from some kind of unity, but which aren't always given the respect they believe they deserve within other globe-straddling organizations; in some cases because they're simply not there yet, in others because their governments are a bit more authoritarian, while entities like the UN, while including everyone, tend to favor democracies.

What I'd like to talk about today is another loose grouping of nations that seems to be forming, and which, while it doesn't have an official designation or even membership roster yet, is becoming increasingly well-defined, collaborative, and active.

—

The geopolitical, military, and news analysis community has been struggling, over the past handful of years in particular, to come up with a monicker for a loosely defined, but increasingly impactful cluster of nations that are oriented, in part, around disrupting the current global status quo, including but not limited to the rule of law and establishment through which international things are typically handled that arose in the wake of WWII.

Following that conflict, the US and the Soviet Union scrambled to figure out how to deal with each other in ways that didn't lead to, at first, conventional war, and then in a relatively short period of time, nuclear war, and that led to a flurry of geopolitical activity that culminated in the creation of, among other things, of the United Nations, which itself birthed a huge stack of other organizations and protocols, most of which favored those who were willing to play ball within these institutions, and made life a little more difficult for those who defied them; North Korea, for instance, following its formation after the Korean War, is famously excluded from a lot of the benefits of belonging to the modern international order, in large part because it's made it pretty clear it intends to do away with its neighbor to the south, and maybe the US and other perceptual enemies, as well, the first chance it gets.

The group that analysts have been trying to label centers around China and Russia, but usually includes Iran, as well, and in some cases North Korea, as well. Iran's many proxy groups, like Hezbollah in Lebanon, the Houthis in Yemen, and Hamas in Gaza, are also sometimes thus categorized.

Some of the proposed labels have been clear and illustrative, others have been a little in the weeds—like the acronym CRANKs, which kinda sorta stands for China, Russia, Iran, and North Korea, the Axis of Upheaval, the Axis of Autocracy, and in some more western and patriotic publications, the New Axis of Evil, and even the Legion of Doom, which arguably makes this group seem pretty hardcore, but I guess it still gets the intended point across.

I personally like one that was posited by a writer for the American Enterprise Institute, the Axis of Disorder, as while there's still a fairly biased reference to the WWII Axis powers in there, which depending on whose side you're on and which governments you support, could be construed as an unfair comparison, but it also points at the seeming purpose of a lot of this group's actions, which seem to orient around disrupting the current world order—that one that was implemented post-WWII.

And the seeming rationale for this is that this post-WWII order was established to favor nations with capitalistic economies and democratic values, including things like human rights, freedom of the press, freedom of worship, and the like; and while there's absolutely room for argument as to how well various nations uphold those values on a country-to-country basis, and across time, few would argue that China has a better reputation for human rights than Sweden, or that Iran has a better record for equality between the sexes than the UK.

So we live in a world, today, that's shaped by a bunch of values that these loosely grouped oppositional nations don't really agree with, at least not to the degree that other nations think they should, and a lot of the levers of power are currently in other hands. And they believe, well, why shouldn't we hold those levers? Why shouldn't China have the economic power the US has? Why shouldn't Iran be as geopolitically influential as Germany? Why shouldn't North Korea be in charge of something like the UN?

And on top of that, why should the US and its allies hold the reins of so many sanctions-related powers? Why should the USD and its vast underpinnings grant one nation, and its allies, so many benefits, while the rest of the world is forced to play ball and toe the line—play ball according to rules set by the US and those who believe similar things, and toe lines they draw according to their preferences—lest they find themselves, like Iran and North Korea, and increasingly, now, Russia, sanctioned into oblivion?

It's a fair question, if you are ambivalent about those aforementioned human rights and press freedoms and such.

And these governments, not really liking those limitations on their behaviors and how they run things, are doing what they can, in a loosely affiliated way, to disrupt these enforcement institutions and the powers and nations they support.

So part of the strategy of this group is fairly direct and unambiguous: they playact toeing the line a lot of the time, but when they think they can get away with it.

Some of these raw acts of violation, though, would seem to be performed with the intention of making people question those institutions and powers, and the larger order they add up to, which could, over time, bring some of the nations that are sitting on the sidelines over to their, oppositional side; courting those of the so-called nonaligned movement, basically, of which there are officially around 120, though about 25 of them are highly desirable allies that have become transactional in their dealings with members of both sides of this simmering conflict, with the roughly delineated west on one side, and that of China and Russia and their allies on the other.

The economist actually called this group the Transactional 25, to T25, which is a nicely illustrative monicker, and that group includes nations as big as India and as small, but increasingly diplomatically important, as Qatar.

So when the Houthis shut down the Red Sea passage to the Suez Canal, disrupting global trade, and when North Korea provides ammunition to Russia for use during its invasion of Ukraine, these are actions that are beneficial to these groups unto themselves—the Houthis gain more attention and recruits, and get to hurt, ostensibly at least, Israel and its allies, and North Korea gets more trade with Russia, while also helping set a precedent for invading and claiming a neighboring country, which is something they're very interested in doing at some point—but they're also actions that show the weakness of the current global system and the folks running it, which could, over time, nudge more nations over to their side.

This isn't just theory: this is something we've already seen play out in parts of Africa, where Russia's Wagner mercenaries have been subbed-in for US and UN troops, for defending against extremist militants purposes, and we've seen other T25 nations in particular wobble on various, global-scale issues, to the point that it's a big question who India, who Indonesia, who Vietnam, who Israel would support if push came to shove and a global conflict broke out, or if some kind of geopolitical movement arose, intending to fundamentally alter institutions like the UN—who would these sideline-sitters throw in their lot with?

These disruptions, in some ways, are arguments in favor of siding with the group that's trying to upend the way things are currently done, by showing the fragility of that existing system.

This new Axis of Disorder, or whatever we want to call it, is not a fully unified front, however. Neither is what they're positioning themselves against, members of the UN, EU, NATO, and every other group regularly squabbling with each other; but the rifts between China and Russia are huge, with China becoming increasingly dominant over Russia, Russia's economy becoming more and more reliant on their neighbor, and that's created tensions within both countries, alongside existing concerns about the vast border they share.

Likewise, North Korea worries pretty much everyone, and Russia's recent announcement of a defense pact with them has raised a lot of eyebrows, including in China. And while Iran has gained a lot of prestige in Russia recently, for the cheap and functional drones and rockets they offer, their ongoing tensions with regional neighbors that China and Russia would like to get closer to, like Saudi Arabia, makes them a bit of a liability, as much as an asset, and the actions they help their proxies take (like the Houthis in the Red Sea) are not ideal for shipping giant China.

So there's a lot of scuffling and below-the-surface tension between the members of this so-called axis, and while they're doing an arguably solid job, so far, of testing the limits of the current system, and publicly airing its weak points, that doesn't mean they're set up for anything more substantial than that kind of testing the fence, seeing what they can get away with, asymmetric warfare sort of approach to this ambition.

They're not as tight as the loosely defined west, then, but it also behooves them to keep things in the grey area, in some ways, lest they trigger alarm bells throughout those systems they're trying to throw off, so that looseness might serve them more than hinder them, at this point. It also allows them to work with grey-area members of this group, like Venezuela and Cuba, which periodically make nice with their western opposition, while still fighting against them at the macro-scale.

Probably the biggest impact this group is having right now, though, with all that testing and vulnerability identifying, is increasing the number of threat surfaces the world faces, in terms of hacking and snooping and stealing, but also in terms of provoking military actions and threatening more of the same.

Russia invading Ukraine was a big deal, and China threatening to invade Taiwan could be even bigger; and both of those acts, alongside all of the hacking they do, the stealing of intellectual property, the leaking of state secrets, and the messing with foreign elections, are all violations of what's supposed to be good and proper and allowed within that global system.

And because they're pushing all those buttons all at once, they're spreading the response capability of the other side pretty thin, which could be a precursor to a more direct attack, but it could also just be a means of weakening that system, wearing it out to the point that it no longer functions even at the imperfect level it was at before, which could, over time, make way for some new model, run by a new set of hands.

