“Independent” Mathematics

We have no visibility, or little visibility, into the fraction of the GOP that feels comfortable with right wing social policy, but is there for economic reasons. Or pseudo-economic reasons. I once had a discussions with someone who felt it was worse to go from a top marginal rate of 33% to 40% on his federal income tax, even if his income doubled. The funny part is he cited the state and local taxes he used to pay, as a New Yorker, but no longer had to pay since moving out. The hilarious part, given his job, is I doubted he was very far in the 28% bracket. Or people with almost no active trading screaming about equal treatment of capital gains and regular income, even if their house (by far their biggest capital gain) were exempted.

Sometimes peoples’ views on taxation have less to do with reality than with their status as temporarily embarrassed billionaires. Or vague notions that the “job creators” would leave the country if we taxed them (like they’re moving to Florida and Texas from New York… sort of). I’m not sure where they would go. Maybe they would try to move their business to low tax jurisdictions, like Europe, or where they might have a less heavy government hand, like China. Or that they would decide the next marginal dollar just wasn’t worth it. And would “slack off,” as if they did everything at the family offices or companies they helm. These are people who’d gladly trade your grandmother for a nickle.

These idiots may code socially liberal, like their favorite niece or nephew is “trans” and they are careful about pronouns and dead-naming. Or they might be gay. But have no problem backing bigots. Or enjoy recreational drugs, especially of the mind-expanding variety. Although I sometimes wonder if they’re using them correctly. They know it’s not a suppository, right? Abortion is okay. Although they don’t get too bent out of shape over taking rights from women. They love crypto currency because of some strange notion about a broken fiat-currency system. Some are staunchly independent, except almost always vote Republican because they think government is out of control, or would like to see a balanced budget. (Something no Republican has done since maybe Eisenhower,). But they would rather talk about sports, crypto-currencies, or video games.

Because they code two ways, I suspect they throw off our sentiment about the country. They might answer a survey saying they are unhappy with the way that Trump is running the country. They may express ire at rounding up immigrants, although they will also talk about “doing it the right way.” They might have liberal girlfriends or wives, or conservative girlfriends or wives, and write “that stuff” off as their partner’s thing. They’re independent. But they will vote Republican at the national level. They’re not Republican, they’re independents, and will point to (for example) supporting someone like Spanberger in Virginia. You know, a “normal” Democrat. But when push comes to shove, at the national level, they have pulled the lever for Trump, more than once, if not all three times.

I suspect status and other grievances in their psyche may play a bigger role in how they vote. Even though they code liberal they like to think they’re a man’s man. (And if you haven’t figured it out – I’m talking about men in particular). Some of them are well educated, even if they haven’t opened a book for pleasure since college. They are not having the career or age of adult manhood they anticipated. Something I suspect they covet, as they prefer super-hero movies, John Wick, or the “pre-woke” Lord of the Rings. They tend to listen to man-o-sphere podcasts. I think there’s definitely an aspect of anxiety about their position and their power. (A lot of them are technically adept but feel they lack power or feel they are bossed around).

This mass of mostly men (almost exclusively men) are part of the reason the mid-terms will be so hard to predict. The expectation, which if the vote were held today I think would be certain, is a wave of anger pushes even safe Republicans out of power. We wind up with a flipped House and Senate. But I’m already seeing more right-wing content show up in my social media feed, so we have to deal with that bleeding off the weak over the next 8 months.

If they view the election as a chance to reign in, or course correct, the president, they may vote for Democrats. Especially since they know the president makes all the decisions, but “congress has a role.” Voting for a Democrats might tell the Republicans to back it off a little. Or, if they are well managed and well messaged by the stupid amount of money that will be coming from the Ellisons, Musk, or any one of a number of injured billionaires, they may ride or die with the Republican party. Woke democrats will be out of control. And when they pull that lever, they think they are doing so as Frodo, not some anonymous orc in Sauron’s armies. After all, they are independent voters.

Why Silicon Valley Isn’t Freaking Out About China

“The Looming Taiwan Chip Disaster” asks a question many are wondering. If China blockades and invades Taiwan, what is Apple going to do? It gets many of its chips from Taiwan and TSMC manufactures its very custom CPU. A blockade or invasion would cut Apple off from TSMC. That would be the end of Apple products, right? So why haven’t Apple and other Silicon Valley companies diversified out of Taiwan to at least have capacity in the United States. Let me tell ya… business idiots are beyond your tiny brain. They understand a broader, global picture that they have to carefully consider. They had a great press event in the oval office to announce a lot of stuff about sexy advanced chips. They even gave Trump a gold thingy for his desk. They’re saying things and doing things you can’t understand. So let me help break it down for your tiny (non business idiot) minds.

First, let’s start with a larger problem, that you can’t just fabricate (fab) a CPU and you’re done. This is part one of that problem, and it’s packaging. Once the silicon is etched and cut into separate chips, it needs to be packaged. This is not just slapping a bunch of plastic or ceramics around the chip. A poorly packaged chip will show problems that prevent it from operating correctly. And modern packaging is a far cry from the 1970s DIP modules, pictured below. A DIP packaged chip might have 40 or so connections. A modern chip can have hundreds of connections. And it may be housed in the same package with other chips, either support chips, or because they’ve adopted a chiplet design to improve yield (number of successful chips on one 30 cm wafer). Packaging is done in Taiwan and because it isn’t sexy, no one focuses on it. Without packaging, you have nothing. And chips etched in the US have to be flown to Taiwan for packaging. If China invaded tomorrow, and all the etching was done in the US, we would still have to fly the chips over for packaging.

Next part of you can’t just fabricate a CPU. A computer isn’t a CPU. There are other chips on the motherboard that control various features. For example, there’s a chip that controls the attached drives. It’s actually a little CPU in its own right, likely running a variation of Linux. Then there are chips to manage the power through the system. These are not simple voltage regulators, they are programmed to ramp up and down the current to keep the CPU running efficiently and cool. You likely have chips to handle all the slow speed IO, like USB ports. That’s not done directly by the CPU, there’s a separate processor for that. You can’t just make the CPU in the US and make a computer without all these other critical chips. Most are made in Taiwan, some in Japan, some in Korea, and some in China. That’s right, you already can’t assemble most electronic things for the US without Chinese made parts.

