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By Tony Wikrent

Strategic Political Economy

Why Resistance Alone Will Fail 

Les Leopold, February 14, 2025

Musk’s political economy

[X-Twitter, via Naked Capitalism Water Cooler 02-10-2025]

Use to discuss topics unrelated posts.

By Tony Wikrent

Strategic Political Economy

Franklin D. Roosevelt, State of the Union Message to Congress, January 11, 1944​​​​​​​

[TW: In this speech, FDR proposed an economic bill of rights]

…a noisy minority maintains an uproar of demands for special favors for special groups. There are pests who swarm through the lobbies of the Congress and the cocktail bars of Washington, representing these special groups as opposed to the basic interests of the Nation as a whole. They have come to look upon the war primarily as a chance to make profits for themselves at the expense of their neighbors- profits in money or in terms of political or social preferment….

One of the great American industrialists of our day—a man who has rendered yeoman service to his country in this crisis-recently emphasized the grave dangers of “rightist reaction” in this Nation. All clear-thinking businessmen share his concern. Indeed, if such reaction should develop—if history were to repeat itself and we were to return to the so-called “normalcy” of the 1920’s—then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home….

The Business Community Is Extraordinarily Stupid. Is a dictatorship good for business?

Hamilton Nolan, February 05, 2025 [How Things Work]

…People often criticize business as greedy. Yes. It is greedy, as water is wet. Understanding corporations as anything other than soulless robots seeking profit is a mistake. This is why it is wise to tightly regulate them and unwise to allow them to do whatever they want. In a related sense, people often say, “Hey, wouldn’t it be in the self-interest of business to pay more taxes and subject themselves to more regulations and and generally push for more progressive values because it would help to create the stable and happy society outlined above, which is good for business in the long run?” Well, sure, but this question misunderstands the fact that the political actions of the business lobby assume that they will always be pushing against some force that is pushing back, and that the progressive forces they are pushing against will be enough to protect the basic structure of democratic society, even as businesses try to undermine it just enough to put money in their own pockets. Businesses want to pick up pennies in front of the steamroller, but they don’t want the steamroller to run them over.

Well fuckers, you have miscalculated. You rats.

The business lobby’s many years of selfish conduct and support for deleterious public policies have produced so much inequality and undermined our democratic institutions so successfully that we are now watching a strongman seize control of our government. Smooth move, you fucks. You grasping roaches. Your efforts have gotten us here. All the Koch Brother/ Federalist Society types who invested so much money in capturing the courts for the right wing have gotten us here. All the nice Chamber of Commerce types who supported the Republican Party even as it radicalized further and further because they wanted those tax cuts have gotten us here….

Shock Doctrine USA

Thomas Neuburger, February 07, 2025 [God’s Spies]

What we’re seeing is not a new autocracy, but the old coup, the one called “neoliberalism,” the one we’ve been watching since Reagan: the complete dismantlement of government-by-the-people till only the rich have rights. It’s not the removal of the big FDR state, but its slow, then faster replacement by an equally muscular state responsive to wealth….

….Carl Biejer highlights this point in a recent paid-only piece, “The shock doctrine comes to America.”

Beijer’s point: This isn’t a new autocracy he’s creating, but the same old tried-and-true shocking. The war’s not being waged by Trump, but by “capital” writ large….

“This is what neoliberals have done over and over again to dismantle the state in other countries.…

“The neoliberals are taking an axe to the government rather than a scalpel, and this means that the left could very well see all kinds of programs related to US empire and the security state undergo some significant defunding. But we should not have any illusions about what is driving this: neoliberal austerity”

The Logic of Destruction, and how to resist it

Timothy Snyder, Feb 02, 2025

What is a country? The way its people govern themselves. America exists because its people elect those who make and execute laws. The assumption of a democracy is that individuals have dignity and rights that they realize and protect by acting together.

The people who now dominate the executive branch of the government deny all of this, and are acting, quite deliberately, to destroy the nation. For them, only a few people, the very wealthy with a certain worldview, have rights, and the first among these is to dominate.

For them, there is no such thing as an America, or Americans, or democracy, or citizens, and they act accordingly. Now that the oligarchs and their clients are inside the federal government, they are moving, illegally and unconstitutionally, to take over its institutions.