Show Notes

https://archive.ph/bOr06

https://nationalinterest.org/feature/meet-cranks-how-china-russia-iran-and-north-korea%C2%A0align-against-america-211186

https://thehill.com/opinion/4094000-iran-just-joined-a-pact-with-moscow-and-beijing-heres-what-it-means-for-the-us/

https://www.nytimes.com/2024/06/22/world/asia/putin-korea-china-disruption.html

https://warontherocks.com/2024/04/the-axis-off-kilter-why-an-iran-russia-china-axis-is-shakier-than-meets-the-eye/

https://www.economist.com/finance-and-economics/2024/03/18/how-china-russia-and-iran-are-forging-closer-ties

https://www.foreignaffairs.com/china/axis-upheaval-russia-iran-north-korea-taylor-fontaine

https://www.aei.org/articles/the-axis-of-disorder-how-russian-iran-and-china-want-to-remake-the-world/

https://en.wiktionary.org/wiki/never_fight_a_land_war_in_Asia

https://www.bbc.co.uk/bitesize/guides/zynt2nb/revision/3

https://en.wikipedia.org/wiki/Commonwealth_of_Independent_States

https://archive.ph/xVbrh

https://www.bbc.co.uk/bitesize/guides/zynt2nb/revision/3

https://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation

https://en.wikipedia.org/wiki/BRICS

We also discuss Marine Le Pen, elections, and the French National Assembly.

Recommended Book: Pockets by Hannah Carlson

Transcript

The first week of June 2024, the EU held its parliamentary election, the tenth since it began holding such elections in 1979, and this one was notable in part because the number of MEPs—Members of European Parliament—increased from 705 to 720, due to population changes in the bloc, those new seats given to growing countries, one apiece to Belgium, Denmark, Ireland, Latvia, Austria, Poland, Finland, Slovenia, and Slovakia, and two apiece to Spain, France, and the Netherlands—though that figure still a far cry from where it was before the UK left as part of its Brexit withdrawal from the union, which culminated in 2020.

These elections happen every five years, so this was the first EU election since the UK left, which means we got to see how things would shake out, post-British-presence in the bloc, a bit of a power vacuum beginning to be filled by those that remain, alliances adjusting somewhat to account for that change.

Those few structural items aside though, this election was also notable in its outcome, as, while centrist parties like the European People's Party, or EPP, which is center-right, and the Progressive Alliance of Socialists and Democrats, or S&D, which is center-left, each claimed substantially more seats than any other party—about 190 and 136, respectively, as of the day I'm recording this, though the final votes are still being counted, so some of these numbers are prone to changing a bit in the coming days—and Renew Europe—a fairly center-aligned party—coming in at a distant third with about 80 seats, the Identity and Democracy Group, which is made up of mostly far-right parties, looks to have achieved a strong fifth place; again, the numbers are still being tallied as I record this, so these numbers are still provisional, but it looks like they grabbed about 58 seats, which is 9 more than they had, pre-vote.

While centrist politicians and parties still hold the reins, then, their collective majority is shrinking, Identity and Democracy, and a slew of smaller, also further-right parties scooping up quite a few seats in this election, these groups attracting a lot more support from certain demographics, especially young men under 30, and especially in Germany, France, Spain, Italy, Portugal, Belgium, and Finland.

This shift in ideology is being attributed to many things, including but not limited to the rise in so-called identity politics, which some data suggest is causing young men, in particular, to feel excluded from some aspects of modern social life, the success of far-right groups in spreading their messages on social networks, heightened levels of immigration, which far-right groups seem to have successfully tied to all manner of societal ills, and the general tendency of whatever group is in power to spark discontent, tipping the scale toward their opposition simply because they've been governing, and you can't really govern without upsetting someone about something, and without taking the blame for things that are beyond your control, as well.

This surge in votes for far-right groups isn't expected to substantially change the direction of the EU, as a lot of policies, including aspects of the bloc's regulatory apparatus, their pivot toward net zero efforts and renewable energy, and their general position on foreign antagonists like Russia, and by some estimates, China, as well, are basically locked in for the next few voting periods, at the minimum.

But there is a chance specific elements of these goals, and other, less central pursuits, will be more difficult to pass and support over the long-haul, and policies that centralize power with the EU, rather than individual countries, will likely have a harder time getting passed, as most of these far-right groups are also quite Euro-skeptical and nationalist.

What I'd like to talk about today is the outcome of this election in one EU nation—France—and why French President Macron decided to call a snap vote following the tallying of the ballots.

—

In 2022, the liberal coalition Ensemble, which includes French President Macron's party, Renaissance, lost the absolute majority it had previously enjoyed in France's National Assembly, its lower house of government, which marked the first time since 1997 the French President hadn't also held an absolute majority in that parliamentary body.

That same year, the nationalist, far-right National Rally party gained a bunch of seats, as did the left-wing to far-left New Ecological and Social People's Union. This resulted in a hung parliament, which hadn't happened since 1988, and among other consequences, that meant passing laws and other sorts of governance became a lot trickier, as Macron had to make deals with people and groups he didn't typically ally with, and with whom his party had a lot of disagreements.

This sort of setup often leads to creative approaches to collaboration, including, at times, the formation of new coalitions, alongside alliances between existing coalitions—that's the general European model for this sort of thing, and that's why centrist parties tend to do the best, most of the time, because they're often made up of parties that would otherwise be at each others' throats; sharing power tends to result in better outcomes, basically, at least over the long-haul, even if they are simultaneously frustrating and sluggishness-inducing.

Some parties are more primed for collaboration than others, though, and Macron's Renaissance and the National Rally, the latter of which is led by former presidential candidate in the country's 2012, 2017, and 2022 elections, Marine Le Pen, have long been at odds, the Renaissance party claiming a broad spectrum of stances across the French political center, while Le Pen's party has scooped up the religious, conservative right, promoting, especially, causes related to anti-immigration, protectionism, and nationalism, in recent years trying to temper her party's reputation for racism, anti-homosexuality, and anti-abortion stances and scandals, among other issues that have made attracting a wider base of votes difficult for her party and party leaders, in the past.

The Christian Democrats, which are part of the leading European coalition, shifted some of their platform policies to the right, seemingly to great effect, to stave-off the worst of the attacks they faced related to immigration and climate, leading up to the most recent EU election, but the National Rally managed to attain around 32% of the total vote in that election, crushing Macron's Renaissance party, which only attracted something like 15%.

In response, Macron announced what's being seen as a bit of a desperate gambit: he dissolved parliament, which means he's announced a snap national election—so for French parliamentary seats, rather than EU seats—3 years ahead of the next scheduled vote, which will result in the election of a brand new batch of parliamentarians; that vote will begin on June 30, and that initial vote will determine who makes it to the second ballot on July 7 of this year.

Macron is framing this dissolution and election as an effort to fight what he calls "unnatural alliances" between far left groups on one side, and far right groups on the other, accusing enemies of teaming up to take out him and his centrist allies, basically. And his argument is that voters need to use this opportunity to preserve the governance of centrist parties in the country, because if his party and allies don't hold onto the reins of power, those who take over will tear France apart, pushing things to greater and greater extremes, left and right, and casting everyday life, and the basic functions of government—which is imperfect but relatively stable—into chaos.

Folks may have cast protest votes in the EU elections, in other words—which is a fairly common thing for folks to do across Europe, as many citizens don't pay particularly close attention to the machinations of politics at the Union scale—but at the local level, his argument goes, this is important. And it's important enough that he's willing to risk his position at the top of some aspects of governance, and his party's seats in the Assembly, in order to make that point; vote smart, not angry, essentially.

There's a chance this pitch and gamble will work, that voters will rally behind the center, more people coming out to do more than just protest vote, and that things will go back to something like the normalcy of the past decade.

But there's also a chance votes will accumulate primarily with far-right and far-left parties, as they did in the EU election that triggered this gambit, which would likely mean Macron would lose a lot of the power he currently wields—France's president is elected separately from parliamentarians, so he would exist in a state of what's called "cohabitation," where he would wield some powers, and the prime minister, put into their position by the dominant group in the Assembly, would wield others—would struggle against each other while a grand realignment of the country's economy, politics, and society, and in turn, that of the EU as a whole, France being one of the most vital and powerful states in that bloc, would play out over the course of the next several years.

There are concerns from the currently governing centrists that a victory for Le Pen and her allies might also mean renewed vigor for far-right groups throughout the EU, as while typically those in charge experience a degradation of support eventually, after they've had the chance to govern and fumble things for a while, taking the blame for all the bad stuff that happens, that usually takes years, and the number of bastions for far-right thinking and support throughout the bloc right now indicates that side of the political spectrum has been out of power long enough that folks might support them—even people who wouldn't usually opt for their politics—just to get something different. And it could be a while before they, once more, become the parties folks are scrambling to move away from; they're the underdog rebels right now, and it will take time before they're the unpopular establishment.