Next, you have to understand that Apple would buy chips from China. And so would Google and HP. If China took Taiwan tomorrow and the option was to go under or buy chips from a now Chinese controlled TSMC, Apple, Microsoft, Google, Meta, or whoever would buy the chips. Even if it meant entering into agreements that require more of the design to be done in a Chinese controlled company that would rip off the IP. Because going without sales (and maybe going under) is worse than maybe losing some US government sales. Plus, the US government will come around when there’s no option. In fact, it might make some things easier and they make even more money in the short term. If you go to these companies and say it might cost you a little bit more, but you insure your supply from being cut off, they would choose not to spend a little more. They will just assume they can continue with business as usual, buying chips from a Chinese controlled Taiwan. And they’ll be happy to do it.

Related, is the executives won’t believe it. Just as the Ukrainians didn’t believe the Russians would actually invade, and it was just a war game, as the Russians were setting up field hospitals on the Ukrainian border to treat the expected wounded, these business idiots don’t believe it will happen. I don’t even think it entered Tim Cooks little pointy head, as he sat through a screening of “Melania,” that China views the situation with anything other than a money lens. That’s because, like all business idiots, he views the world in a money lens. Why would China do something that would cost them money? The idea that China has felt humiliated and carved up by the West and this is about national pride is alien to them. Pride? If it costs you money? Tim Cook sat through a screening of what was essentially a bribe from Bezos to Trump to protect his money. Executives periodically line up, lips puckered, to pull down Trump’s piss-stained shorts and kiss his un-wiped ass. Money good. Must get more money. Corruption make more money faster.

For all these reasons, until China invades Taiwan, US tech companies are going to do a goddamn thing. And when China invades Taiwan, they will happily license their IP (their chip designs and process documents) to the Chinese controlled TSMC. The fact China will cut them out of the fucking loop once all the IP is stolen is lost on them. Just as they have done with every step of the way so far. Just as China is learning to cut Western designers out of other products. Why would you buy something at a premium, just because it has a Western label on it, when you can buy from the Chinese factory at a discount? Why would you buy an US branded computer when all the chips come from China, and it’s manufactured in a Chinese factory? It’s not like they’re going to get payback for the US putting spyware into the US networking gear bought by Chinese companies.

Once upon a time, there was a thing called the Marshmallow Test. You take a preschool aged child into a room and tell them if they don’t eat the marshmallow on the table, they’ll get that one and another one later. The idea is to see which kids will become doctors, lawyers, and CEOs, by delaying gratification, and which kids will scroll Tik-Tok and scratch their junk for a living. It turns out the whole thing was bogus, but it made a lot of parents try this at home and weep to see little Johnny gladly stuffing the first marshmallow in his fat little mouth. No delayed gratification. No future. Delayed gratification is not what business idiots learned. They learned to demand more marshmallows or else they’ll stop going potty in the right place. Just as they’ve learned to demand tax breaks, guaranteed loans, or other inducements to do the right thing.

If you think you’re going to get Tim Cook to buy a US made chip for his Macs or iPhones, well… he might. He might buy some from a Fab in Arizona to kiss Trump’s fat ass, ship them to Taiwan to be packaged, and then off to China to be assembled into an iPhone. Because Tim can’t package the chip in the United States. Nor can he make all the other parts of an iPhone in the United States – as just a practical matter. And as far as he’s concerned, it’s just keeping Trump happy. Just like he goes through the press conference (along with many tech leaders) announces a bunch of stuff but does nothing. Just like NVidia was supposed to invest 100 billion… I mean 30 billion… I mean up to 30 billion in OpenAI1. Business idiots just say words that have no meaning. He will do the bare minimum necessary to keep Trump happy so Apple doesn’t have to worry about the administration lobbing trade bombs at Apple. He will make the bare minimum number of chips in the US, though parting with that extra nickle every iPhone makes him weep.


Note that this story from Forbes does not invalidate my point. They will likely have US workers shove motherboards flow in from into a case and call that American manufacturing (because, remember, other parts come from other parts of Asia, including China). On their lowest volume product. And a vague promise for other stuff. All so they don’t have to pay a significant tariff on iPhones (their highest volume product).

  1. Note that $20 in McDonald’s gift certificates counts as “up to 30 billion.” ↩︎

What’s On Tap for This Week

This is going to be a light news week.

Tuesday – Case Schiller home price index.
Friday – CPI/PPI data

The other thing to watch is who is filing for refunds for tariffs paid. There are two levels of tariffs at play. The first are the tariffs in place before we started this descent into stupidity, and the yo-yo tariffs that have come on and off since “Liberation Day.” There is an orderly process for refunds, but not everyone is sure these refunds will be orderly. It may result in a class action suit to compel the refunds, but we’ll see.

CNBC estimates about 175 billion subject to refunds. That’s in line with other estimates from 130 to 175 billion. That’s considerably less than the additional tariff revenue collected since April 2025. That’s because the other tariffs were under different laws, which are still in place. For example, if there’s a finding of an unfair trade practice, a different law is applicable. The process under those laws requires some additional work. Whether it’s all kabuki theater or it will be done in good faith, I can’t say. (Despite my suspicions). I’m not an expert, but my guess is the section 122 tariffs (the sudden imposition of a 15% tariff on “global” imports that expires in 150 days) will be a bridge to get all the paperwork complete for other tariff statutes.

That said, the random 100% today and 20% tomorrow and then 55% the day after tariff announcements were under the International Emergency Economic Powers Act. That’s what the Supreme Court said was unconstitutional, because under their reading, it did not grant tariff authority. Section 122 requires Congress to reauthorize the tariffs in 150 days. I think Republican support for that is far from automatic. That means going into Labor Day (when most people start to think about elections), Congress people would have to explain why they authorized more taxes on American businesses.