The parts of the government that work to implement laws have been maligned for decades. Americans have been told that the people who provide them with services are conspirators within a “deep state.” We have been instructed that the billionaires are the heroes.

Constitutional crisis

Elon Musk Wants to Get Operational Control of the Treasury’s Payment System. This Could Not Possibly Be More Dangerous

Nathan Tankus, February 4, 2025 [Notes on the Crisis]

I try to keep emotion out of this newsletter. I have always tried to write Notes on the Crises in a calm, detached tone so that the information I highlight shines through. However, I must be honest with readers: I’m absolutely terrified…. There is nothing more important on the entire planet than getting Elon Musk and DOGE out of the Bureau of the Fiscal Service and allowing career civil service employees to run the Treasury’s internal payments system without capricious and self-serving interference from billionaires and their allies….

Musk and his cronies are clearly aiming to redesign the payments system to serve their agenda. The most chilling sentence is this one from the Wall Street Journal:

“It couldn’t be determined what DOGE representatives intended to do with their access to the payment system. Musk and his team think the payment system should be overseen by political appointees selected by President Trump, the people said.”

This is not the attitude of people who are trying to simply technocratically make the payment system more “efficient.” They have a very clear and specific agenda, which involves unilaterally cutting spending, particularly spending they perceive to be going to their ideological foes. Is “Wokeness,” the “Green New Deal,” “Marxism,” and “Gender Ideology” going to be the new definition of an “improper payment”? ….

The data the Treasury collects could not possibly be more sensitive. We are talking about hundreds of millions of Social Security numbers, as well as a raft of other specific identifying information….

This system collects between “10,000 – 99,999” social security numbers along with identifying “business” information, including sensitive financial records and “business” bank accounts. Does anyone think that if Musk could get his hands on this information, whether directly or indirectly, he would not use it to go after, say, nonprofits he dislikes? At 3:14am Sunday, Musk pledged to shut down “illegal payments” to Global Refuge, a faith-based organization that exists to provide “safety and support to refugees, asylum seekers, and immigrants from across the world.” Musk messing with ASAP is no hypothetical at all….

In some ways, as enormously alarming at this all is, it’s somehow not the biggest concern that I have been thinking about. For the past 36 hours (writing these words at Midnight on Saturday) my mind has returned over and over to the idea that they have been asking for “source code information” to the Treasury’s internal payments system….

COBOL is the lingua franca of mission critical legacy IT in use since the 1960s and too many systems have been too important to abandon it. “Modernization” has instead been built around making COBOL function somewhere besides a mainframe. The “modernization” of the Treasury’s IT payments infrastructure seems to have constituted a combination of rooting out Assembly code and a basically completed transition of “mainframe” COBOL to an “internally-developed RM COBOL” running on Linux servers. RM COBOL is an update on mainframe COBOL “designed for optimum performance and wide portability across a broad diversity of computers and operating systems.” Most notably, the Treasury’s transition to RM COBOL seems to have involved harmonizing more than 30 different COBOL systems which had evolved separately. It was 30 “dialects” they managed to get to speak one standardized language.

Does Elon Musk understand any of this? Does he have any grasp of the scale and complexity he is trying to reach into and exercise “influence”? Currently the most urgent and profound danger is not what he intends to make this sprawling apparatus do. The most immediate danger is what might break in the process of trying to get this apparatus to do what he wants.

At every step of modernizing this system they have run systems concurrently to make sure the “new” functions as well as the old. Redundant systems are only phased out over long time periods after they have enough data on system functioning to feel confident in the “modernized” infrastructure. This is expensive, time consuming and absolutely necessary to make sure this system functions 100% of the time. Elon Musk, however, has never shown respect or understanding of the concept of a mission critical IT system. All he sees is “inefficiency” because he doesn’t understand that there are some things in this world that need to function no matter what and you spend the additional money to make sure it runs, including when it’s being updated….

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By Tony Wikrent

Strategic Political Economy

We Found the $2 Trillion

David Dayen, January 27, 2025 [The American Prospect]

GRAPH — The Road to $2 Trillion

Elon Musk wants to cut government spending. But the waste in the system goes to elites like him. Here’s a better way to bring down deficits….

