#the american prospect

[mostlysignssomeportents]

The one weird monopoly trick that gave us Walmart and Amazon and killed Main Street

I'm coming to BURNING MAN! On TUESDAY (Aug 27) at 1PM, I'm giving a talk called "DISENSHITTIFY OR DIE!" at PALENQUE NORTE (7&E). On WEDNESDAY (Aug 28) at NOON, I'm doing a "Talking Caterpillar" Q&A at LIMINAL LABS (830&C).

Walmart didn't just happen. The rise of Walmart – and Amazon, its online successor – was the result of a specific policy choice, the decision by the Reagan administration not to enforce a key antitrust law. Walmart may have been founded by Sam Walton, but its success (and the demise of the American Main Street) are down to Reaganomics.

The law that Reagan neutered? The Robinson-Patman Act, a very boring-sounding law that makes it illegal for powerful companies (like Walmart) to demand preferential pricing from their suppliers (farmers, packaged goods makers, meat producers, etc). The idea here is straightforward. A company like Walmart is a powerful buyer (a "monopsonist" – compare with "monopolist," a powerful seller). That means that they can demand deep discounts from suppliers. Smaller stores – the mom and pop store on your Main Street – don't have the clout to demand those discounts. Worse, because those buyers are weak, the sellers – packaged goods companies, agribusiness cartels, Big Meat – can actually charge them more to make up for the losses they're taking in selling below cost to Walmart.

Reagan ordered his antitrust cops to stop enforcing Robinson-Patman, which was a huge giveaway to big business. Of course, that's not how Reagan framed it: He called Robinson-Patman a declaration of "war on low prices," because it prevented big companies from using their buying power to squeeze huge discounts. Reagan's court sorcerers/economists asserted that if Walmart could get goods at lower prices, they would sell goods at lower prices.

Which was true…up to a point. Because preferential discounting (offering better discounts to bigger customers) creates a structural advantage over smaller businesses, it meant that big box stores would eventually eliminate virtually all of their smaller competitors. That's exactly what happened: downtowns withered, suburban big boxes grew. Spending that would have formerly stayed in the community was whisked away to corporate headquarters. These corporate HQs were inevitably located in "onshore-offshore" tax haven states, meaning they were barely taxed at the state level. That left plenty of money in these big companies' coffers to spend on funny accountants who'd help them avoid federal taxes, too. That's another structural advantage the big box stores had over the mom-and-pops: not only did they get their inventory at below-cost discounts, they didn't have to pay tax on the profits, either.

MBA programs actually teach this as a strategy to pursue: they usually refer to Amazon's "flywheel" where lower prices bring in more customers which allows them to demand even lower prices:

https://www.youtube.com/watch?v=BaSwWYemLek

You might have heard about rural and inner-city "food deserts," where all the independent grocery stores have shuttered, leaving behind nothing but dollar stores? These are the direct product of the decision not to enforce Robinson-Patman. Dollar stores target working class neighborhoods with functional, beloved local grocers. They open multiple dollar stores nearby (nearly all the dollar stores you see are owned by one of two conglomerates, no matter what the sign over the door says). They price goods below cost and pay for high levels of staffing, draining business off the community grocery store until it collapses. Then, all the dollar stores except one close and the remaining store fires most of its staff (working at a dollar store is incredibly dangerous, thanks to low staffing levels that make them easy targets for armed robbers). Then, they jack up prices, selling goods in "cheater" sizes that are smaller than the normal retail packaging, and which are only made available to large dollar store conglomerates:

https://pluralistic.net/2023/03/27/walmarts-jackals/#cheater-sizes

Writing in The American Prospect, Max M Miller and Bryce Tuttle1 – a current and a former staffer for FTC Commissioner Alvaro Bedoya – write about the long shadow cast by Reagan's decision to put Robinson-Patman in mothballs:

https://prospect.org/economy/2024-08-13-stopping-excessive-market-power-monopoly/

They tell the story of Robinson-Patman's origins in 1936, when A&P was using preferential discounts to destroy the independent grocery sector and endanger the American food system. A&P didn't just demand preferential discounts from its suppliers; it also charged them a fortune to be displayed on its shelves, an early version of Amazon's $38b/year payola system:

https://pluralistic.net/2022/11/28/enshittification/#relentless-payola

They point out that Robinson-Patman didn't really need to be enacted; America already had an antitrust law that banned this conduct: section 2 of the the Clayton Act, which was passed in 1914. But for decades, the US courts refused to interpret the Clayton Act according to its plain meaning, with judges tying themselves in knots to insist that the law couldn't possibly mean what it said. Robinson-Patman was one of a series of antitrust laws that Congress passed in a bid to explain in words so small even federal judges could understand them that the purpose of American antitrust law was to keep corporations weak:

https://pluralistic.net/2023/04/14/aiming-at-dollars/#not-men

Both the Clayton Act and Robinson-Patman reject the argument that it's OK to let monopolies form and come to dominate critical sectors of the American economy based on the theoretical possibility that this will lead to lower prices. They reject this idea first as a legal matter. We don't let giant corporations victimize small businesses and their suppliers just because that might help someone else.