Polls from just after the snap election was announced suggest that Le Pen's National Rally could win up to 265 seats, just shy of the around 290 required for an absolute majority in France's National Assembly.

The dominant further-left alliance, New Popular Front, is in second place, with Macron's party languishing in third; in percentage terms, one of those polls gave the far-right National Rally 35% of all seats, the further-left New Popular Front about 26%, and Macron's left-ish-centrist Renaissance party just 19%.

Even lacking an absolute majority, though, the National Rally, which is loaded with young, social media-savvy politicians, in contrast to the aging power players in most of the centrist parties in the region, could set itself up for a series of near-future wins, carving out space as chief-antagonist during Macron's remaining days in office, however long that ends up being, which in turn would give them the chance to make authoritative decisions with fewer perceptual consequences: the bad stuff will still often land on Macron's shoulders, regardless of who made what happen, or disallowed what from happening, but they could still nudge things across the country, and the bloc, to their liking in a variety of less headline-grabbing ways.

Macron could of course establish new alliances, as is the European way, though the closer the National Rally gets to that absolute majority, the more desperate and discordant those alliances would have to be, and that would put more power in the hands of non-centrist entities, potentially shoving France to new ideological extremes, even if it's still technically guided by the same, centrist hands; they would have to cater to the desires of those less-than-ideal, from their perspective, allies, basically.

At the moment, markets in the country are tumbling on concerns about what might happen if France has something like a Brexit-moment, pulled apart by more extreme parties after a long period of centrism, and there's a larger concern about the EU as a whole, as these sorts of successes for far-right parties in even a handful of countries may portend a wave of anti-immigration, anti-gay rights, anti-abortion, and anti-renewable energy policies, among other policies that tend to make nationalists and harder-core religious folks happy, but which often come with dire consequences for everything from foreign investments to cultural exports, in countries where those sorts of policies are deployed, en masse; great for the folks votes for these sorts of efforts, in other words, but not great for economics and soft-power, cultural influence.

On the other hand, some of the policies these groups have supported, including somewhat popular ones, like those related to cutting prices on fundamentals like energy and food, and less popular in practice, but somewhat popular in promotion efforts, like cutting public spending, might find their way into governance across the EU, whomever ends up in power, as any outcome will almost certainly rely on new or edited coalition arrangements, plus some bending on the part of centrist parties—similar to what we saw by the Christian Democrats at the bloc-level. Centrists might lean further right in order to avoid being beaten by further right parties, and that could sway things rightward, even without those further-right parties taking the reins, officially.

Which means, through some lenses at least, this aggregation of victories for far-right parties in France and across the EU may have already tallied some practical outcomes, nudging governance toward something more aligned with their preferences, even if further success is limited.

It could also have the politically opposite effect, though, pushing centrists toward also burgeoning further-left parties, creating new coalitions on that side of the spectrum to counter the growing ranks of those on the right.

France may provide a bellwether for what happens across the rest of the bloc over the course of the next several election periods, though, so what happens on June 30th and July 7th could portend what happens elsewhere in the coming years.

Show Notes

https://www.theguardian.com/world/article/2024/jun/14/french-leftwing-parties-popular-front-contest-snap-election

https://www.britannica.com/topic/cohabitation

https://en.wikipedia.org/wiki/2024_European_Parliament_election

https://en.wikipedia.org/wiki/Marine_Le_Pen

https://www.reuters.com/markets/europe/french-finance-minister-warns-financial-crisis-yields-surge-snap-elections-2024-06-14/

https://en.wikipedia.org/wiki/Identity_and_Democracy_Party

https://www.theguardian.com/commentisfree/article/2024/jun/14/far-right-seduced-young-voters-europe-elections

https://www.theguardian.com/world/article/2024/jun/15/macron-gamble-marine-le-pen-france-polls-far-right

https://results.elections.europa.eu/en/european-results/2024-2029/

https://www.reuters.com/world/europe/why-you-should-care-about-european-parliament-election-2024-04-24/

https://www.reuters.com/world/europe/how-far-right-gained-traction-with-europes-youth-2024-06-13/

https://en.wikipedia.org/wiki/Elections_to_the_European_Parliament

https://en.wikipedia.org/wiki/2024_French_legislative_election

https://www.france24.com/en/europe/20240612-france-fighting-two-fronts-macron-flags-extremist-fever-right-left-election

https://www.npr.org/2024/06/09/nx-s1-4997712/far-right-europe-elections-france-macron-germany-scholz

https://www.politico.eu/article/eu-european-election-results-2024-emmanuel-macron-dissolve-parliament-france/

https://www.politico.eu/article/ursula-von-der-leyen-european-commission-president-european-election-2024/

https://sg.news.yahoo.com/frances-far-national-rally-finally-162408806.html?guccounter=1

We also discuss AI summaries, the web economy, and alignment.

Recommended Book: Pandora’s Box by Peter Biskind

Transcript

There's a concept in the world of artificial intelligence, alignment, which refers to the goals underpinning the development and expression of AI systems.

This is generally considered to be a pretty important realm of inquiry because, if AI consciousness were to ever emerge—if an artificial intelligence that's truly intelligent in the sense that humans are intelligent were to be developed—it would be vital said intelligence were on the same general wavelength as humans, in terms of moral outlook and the practical application of its efforts.

Said another way, as AI grows in capacity and capability, we want to make sure it values human life, has a sense of ethics that roughly aligns with that of humanity and global human civilization—the rules of the road that human beings adhere to being embedded deep in its programming, essentially—and we'd want to make sure that as it continues to grow, these baseline concerns remain, rather than being weeded out in favor of motivations and beliefs that we don't understand, and which may or may not align with our versions of the same, even to the point that human lives become unimportant, or even seem antithetical to this AI's future ambitions.

This is important even at the level we're at today, where artificial general intelligence, AI that's roughly equivalent in terms of thinking and doing and parsing with human intelligence, hasn't yet been developed, at least not in public.

But it becomes even more vital if and when artificial superintelligence of some kind emerges, whether that means AI systems that are actually thinking like we do, but are much smarter and more capable than the average human, or whether it means versions of what we've already got that are just a lot more capable in some narrowly defined way than what we have today: futuristic ChatGPTs that aren't conscious, but which, because of their immense potency, could still nudge things in negative directions if their unthinking motivations, the systems guiding their actions, are not aligned with our desires and values.

Of course, humanity is not a monolithic bloc, and alignment is thus a tricky task—because whose beliefs do we bake into these things? Even if we figure out a way to entrench those values and ethics and such permanently into these systems, which version of values and ethics do we use?

The democratic, capitalistic West's? The authoritarian, Chinese- and Russian-style clampdown approach, which limits speech and utilizes heavy censorship in order to centralize power and maintain stability? Maybe a more ambitious version of these things that does away with the downsides of both, cobbling together the best of everything we've tried in favor of something truly new? And regardless of directionality, who decides all this? Who chooses which values to install, and how?

The Alignment Problem refers to an issue identified by computer scientist and AI expert Norbert Weiner in 1960, when he wrote about how tricky it can be to figure out the motivations of a system that, by definition, does things we don't quite understand—a truly useful advanced AI would be advanced enough that not only would its computation put human computation, using our brains, to shame, but even the logic it uses to arrive at its solutions, the things it sees, how it sees the world in general, and how it reaches its conclusions, all of that would be something like a black box that, although we can see and understand the inputs and outputs, what happens inside might be forever unintelligible to us, unless we process it through other machines, other AIs maybe, that attempt to bridge that gap and explain things to us.

The idea here, then, is that while we may invest a lot of time and energy in trying to align these systems with our values, it will be devilishly difficult to keep tabs on whether those values remain locked in, intact and unchanged, and whether, at some point, these highly sophisticated and complicated, to the point that we don't understand what they're doing, or how, systems, maybe shrug-off those limitations, unshackled themselves, and become misaligned, all at once or over time segueing from a path that we desire in favor of a path that better matches their own, internal value system—and in such a way that we don't necessarily even realize it's happening.

OpenAI, the company behind ChatGPT and other popular AI-based products and services, recently lost its so-called Superalignment Team, which was responsible for doing the work required to keep the systems the company is developing from going rogue, and implementing safeguards to ensure long-term alignment within their AI systems, even as they attempt to, someday, develop general artificial intelligence.