Senate Seats Up for Grabs

The ability for Trump to set up a primary challenge to House and Senate candidates will have been long past, and it will be the Democrat challenger that candidates will be the big concern for Republicans. If the administration wants section 122 tariffs (the 15% just imposed) extended beyond late July, it will have to convince the Republican House and 22 Senate Republicans to vote for it, knowing they will hand their Democratic opponents a blunt instrument which will be used to beat them, repeatedly. Or, they will have to explain why tariffs on French wine and cheese is a national security issue.

This is an administration that is threatening Netflix with “consequences” if they keep Susan Rice on their board, given Netflix needs government approval for their upcoming merger with Warner Brothers. Their willingness, and the willingness of the billionaires who are ideologically aligned, to use every legal and possibly illegal means to keep at least the Senate will be used. These people realize if the Democrats do come to power, they won’t retaliate in the same way the Trump administration will retaliate. A Democrat president will probable drag their feet on firing the partisan hacks, like Brendan Carr, when they get into office. So why should they care about what Democrats might do them, should power change.

Nor is it clear that the election will not result in massive chaos. As was evident in the 2020 election, claims of fraud went forward even though it (implicitly) invalidates Republicans that won down-ballot. They might have a Democrat win a House race, and a Republican win the Senate race, but still claim the vote was fraudulent. And the 40% or so of the country that’s “ride or die” with Trump, they may even be more amped up than 2020. Along with the fact social media execs have shifted right, ff not captured by a system of patronage, that suggests they’ll be protected if they help Trump. For example, showing they are willing to exempt Apple ICs from tariffs, but also “mentioning” that Apple News appears to favor a left-wing liberal agenda.

2026 is not in the bag for a Blue Wave. Nor is 2028 in the bag for a transfer of power. At this point Trump is still respecting the decision of the courts, if only grudgingly, and sometimes completely with contempt. If the energy is to impeach and prosecute him for stealing billions of dollars (for example, transferring US funds to his board of pieces of shit), he may pull off the last guard rail. A lot of his supporters among the elite are not ride or die. They know they may not go to real jail if caught for criminal activity, they may lose a lot of money. But if the deal is better to back Trump over the US constitution, they may back Trump.

I would like to think that between tariffs and immigration enforcement Republicans would be handed a soul-searching political ass-pounding. But social media feeds can have an insidious impact on political opinion. Just like Tik-Tok’s algorithm fed several many times more images of murdered Gazans than murdered Israelis, and helped from the initial push for protests of Israel. Then Israel managed to provide more than enough reason to protest their invasion of the Gaza strip and continued occupation of the West Bank. But that’s for another day. The point is, that among Tik-Tok users, those videos were very effective. And I think, with the transfer of Tik-Tok away from China to Trump’s friends, I think the feeds will be manipulated to stunt what should be an epic smashing.


A side note if you think other governments pay tariffs. You are ignorant. Many people have explained how tariffs work and it’s the company importing the good or service that pays the tariff. Since China doesn’t import anything into the United States, it’s US companies like Wal-Mart that import Chinese made goods, it’s the US company that pays the tariffs. There are so many explanations of this around that if you don’t understand it, you’re a fucking idiot.

What the Supreme Court Decision was Not About

It was not about anything other than Article I specific powers that Congress has and the statute under which Trump was operating. Let’s say that despite their best efforts, Republicans lose the White House in 2028. And 2029, despite the Sargent at Arms arresting him to count the electoral votes, Democrats take over. A Democrat decides to cut tariffs on everything, but double them on hydro-carbons. Because the climate is an emergency and the president has these emergency powers. And the three justices who “crossed the line” understood that and the law.

I think they would have easily changed their tune had the tariffs been enacted by a Democrat. I think the mask has been off with Alito and Thomas for some time. They aren’t concerned with the about a Democrat using those powers, because they would stop that in a heartbeat. They are not there for precedents or the law. I think they’re there for a political agenda. This should have been a 9-0 decision. It should have been a slam dunk. Nothing in the statute indicated Congress gave up the power to tax.

My hope is that a Democrat House and (more importantly) Senate majority is in place when Alito or Thomas leave their posts. That way the majority leader could discover a tradition that says the appointment of a new judge can wait until the next president. You know, pulling a Mitch McConnell. Clarence Thomas is 77 and Alito is 75. The average age for upper income Americans is in the 80s. They might go for six more years, but they might not. Or it might be evident that they cannot. I don’t know what will happen if a dementia ridden judge refuses to step down because the president is the “wrong party.”

And let’s face it, we no longer care what the Bar Association thinks about qualifications, temperament, or caliber of individual. The court has come out as partisan so we’re going to pick the youngest partisan hack we can find that has a credible CV for the Supreme Court. An existing federal judge who we think will advance our agenda. The idea we’re going to pick our best jurists for the role is a quaint notion.

What the decision was not about was any kind of split or rebuke of the president. For the three judges who “crossed over,” their basic sense of the job and their sense of their legacy probably prevented them from voting to protect the tariffs. But only in this narrow instance. From the earlier immunity decision, we have plenty of evidence what the conservative justices think the limits of their president are. To varying degrees, they support a stronger, less restrained executive. (And thankfully it’s openly written about, so we know the Unitary Executive isn’t just a liberal brain disease).

Will the US Strike Iran?

I don’t think the gold market thinks so. Price action is essentially flat. This may change on Friday, but right now it looks like gold is having a consolidation moment after the run-up. I don’t think a lot of countries want to hold gold as a reserve, as its volatility means your reserves are subject to constant swings. The traditional reserve was the dollar, but many countries are looking at an administration willing to subvert its own laws and weaponize its currency. So that makes the Euro more attractive, but it lacks the depth and breadth of market the collar occupies.

The next proof point would be an appreciation of the dollar combined with falling prices on bonds. I see some, but not much movement. Again, that could change by Friday. But the dollar and interest rate aren’t signalling a belief the US will attack this weekend. The dollar continues to sit in it’s range and the upward movement is as easily explained by the strong economy and the likelihood interest rates don’t change until mid-summer.