This article should come with a warning label: We should not cancel the equivalent of 7 percent in annual GDP all at once, which would trigger a deep recession. But identifying the real sources of inefficiency in our government—the trillions funneled to elites—can preserve resources for programs to help those in need….

Ramaswamy has called for a 75 percent personnel reduction across federal agencies. This would hardly save anything. According to the Congressional Budget Office, there are about 2.3 million federal employees with total compensation in 2023 of $271 billion; that’s 4 percent of the U.S. budget. Federal employees were roughly 4.3 percent of all workers in 1960 and 1.4 percent today. As a result, we’ve seen an explosion in contractors undertaking tasks that government workers used to perform. Nearly three times as much money is spent on contractors than federal workers.

Slashing the federal workforce, almost two-thirds of which is at the Departments of Defense, Veterans Affairs, and Homeland Security, would likely lead to more expensive contractors, and also increase the $247 billion in improper payments the government makes every year….

Physicians for a National Health Program (PNHP), which advocates for a single-payer system, noticed even greater savings potential in the MedPAC report. Traditional Medicare sets a “benchmark” for spending on the average beneficiary. Several studies have shown that MA plans spend between 11 and 14 percent less, because they cherry-pick healthier patients, even after accounting for upcoding to make them look sicker. Increasing denials of care allows MA plans to rake in even more profit.

In all, PNHP found that MA plans charge the government at rates $140 billion per year higher than traditional Medicare….

The government also spends massive amounts of money on prescription drugs. In 2022, U.S. drug prices were 178 percent higher than in 33 other industrialized nations, according to a report funded by the Department of Health and Human Services. Some of these drugs are sold at 20 to 30 times the cost of production and distribution; pharmaceutical profit margins are significantly higher than private-sector counterparts…. Using federal statutes to seize certain drug patents and distribute them to generic manufacturers that charge less would also save billions. But more structurally, we could overhaul the monopoly patent system that gives drug companies exclusive rights to charge whatever they want for a set period….

Of course, moving to a single-payer system wholesale could yield over half a trillion dollars in savings from administrative expenses alone, per the People’s Policy Project. But even if the nation isn’t ready for single-payer, limiting private-sector profit-taking and boosting public provision comes to roughly $490 billion per year….

In 2021, the Congressional Budget Office offered a range of options to take the Pentagon budget down by $1 trillion over a decade. Gledhill estimated significant savings from service contracts, which make up close to half of all Pentagon obligations. Many are redundant or could be done more cheaply in-house. Other possibilities include unwinding ineffective contract orders and bringing in other firms to drive down costs through a competitive bidding process….

Putting a number on Pentagon savings is difficult, but using CBO’s conservative figures would net $100 billion per year. Some people I talked to think that could double. Let’s split the difference and say $150 billion a year.

The kind of procurement reform in service contracts and equipment orders needed at DOD could be replicated across the government, insourcing operations and ensuring that taxpayers aren’t routinely ripped off. The Project on Government Oversight has found that federal employees are almost uniformly less expensive than contractors. The Organization for Economic Co-Operation and Development estimates that one-fifth of government procurement globally is siphoned away through bid-rigging. In the U.S., that translates to $150 billion a year. As much as $521 billion a year is lost due to fraud, according to the Government Accountability Office. As Matt Stoller has written, management consultants with a tendency to do nothing but add bloat cost the government $70 billion in 2023.

GRAPH — The Road to $2 Trillion

…. the tax gap, the distance between tax liability in a given year and actual taxes paid. In 2022, the last year studied, the IRS put this number at an astonishing $606 billion per year. This gap is concentrated among the top 1 percent, who evade $163 billion per year, according to a 2021 Treasury Department report….

…A one-percentage-point increase in the corporate tax rate equals about $13.5 billion per year in revenue. Setting a 25 percent tax rate through stock returns would lead to almost no difference between the nominal and the effective tax rate. For the past couple of years, the effective corporate tax rate has been around 20 percent. Add five points and you’re up to $65 billion per year….

…There are several other major tax expenditures; the Tax Policy Center lists the top 13 as costing between $1.12 trillion and $1.38 trillion per year, depending on the estimate. It’s a dizzying amount of money, funneled mostly from working people to elites….