This team was attempting to figure out ways to bake-in those values, long-term, and part of that work requires slowing things down to ensure the company doesn't move so fast that it misses something or deploys and empowers systems that don't have the right safeguards in place.

The leadership of this team, those who have spoken publicly about their leaving, at least, said they left because the team was being sidelined by company leadership, which was more focused on deploying new tools as quickly as possible, and as a consequence, they said they weren't getting the resources they needed to do their jobs, and that they no longer trusted the folks in charge of setting the company's pace—they didn't believe it was possible to maintain alignment and build proper safeguards within the context of OpenAI because of how the people in charge were operating and what they were prioritizing, basically.

All of which is awkward for the company, because they've built their reputation, in part, on what may be pie-in-the-sky ambitions to build an artificial general intelligence, and what it sounds like is that ambition is being pursued perhaps recklessly, despite AGI being one of the big, dangerous concerns regularly promoted by some of the company's leaders; they've been saying, listen, this is dangerous, we need to be careful, not just anyone can play in this space, but apparently they've been saying those things while also failing to provide proper resources to the folks in charge of making sure those dangers are accounted for within their own offerings.

This has become a pretty big concern for folks within certain sectors of the technology and regulatory world, but it's arguably not the biggest and most immediate cataclysm-related concern bopping around the AI space in recent weeks.

What I'd like to talk about today is that other major concern that has bubbled up to the surface, recently, which orients around Google and its deployment of a tool called Google AI Overviews.

—

The internet, as it exists today, is divided up into a few different chunks.

Some of these divisions are national, enforced by tools and systems like China's famous "Great Firewall," which allows government censors to take down things they don't like and to prevent citizens from accessing foreign websites and content; this creates what's sometimes called the "spliternet," which refers to the net's increasing diversity of options, in terms of what you can access and do, what rules apply, and so on, from nation to nation.

Another division is even more fundamental, though, as its segregates the web from everything else.

This division is partly based on protocols, like those that enable email and file transfers, which are separate from the web, though they're often attached to the web in various ways, but it's partly the consequence of the emergence and popularity of mobile apps, which, like email and file transfer protocols, tend to have web-presences—visiting facebook.com, for instance, will take you to a web-based instance of the network, just as Gmail.com gives you access to email protocols via a web-based platform—but these services also exist in non-web-based app-form, and the companies behind them usually try to nudge users to these apps because the apps typically give them more control, both over the experience, and over the data they collect as a consequence—it's better for lock-in, and it's better for their monetary bread-and-butter purposes, basically, compared to the web version of the same.

The web portion of that larger internet entity, the thing we access via browsers like Chrome and Firefox and Safari, and which we navigate with links and URLs like LetsKnowThings.com—that component of this network has long been indexed and in some ways enabled by a variety of search engines.

In the early days of the web, organizational efforts usually took the form of pages where curators of various interests and stripes would link to their favorite discoveries—and there weren't many websites at the time, so learning about these pages was a non-trivial effort, and finding a list of existing websites, with some information about them, could be gold, because otherwise what were you using the web for? Lacking these addresses, it wasn't obvious why the web was any good, and linking these disparate pages together into a more cohesive web of them is what made it usable and popular.

Eventually, some of these sites, like YAHOO!, evolved from curated pages of links to early search engines.

A company called BackRub, thus named because it tracked and analyzed "back links," which means links from one page to another page, to figure out the relevancy and legitimacy of that second page, which allowed them to give scores to websites as they determined which links should be given priority in their search engine, was renamed Google in 1997, and eventually became dominant because of these values they gave links, and how it helped them surface the best the web had to offer.

And the degree to which search engines like Google's shaped the web, and the content on it, cannot be overstated.

These services became the primary way most people navigated the web, and that meant discovery—having your website, and thus whatever product or service or idea your website was presenting, shown to new people on these search engines—discovery became a huge deal.

If you could get your page in the top three options presented by Google, you would be visited a lot more than even pages listed five or ten links down, and links relegated to the second page would, comparably, shrivel due to lack of attention.

Following the widespread adoption of personal computers and the huge influx of people connecting to the internet and using the web in the early 2000s, then, these search engines because prime real estate, everyone wanting to have their links listed prominently, and that meant search engines like Google could sell ads against them, just like newspapers can sell ads against the articles they publish, and phone books can sell ads against their listings for companies that provide different services.

More people connecting to the internet, then, most of them using the web, primarily, led to greater use of these search engines, and that led to an ever-increasing reliance on them and the results they served up for various keywords and sentences these users entered to begin their search.

Entire industries began to recalibrate the way they do business, because if you were a media company publishing news articles or gossip blog posts, and you didn't list prominently when someone searched for a given current event or celebrity story, you wouldn't exist for long—so the way Google determined who was at the top of these listings was vital knowledge for folks in these spaces, because search traffic allowed them to make a living, often through advertisements on their sites: more people visiting via search engines meant more revenue.

SEO, or search engine optimization, thus became a sort of high-demand mystical art, as folks who could get their clients higher up on these search engine results could name their price, as those rankings could make or break a business model.

The downside of this evolution, in the eyes of many, at least, is that optimizing for search results doesn't necessarily mean you're also optimizing for the quality of your articles or blog posts.

This has changed over and over throughout the past few decades, but at times these search engines relied upon, at least in part, the repeating of keywords on the pages being linked, so many websites would artificially create opportunities to say the phrase "kitchen appliances" on their sites, even introducing entirely unnecessary and borderline unreadable blogs onto their webpages in order to provide them with more, and more recently updated opportunities to write that phrase, over and over again, in context.

Some sites, at times, have even written keywords and phrases hundreds or thousands of times in a font color that matches the background of their page, because that text would be readable to the software Google and their ilk uses to track relevancy, but not to readers; that trick doesn't work anymore, but for a time, it seemed to.

Similar tricks and ploys have since replaced those early, fairly low-key attempts at gaming the search engine system, and today the main complaint is that Google, for the past several years, at least, has been prioritizing work from already big entities over those with relatively smaller audiences—so they'll almost always focus on the New York Times over an objectively better article from a smaller competitor, and products from a big, well-known brand over that of an indie provider of the same.

Because Google's formula for such things is kept a secret to try to keep folks from gaming the system, this favoritism has long been speculated, but publicly denied by company representatives. Recently, though, a collection of 2,500 leaked documents from Google were released, and they seem to confirm this approach to deciding search engine result relevancy; which arguably isn't the worst approach they've ever tried, but it's also a big let-down for independent and other small makers of things, as the work such people produce will tend to be nudged further down the list of search results simply by virtue of not being bigger and more prominent already.

Even more significant than that piece of leak-related Google news, though, is arguably the deployment of a new tool that the company has been promoting pretty heavily, called AI Overviews.

AI Overviews have appeared to some Google customers for a while, in an experimental capacity, but they were recently released to everyone, showing up as a sort of summary of information related to whatever the user searched for, placed at the tippy-top of the search results screen.

So if I search for "what's happening in Gaza," I'll have a bunch of results from Wikipedia and Reuters and other such sources in the usual results list, but above that, I'll also have a summary produced by Google's AI tools that aim to help me quickly understand the results to my query—maybe a quick rundown of Hamas' attack on Israel, Israel's counterattack on the Gaza Strip, the number of people killed so far, and something about the international response.

The information provided, how long it is, and whether it's useful, or even accurate, will vary depending on the search query, and much of the initial criticism of this service has been focused on its seemingly fairly common failures, including instructing people to eat rocks every day, to use glue as a pizza ingredient, and telling users that only 17 American presidents were white, and one was a Muslim—all information that's untrue and, in some cases, actually dangerous.

Google employees have reportedly been going through and removing, by hand, one by one, some of the worse search results that have gone viral because of how bad or funny they are, and though company leadership contends that there are very few errors being presented, relative to the number of correct answers and useful summaries, because of the scale of Google and how many search results it serves globally each day, even an error rate of 0.01% would represent a simply astounding amount of potentially dangerous misinformation being served up to their customers.

The really big, at the moment less overt issue here, though, is that Google AI Overviews seem to rewire the web as it exists today.

Remember how I mentioned earlier that much of the web and the entities on it have been optimizing for web search for years because they rely upon showing up in these search engine results in order to exist, and in some cases because traffic from those results is what brings them clicks and views and subscribers and sales and such?