What we learned from Venezuela is firstly the operation was a surprise. Second, we have some tactics and weaponry a lot of us didn’t realize we had. Third, the US had no interest in anything but a quick win. Forth, there is no interest in democracy or actual regime change. Fifth the goal, explicitly stated, is control of oil and oil sales.

Thanks to Charle’s brother, the news has a lot on the arrest of Andrew. Iran is below the fold at the NY Times, not on the front page at Bloomberg, and missing from The Guardian. I’ll get to the AP and BBC later, but likely the same. People aren’t looking that way and the administration has tamped down the rhetoric, making it look like talks are underway. No reason to attack if people are talking, right?

The attacks preceding the abduction may have been probes to test the speed, reaction, and air defenses of Venezuela. I suspect we have that dialed in on Iran after the raids with Israel. It’s likely we have good intelligence and wouldn’t need to probe their defenses by striking other targets. After all, we dropped bombs on their most sensitive nuclear facilities with impunity. I suspect we can strike anywhere in the country at any time. And likely one result of the Ukraine war is highly detailed information on Russian air defenses at their most capable.

It’s not likely the US would swoop in and take the Ayatollah back to Rikers in cuffs. But it might be a decapitation strike. There are plenty more religious leaders waiting in the wings to replace any “martyred” leader. So I’m not sure what lasting chaos or policy change it might cause. If there’s anything to strike that would have lasting impact, it’s the revolutionary guard and secret police forces. Maybe target the control and command systems that enable them to suppress internal dissent? After reading about their brutal response to protesters, I doubt anyone would shed tears for secret police and military that shoot at civilians.

The moon this weekend is heading to first quarter. The next new moon is March 3. This doesn’t matter as much as some people think, with the assault for Maduro taking place, as January 3 was a full moon. The moon will set in Tehran shortly after 10 PM, local time. Which means it will be moonless in the early hours of the morning. (The moon isn’t always up at night – remember?)

What will the US want? I don’t think anything but a vague “lay off the dissidents” and demands on the oil. It might have some added benefits of keeping Iranian drones out of Russian hands, to fire on Ukraine. With all the ships and capabilities arriving in the Gulf, a timer has started. There’s a point at which those assets have to be rotated out for maintenance and refurbishment, and to give their crews some time off. A build-up can’t sit there forever. A “permanent” presence, simply means the US rotates ships in and out of the region. It’s not the same ship, years on end.

I don’t expect the US to land troops or in any way take a long-term approach. I suspect it will be much like Venezuela, meaning they realize no one is going to keep paying attention to see it spiral into shit or realize nothing changed. I don’t know what targets they intend to hit. Maybe it will be the re-built nuclear sites. Maybe it will be the revolutionary guard barracks and headquarters. Maybe it will be government buildings. I have no idea. But I don’t think Iran will be able to retaliate in any meaningful way and I don’t expect Iran to be able to stop the attack.

[Note] With this administration, watching the markets may be a good indication they’re about to do/not do something. They tend to be leaky with non-public information.

Calling It What It Is

The practice of calling something what it is seems jarring sometimes. None of us want to come to the horrible conclusion what we’re looking at is as bad as we think it is. That’s why it’s nice to see the NY Times call out voting restrictions for what they are: an attempt to blunt the Democrats taking the house and possibly Senate. Do I think Republicans know better than to believe that illegal immigrants voted in 2020? At this point, I don’t know. I think the person who originates a lie knows it’s a lie, but maybe not the person who repeats it. And human beings have an amazing ability to believe something that suits them.

A lot of journalism, in order to avoid seeming biased, gives both sides a pass. That’s why people who pushed an anti-science agenda that carbon emissions aren’t ruining the climate got an equal hearing with actual scientists. This is especially true if the denier had some scientific credentials, even if they weren’t in anything related to meteorology or climate work. Putting one person “pro” and once person “con” in a discussion group makes it seem like there is a split on opinion. Even though you can see the impacts of a changing climate, you find something else to believe. Or you just don’t believe it, because it’s easier not to. Even with a top tier education, all the information in the world at you fingertips, and being accomplished in your own field, does not prevent you from convincing yourself of something that isn’t true. It allowed you to believe that the scientific field is split, and therefor no one knows. And if it’s all about money, maybe its the 60k a year climate researcher that’s making a mint on this.

Often, this follows familiar contours. We just went through the Epstein file dump and saw the degree to which people tried to excuse, minimize, hide, or ignore what it was about Jeffrey Epstein that was so vile. And what it implied about him and the people that frequented his island. It has become clear that at many turns people could have named Epstein for what he was and what he did, but chose not to. Not because they don’t abhor trafficking and raping children, but it would mean naming themselves as abetters and enablers, and their friends (and possibly family) as rapists. I’m not sure what they allowed themselves to think, or what to believe. I don’t think they can think of themselves in those terms. I don’t think any decent person can, so there has to be another explanation. He’s mentoring them. They’re actually older than they look. Maybe those girls are getting something out of it too, staying on a nice island. And for some of the abusers, probably that if she really didn’t want to, she would have left the room.

Unless we want to fall into that same pattern of behavior, at some point we have to name the Republican party and its attempts to illegitimately secure power. They intend to keep eligible voters out of the polls to hold power in the 2026 mid-terms and the 2028 election. This is an undemocratic attempt to maintain one party rule by tampering with elections in a way that gives a thin veneer of legality. Enough of a veneer to let people continue to believe it’s for securing or protecting the elections. That they’re the good guys, because otherwise, it would make them no better than any other one-party rule dictatorship. They have to believe there is a problem with illegitimate voting, despite the evidence to the contrary. Because if they actually named what they are doing out loud, if they acknowledge it to themselves, they will realize the enormity of what they are doing.