Trump and Elon Musk Just Pulled Off Another Purge—and It’s a Scary One

Greg Sargent, January 31, 2025 [The New Republic]

…Why is Musk’s DOGE trying to access payment systems inside the Treasury Department? It’s not clear what relevance this would have to his ostensible role, which is to search for savings and inefficiencies in government, not to directly influence whether previously authorized government obligations are honored.

Another question: Did Trump directly authorize Musk to do this, or did he not? Either answer is bad. If Trump did, he may be authorizing an unelected billionaire to exert unprecedented control over the internal workings of government payment systems. If he did not, then Musk may be going rogue to an even greater extent than we thought….

Former officials I spoke with were at a loss to explain why Musk would want such access. They noted that while we don’t yet know Musk’s motive, the move could potentially give DOGE the power to turn off all kinds of government payments in a targeted way. They said we now must establish if Musk is seeking to carry out what Trump tried via his federal funding freeze: Turn off government payments previously authorized by Congress. The White House rescinded the freeze after a national outcry, but Trump’s spokesperson vowed the hunt for spending to halt will continue. The former officials are asking: Is this Treasury power grab a way to execute that?

“Anybody who would have access to these systems is in a position to turn off funding selectively,” said Michael Linden, a former OMB official who is now director of Families Over Billionaires, a group fighting Trump’s tax cuts for the rich. “The only reason Musk wants to get himself in there must be because he wants to turn some things off.”

Senior U.S. official to exit after rift with Musk allies over payment system 

[Washington Post, via Naked Capitalism Water Cooler 01-31-2025]

“David A. Lebryk, who served in nonpolitical roles at Treasury for several decades, announced his retirement Friday in an email to colleagues obtained by The Washington Post. President Donald Trump named Lebryk as acting secretary upon taking office last week. Lebryk had a dispute with Musk’s surrogates over access to the payment system the U.S. government uses to disburse trillions of dollars every year, the people said. The exact nature of the disagreement was not immediately clear, they said.” That’s too bad. Why? “Typically only a small number of career officials control Treasury’s payment systems. Run by the Bureau of the Fiscal Service, the sensitive systems control the flow of more than $6 trillion annually to households, businesses and more nationwide. Tens, if not hundreds, of millions of people across the country rely on the systems, which are responsible for distributing Social Security and Medicare benefits, salaries for federal personnel, payments to government contractors and grant recipients and tax refunds, among tens of thousands of other functions…. ‘This is a mechanical job — they pay Social Security benefits, they pay vendors, whatever. It’s not one where there’s a role for nonmechanical things, at least from the career standpoint. Your whole job is to pay the bills as they’re due,’ [Mark Mazur, who served in senior treasury roles during the Obama and Biden administrations] said. ‘It’s never been used in a way to execute a partisan agenda. … You have to really put bad intentions in place for that to be the case.’”

Trump: We’re Forging A New Political Majority That’s Shattering The New Deal Coalition

[RealClearPolitics, via Naked Capitalism Water Cooler 01-28-2025]

President Donald Trump speaks at the House Republican Issues Conference at the Trump National Doral Miami Resort: “Together, we’re forging a new political majority that’s shattering and replacing Franklin Roosevelt’s New Deal coalition, which dominated American politics for over 100 years…. If we do our job over the next 21 months, not only will House Republicans be reelected and expand our majority in 2026, we will cement a national governing coalition that will preserve American freedom for generations to come. There has never been anything like what’s happened in politics in the last few years.”

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Week-end Wrap – Political Economy – January 26, 2025

By Tony Wikrent

The Trump “Litmus Test” 

Scott Ritter [via Naked Capitalism 01-25-2025]

…I’ll take this moment to remind President Trump that one of the “crimes” I was accused of committing by the Ukrainian government which put me on their State Department-funded death lists, was to claim that the Russian-Ukrainian conflict was a direct result of NATO expansion.

Which is, of course, the same assessment put forward by President Trump.

If you were an average American citizen, Mr. President, your name would be on that list.

Now is your chance to stand up in defense of the average American citizen and shut these lists down while terminating all connectivity between the US and Ukrainian governments which target US citizens for speaking out against Ukrainian propaganda talking points.

