Ian Welsh

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

Author: Ian Welsh Page 1 of 399

The American Delusion

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On February 28, 2025

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So, Nick Kristoff is crying about USAid, and I agree, mostly:

I’m hearing from experts around the world about what the destruction of USAID is meaning: “a global health massacre,” in the words of a doctor who has devoted her life to humanitarian work on the front lines. Millions of malnourished children left to starve. Pregnant women not getting micronutrients to prevent neural tube defects. Programs against schistosomiasis abandoned. HIV positive patients left without ARV’s. Water no longer purified. Surveillance against Ebola and bird flu set back. TB patients unable to get medicine. I’ve long argued that USAID should be reformed, but this Trump/Musk demolition is cruel and incompetent and benefits China, while killing children just as wonderful as our own.

It’s worth reading the replies to this. The usual one is “we have lots of homeless and sick people, we should take care of them first.” Trump’s budget cuts 400 billion to Medicaid, to pay for tax cuts for rich people who have more than enough. MAGAts are delusional cultists.

USAid is skeezy in many ways: lots of nasty intelligence shit hidden there, but it also does a lot of good, and the price tag is trivial. If you want to house and feed and give healthcare to Americans, cut the defense budget, raise taxes on billionaires, and get on with it. It’ll even be good for the economy.

Americans aren’t homeless and sick because of foreign aid, they’re homeless and sick because for 45 years all the money has gone to rich people and they’ve jacked up the price of homes and healthcare, and gotten rid of millions of good jobs. That’s all.

This has been a bipartisan project. Democrats hands are not clean. I remember Clinton’s massive welfare cuts and Obama helping banks literally steal people’s homes with fraudulent documents as two of thousands of possible examples. But anyone who thinks Trump wants to fix this rather than accelerate it is so delusional they should be in an asylum.

I have no patience left, none, for either Democrats or Republicans. All of you are monsters who have hurt the weak, destroyed the middle class and made millions of Americans homeless while denying them healthcare. You’re all monsters.

America has always had enough wealth to feed and care for all Americans and even help a lot of foreigners, but the entire project since Reagan has been to make the rich richer, and fuck everyone else. Anyone who says otherwise is lying or delusional & a piece of human garbage.

America is a shithole because that’s what both Democrats and Republicans wanted, and it’s what they worked hard for.

Every time an off-ramp was offered, and there was almost always someone running in Democratic Presidential primaries who was against this, they were crushed. Usually the number of primary votes they received was so small as to be a joke. Democratic primary voters wanted what has happened. So did Republicans.

Welcome to the America you voted for, again and again.

 

 

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Understanding the Core Goal Of Western Governments & Western Decline

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On February 27, 2025

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I was talking with a friend the other day and he said the problem with democracies is that policy can swing 180 degrees with each election.

And in some ways that’s true: Trump’s switch on Ukraine is a good example.

But it’s not true when it comes to the core goals of western government since 1979 or so.

The ur-rule of neoliberalism is that the rich must always get richer.

Trump’s budget cuts 600 million from Medicaid and other health care in order to give tax cuts to the rich.

Trudeau’s big change from previous Prime Ministers was to massively increase immigration. The effect was to depress wages and increase rent and real-estate prices.

When European countries talk about increasing military spending there is the inevitable comment that this will require slashing social spending. Somehow the idea of taxing the rich and corporations more is never raised, even though that would easily cover the cost.

DOGE’s civil service cuts will lead to massive outsourcing of whatever the government really has to do, which will cost more than doing it in house and profit the rich.

Starmer’s extate taxes on family farmers will force them to sell their farms to agri-business or developers (and, overall, make the UK even less able to feed itself.)

Trump’s proposal to cut the military budget massively in concert with China and Russia would open up more room for tax cuts. The savings won’t be used to help poor and middle class Americans, you can be sure of that. (It also isn’t going to happen that way, because China can easily afford its military budget. More on that in a later article probably.)

This isn’t to say there are never exceptions, but they are exceptions.

This is quite different, by the way, from China.