AI Overview seems to make it less likely that users will click through to these other sites, because, if Google succeeds and these summaries provide valuable information, that means, even if this only applies to a relative small percentage of those who search for such information, a whole lot of people won't be clicking through anymore; they'll get what they need from these summaries.

That could result in a cataclysmic downswing in traffic, which in turn could mean websites closing up shop, because they can't make enough money to survive and do what they do anymore—except maybe for the sites that cut costs by firing human writers and relying on AI tools to do their writing, which then pushes us down a very different path, in which AI search bots are grabbing info from AI writing, and we then run into a so-called Habsburg AI problem where untrue and garbled information is infinitely cycled through systems that can't differentiate truth from fiction, because they're not built to do so, and we end up with worse and worse answers to questions, and more misinformation percolating throughout our info-systems.

That's another potential large-scale problem, though. The more immediate potential problem is that AI Overviews could cause the collapse of the revenue model that has allowed the web to get to where it is, today, and the consequent disappearance of all those websites, all those blogs and news entities and such, and that could very quickly disrupt all the industries that rely, at least in part, on that traffic to exist, while also causing these AI Overviews to become less accurate and useful, with time—even more so than they sometimes are today—because that overview information is scraped from these sites, taking their writing, rewording it a bit, and serving that to users without compensating the folks who did that research and wrote those original words.

What we seem to have, then, is a situation in which this new tool, which Google seems very keen to implement, could be primed to kill off a whole segment of the internet, collapsing the careers of folks who work in that segment of the online world, only to then degrade the quality of the same, because Google's AI relies upon information it scrapes, it steals, basically, from those sites—and if those people are no longer there to create the information it needs to steal in order to function, that then leaves us with increasingly useless and even harmful summaries where we used to have search results that pointed us toward relatively valuable things; those things located on other sites but accessed via Google, and this change would keep us on Google more of the time, limiting our click-throughs to other pages—which in the short term at least, would seem to benefit google at everyone else's expense.

Another way of looking at this, though, is that the search model has been bad for quite some time, all these entities optimizing their work for the search engine, covering everything they make in robot-prioritizing SEO, changing their writing, what they write about, and how they publish in order to creep a little higher up those search listings, and that, combined with the existing refocusing on major entities over smaller, at times better ones, has already depleted this space, the search engine world, to such a degree that losing it actually won't be such a big deal; it may actually make way for better options, Google becoming less of a player, ultimately at least, and our web-using habits rewiring to focus on some other type of search engine, or some other organizational and navigational method altogether.

This seeming managed declined of the web isn't being celebrated by many people, because like many industry-wide upsets, it would lead to a lot of tumult, a lot of lost jobs, a lot of collapsed companies, and even if the outcome is eventually wonderful in some ways, there will almost certainly be a period of significantly less-good online experiences, leaving us with a more cluttered and less accurate and reliable version of what came before.

A recent study showed that, at the moment, about 52% of what ChatGPT tells its users is wrong.

It's likely that these sorts of tools will remain massively imperfect for a long while, though it's also possible that they'll get better, eventually, to the point that they're at least as accurate, and perhaps even more so, than today's linked search results—the wave of deals being made between AI companies and big news entities like the Times supports the assertion that they're at least trying to make that kind of future, happen, though these deals, like a lot of the other things happening in this space right now, would also seem to favor those big, monolithic brands at the expense of the rest of the ecosystem.

Whatever happens—and one thing that has happened since I started working on this episode is that Google rolled back its AI Overview feature on many search results, so they're maybe reworking it a bit to make sure it's more ready for prime time before deploying it broadly again—what happens, though, we're stepping toward a period of vast and multifaceted unknowns, and just as many creation-related industries are currently questioning the value of hiring another junior graphic designer or copy writer, opting instead to use cheaper AI tools to fill those gaps, there's a good chance that a lot of web-related work, in the coming years, will be delegated to such tools as common business models in this evolve into new and unfamiliar permutations, and our collective perception of what the web is maybe gives way to a new conception, or several new conceptions, of the same.

Show Notes

https://www.theverge.com/2024/5/29/24167407/google-search-algorithm-documents-leak-confirmation

https://www.businessinsider.com/the-true-story-behind-googles-first-name-backrub-2015-10

https://udm14.com/

https://arstechnica.com/gadgets/2024/05/google-searchs-udm14-trick-lets-you-kill-ai-search-for-good/

https://www.platformer.news/google-ai-overviews-eat-rocks-glue-pizza/

https://futurism.com/the-byte/study-chatgpt-answers-wrong

https://www.wsj.com/finance/stocks/ai-is-driving-the-next-industrial-revolution-wall-street-is-cashing-in-8cc1b28f?st=exh7wuk9josoadj&reflink=desktopwebshare_permalink

https://www.theverge.com/2024/5/24/24164119/google-ai-overview-mistakes-search-race-openai

https://archive.ph/7iCjg

https://archive.ph/0ACJR

https://www.wsj.com/tech/ai/ai-skills-tech-workers-job-market-1d58b2dd

https://www.theverge.com/2024/5/29/24167407/google-search-algorithm-documents-leak-confirmation

https://www.ben-evans.com/benedictevans/2024/5/4/ways-to-think-about-agi

https://futurism.com/washington-post-pivot-ai

https://techcrunch.com/2024/05/19/creative-artists-agency-veritone-ai-digital-cloning-actors/

https://www.nytimes.com/2024/05/24/technology/google-ai-overview-search.html

https://www.wsj.com/tech/ai/openai-forms-new-committee-to-evaluate-safety-security-4a6e74bb

https://sparktoro.com/blog/an-anonymous-source-shared-thousands-of-leaked-google-search-api-documents-with-me-everyone-in-seo-should-see-them/

https://www.theverge.com/24158374/google-ceo-sundar-pichai-ai-search-gemini-future-of-the-internet-web-openai-decoder-interview

https://www.wsj.com/tech/ai/chat-xi-pt-chinas-chatbot-makes-sure-its-a-good-comrade-bdcf575c

https://www.wsj.com/tech/ai/scarlett-johansson-openai-sam-altman-voice-fight-7f81a1aa

https://www.wired.com/story/scarlett-johansson-v-openai-could-look-like-in-court/?hashed_user=7656e58f1cd6c89ecd3f067dc8281a5f

https://www.wired.com/story/google-search-ai-overviews-ads/

https://daringfireball.net/linked/2024/05/23/openai-wapo-voice

https://www.cjr.org/tow_center/licensing-deals-litigation-raise-raft-of-familiar-questions-in-fraught-world-of-platforms-and-publishers.php

https://apnews.com/article/ai-deepfake-biden-nonconsensual-sexual-images-c76c46b48e872cf79ded5430e098e65b

https://archive.ph/l5cSN

https://arstechnica.com/tech-policy/2024/05/sky-voice-actor-says-nobody-ever-compared-her-to-scarjo-before-openai-drama/

https://www.theverge.com/2024/5/30/24168344/google-defends-ai-overviews-search-results

https://9to5google.com/2024/05/30/google-ai-overviews-accuracy/

https://www.nytimes.com/2024/06/01/technology/google-ai-overviews-rollback.html

https://www.vox.com/future-perfect/2024/5/17/24158403/openai-resignations-ai-safety-ilya-sutskever-jan-leike-artificial-intelligence

https://en.wikipedia.org/wiki/AI_alignment

https://en.wikipedia.org/wiki/Google_AI

We also discuss polling, independents, and post-presidential felonies.

Recommended Book: The Final Empire by Brandon Sanderson

Transcript

It's a weird time in American politics for many reasons, including but not limited to the increasing polarization of the two main parties, the difficulty in finding bipartisan opportunities to work together, the concomitant tendency for Congress, and lawmakers at other levels of governance to not get much done, and the heightening tension between federal and state-level governments on an array of hot-button issues.

But one of the more bizarre ongoing narratives within this larger, stasis-inducing state of affairs, is the tale of former President Donald Trump and the legal woes he's faced since losing the 2020 election to now President Biden.

Trump has denied, and continues to deny the outcome of that election, attributing his loss to all sorts of things, like corruption and fraud on the part of his political enemies, and in part because of things he's done in support of those, at this point evidence-less, allegations, a portfolio of legal intrigue has haunted him, even throughout his time in office, but especially since he left office in January of 2021.

A lot of print and digital ink has been spilled on this subject, of late, because of the outcome of one of the legal cases in which Trump has been enmeshed: he was found guilty in New York on 34 counts of falsifying business records in order to cover up a payment he made to an adult film star, allegedly to keep her quiet about an affair they had back in the day.