“The First Amendment to the United States Constitution,” you wrote, “an amendment essential to the success of our Republic, enshrines the right of the American people to speak freely in the public square without Government interference.”

You promised to defend this right.

Prove it with action, not just words.

Strategic Political Economy

”a way for those who want something from Trump to transfer money directly to him”

Heather Cox Richardson, January 20, 2025 [Letters from an American]

The tone for the inauguration of Donald J. Trump as the 47th president of the United States at noon today was set on Friday, when Trump, who once trashed cryptocurrency as “based on thin air,” launched his own cryptocurrency. By Sunday morning it had made more than $50 billion on paper. Felix Salmon of Axios reported that “a financial asset that didn’t exist on Friday afternoon—now accounts for about 89% of Donald Trump’s net worth.”

As Salmon noted, “The emoluments clause of the Constitution,” which prohibits any person holding a government office from accepting any gift or title from a foreign leader or government, “written in 1787, hardly envisaged a world where a president could conjure billions of dollars of wealth out of nowhere just by endorsing a meme.” Salmon also pointed out that there is no way to track the purchases of this coin, meaning it will be a way for those who want something from Trump to transfer money directly to him.

Former Trump official Anthony Scaramucci posted that “anyone in the world can essentially deposit money” into the bank account of the president of the United States….

Walter Schaub, former head of the Office of Government Ethics under Trump in his first administration, who left after criticizing Trump’s unwillingness to divest himself of his businesses, wrote to CNN: “America voted for corruption, and that’s what Trump is delivering…. Trump’s corruption and naked profiteering is so open, extreme and pervasive this time around that to comment on any one aspect of it would be to lose the forest for the trees. The very idea of government ethics is now a smoldering crater.”

The Land of Greater Fools: America as a big con.

Hamilton Nolan, January 21, 2025 [How Things Work]

Watching Trump launch a crypto coin days before his own inauguration that instantly made him billions of dollars richer is kind of impressive, in the way that you might be impressed by watching the planes strike the twin towers on 9/11. People said this was bad, yes. But do you understand the level of corruption that is on full display here? This is—I don’t want to be hyperbolic here—a level of public corruption that is, let’s conservatively say, one thousand times worse than the Watergate scandal. That was just an instance of a paranoid president trying to steal secrets from his political opponents and then covering it up. This, on the other hand, is the president-elect of the United States of America putting out a big bucket that says “BRIBE ME” right before he takes office. Anyone can now buy an imaginary “coin” and the money will go directly into the pockets of the Trump family, as they run the United States government. That is what happened here. Donald Trump’s net worth went up by tens of billions of dollars in one day. In one day! The day before his inauguration! Out of thin air! And then his fucking wife made a coin, too! This is not even the same as the Trump family launching a business, building hotels that wealthy interests might stay in to try to curry favor. There is no business here. This is just saying, “Give the president money and we’ll give you this token we made up.” It is a tip jar that sits on the desk of the Oval Office. You almost have to laugh. The way that I know that people have not quite internalized how outrageous this is is that everyone is not still talking about it, right this minute.

Imagine a grainy undercover FBI sting video of a crooked politician being handed a paper bag full of money. Now imagine that the bag contains ten billion dollars. Now imagine the camera pulling back and the guy taking the bag also controls the FBI. That’s what is happening, my friends. It is not hidden. It is the opposite of hidden. Boldness is the way of the wise crook. Hiding things implies that you think that they are wrong.

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By Tony Wikrent

Strategic Political Economy

Can nonviolent struggle defeat a dictator? This database emphatically says yes

[Waging Non-Violence, via Naked Capitalism Water Cooler 01-14-2024]

“[T]he Global Nonviolent Action Database, or GNAD, built by the Peace Studies department at Swarthmore College. Freely accessible to the public, this database — which launched under my direction in 2011 — contains over 1,400 cases of nonviolent struggle from over a hundred countries, with more cases continually being added by student researchers. [T]he database details at least 40 cases of dictators who were overthrown by the use of nonviolent struggle, dating back to 1920. These cases — which include some of the largest nations in the world, spanning Europe, Asia, Africa and Latin America — contradict the widespread assumption that a dictator can only be overcome by violence. What’s more, in each of these cases, the dictator had the desire to stay, and possessed violent means for defense. Ultimately, though, they just couldn’t overcome the power of mass nonviolent struggle.”

