My keyboard appears to have a short and is spamming keys making typing anything long near impossible. So, probably nothing more till tomorrow when I should have it replaced. Hope all are well and having a less frustrating day than I am.
Feel free to use as an open thread.
So, a Chinese financial firm (not even a software or computer company) has put out an open source AI model which is 50 times more efficient than Chat-GPT or any other American AI. It’s so simple you can run it on some phones, it doesn’t have to call home.
The sound you hear is Sam Altman screaming at the Devil as he realizes he sold his soul to become the world’s richest man, and it ain’t gonna happen.
(Faintly, in the background, the devil laughing his ass off.)
Absolutely hilarious. Oh, and they did it with a tiny team for hardly any money. Didn’t take billions. Doesn’t require massive amounts of energy.
And that whole open source thing matters: everyone else can build off their model. Deepseek, being Chinese, has some censorship in it (type Xi Jingping’s name to see it in action), but you can build your own without the censorship.
One of the interesting things is that it was built by a team of quants. Seems that the Chinese have been crushing the finance industry lately, since they saw what it has done to the West, so the Quants decided to try their hand at a bit of optimized AI code.
This chart is one of the most illustrative of Xi’s policy over the last six years or so:
Seems Xi has also figured out (as I’ve noted in the past) that billionaires suck. They form a power center outside the party and they act against the best interests of everyone in society but themselves.
Turns out that having lots of billionaire is a policy choice. The West made that choice and so did China, for a while, but when they saw how dangerous and harmful billionaires are, they reversed themselves and changed policy to crush them. They’ve even thrown them in prison. (Vietnam recently executed a mogul, though she wasn’t quite a billionaire.)
China’s CCP wants prosperity for everyone in the country. It’s the best way for them to stay in power, and hell, there’s every indication they really believe it’s the right thing to do. They’ve deliberately crushed their housing bubble and the state is moving heavily into building housing, they cracked down on exam-prep tutors, because that’s a red-Queen’s race which favors the rich and hurts everyone else, including kids. They built recreation centers just for delivery workers and forced companies to treat them better.
And they have the tech lead in about 80% of fields, plus, it appears, one more now. Just as Trump announces his five hundred billion dollar AI fund, launches his own shitcoin so people can bribe him without having to stay at one of his hotels and juices crypto, a fraudulent field which caters to the Western desire to get rich without actually doing anything useful for society.
America’s flailing around. Their only real plans is “let’s loot our vassals and satrapies”, and they’ll manage to do more of that. But it isn’t going to change America’s trajectory. It’s a failing Empire, it’s swirling the drain and nothing is going to stop that, since the actual necessary steps require policies like, y’know, slashing home prices, gutting billionaires, raising taxes on the rich, taking utilities and other public goods back into public control and so on: all the stuff no one, Trump included, wants to do.
Empires die hard, and a lot of suffering goes with that. But die the American Empire is, and will. China has already won, and they deserve to.
Week-end Wrap – Political Economy – January 26, 2025
By Tony Wikrent
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.
The US thru a kitchen sink of sanctions at Russia after the start of the Ukraine war, including freezing their foreign assets. The result?
The number is exaggerated, given Russian inflation, but even inflation adjusted, Russia’s doing fine.
It is impossible to choke out Russia with sanctions if China isn’t willing to go a long. (India not cooperating is the cherry on top.) Cannot be done. Impossible.
In fact, sanctions against Russia have been a huge favor to it, forcing a vast surge in import substitution, improving its industry, creating a booming economy whose only real problem is inflation. Russian oligarchs have been forced to spend their money and effort in Russia instead of wasting their money in the West. Meanwhile the sanctions have damaged Europe massively, though somewhat to the benefit of America, since much energy-intensive industry in Europe is shutting down and moving to the US.
If Trump wants peace for Ukraine with Russia he’s going to have to offer a good deal. Threats won’t cut it. Or just wait for the Russians to win and impose a peace.
Since Trump appears to be reducing aid to Ukraine, that will happen sooner than otherwise. Perhaps it’s his real strategy, or more likely, he’s simply incoherent. Russia halting along the current lines would be stupid of them, since they’re advancing inexorably and all reports are of significant Ukrainian manpower shortages.
Trump’s always been a bully, but Russia isn’t one of America’s vassals or satrapies. It’s a junior ally in the Chinese sphere, and Trump doesn’t have the economic or military leverage to make it do anything. The only country in the world which can force Russia is China, and China isn’t going to help America v.s. Russia under any likely Trump policy regime.