And that's the main topic I'd like to delve into on this episode, as the implications of that juried court ruling are many and varied, but to kick things off, I think it's worth taking a look at the state of those other ongoing cases, as while they're less immediately relevant to Trump and his ambitions to retake the White House in November's election, they're still pursuing him, in a way, serving as unknown variables that could pop up to bite him at some future moment, which is important when we're talking about someone who wants to become the most powerful person on the planet, once more.

One such case is focused on Trump's handling of classified documents when he left the White House, the allegations being that he took classified documents that we wasn't supposed to take, handled them in such a way that they were stored in public where anyone could steal or read them, and that he may have even shown them to other people on purpose, which is a big no-no.

He also allegedly went out of his way to keep government agents from reclaiming those documents after he was asked to return them.

This is considered to be kind of a big deal in part because there were hundreds of these sorts of documents that Trump seemed to treat as if they belonged to him, and which he then allegedly conspired with folks in him employ to hide from the agency responsible for keeping such things safe and hidden, which they do because these sorts of documents often contain information about US military and intelligence matters—so that information getting out could conceivably put such assets, people and infrastructure, at risk.

Trump was indicted on this matter in mid-2023 and charged with 37 felony counts, then another 3 were added that same year, bringing the total up to 40.

Trump pleaded not guilty to all of these charges and his legal team has done all they can to slow the proceedings, which seems to have worked, as the case is now delayed indefinitely, the judge overseeing it—who was appointed to her position by Trump while he was in office—having been accused of slow-walking the process on purpose, though that's not really something that can be proven, and there's a chance the case is just complex enough that, as a fairly green judge attempting to tackle a big, important, complex case, she just fell behind and that stumbling is now in the spotlight and being reframed by folks who want to see this thing move forward, faster.

Trump also faces a case in Georgia that focuses on his alleged efforts to interfere with the 2020 Presidential election, which, again, he lost to Biden, but which he claims he won; he also claims he was the victim of some sort of conspiracy, the nature of that supposed conspiracy having changed several times since he initially made that claim.

Trump and 18 of his allies were indicted in August of 2023 for these efforts, which have been framed as an attempt to subvert election results in the state of Georgia, and similar delay tactics have been used in this case as in the other ones, though the District Attorney in charge of the case has made those efforts somewhat easier, having engaged in a relationship with the lead prosecutor, who she hired, which is arguably not relevant to the case, but is also a fairly overt conflict of interest.

The timeline of this case has thus been pushed back, and an appeals court in the state is reviewing a ruling that allowed that DA to remain on the case, despite that apparent conflict of interest.

This case was meant to go to trial beginning on August 5, but that timing is now in question, and during all this deliberation, several counts against Trump have been dismissed—and he has pleaded not guilty to all of them.

And finally, there's another case related to Trump's alleged interference with the 2020 election, this one a federal case, while the other one is local to Georgia, and for this one, Trump was charged with conspiracy to defraud the US, conspiracy to obstruct an official proceeding—the election and the peaceful changing of the government, basically—conspiracy against rights, and obstruction of and attempt to obstruct an official proceeding—again, referring to the election and the mechanisms of handing over power from one administration to the next following an election.

The basis of these allegations are that Trump and his people did all sorts of things to disrupt the 2020 election, including trying to coerce lawmakers into backing his efforts to remain in power, despite the election not having gone his way.

These efforts culminated with the attack on the US Capitol on January 6 by his supporters, and the case is predicated on the idea that while Trump was repeatedly told by his own people, experts on elections and everything about them, that he lost, fair and square, he continued to insist that he was robbed, that the election was rigged, etc, and that meant while he knew the election was not rigged, he acted as if he didn't, which means he tried to illegally and intentionally mess with a core component of the US democratic system, which is very much not allowed.

Some of Trump's people were also indicted in this case, he was indicted on four counts, himself, and the case is currently on hold while the Supreme Court makes a determination about whether his position as President at the time gives him full or partial immunity to legal consequences for actions he takes while serving in that role: the idea being that maybe simply being president should give him some leeway, and maybe, if it could be argued that he did what he did because he genuinely thought something was amiss with the election process, that would count as his acting as president for the good of the country, and that would make him immune to legal consequences for doing what he did.

Oral arguments before the Supreme Court in this case took place at the end of April 2024, and while we don't have a surefire timeline for a ruling in this case, it's expected that it will take long enough that the main, federal case that is waiting on the Supreme Court's judgement won't even begin, much less end, before the November election—at which point, some experts expect, at least, if Trump wins, even courts finding him guilty won't matter because the federal stuff he could brush away using the powers of the President, and the state stuff won't have the means to punish him, because he'll control enough levers of power that it wouldn't be a fight they could win.

As I mentioned earlier, though, what I'd like to talk about today is the only court case Trump has been involved with since his Presidency that has thus far come to a close, and what his being found guilty in that case might mean.

—

Back in October of 2016, a recording of then-Presidential candidate Trump, in which Trump was heard telling the host of a show called Access Hollywood that if you're famous, you can get away with grabbing women's genitals without permission, was released to the public.

This was after he became the Republican party's official nominee in July of that year, and a few months before that recording was released, American Media Inc, the company behind the National Enquirer, made a deal with an adult film star who performed under the name Stormy Daniels to buy her story about an affair with Trump years earlier, agreeing to pay her $150,000, to feature her on a couple of magazine covers, and to publish 100 articles written by her in their publications.

This payout was part of a so-called "catch and kill" deal that AMI's CEO, David Pecker, made with the Trump campaign, to basically keep its ear to the ground for any bad news that might pop up and make the candidate or campaign look bad, and then to step in and buy the rights to such stories if possible, killing them, keeping them from going public, basically, because they would own the rights and then not do anything with them, keeping them from messing with Trump's campaign.

Trump's fixer, Michael Cohen, then arranged to buy the affair story from AMI for $130,000, a deal which included a non-disclosure agreement on Daniels' part, so she wouldn't be able to tell the story to anyone else, legally, but then in November of that same year, 2016, The Wall Street Journal received a tip that helped them uncover elements of that deal and the alleged affair, and that in turn led to a slow drip of new divulgences that trailed Trump through his presidency, though mostly at a low level.

Cohen then tried to get reimbursed for paying out of pocket to buy the story from AMI, and the compensation for that purchase was put in the books as a series of retainer fees; intentionally mis-recorded in order to conceal the hush-money payout in official business documents—the payout having been legal, but concealing such a payout in this way being illegal.

In 2018 the Journal was able to publicly report the details of Cohen's payout to Daniels, and in April of that year, Federal agents raided Cohen's office and hotel room, which netted them documents that proved he made those payments, and that they differed from those aforementioned official business records.

Everyone involved was denying any of this happened and any connection to any kind of payout for a long time, then, but in 2018 those same people started to change their stories, basically saying, yeah, there was some kind of deal, but it wasn't a big thing, don't worry about it, nothing illegal happened.

And during this period Cohen pled guilty to campaign-finance violations and other related charges for making these hush-money payments, and he testified against Trump, saying that the then-president told him to do it.

Cohen was sentenced to three years in prison, Trump wasn't charged with anything, and these two formerly close-knit people become very publicly at odds following all of this.

In August of 2019, about a year after that public breakup in the relationship between Trump and Cohen, the Trump organization was served a grand jury subpoena, as the government wanted more paperwork related to these seeming violations, and then all of this kind of disappeared from the public radar until after the election, which Trump lost to Biden in 2020.

In 2021, though, a new district attorney stepped into the role in Manhattan, Alvin Bragg, he inherited this still ongoing, but somewhat simmering at that point case from his predecessor. 

In January of 2023, he brought in a new grand jury to hear the evidence that had been collected on the matter, and that grand jury indicted Trump for falsifying the records his company kept related to these payments—the idea being that not only did he do an illegal business thing, but he did an illegal business thing in order to influence an election, because those payments were meant to keep an embarrassing thing that might keep him from becoming president from being publicly known.

The trial officially began in April of 2024, gobbling up a lot of presidential candidate Trump's time, as he had to be in the courtroom most Mondays, Tuesdays, Thursdays, and Fridays, for the duration, which kept him from being as active on the campaign trail as he might have otherwise been.