[Lambert Strether: “I would like for this to be true. I would also want to check those 40 cases for contamination by spook-driven color revolution, and the geopolitical context.”]

How the West Was Lost

Krzysztof Tyszka-Drozdowski [American Affairs Journal, via Naked Capitalism 01-18-2025]

REVIEW ESSAY
Le Défaite de l’Occident

by Emmanuel Todd

Gallimard, 2024, 384 pages

….European elites have yielded to what Todd calls the anti-ideology of “Europeanism.” It is an anti-ideology insofar as it does not allow for any active political community to emerge: the upper classes have been captivated by the belief that nations should not exist. In this respect, Europeanism is very similar to Anglo-Saxon ultraliberalism, which also dismisses the nation as a pernicious fiction. According to Todd, this belief manifests in various ways, primarily through efforts to abolish nations via European integration or to fragment them by geo­graphically separating minorities, ultimately increasing atomization in the name of multiculturalism.2 Without a shared moral compass, society disintegrates “into isolated bubbles, confined to their own problems, pleasures and pains.” In this condition, the governing establishment constitutes nothing more than another “autistic group,” says Todd, with the only difference being its greater visibility.3

At a more practical level, the abandonment of the national framework in economic thinking has led to many policy mistakes that have weakened European states. Alternatives to liberalism have been stamped out, reducing economic policy exclusively to making the labor market more flexible or to cutting public spending. Another consequence of rejecting the concept of the nation is the neglect of demographic issues….

Why Biden May Matter

David Leonhardt [New York Times, via Naked Capitalism Water Cooler 01-16-2024]

“one major part of Biden’s agenda has a decent chance of surviving. It was the idea that animated much of the legislation he signed — namely, that the federal government should take a more active role in both assisting and regulating the private sector than it did for much of the previous half-century. This idea has yet to acquire a simple name. The historian Gary Gerstle has called it the end of the neoliberal order….

The philosophy didn’t originate with Biden, but he meaningfully shifted the country toward it, first as a candidate in 2020 and then as president. He moved the Democratic Party away from decades of support for trade liberalization and imposed tariffs on China. He pursued an industrial policy to build up sectors important to national security (like semiconductors) or future prosperity (like clean energy). And his administration was more aggressive about restraining corporate power than any in decades, blocking mergers, cracking down on ‘junk fees’ and regulating drug prices….

Trump will surely undo major parts of the Biden agenda, especially on climate change and some aspects of corporate regulation. In other ways, though, Trump is part of the shift away from neoliberalism. He romped through the 2016 Republican primaries partly because he was more hostile to trade, China and cuts to Medicare and Social Security than other Republican politicians. Some of Trump’s second-term nominees, including for labor secretary and head of the Justice Department’s antitrust division, are hardly small-government neoliberals. Neither is Vice President-elect JD Vance.”

Wall Street could get a boost from $1 trillion in buybacks, Goldman says 

[Reuters, via Naked Capitalism 01-18-2025]

Goldman estimates that companies could spend some $1.07 trillion on buying back their own stock this year

The Competency Crisis Is Not About DEI

Ian Welsh, January 15, 2025

That DEI (women and brown people) are responsible is a constant right wing cry.

The competency crisis is a result of an economy where making money without making a product is easier than making something. We prioritized financial profits—multi generational rises in asset prices that were faster than inflation. Housing went up. Stocks went up. Private equity earned money buy buying companies, larding them up with debt, and running them into the ground. Profits were juiced by moving production offshore and engaging in regulatory and labor arbitrage.

The best profit came from playing financial games and rentierism. You didn’t have to make anything or delivery anything, you just had to find a way to squeeze money out of something by making it go up faster than inflation, or by destroying something which was already built, taking all the future value now and giving it to yourself….

Everyone wanted to make money without having to create to get it. Mostly they either wanted to get unearned money from appreciation, to destroy what others had built, or to capture a market in an oligopoly or monopoly so they could juice prices.

Meanwhile, the manufacturing floor moved to China and elsewhere. The people who knew how to make things retired, moved to other jobs, retired and eventually died.