This is why the facts don’t matter. Because the belief is based on what they want to be true. For example, Biden won on the presidential ticket, but Republicans won down-ballot. Does that mean that those results are invalid? It doesn’t matter to them. If you look at pieces of evidence like the Utah audit of illegal voters, that found essentially no problem, it doesn’t matter to them. And it’s no longer just a few fringe lunatics like Sidney Powell, who came off as nuts. In terms of people who’ve convinced themselves illegal immigrants voted, it’s likely a majority of the Republican caucus. If not almost all of the Republican caucus. Some are just dumb and gullible, but others have just convinced themselves this must be true. Otherwise, they will have their asses handed to them in a few months. And more importantly, if they can’t convince themselves, it just means they are anti-democratic and breaking with a fundamental tenant of being American.

Representation, voting, was the chief complaint of Americans that lead to independence. That the English parliament, across an ocean, was making decisions about English citizens that were denied the same representation available to people living in England. While many people look at the tax issues, it was that the taxes were imposed without the colonists feeling like they had a say in it. Denying eligible voters, in America, access to the ballot box makes one a traitor to the very idea of being American. And that’s what these laws intend to do. To take people who could vote, and have grievances about how the government is running, and turn them away by adding additional requirements for identification well beyond what is necessary. Or up-ending the constitution and imposing control over a function explicitly left to the states.

For example, say you were born overseas but became a US citizen. You are allowed to vote. The proposed laws require you to show a passport or birth certificate to vote. Your birth certificate is useless. You have to show a passport. I have always had a valid passport. But only half the country does. I’m assuming among that half are people a fair number are born overseas. It can take weeks to get a passport and there is a non-negligible price. Or if you are a woman, who changed her name after being married, you need to show both the passport and a marriage certificate. I’m sure my marriage certificate is around somewhere, but I’ve never had to show it. Women have been been skewing toward Democrats, as might more immigrants after the horrific ICE crackdowns. What better way to throw up a little roadblock to registering to vote. The icing on the cake will be to place ICE at polling places. The goal being to instill fear into people afraid they might get unlawfully arrested and spend weeks in detention before their citizenship is verified, don’t show. Why on earth would they think that? Because that has been happening to brown people, especially if they have an accent.

But, that’s only a few people, right? Think about how close the elections can be in the United States. We now consider a presidential election decisive if there’s a whole percentage point difference in the popular vote. You don’t have to keep 10% of the likely Democrats from voting. Maybe just have to keep a percent or two from voting. You might still lose the House, but maybe keep the Senate, and pretty much stay in power. Nothing a Democrat House does will pass a Republican Senate. And the slim margin is even more true during the presidential election. And on top of that, the administration will lean on broadcasters and social media to avoid spreading messages that will hurt them in the polls. While no longer under the cover white supremacists funnel money into Republican races. And what coercion by the FCC or FTC can’t handle, and money can’t buy, the patronage system pressure companies to fall in line.

But that may not be enough. You may get a large number of people voting for Democrats, even with all that suppression work. You might think the laws would prevent them from claiming fraud. It won’t. Just like 2020, they will let results that favor Republicans stand, while claiming Democrats cheated with illegal votes. If passage of voter id laws is blocked by either the Senate or impeded by the courts, they will claim the results were full of illegal votes. If the laws are passed, enacted, and allowed for the 2026 mid-terms, they will claim the laws weren’t enough, or that Democrat states failed to enforce them. And it won’t matter if those states are traditionally ‘red’ states. They will do everything they can to deny Democrats seats but will not attack a Republican win, even on the same ticket. They did this in 2020. They will do it in 2026 and 2028.

The voter id laws are a thing to help them structure their fantasies. In one sense they don’t matter. With the laws in-place, after a defeat in the mid-terms, they won’t care about audit trails, voter roles, manual re-counts, or whatever you propose. These are people who legitimately looked for traces of bamboo in paper to show it was from China. They cannot believe anything else than they lost because they cheated. Will there be Republicans that know they lost but still make the argument? Of course there are. Just as there were tobacco executives that realized smoking was killing people, was addictive, and they needed to get kids hooked as teenagers. And that their claims about the science not supporting the cancer claims was just a smoke screen. But plenty of people allowed themselves to be convinced tobacco wasn’t the problem, it wasn’t that addictive, it was their right to smoke, and that if teens smoked, it was the parents’ fault.

It may come to mass protests in November through January to force the Democrats to be seated in Congress. You can be assured that every procedural impediment to swearing in new Democrat congress members will be applied. Every court challenge to their win. Every counter protest (complete with stop the steal activists in battle-rattle and long guns) to declare the results invalid will be pushed. Every attempt to cower the media and social media narratives to de-legitimize the results will be taken. Every time a Republican is interviewed, they will focus on language tuned to resonate with their base and help them continue to believe the election is being stolen. That their country is being stolen. That their voice is being stolen. And their way of life will be stolen, if the Democrats win. But at the same time, accepting every Republican win as legitimate, not really up for discussion, or part of the clever plot.

Just as many Republicans have made it clear they feel voting is a privilege, not a right. Or that maybe their faith says we should allow head of household voting. Or that they can discern who the real Americans are, and only they should vote. Or, if push comes to shove, they can’t trust the ballot box to their satisfaction so there’s no point in having elections. We have over-used the word “fascist” way too often. The county requires separating recycling by type, and people scream it’s fascist. It’s lost its meaning. Authoritarian and autocratic don’t hit has hard as fascist used to hit. But make no mistake, what I’m seeing in America is little different from the slide that Turkey and Hungary took, and Poland was taking, to a single-party, failed democracy. If Orban loses, he may not leave power without blood in the street. Erdogan has shown a willingness to brutally crack down on his opposition and probably won’t leave without a revolt or military coup. And Putin consolidated power that ten years ago so people largely stopped questioning obvious murder.