China used to be willing to mint billionaires, but they figured out it was harming the majority of the population, so they are dealing with it. This is one of the reasons why China has won, and the US has lost. (Another part is that China doesn’t talk about free markets, but actually has them, while the West talks about them but makes sure they never happen.)

Neoliberalism is in the process of ending, but until the ur-rule of always making the rich richer by screwing everyone else ends, the most important part of the oligarchical state will continue. What’s really happening under Trump is the tech-oligarchs taking lead trace away from the banking oligarchs. It’s an internal shuffle of power, while the looting continues.

Since a board prosperous population combined with massive industry is what actually makes post-industrial revolution societies powerful, American and Western decline will continue as long as the determination to fuck over ordinary people remains.

 

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Trump’s Budget Will Cause A Recession

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On February 26, 2025

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The new budget is going to hurt the economy massively. There are 4.5 trillion in tax cuts to high earners and corporations and 880 billion in cuts from “Energy and Commerce”.

Energy and commerce probably sounds innocuous, but that committee overseas healthcare and it has only 200 billion in spending that isn’t health care, which means cuts to Medicaid, CHIP and ACA.

DOGE has put in some massive cuts to research, but the cuts hit research hospitals hard and are going to result in a lot of loss of hospital jobs because of loss of overhead.

Tariffs will also hit the economy hard, especially tariffs on energy, where there’s little ability to domestic producers to eat cost increases.

Tax cuts to high earners and corporations don’t increase the strength of the real economy: the money will go to buyouts, stock buybacks, executive salaries and luxury goods, not to investment in production and new jobs. Cuts to the civil service also have an obvious negative effect on the economy, though some will lead to higher profits due to no longer needing to comply with regulations and laws. (IRS cuts to auditors are the worst of these.)

If you want to re-industrialize you have to force companies to invest in new production, which means ending things like stock buy backs, executive options, and various other ways for corporations and rich people to juice their income without doing something productive.

In other words this is a very good budget if you’re rich, and a very bad budget if you aren’t. It’s going to hit red states harder than blue states, since they are overall more dependent on federal budget spending.

This budget will make America weaker, damage administrative capacity and hurt everyone but maybe to the top 5% or so.

Welcome to Trump’s America.

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Tiresome Reminder Of China’s Tech and Industry Lead

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On February 25, 2025

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China has the lead in about 80% of tech fields:

China has a “stunning lead” in 37 out of 44 critical and emerging technologies as Western democracies lose a global competition for research output, a security think tank said on Thursday after tracking defence, space, energy and biotechnology.
The Australian Strategic Policy Institute (ASPI) said its study showed that, in some fields, all of the world’s top 10 research institutions are based in China.

There is every reason to believe this will be nearly 100% in a decade or so. China is now catching up in pharma, for example:

Among the drugs in clinical research worldwide, approximately 35% are original or co-developed by Chinese companies, ranking second globally.

 

Then there’s the universities:

It’s all over but the screaming. The US is, under DOGE, cutting science funding. Oh, administrative overhead needed to be reduced, no question, but you don’t do that by suddenly slashing it 75% or so, that leaves no time to adjust.

Tech and science, as I have tiresomely pointed out over and over again, always moves to the country with the manufacturing floor lead. There is a delay, but it is now past.

Meanwhile, as of 2024 China controls 35% of industrial output, up from 31% in 2022.

China is moving towards the sort of economic and technological dominance the US enjoyed after World War II. It’s that significant.

And notice that the tech and science lead is accelerating.

Everything in geopolitics, economics and trade needs to take this into account. Nothing is more important except ecological issues.

People talk about a multipolar world, but what is actually happening is a new cold war, with the American side weaker and more backward. The USSR lost not because of some mythical inferior system, but because it started behind and stayed behind, with less population and fewer resources. It competed in some techs for a while, but was never able to establish a sustained lead in any significant number.

People wonder why I suggest most countries should be cutting a deal with and at least slightly aligning towards China. It’s because they’ve already won, and being on the stronger, more prosperous side is superior to being on the weaker, less prosperous side. Further, the sooner countries cut a deal, the better that deal will be.