There’s a lot of pushback on DEI these days, with some major companies ending their DEI programs. This has been tied into the competence crisis, which is bullshit.
Let’s put the idea that there isn’t massive discrimination to rest. There have been many studies. One found that identical resumes from people with black names vs. people with white names had half the interview requests. A meta-study found the effect less overall: 24%.
Now I don’t know if DEI overcomes that, but modern studies don’t find any less of a gap, so I’m guessing “no”, though the effect on promotion may be more significant.
The obvious solution is to do something similar to the how orchestras evaluate musicians: they place them behind a screen, and they play their music. The evaluators don’t know who’s playing, or anything about them.
Modern technology makes this viable: wipe the resume of any identifying remarks and do the same with any testing. Have the interview with an avatar with a computer masked voice. If you really want to evaluate entirely on merit: their record and their abilities, that would be the way to do it.
The counter-argument is “cultural fit” and I’m not going to say that there’s nothing to it. The evidence is that diverse teams improve quality at the cost of speed and increased conflict but the benefits don’t accrue for teams which don’t work together much. If you’re doing something you already know how to do, where quality isn’t much of a factor, speed is and team members don’t interact much anyway, then there’s a case for “cultural fit” teams. But if you’re dealing with uncertainty, or quality is more important than speed, then a diverse team is probably better.
(Amusingly the evidence is that startup funds perform less well without diversity, but silicon valley hates diversity and prioritizes fit, which is one reason for their under-performance the last couple decades since the tech-bros took charge.)
I’m not a huge fan of DEI. It introduces a variable that shouldn’t matter. Problem is that variable already matters, and DEI is an effort to counter people hiring less competent people because of prejudice.
But there is another solution: one that prioritizes merit, at least for hiring (and it could be extended to some types of promotion decisions). Decisions based on blinding out gender and race.
If the real issue is merit and not something else, this is the obvious way to go. Strange how rarely it is suggested.
Actuaries are probably the world’s foremost experts on risk. The Institute & Faculty of Actuaries has weighed in on the likely effects of climate change (pdf):
They expect this between 2050 and 2070, but it appears to be based on reaching over 2 degrees increase. I’d personally expect it sooner. Whatever the case, 2 billion deaths is one of the more extreme numbers I’ve seen from a mainstream source. (I personally expect at least half of the world’s population to die.)
By 2070 to 2090 they expect as much as a 50% loss of GDP.
The global economy could face a 50% loss in GDP between 2070 and 2090, unless immediate policy action on risks posed by the climate crisis is taken. Populations are already impacted by food system shocks, water insecurity, heat stress and infectious diseases. If unchecked, mass mortality, mass displacement, severe economic contraction and conflict become more likely.
I think the simplest and most important quote is this one:
Our society and economy fundamentally depend on the Earth system which provides essentials such as food, water, energy and raw materials.
A lot of people seem to miss that the economy is a wholly owned subsidiary of the environment. Mother nature has the final say on everything.
As long as we’re banging on about climate change, this lovely little chart shows the effects on precipitation of climate change. (Hotter air means more water in the air, and thus more rain and snow.) In other words, expect more floods, mudslides and so on. Notice that the slope appears to be accelerating.
Remember, realism is not pessimism.
What can I say, it’s an old picture, but I like it
The Guardian has a pretty good list of Trump’s executive actions day one.
January 6th pardons are the most interesting, to me. Trump should have granted these pardons before leaving office in 2020 but I’m sure they’re still a great relief to those charged or imprisoned. (I actually know one guy who wound up in prison because of J6.) When I say “should” I’m not expressing support for them storming the capital, just noting that a smart leader protects his most fanatical followers. Might need them again, after all.
There are a bunch of oil and climate related orders, which amount to “drill more, and screw any anti-climate change policies or agreements” including leaving the Paris accords. I’m not that worked up, Biden massively increased drilling too, he just protected a few places from it. As for the Paris agreement, it’s always been a dead letter. I notice that Musk has skated by, at least so far, Trump got rid of the “goal” to have half of all autos be electrical, but didn’t get rid of the subsidies, without which Musk would lose hundreds of billions of dollars .