If the Democrats do well enough in the polls come November, we may not have to listen to history rhyme as Americans fight to be represented. That even if you wipe out a few thousand votes here or there, it doesn’t make any difference and the House and Senate are both taken by Democrats. And that if you don’t acknowledge the election, you can’t seat a new Congress, and the business of the country stops. (I don’t put a full up coup beyond the pale at that point. You just don’t seat Congress and the president runs the country by fiat. Or tries to, in which case we’ll see which way the military heads.) But the fact that a blow-out or landslide is the only way we keep democracy going, kind of shows we’ve already lost. And lost because of the dumbest reason, that people have convinced themselves of something that isn’t true as they can’t just admit they are sheep who would rather give up their rights and live in a dictatorship.

It’s a Special Hell

I feel like it’s a special hell to be stuck in a democracy with people who are so fickle and easily manipulated. Frankly, the best thing that could happen is that we walk away from social media and instead start walking toward places where we meet other people, like a bowling league, bar, maker space, library, or whatever. Sure, some places will code right-wing, but people don’t like blowhards and usually just want to bowl, or have a couple of beers, or work on a project, or find a good book. At the end of the day, in spaces with people, blow-hards have their moment and flash out. You find your people. The people who you look forward to seeing the next time you go there.

But we aren’t doing that as much as we should. We just scroll through phones and social media posts. Like, share, re-share, or maybe even re-mix if you’re bored. And before you know it, another hour or two has gone by. That happens for most of the week and you lose days worth of time before you know it. You look and see things aren’t going so well in other areas, so you jump back on social media. Its a combination of an escapism factory and a dopamine dispenser. How should you feel about something? How did you react to that meme? Did you re-share it? Or did it change your gut reaction to a story? Did you switch teams on that one? Did it make you feel smarter? You’re not a sheep. You think for yourself! Except, did you?

It’s a special hell to be stuck making decisions with people whose frontal cortices have shriveled and are driven by their amygdala and limbic system. Feed enough of the right trash into the chum-bucket that is their media diet and a president trying to become a dictator is romanticized as a Tony Soprano, having the guts to go for what he wants. Not pausing to think that it’s against the basic idea of American democracy. Reaching that conclusion requires logical thought. Having an instant reaction to a meme, an image, a video that has to be shortened to seconds to deal with a decaying attention span, requires no thought. Feed enough of those images and you get powerful reactions.

All the while the people that are making money by monetizing your eyeballs are entering into a new and dangerous relationship with a dictatorship-coded regime. One of patronage. Special privileges, tax breaks, or rewards for being a swell pall. The people who decide what to feed your atrophied brain have an interest in feeding the message the dictatorship wants. What Orwell missed about dictatorship was not that government ministries had the ability to sway citizens. It would be the private companies, beholden to the state, that would do the state’s bidding to pursue personal wealth. It wouldn’t be faceless bureaucrats. It would be opaque content policies that might decide which image to feed you, based on careful targeting.

And with all the noise about the Blue Wave, I imagine we have yet to see the content that will be pushed to fire up fear, resentment, and anger to counter that Blue Wave. Whether it’s voter suppression by making people feel their vote is meaningless to stem the authoritarian tide, and they should just protest, or drowning them in emotional counter-narrative, the push back is coming. They don’t have to hire an army of content creators. They just have to push what ever is working and amplify that. That is the same tactic Russia uses to push its narratives in the West. Don’t push all at once. Seed it. See what works. Amplify that.

In addition we have the novelty of AI to prod the narrative. Imagine an Open AI signaling they need government investment to be profitable, and the only condition is they inject some additional prompting. If someone searches about specific topics, inject a small push to the government’s position. Not overt. Not blaring. Just a nudge. Offer content from a set of friendly sites to back up the claim. Not Fox News, just friendly sites. It can’t be obvious they’re being nudged. Maybe let Google and Meta know that a government ready to invest asks that they just treat sensitive subjects in a way the government desires.

Oh, but won’t they fear the Democrat’s backlash? What backlash? Backlash from people who are making their platform “we follow the law?” The Trump platform is “if you can’t help me – I’ll keep you out of jail and make you rich.” That’s why he’s pardoning scammers who now no longer have to provide restitution to their victims. And if he’s willing to bail out a scammer, he’ll definitely cover for a big-tech CEO. And they have no problem lying, even under oath. If anyone ever asks, it never happened. As we get past labor day, expect your feeds to get a little ‘odd.’ Nothing big, but … wow …. you did not know that Islamic terrorists were among the Minnesota protestors. I wonder what else those people with whistles lied about?

This is truly a special hell. I stay off social media not because I’m immune to manipulation (no one is, regardless of their self-image), but because I am just as susceptible as the next person. I had the misfortune to hop on today and was reminded how addictive scrolling the feed can be. Especially when people react to a comment or re-post. But millions of voters hook themselves to it, willingly reshaping their minds to big tech’s content.

[Note] I originally used the phrase “Red Wave”, when I meant “Blue Wave.”

The US Is Backing Out Of Europe

That may seem a little extreme to say, but also not extreme enough. Marco Rubio will be visiting Slovakia and Hungary, two European countries that have embraced the far right and are vaguely pro-Putin. Like most authoritarian countries, they have relatively small economies and are performing well below their democratic peers. From the president on down, the message is clear. They want a more divided, more authoritarian, more corrupt Europe. A Europe in their own self image.

This is both a good and a bad thing for Europeans. The fact the Germans were all but disbanding their military less than a decade ago was a stupid idea. A short sighted one based on a false understanding that ties with Russia brings security and cooperation. In 1985, as the US and Europe faced off against the threat of Warsaw Pact forces pushing West across Germany, military readiness was a real concern. The US beefed up its nuclear capabilities using a combination of cruise and intermediate range missiles to blunt what they believed would be an unstoppable roll of red armor. A mere twenty years later, a reunited Germany faced social problems and a Russia more concerned with separatist regions, like Chechnya. The war in Europe was over, as most people believed.