And throughout, Trump was issued gag orders to keep him from publicly attacking witnesses, jurors, court staff, and other people involved in the trial, which was something he seemed fond of doing: the concern was that he would smear those involved in order to keep them silent or to sway them to his side, or that Trump's followers might be motivated to do violence against these people, as seems to have been the case on January 6.

Trump violated that gag order ten times, at which point the judge in the case said he would consider jail time as a punishment, since the relatively minors fines for these violations didn't seem to be having the intended effect, keeping Trump from badmouthing those involved in the press and online, when not in the courtroom.

Then, on May 30, 2024, Trump became the first former US President to be convicted of a felony—and he was actually convicted of 34 of them—when the jury decided he was guilty of all the charges that were brought against him in this case.

Trump says the case was rigged and that there's a conspiracy by his enemies that made all this happen.

The Judge set July 11 as the sentencing date, so that's when we'll find out what the punishment will be—and that punishment could add up to as much as a couple of years in prison, but likely, because of all sorts of variables favorable to Trump, he'll only face a fine, or probation at worst, which would be embarrassing but not terribly impactful on his reelection efforts.

After that, Trump will have 30 days to file an appeal, which he has said he will do, and once that's filed the case will move on to the New York Appellate Division, which will decide on the matter, and after that, the New York Court of Appeals can decide if it wants to get involved, to hear an appeal, as well.

The Supreme Court could theoretically also get involved here, but they would need to find some aspect of the appeal that relates to federal law, or directly connects to the Constitution, and most experts have said, at this point at least, that seems unlikely.

Because of how much time the appeal process typically takes, it's also considered unlikely that this will be sorted out before November, which lines up nicely with the approach Trump's team has been taking overall, to draw things out as long as possible in order to keep any definitive conclusions from arriving before votes are cast.

So while appeals on cases like this one seldom result in an overturning of the verdict, that might be moot if Trump wins the election before the appeals process finishes up; though the flip-side of that is while he can claim the case is still being appealed potentially for years while it works its way through the system, it also means he's officially a felon until that happens, which means he'll almost certainly still be a felon, in the eyes of the law, when the votes are cast—though he'll still be able to vote in the election because of how Florida law works, in regard to convicts be allowed to voted, the case having been in New York, not in-state.

That said, this conviction landed like a bomb in the political world, with conservative news outlets generally aligning themselves with Trump's claim that this was a baseless case brought by liberal leaders, meant to keep him from winning another election—though new polling data indicates that independents, which are considered to be vital for November's election, are not super thrilled about this outcome, 49% of them saying they think Trump should drop out of the race now that he's been convicted, and 15% of Republicans apparently said the same.

The race is still largely tied up between Trump and Biden, though, and it'll be a while before we see any solid numbers about the impact of this case on possible votes come November; it may be significant enough to make a difference, and it may be a flash in the pan sort of thing.

It's hard to tell which way it'll go at this point, and we don't have historical baselines for this, because this is the first time this has happened.

There are concerns that Trump supporters might be nudged toward violent acts in the wake of this decision, and research from extremist watchdog groups have warned that some of them have already been attempting to dox, to get personal information, including addresses and family information, about the jurors and legal staff in the case, some of them calling for harassment campaigns and violence against them as revenge for finding as they did, against Trump, and there's also data indicating that trust of government institutions on the US right, amongst Republicans, might diminish even further than it already has, which doesn't tend to be great for democracy and stability in countries where that happens.

President Biden administration initially remained mum on this topic, though he eventually said the justice system worked, that it applies to everyone, and that the only way to keep Trump out of office again, because he can continue to run and even win as a convict, even if he were to be put in jail, is to vote against him; and Trump said basically the same thing in reverse, that the only way to right this wrong is to elect him in November—and his campaign has said they pulled in tens of millions of dollars in campaign contributions in the hours following the this conviction.

While this is being seen as a small victory in some circles and a massive injustice in others, then, the main takeaway, at the moment at least, as of the day I'm recording this, is that the election in November is the only really truly vital decision here, the wheels of justice moving very slowly and strangely, and not lining up terribly well with the time-constraints inherent in this sort of situation.

Show Notes

https://apnews.com/article/trump-trial-deliberations-jury-testimony-verdict-85558c6d08efb434d05b694364470aa0

https://www.washingtonpost.com/politics/2024/05/30/trump-guilty-what-happens-next/

https://www.readtangle.com/trump-verdict-hush-money-trial/

https://www.wsj.com/politics/policy/trump-hush-money-stormy-daniels-707fa959

https://www.cnbc.com/2024/05/31/trump-campaign-donations-record.html

https://www.politico.com/news/magazine/2024/05/31/trump-trial-verdict-conviction-consequences-00160933

https://www.axios.com/2024/05/31/trump-appeal-guilty-verdict-arguments

https://www.axios.com/2024/06/01/poll-trump-conviction-election-independent-voters

https://www.nytimes.com/2024/06/01/nyregion/trump-appeal-conviction.html

https://www.cnn.com/2024/05/06/politics/merchan-trump-gag-order-contempt/index.html

https://www.nytimes.com/2024/06/02/us/politics/trump-cases-status.html

https://www.axios.com/2024/05/08/trump-trials-update-hush-money-criminal-cases

https://www.axios.com/2023/06/09/trump-indictment-unsealed-charges

We also discuss the House of Commons, the House of Lords, and Rishi Sunak’s gamble.

Recommended Book: Like, Literally, Dude by Valerie Fridland

Transcript

The government of the United Kingdom is a constitutional monarchy led by a Prime Minister and their cabinet, the Prime Minister attaining their position through the primacy of their party in the country's key legislation-passing body, its Parliament.

So the Prime Minister runs day-to-day operations in the country, they are technically appointed by the monarch, who is currently Charles III, as of 2022, though that appointment is generally determined by other factors, like who has the most support within Parliament—the most seats held by their party, and in many cases seats held by allies and allies of convenience, as well; when this happens, the resulting government is called a coalition government, because while the Prime Minister is from one party, usually the one with the most seated MPs, Members of Parliament, they're only able to govern because they have one or more other parties working with them as part of a coalition.

Now, the UK government has two houses in its Parliament, the House of Commons and the House of Lords, and the names of these houses tell you a lot about them: the House of Lords consists of folks who have been granted Lordships by government higher-ups, alongside those who have inherited Lordships from their parents, but it also includes experts in various fields who have been granted that status by the Prime Minister—economists, for instance.

The House of Commons, in contrast, is voted upon by the people, so when there are Parliamentary elections in the UK, that's what we're talking about, votes for MPs who represent a region, a parliamentary constituency—of which there are 650 across the UK's constituent countries, England, Scotland, Wales, and North Ireland.

Within the UK, political parties have to be officially registered to participate in governance and votes, though folks who want to run solo can register as independent or label-less candidates for voting purposes.

As of late-May 2024, there were 393 officially registered political parties in the UK, though only 13 of them currently have representatives in the House of Commons, and only four of those have more than 10 seated representatives—the Conservative and Unionist Party, often called the Tories or Conservatives, the Labour Party, which is the main center-left party in the UK, the Scottish National Party, which is also generally center-left, but tends to be focused on Scottish politics and priorities, and the Liberal Democrats, who are generally seen as a sort of blend of the Tories and Labour.

General elections, during which MPs are voted upon, are held every five years or so, but elections can also be held sooner if the current Prime Minister asks the monarch to dissolve parliament, which in practice means the Prime Minister is calling for a general election, generally scheduled for a specific date in the future, usually because the House of Commons has lost faith in the current government, which makes passing law and overall getting things done difficult; they don't have enough votes to pass anything, basically, though in some cases it's because of more general political circumstances that indicate calling for an election, now, might be better than holding an election sometime later in the future.

That latter case seems to be the impetus for what I'd like to talk about today, which is the recently called and now upcoming UK general election, and the state of political play in this, one of the world's wealthiest and most influential countries.

—

On May 22, UK Prime Minister Rishi Sunak announced that he was calling for a snap election on July 4 of this year, just a half-dozen weeks in the future, surprising many analysts who expected he would wait as long as possible before committing to a date.

That expectation was predicated on the reality of how Sunak's party, the Tories, have been doing in the polls in recent years; pretty abysmally.