Trump also ordered more work on the wall (Biden hadn’t actually stopped building barriers), ended appointments, seems to have effectively ended refugees and most impressively ordered all government departments not to issue documents related to birthright citizenship of any children born to illegal refugees. This is in direct violation of the 14th amendment as written, but given the makeup of the Supreme Court, the 14th may be a dead letter. He’s also declared an “emergency” so that troops can be deployed to the border, which would otherwise be illegal.
He has declared Mexican cartels terrorists and I’d guess he’s thinking of launching raids across the border, without Mexican government permission, which is going to be a nightmare.
All genders other than male and female have been declared non-existent, all policies allowing or encouraging gender change are disallowed, and the government can’t fund anything. Anti-trans hysteria continues. Pure pandering from Trump, as he’s suggested in the past that he doesn’t really care but is happy to whip up crowds with it. DEI related executive orders have been rescinded. Won’t do a thing to help the competency crisis, but more red meat.
Trump has also removed Schedule F protection for Federal civil servants from arbitrary dismissal. This will be challenged, but the consensus seems to be he’s within his rights. I’m not super worked about this, winning political parties should be able to put their people in place and it will work to the advantage of future Presidents as well.
Overall there’s not much here that’s surprising. For immigrants the real question is his planned immigrant roundups and expelling, which seem likely to start soon. The border guards were always his most loyal servants among the paramilitary forces and I’m sure they’re salivating at the opportunity to beat people up and degrade them.
The most interesting thing is that Musk has thus far bought himself a reprieve. Were I him, I’d showboat less, because Trump doesn’t like people who steal his limelight. Musk was essentially created by Obama era policies and subsidies favoring both private spaceflight and electric cars, and he can be destroyed just as easily by a hostile President.
There’s a lot of celebrating of the Gaza ceasefire. Hamas troops are openly on the streets, hostages from both sides are being returned (that only Israeli captives are called hostages is ludicrous) and it’s clear that Israel came nowhere close to destroying Hamas. This is an impressive accomplishment, Gaza is only 25×5 miles: Gaza is tiny. Hamas’s tunnel strategy clearly worked.
That said, Gaza is a wreck.
The official civilian casualty numbers are under 100K, but I suspect a full population study will find the death toll far higher. All Gaza hospitals are non-operational, often destroyed entirely and a high percentage of the nurses and doctors are dead. Water and power infrastructure has been smashed, and even if Israel turns their side back on most of Gaza will be without.
A great deal will depend on whether the ceasefire sticks. Netanyahu has suggested that the war will start up again.
So, with all due respect to Hamas, Yemen and Hezbollah, it’s going to depend on Trump. Of the three Yemen has the most leverage, it can keep attacking if Israel keeps violating the ceasefire and the only way to get it to stop is to keep the ceasefire, which will re-open shipping as nothing else can, but by itself it’s not sufficient.
However ultimately Trump has plenty of leverage. As Yitzak Brick, the ex-IDF general said:
“All of our missiles, the ammunition, the precision-guided bombs, all the airplanes and bombs, it’s all from the U.S. The minute they turn off the tap, you can’t keep fighting. You have no capability. … Everyone understands that we can’t fight this war without the United States. Period.”
The war doesn’t start up again if Trump is willing to use his leverage. It’s that simple. Trump doesn’t seem to like war, but he’s also surrounded by Zionists and hawks. Israel has already, as usual, violated the ceasefire, as it has thousands of times in Southern Lebanon. It will attempt to find an excuse to re-start full scale bombing.
But if Trump really doesn’t want that, it doesn’t happen. That simple. Israel still has tens of thousands of internal refugees, a huge loss of middle and small sized businesses and it also requires US financial and economic aid. Israel can’t fight if Trump brings down the hammer.
I will note, that at least so far, it appears that those who refused to vote for Biden because of the Gaza genocide were justified, and that those Muslim leaders who appeared publicly with Trump appear vindicated. Biden was pro-genocide, and refused to his leverage to stop the war. Trump, even before taking power, said that if the hostages weren’t returned by January 20th, there’d be hell to pay, and lo-and-behold, on January 19th the hostages were returned. Trump’s envoy forced Netanyahu to meet him during Shabbat, after Netanyahu initially refused.
Israel has a great deal of power in the West, thru its operatives and donations, but it is the tail to America’s dog, and a determined President, like Reagan in Lebanon or George Bush Sr. can stand against if they decide to. Since Trump can’t have a third term, he doesn’t need to kiss AIPAC’s ass.
We’ll see how it plays out, but at least the start has been promising.
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