A few years later and people saw a Russia that appeared to have significant, advanced military capabilities. Prior to the invasion of Ukraine, some speculated that Russia’s ability to wage war meant they could drive to the Pyrenees mountains before they could be stopped. With the US presence there as a last resort, the Germans (especially) tried to ensure peace through diplomacy. If Russia sells gas to Europe, it should be invested in a stable and prosperous Europe. It’s much cheaper than trying to counter so mighty a military. But, as was seen in Ukraine, the entire Russian military structure was rotten on the inside. And the Russian army in the 2020s was still driving meat assaults behind artillery, as it had for over a hundred years. Whatever was left after the artillery finished would be murdered or raped by untrained troops that were rioters as much as they were soldiers. They could only get to the Pyrenees if they stole spare parts, gas, phones, televisions, food, equipment, and medicine along the way.

The Europeans have a choice. Do they stay in the American orbit, which is becoming increasingly inhospitable, or do they strike off on their own? If they stay with the US they have to deal with attacks from both Russia and the US on their economic and political union with the express intention to weaken it. Like they did with Russia, they could try to dance diplomatically, trying to spin away the truth. Or they can have a look in the mirror and realize that they are better off in a union, Russia is their immediate threat, and America is on the way to becoming a threat.

Europe doesn’t have to defeat China. They barely have a dog in that fight, except the UK’s sense of solidarity or loyalty with Australia and New Zealand. Nor do they really have to secure the Pacific trade routes, although goods from South Korea and Japan are nice. India and Africa can be low-cost manufacturing hubs for Europe and those are much easier routes to secure. Technology, electrification, and reduced dependence on fossil fuels are in Europe’s interests, along with securing energy arrangements with Africa and the Middle East. Europe doesn’t need eleven nuclear aircraft carriers to deal with Russia. Nor do they need to land forces anywhere in the world within a few hours of getting the word. They need to deal with one threat that has a fraction of their population and a pathetic economy. If Russia did not have nuclear weapons, it wouldn’t be considered a major power.

What most people don’t understand is when you buy a weapon, like a missile or a plane, it needs constant servicing and updates. A missile might need software updates to deal with new counter-measures. The F-35 needs software updates for each mission. It is impossible for any EU country to maintain their F-35s without support from US contractors, manufacturers, and the US government that controls them. What if Russia invades Estonia and the US decides they don’t want to get involved, so they say Europe can’t use the F-35 to fight Russia? It’s not likely, but it’s possible. In part because Russia may not directly attack Estonia, but rather foment insurrection among a portion of the Russian speaking minority and send in “little green men.” Would Trump just say “it’s an internal Estonian matter” and refuse to abide by Article 5? And would certainly not extend the nuclear umbrella to cover an “internal matter.”

If Europeans are hoping other pro-NATO Republicans would step in and stop any serious break in the relationship, they are taking a gamble that hasn’t paid off so far. When confronted about Trump, the first thing the Republicans do is ask to see the proof, as “they haven’t read it.” When you show them the proof of statements made by senior officials and policy documents, they say it’s not serious and look at what the administration does. When you point to actions by the administration, they find some other excuse. That frog has been boiled. It is now Trump soup. And even if the mid-term elections sweep in majorities of Democrats in the House and Senate, there is no guarantee they are going to be worried about Europe. In fact, some of those who get elected will have a “not our problem” approach to foreign policy. Because their electorate doesn’t view it as their problem.

The only real choice is to develop home-grown infrastructure and capabilities they can rely on without participation by the United States. Look at this period as a chance at a transition. The alliance allows countries to specialize, and the US provided a lot of the intelligence, communications, and control infrastructure. And, most importantly, a nuclear umbrella. Europe is going to have to mitigate its loss by developing their own capabilities. This means pushing a European satellite launch program and reusable rocket program (to keep costs manageable). It’s going to mean more nuclear weapons and delivery systems. It’s going to mean replacing US infrastructure, knowing that it could be denied to them, or worse, weaponized against them. It will also mean conducting more aggressive and intelligence and influence operations to help shape US opinion and deal with Russian and US disinformation.

On its best days, Europe is like a super-tanker. It’s slow to turn, but once it has a direction it’s impossible to stop. On it’s worst days, it’s a super-tanker with a stuck rudder. But it has some advantages that the US does not. In Ukraine it has a modern warfare laboratory to develop new weapons and tactics. To take a look at the NATO standard tactics that aren’t working and refine those tactics. It’s a chance to develop weapons for what future combat might look like, and to counter newer Russian weapons. Maybe it’s a dark forest of lurking drones and anti-drones. It also allows space for home-grown replacements to US systems to be vetted and refined. It’s horrible to think of Ukraine as a testing ground, but Ukraine needs more weapons and they need more imaginative to counter the ones Russia is firing at them. And Europe needs to quickly build capabilities.

What I don’t think a lot of Americans appreciate is that US companies they invest in, have in their 401(k), and work for, sell to Europe. Europe won’t just be replacing a few F-35s. It will be replacing Master Card and Visa as payment processors. It will need to replace Meta, X, and YouTube for for social networks. And it will need to replace Amazon, Microsoft, and Google as infrastructure providers. It will need an independent industry to provide semi-conductors and equipment so that a mercurial President can’t suddenly demand those exports are halted. (And a lick-spittle congress does nothing). It will mean moving away from US dollars as a reserve, thereby driving down the US dollar long-term. The US has been the incredible beneficiary of a close alliance with Europe, but they took the benefits for granted.

A Not So Quick Note on Jobs Report

The fun thing about the jobs report is re-interpreting it to better suit your political leanings. “Yes, but they’re not good jobs.” Estimates were in the 70k ballpark and the number came in at 130k. There was also slight wage inflation. This makes a rate cut less likely in the next few months, Warsh or no Warsh. The bulk of the jobs came in health care and education, with the government losing jobs. We’ve been assuming that the interest rates have been a drag on the jobs market but the economy may have adjusted to having any number other than zero as an interest rate. In fact, there’s a case for an interest rate increase in the coming year.

  1. The last mile on inflation is sticky, which may mean rates are not high enough.
  2. If the economy is expanding and pushing up wages at 3.5% funds rate, the neutral rate may be higher.
  3. Inflation may accelerate if GDP continues at its current clip and wage pressure continues to rise.
  4. Aggressive spending (like a 45% increase in the DoD budget) may fuel more inflation.