Beyond this, there's the realpolitik of monopoly. Yes, companies could pass lower costs on to customers, but will they? Look at Amazon: the company takes $0.45-$0.51 out of every dollar that its sellers earn, and requires them to offer their lowest price on Amazon. No one has a 45-51% margin, so every seller jacks up their prices on Amazon, but you don't notice it, because Amazon forces them to jack up prices everywhere else:

https://pluralistic.net/2024/03/01/managerial-discretion/#junk-fees

The Robinson-Patman Act did important work, and its absence led to many of the horribles we're living through today. This week on his Peoples & Things podcast, Lee Vinsel talked with Benjamin Waterhouse about his new book, One Day I’ll Work for Myself: The Dream and Delusion That Conquered America:

https://athenaeum.vt.domains/peoplesandthings/2024/08/12/78-benjamin-c-waterhouse-on-one-day-ill-work-for-myself-the-dream-and-delusion-that-conquered-america/

Towards the end of the discussion, Vinsel and Waterhouse turn to Robinson-Patman, its author, Wright Patman, and the politics of small business in America. They point out – correctly – that Wright Patman was something of a creep, a "Dixiecrat" (southern Democrat) who was either an ideological segregationist or someone who didn't mind supporting segregation irrespective of his beliefs.

That's a valid critique of Wright Patman, but it's got little bearing on the substance and history of the law that bears his name, the Robinson-Patman Act. Vinsel and Waterhouse get into that as well, and while they made some good points that I wholeheartedly agreed with, I fiercely disagree with the conclusion they drew from these points.

Vinsel and Waterhouse point out (again, correctly) that small businesses have a long history of supporting reactionary causes and attacking workers' rights – associations of small businesses, small women-owned business, and small minority-owned businesses were all in on opposition to minimum wages and other key labor causes.

But while this is all true, that doesn't make Robinson-Patman a reactionary law, or bad for workers. The point of protecting small businesses from the predatory practices of large firms is to maintain an American economy where business can't trump workers or government. Large companies are literally ungovernable: they have gigantic war-chests they can spend lobbying governments and corrupting the political process, and concentrated sectors find it comparatively easy to come together to decide on a single lobbying position and then make it reality.

As Vinsel and Waterhouse discuss, US big business has traditionally hated small business. They recount a notorious and telling anaecdote about the editor of the Chamber of Commerce magazine asking his boss if he could include coverage of small businesses, given the many small business owners who belonged to the Chamber, only to be told, "Over my dead body." Why did – why does – big business hate small business so much? Because small businesses wreck the game. If they are included in hearings, notices of inquiry, or just given a vote on what the Chamber of Commerce will lobby for with their membership dollars, they will ask for things that break with the big business lobbying consensus.

That's why we should like small business. Not because small business owners are incapable of being petty tyrants, but because whatever else, they will be petty. They won't be able to hire million-dollar-a-month union-busting law-firms, they won't be able to bribe Congress to pass favorable laws, they can't capture their regulators with juicy offers of sweet jobs after their government service ends.

Vinsel and Waterhouse point out that many large firms emerged during the era in which Robinson-Patman was in force, but that misunderstands the purpose of Robinson-Patman: it wasn't designed to prevent any large businesses from emerging. There are some capital-intensive sectors (say, chip fabrication) where the minimum size for doing anything is pretty damned big.

As Miller and Tuttle write:

The goal of RPA was not to create a permanent Jeffersonian agrarian republic of exclusively small businesses. It was to preserve a diverse economy of big and small businesses. Congress recognized that the needs of communities and people—whether in their role as consumers, business owners, or workers—are varied and diverse. A handful of large chains would never be able to meet all those needs in every community, especially if they are granted pricing power.

The fight against monopoly is only secondarily a fight between small businesses and giant ones. It's foundationally a fight about whether corporations should have so much power that they are too big to fail, too big to jail, and too big to care.

Community voting for SXSW is live! If you wanna hear RIDA QADRI and me talk about how GIG WORKERS can DISENSHITTIFY their jobs with INTEROPERABILITY, VOTE FOR THIS ONE!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/08/14/the-price-is-wright/#enforcement-priorities

[thoughtportal]

"These are the real hero innovators of our time: scientists nobody has heard of in labs ironing out the kinks in perovskite solar panels for a few more percentage points of efficiency…working on heat pumps that can work in very cold temperatures; and on and on."