The US is flailing about with the remains of its power, but the closest analogy to its position is Britain in 1918. The Empire still exists, but everyone with sense can see that its days are numbered. The analogy isn’t perfect, there was no Great War, and America is a continental power, but the same power overhang without the ability to sustain exists.

This informs everything: the US withdrawal from Europe, which is underway. The French being kicked out of Africa, because China can supply everything they need. America’s attempts to cannibalize its vassals for as much tech and industry as they can get, and so on.

America’s currently pressuring Taiwan and TSMC to give them their 2nm fab tech. 85% of Taiwanese oppose this, but the US is piling the pressure on.

Thing is, in time, it won’t matter. China’s catching up anyway.

America’s burning down its old Empire to try and stay in the game. But its vassals are fools if they cooperate. There is nothing the US can offer at this point which is worth the long term cost of submitting to US looting. This is true of Ukraine as well, by the way, and it appears they’re going to sign a minerals deal with Europe instead of the US, which is not ideal, but at least they won’t be screwed both ways to Sunday.

Disentangling from a flailing declining Empire is dangerous and difficult. But it has to be done. By everyone with any sense. Give America its splendid isolation as it falls into decline, or join it.

 

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Germany’s Merz Is A Moron, But At Least He’s Got Some Guts

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On February 24, 2025

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So, Merz is likely Germany’s next Chancellor. He’s said one good thing:

“My absolute priority will be to strengthen Europe as quickly as possible so that, step by step, we can really achieve independence from the USA.

“After Donald Trump‘s statements, it is clear that the Americans, at least this part of the Americans, this administration, are largely indifferent to the fate of Europe.”

Excellent. The first step in recovery from being a slave, or vassal, is admitting the problem and deciding to stand up.

Problem is Merz is rabidly anti-Russia, pro-Israel and stupid. If Germany wants to re-arm, it has to stop its de-industrialization, and that means it needs cheap energy, which right now can only be supplied by Russia. Then it needs to massively invest in tech and science, because it’s far behind China, the US, Japan and South Korea. Its industry is almost all legacy 20th century industry.

If Europe’s going to re-arm, where it getting the weapons from? The US? China? Russia? It has to have its own arms industry.

Germany’s been doing a pretty good job of moving to electrification, but during the transition it’s going to need cheap oil and gas. It also needs to invest in new forms of nuclear power which are safer and cheaper to provide electrical backbone (and to catch up in tech.)

All of this is going to take a lot of money and forcing Germany companies to stay in Germany and invest in research and new products. That means raising taxes on the rich and corporations, and re-jiggering the tax code to force reinvestment of profits into research and new production.

Merz isn’t the sort of guy who’s going to want to put top marginal tax rates back up to 80 or 90%, end stock options, smash CEO and exec pay, and so on.

Still, at least Merz has got it thru his thick head that America is Europe’s overlord and something should be done about that.

But actually stopping Germany’s decline requires making Russia a trade partner, not an enemy. Same for almost all of Europe. Until Europeans get over their paranoid delusions about Russia, they’re going to continue their decline. Same with China. If they insist on being hostile to both Russia and China, even as the South doesn’t want to do business with them, there is no path to save the “garden.”

 

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Open Thread

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On February 22, 2025

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Use to discuss topics unrelated to recent posts. No vax/anti-vax.

Understanding DOGE’s War Against The 20th Century

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On February 21, 2025

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To understand DOGE it’s best to start with Reagan. Reagan reduced regulation massively, and where he couldn’t get rid of laws he and his successors just stopped regularly enforcing them. This took steam over time, so for example there was some anti-trust action up until George W. Bush. In fact without anti-trust actions there would be no Microsoft as we understand it. IBM had MS write the operating system for the IBM PC because they had been hit by anti-trust action repeatedly and wanted to avoid it. It’s not like IBM couldn’t write its own operating system

Gates himself engaged in repeated violations of anti-trust law, and most of it was allowed to slide, but eventually the Feds went after him. The case was going badly for him, but George Bush Jr. ordered it shut down.