We can’t build most things because we haven’t prioritized building things, or getting better at building things since the 70s. The eighties are where predatory capitalism took hold, and since then the whole game has been rentierism, unearned gains, predation and arbitrage….

Global power shift

The State of Western Warcraft 

Lee Slusher [via Naked Capitalism 01-15-2025]

Britain’s post-imperial delusion 

[Unherd, via Naked Capitalism 01-15-2025]

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By Tony Wikrent

Strategic Political Economy

The Lost Memos That Predicted This Era

David Sirota, January 07, 2025 [The Lever]

THE PLUTONOMY MEMOS: As we welcome in 2025, it’s worth noting that this year is the 20th anniversary of the release of the so-called Plutonomy Memos — a series of Nostradamus-like reports that predicted much of the world we live in today.

The memos written in 2005 and 2006 came from Citigroup, and they effectively admit that Wall Street and its neoliberal political allies were creating a feudal American economy. These documents — which you can find here, here, and here — survive on economist Brad DeLong’s blog and in a few old media mentions, book references, and tweets but barely exist on the internet (Citigroup reportedly worked to get them memory-holed off the Internet).

“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take,” the Citigroup analysts wrote. “There are the rest, the ‘non-rich,’ the multitudinous many, but only accounting for surprisingly small bites of the national pie.”

Underscoring the accuracy of these predictions, a new UBS report finds that billionaires’ total wealth has more than doubled over the past ten years to $14 trillion.

In 2005 Citigroup Saw Canada, the U.S. & UK as “Plutonomies” – Economies Where Only the Rich Mattered.

Dougald Lamont, January 09, 2025

Their plan? Figure out how to make even more money from making the rich richer, and the poor poorer. Spoiler: Citigroup flamed out three years later….

Now, if you’re looking for some kind of morality in this tale, you should know Citigroup and its leaders managed to create the conditions for the 2008 Global Financial Crisis. They had lobbied for the 1990s-era repeal of the New Deal Era Glass-Steagal Act, which kept commercial banks and investment banks separate.

The “Plutonomy” is a study in Icarean Hubris. In the Global Financial Crisis, Citigroup crashed and received more in bailout money than it was worth;

“The U.S. Treasury extended a $45-billion credit line, and gave it a guarantee for $300 billion in “trouble assets” junk mortgages whose market price had fallen by 60 to 80 percent. Thic actions saved the bank and its bondholders, but Citigroup stock plunged belov a dollar by March 2009 as its equity value fell by more than 90 percent, to just $20 billion compared to $244 billion in 2006….

“Little of this note should tally with conventional thinking. Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy?….

4) In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take.

There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.

Global power shift

Collapsing Empire: RIP ‘Overt Operations’ 

Kit Klarenburg, January 05, 2025 [Global Delinquents]

In recent months, a remarkable development in the Empire’s decline has gone almost entirely unnoticed. The National Endowment for Democracy’s grant database has been removed from the web. Until recently, a searchable interface allowed visitors to view detailed records of Washington-funded NGOs, civil society groups, and media projects in particular countries – covering most of the world – the sums involved, and entities responsible for delivering these initiatives. This resource has now inexplicably vanished, and with it, enormous amounts of incontrovertible, self-incriminating evidence of destructive US skullduggery abroad.

Take for example NED grant records for Georgia, the site of recent repeated colour revolution efforts, at the forefront of which were Endowment-bankrolled organisations. While still accessible via internet archives, they were deleted during the summer. Today, visitors to associated URLs are redirected to a brief entry simply titled “Eurasia”. The accompanying text describes in very broad terms the Endowment’s aims regionally and the total being spent, but the crucial questions of where and on what aren’t clarified….

Gaza / Palestine / Israel

The dream of a free Middle East is coming true 

[The Telegraph, via Naked Capitalism 01-06-2025]

Israel built an ‘AI factory’ for war. It unleashed it in Gaza. 

[Washington Post, via Naked Capitalism 01-06-2025]

Chris Hedges: Genocide — The New Normal 

[Consortium News, 01-08-2025]

New York Times rejects Quaker ad for calling Israel’s actions “genocide” 

[American Friends Service Committee, via Naked Capitalism 01-09-2025]

Oligarchy

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