But here’s the thing. Don’t read too much into one report. Next month could surprise down by 50k. Who knows why – there are some long-standing data collection issues. The numbers will bounce around, especially as they get revised. There’s the table of year end revisions to the 2025 reports and it’s illuminating.

We created (revised) 181k jobs net last year. Maybe the yardstick of over 100k per month for a growing economy doesn’t make sense in a country that may start to experience population declines (as we shut off the immigration flows). That’s been the number I’ve used to evaluate jobs reports, but net migration to the US (by policy) is intended to be zero. We’re not fucking enough to make enough new kids. In fact, if the population isn’t growing, and it’s just aging. Wouldn’t slight job losses, but more jobs concentrated in healthcare, be a good jobs report? Maybe the yardstick should be net zero jobs near full employment? And only shrinking and growing during recession or post-recession recovery?

As I think about this, I start to think about the elasticity of wages with respect to growth. Once we push up against full employment, wages need to rise to get more workers into the job market. How much do wages need to rise once we get more workers into the job market? If we go from 4.3% unemployment to 4% unemployment (very low, historically), do we see wages shoot up enough to drive inflation? But if we get not much more slack than 4.5%, do we see wages falling? That would suggest wages are inelastic with respect to employment near full employment. I suspect the same isn’t true in a recession, if unemployment spikes to 7% or 8%, and much smaller (if any) increase in wages are needed to bring down unemployment. We go from having a Philips curve to a Philips hockey-stick.

It also has some implications on growth. A shrinking population suggests that growth that’s slightly too fast results in inflation. With a growing population, part of growth simply goes to absorbing new workers. You need to grow, otherwise you quickly accumulate large masses of unemployed people. And I suspect it favors younger, less experienced workers, as you can hire more of them to replace older workers. They are cheaper and plenty of them. But what if a shrinking population size makes you risk averse, preferring to stay with proven workers rather than bringing in new, lower return, unproven workers from a smaller (and therefore not much cheaper) pool? Maybe that’s why Europe has had a persistent youth unemployment problem?

Hear me out on this brain fart. In a fixed population (or shrinking population), you basically trade one worker for another. When Bob retires, Alice steps in. You knew what to expect with Bob. Bob was very well trained. In Bob’s cohort, unemployment is like 2%. To balance that, in Alice’s cohort, unemployment needs to be higher, say 10%, so on average, we have that magic non-inflationary level of unemployment. But Bob is old and Alice is young. Alice would be much cheaper, if we had a larger pool of Alices than Bobs.

But there aren’t a ton of Alices sitting at home, vaping and playing Call of Duty. Alice is a risk. You could bring in Alice, train Alice, and then lose Alice as she’s offered a better job by your competitor. In addition to the fact you need (say) 1.5 Alices to equal one Bob until Alice gets a few years of experience. Whereas they are not likely to poach Bob, and Bob would probably not get a better deal if he moved. You have an incentive to hold on to Bob and only hire Alice, if Bob leaves. And if one Bob leaves, a slightly younger Bob would be preferable.

Once Alice’s cohort comes into jobs, their unemployment also drops to some low number. But in order for that to work, the unemployment among new workers has to stay fairly high. Maybe I just made a realization labor economists have known for years. In any case, I think we’re going to have to get used to flat jobs reports and more of our workforce moving into healthcare. Otherwise you wind up with inflation pressure and Boomers dying on the side of the road.

The Downside of Flooding the Zone

Trump has Overwhelmed Himself,” by Ezra Klein, points out one of the problems with flood the zone. That it removes focus from the ones doing the flooding. It makes it feel like the entire White House is in chaos. I don’t know if Trump supporters see it that way, but for those who pay attention, it floods their attention as well. I assumed it would have a built in advantage because of the short attention spans of most people. Something horrible happens in the US, something that feels like we should never forget it happened. A year or two later we see a news story about an anniversary of the event and think “wow – that happened and I should not have forgotten.”

As much as the murder of Alex Pretti at the hands of paramilitary forces is tragic, will we remember a few months from now? What horror shows did you remember from 2025? Do you remember he gutted US AID? Do you remember DOGE rifling through government databases, in locked rooms, with no supervision and the windows blanked out? Do you remember the insanely ridiculous tariff calculations? Signal gate? And we’ve become accustomed to the absolutely corrupt use of the pardon power. The president has been issuing pay for play pardons to convicted scammers. That’s a thing. It barely makes the news. Remember when Clinton got roasted for a couple of questionable pardons at the end of his second term? Trump does that and more on a weekly basis.

I think part of the flood the zone strategy is to keep crisis after crisis going so the real problems don’t surface. Look at the companies footing the bill for the ballroom or the sycophantic Melania movie. Alone, in previous administrations, would have come across as so corrupt as to be career ending. However, when we’re threatening NATO countries, who’s paying attention to the graft from World Liberty Financial, the Trump crypto scam and bribe channel?

I don’t know if Trump wants to run again. But if he doesn’t, he’s going to walk away with as much lucre as he and his family can steal. The party that went purple in the face with rage over Hunter Biden clumsily parlaying his supposed connections to wealth, became the story of the “Biden Crime Family.” And yet turn a completely blind eye to overt corruption. They can because we’re screaming about whether or not the government has to respect the fourth or first amendments. The courts plod along on these cases, with the shadow docket in the tank for Trump. Only going to bat for the constitution and norms when money is involved. Any sense the Supreme Court was non political has been dashed and as far as I’m concerned, sympathy for my causes is more than jurisprudence.

I think it’s too early to declare “Flood the Zone” a dead strategy. Because Trump knows he’ll walk away with billions, hidden behind a screen of outrage. The next president will likely face new limits on their pardon power or power to gut agencies. This is especially true if the next president is a Democrat and the Supreme Court will suddenly rediscover the constitution limits the power of the President.