Generally regulations do impose a cost, and in return the public receives a benefit. There’s also some benefit to corporations, because regulations increase trust. But as time goes by people assume companies are trustworthy, and regulations start seeming like pure cost.

Cut regulations, and you increase profits, it’s often that simple. The decay of trust which loses money takes decades and the profits are now.

Likewise when you cut government workers, the work usually still needs to be done. Contractors take over and they charge more, and usually do a shittier job, if not immediately, then after a while. Here in Toronto where I live, half the garbage collection was given to private enterprise. At first they were cheaper, but within ten years, why, they were more expensive than union work, though somehow the actual workers were getting paid less. Strange that.

Nor is the Federal bureaucracy in any significant way bloated:

The chart above is in absolute numbers, which means the size of the federal workforce, relative to population, has been declining. You wonder why you’re getting bad service? That, plus contractors, is why.

All of this, of course, doesn’t include the fact that Musk was under investigation by multiple agencies. This Grok (his own AI) generated list from February, amuses:

Before the election Musk said:

Billionaire Tesla and X boss Elon Musk suggested Monday that he will end up behind bars if Vice President Kamala Harris beats former President Donald Trump in next month’s election.

“If he loses, I’m f—ed,” Musk told Tucker Carlson of the Republican nominee in an interview broadcast on X.

“How long do you think my prison sentence is going to be?” the world’s richest man quipped. “Will I see my children? I don’t know.”

Perhaps more important is the larger picture of financial enforcement. Musk wants X to be an “everything app”, which includes making it a payment system and, in effect, a bank. Like Crypto-entrepreneurs and many others he wants the profits of a financial corporation without the oversight, including without the FDIC deposit insurance.

Tech bros have spent over 30 years staring at financial elites and seeing how rich they are, salivating for some of that easy money. Destruction of and intimidation of regulatory agencies is what is required to make it truly happen. Remember that Musk and other politically active tech-bros like Peter Thiel made their first bundle from PayPal.

Finance firms have been the most politically powerful special interest group since at least the 90s, but they are being replaced by politically connected tech firms: an industry they helped birth, and billionaires who would not exist without tax and financial law changes spear-headed by Wall Street.

DOGE’s purpose isn’t to cut costs. It’s to open up new profit profit opportunities, attack resisting parts of the deep state and to remove legal risk from breaking the law. That’s all. It’s why the second part of the government shut down entirely was the Consumer Financial Protection Bureau.

The idea, as always, is to end the reforms which ended with FDR’s New Deal and go back to the 1890s. Notice how obsessed Trump is with ending income tax and going to tariffs: that’s a 19th century political economy setup.

Welcome to the new Gilded Age, with even richer oligarchs.

 

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If You Go For The King #2: Romania

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On February 20, 2025

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So, the supreme court of Romania cancelled the previous Presidential election, ostensibly because of Russian interference.

The guy who won last time, however, will probably win the next elections in May. He recently stated:

Westerners don’t seem to get how you do lawfare. If Democrats and/or the deep state were going to prosecute Trump and his associates, they needed to make sure Trump wound up in jail and unable to run for President. The purges which have happened since his re-election are only logical: why wouldn’t he try and destroy the people and the mechanisms used to go after him?

Same thing with Romania. Cancel the election, then don’t lock Georgescu up? Were they smoking their own crack? Did they genuinely think something would change the numbers in the next election?

I think what Pakistan has done to Imran Khan is despicable, but once you break norms and go after someone who normally would be beyond bounds, you have to finish the job, which the Pakistani deep state (military) did: they threw him in prison on essentially bogus charges.

Western liberals are good at foreign coups and whatnot, but they haven’t quite figured out how to use lawfare properly against truly powerful people in their own countries. That, I suppose, is a good thing, but it is rather pathetic and it isn’t a weakness shared by their domestic opponents.

You get what you pay for. This blog is free to read, but not to produce. If you enjoy the content, donate or subscribe.

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