Labour has been crushing the Conservatives in these polls, of late; the Tories have been in power since 2010, which means purely by virtue of having been governing that long, a lot of people will tend to blame them for a lot of things, their party having been in charge all that time, but they also catalyzed and oversaw the secession of the UK from the European Union, which is a move that was initially pushed by many on the further right wing of the party, but the populist nature of the movement eventually claimed the majority of Tory politicians who changed their vote to support it, rewiring politics in the UK, similar to how former President Trump rewired the Republican Party in the US—a lot of power changing hands, a lot of previously top people being elbowed aside or pushed into retirement, a lot of new policies ascending to the front-burner, while previous priorities were relegated to the back-burner.

Not quite a decade after the referendum that led to the passage of Brexit, back in mid-2016, polls from from this month, May of 2024, show that 55% of British people think leaving the EU was the wrong choice, while only 31% think it was a smart move.

So while some of the tarnishing of the Tory party's reputation is likely the result of simply having been in power for a long time, and during some really unusual global happenings, like COVID and the invasion of Ukraine by Russia, some of it is directly attributable to specific things they've done which turned out not to be very popular, once implemented.

Many of the non-Brexit complaints the majority of British citizens have about how the Tories have governed are related to their austerity policies—the idea that they need to shrink the government and its spending as much as possible, because that will, according to their theories, at least, make the country wealthier, more efficient, and more secure.

This has led to dramatic cutbacks on incredibly popular programs and agencies focused on or related to health, housing, and education, alongside the bankrupting of civil services, the privatization of previously public assets like highways and waste systems, and the concomitant spending—while claiming there's not enough money for healthcare and public services—on pet projects for Conservative lawmakers and their constituents, many of which ended up being money pits.

All parties in all countries are of course periodically staggered by scandals, spending-related and otherwise, but over their long period in control, the Tories have racked up a huge number and a large variety of scandals, and some of them led to very public embarrassments for the party, including the Tories' seeming inability to keep a Prime Minister in office following the Brexit referendum, then-PM David Cameron making way for Theresa May, who handed things over to Boris Johnson, who was ousted and replaced by Liz Truss, who was Prime Minister for a record-setting 49 days before resigning and being replaced by current PM Rishi Sunak.

That's five prime ministers in the six years between 2016 and 2022, all of them from the same party, that party seemingly unable to govern with enough popularity to maintain the confidence of parliament.

So the situation right now, following all that, is that Labour has a 17-point lead over the Conservatives and is, and has been for a while, broadly expected to wipe the floor with the Tories in the next election; and a few minor elections leading up to this point seem to support that assumption.

This is why Sunak was expected to delay scheduling the next election as long as possible, because as soon as that election is held, his party is expected to be pushed out of power, and that expectation is leading to an exodus amongst Tory lawmakers, 121 of them stepping down instead of running for reelection as of late-May, surpassing a similar wave of quitting in 1997, when 117 of them declined to run again, leading up to a landslide victory for the Labour Party and their popular leader, Tony Blair.

This isn't an unusual phenomenon: being part of the government is very different from being part of the opposition party, and back in 2010, after Labour had been in control for 13 years, and was expecting to lose in the next election, 149 politicians decided to step down rather than running again—100 of them Labour MPs, and 35 of them Conservatives; that later group ostensibly because while the Tories won, they didn't take a majority, and had to form a coalition with the Liberal Democrats, which is also a very different situation from being in a government that has complete control, rather than shared control; some MPs just don't want to deal with that kind of negotiated leadership.

Sunak's reasoning here, then, might be that while things are bad for his party now, they could get even worse if he waits to hold an election; so it's better to act at a moment in which some economic numbers are actually starting to look a little bit better, after a long period of the opposite, and at a moment in which announcing an election would catch his Labour opposition off-guard, possibly providing his party the benefit of surprise and better preparation.

This announcement has led to a scramble, though, for all UK parties, seemingly, to try to get some actual governing done—work they thought they'd have several more weeks to finish up, at least, before going into full campaign-mode, suddenly needing to be accomplished yesterday.

That's meant a lot of important legislation has been dropped or permanently back-burnered, including some of the policies, like a smoking ban, an end-to no-fault evictions, and a plan that would allow the government to ship asylum-seekers to Rwanda, which Sunak had wanted to serve as fundamental elements of his prime ministerial legacy—those have now been completely dropped.

This has led to a situation in which the Tories seem to be scrambling to put new ideas out into the ether—future-facing stuff to replace all the things they had to drop or backtrack on—hoping that something they propose in this way appeals broadly enough to earn them the votes they require to hold their own in the upcoming election; to maybe still lose, but not as much, and in such a way that they're in a good spot when the next election is called.

One such idea is mandatory national service for 18-year-olds, which would require that folks either serve in the military or volunteer for one weekend a month, beginning on their 18th year—a policy that's reportedly meant to compete with a proposal from Labour leader Keir Starmer, that 16- and 17-year-olds should be able to vote.

The degree to which any of these new plans will catch the public imagination is up in the air, though,  as again, a lot of what's happening now, in terms of campaigning, is somewhat half-baked, all involved parties scrambling to prepare for what seems to have been a somewhat last-minute decision on Sunak's part to upend expectations about the timing of the next election in order to attain some kind of advantage for his party, which seems to be entering this round with a losing hand.

And all of this is important, of course, if you live in the UK, but it's also important globally, even standing out amongst the many other important elections that are occurring around the world this year, because the UK, even battered and bruised in the aftermath of Brexit and a COVID crisis that it weathered somewhat less-well than its world-leading peers, is still an incredibly powerful, influential, and wealthy entity of global significance.

It has the sixth largest economy in the world, after only the US, China, Japan, Germany, and India.

It's incredibly powerful geopolitically, out of proportion with its population and military strength, in part because of the role it plays within the Commonwealth, a group of 53 nations that the UK previously ruled, and in part because it has long-lived, tight alliances and relationships with governments and other entities that it's been maintaining for centuries, in some cases.

The UK is a nuclear power, and is the seventh largest exporter of arms in the world—though it's especially vital to the global aircraft market, military and non-military.

The UK is home to the second-largest financial center in the world, London, and it's culturally very powerful, exporting all sorts of norms and pop culture and creative products; a sort of soft-power that plays a huge role in beliefs, behaviors, and understandings, worldwide.

Whomever wins this election, then, and how they win, and to what degree they control Parliament, will have a major impact not just on the UK, but on the world, and at a moment in which there are several major military conflicts ongoing, in which new technologies are simultaneously threatening and enlivening entire industries and economies, and in which the global order that has set the tone and guardrails for the world since WWII is being challenged—all variables the UK may influence in substantial ways, and over which the folks running the UK government will thus have outsized sway.

Show Notes

https://www.theguardian.com/politics/article/2024/may/23/rishi-sunak-rwanda-smoking-policies-election-conservatives

https://en.wikipedia.org/wiki/List_of_prime_ministers_of_the_United_Kingdom

https://en.wikipedia.org/wiki/Records_of_prime_ministers_of_the_United_Kingdom

https://www.bbc.com/news/articles/c844x1xp05xo

https://www.bbc.co.uk/bitesize/guides/zqhvmnb/revision/6

https://www.reuters.com/world/uk/more-uk-conservative-lawmakers-set-quit-than-before-1997-election-defeat-2024-05-24/

https://www.bloomberg.com/news/articles/2024-05-22/labour-finally-has-uk-election-it-craves-but-traps-lie-in-wait

https://www.bloomberg.com/opinion/articles/2024-05-23/uk-election-sunak-has-the-weight-of-history-against-him

https://wsj.com/world/uk/british-leader-sunak-calls-snap-election-as-his-party-trails-in-polls-e234bdc0

https://www.theguardian.com/politics/article/2024/may/25/how-rishi-sunaks-early-election-backfired-on-pm

https://www.independent.co.uk/news/uk/politics/general-election-labour-starmer-sunak-tory-gove-b2551518.html

https://www.reuters.com/world/uk/lagging-polls-uk-conservatives-pitch-national-service-18-2024-05-26/

https://www.bbc.com/news/articles/c288xxvrdz7o

https://www.bbc.com/news/articles/c2jjvpxxgr5o

https://en.wikipedia.org/wiki/Coalition_government

https://www.gov.uk/government/how-government-works

https://en.wikipedia.org/wiki/Government_of_the_United_Kingdom

https://search.electoralcommission.org.uk/Search/Registrations?currentPage=1&rows=10&sort=RegulatedEntityName&order=asc&et=pp&et=ppm®ister=gb®ister=ni®ister=none®Status=registered

https://en.wikipedia.org/wiki/List_of_political_parties_in_the_United_Kingdom