[houseofbrat]

If it hasn’t already, DOGE’s onslaught against the federal workforce—composed of millions of workers in every state—will soon be responsible for the premature deaths of people throughout the United States, too. The problem with this, as in politics more broadly, is that someone must tell the public who’s responsible; they won’t always figure it out on their own.

Last weekend’s deadly spate of extreme weather is among the latest examples of how Trump and Musk are putting millions of Americans in harm’s way. Dozens of people across the Midwest and South were killed by a combination of tornadoes, dust storms, and wildfires between Friday and Sunday. This carnage unfolded just days after Trump and Musk pushed out more than a thousand National Oceanic and Atmospheric Administration (NOAA) employees at the start of peak tornado season, including meteorologists who provide forecasts in National Weather Service (NWS) offices around the country.

On March 12, two days before the chaotic weather began, the Associated Press reported that following a fresh round of cuts, NOAA will have eliminated roughly 1 in 4 jobs since Trump’s inauguration. In the words of former NOAA administrator Rick Spinrad, “There is no way to make these kinds of cuts without removing or strongly compromising mission capabilities.” “People are going to start seeing this very quickly,” warned former NOAA chief scientist Craig McLean.

Early indications are that a last-minute appeal from Rep. Tom Cole (R-OK) helped keep open an NWS office in Norman, Oklahoma, which is why that facility issued lifesaving warnings about the storms. Had Cole’s request been ignored, the death toll would almost certainly have been higher. What about other NWS centers? Were they spared?

According to Inside Climate News, the NWS issued “more than 250 tornado warnings in less than 72 hours,” suggesting that many local offices remained operational. Nevertheless, “NOAA’s own website suggests that some functions of the agency have already been affected by the administration’s actions,” ICN reported Monday. On Tuesday, the NWS website acknowledged “nation-wide internet and communications issues,” stating that “you may not be able to access products on our webpages, or these products will be old.”

What’s indisputable is that Trump and Musk’s ongoing assault on scientific knowledge and already understaffed federal agencies will exacerbate death and destruction in the future. Dismantling NOAA, the agency tasked with monitoring and warning the public about storms, and shrinking the Federal Emergency Management Agency (FEMA), which is responsible for coordinating disaster responses, will needlessly worsen mortality and hardship. There will be more tornadoes, and official wildfire and hurricane seasons are quickly approaching. Virtually every form of extreme weather is growing in frequency, severity, and duration due to planet-heating pollution, which is set to increase further thanks to the Trump administration’s embrace of even more fossil fuel production.

[monetizeme]

"The industry expects artists to cultivate a personal brand that aligns with future corporate partnerships at all times."

[stephenist]

[debtcrusherpro720]

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[ratatatastic]

"Hey, listen. I've got a bit of bone to pick with you here. I know you're gonna be representing Team USA in the 4 Nations Cup. Your dad, Keith, represented team USA before but what's going on? Why aren't you thinking about representing Canada? Your mom, Chantal, is from Canada, right? She's from Winnipeg. What's going on here? And have you thought about representing team Canada instead of the US?" "No, never in my life. I'm an American through and through, I would ne—I would never—I would never play for them that's been... I'm as... I'm as American as it gets. I think if you ask my brother, and my dad that too, we'll say the same thing." "You get your toughness from your mom, we know that."

boston bruins @ florida panthers | 1.11.25

[aashiqeddiediaz]

in the interest of complacency, here are some screenshots of polls right up until november 8, 2016:

(from this website) - there are many more polls in here, but i just took a screenshot of one bunch as an example. the graph is made of an aggregate of 1,106 polls total.

you cannot trust the polls. hillary clinton was up in the polls pretty much her entire campaign by a huge margin and she still lost. the only way to ensure that the polls reflect true is to increase voter registration, ensure people go out and actually vote, and make sure people know what's at stake this election.

also, i got a few people saying that the democratic party isn't appealing to single-issue voters re: my last post. and you're right. they're not. kamala's speech on the war in gaza was shoehorned and empty at best, and reflected that same zionist outlook we've been watching pretty much the whole time. but the whole point of that post was to urge people to elect a president who would actually listen, and to look at all the other issues that are also at stake in this election.

it's so fucking shitty that we have to come down to that, but we have a greater chance of getting what we want re: palestine if kamala's president than if trump is re-elected. not to mention kamala will protect women's rights, reproductive rights, queer rights, cut taxes for middle-classes, and reduce debt (and more). trump endeavours to do the exact opposite, and his support for netanyahu is far greater than kamala's or even joe biden's is.

i also think that people are seeing trump as "the devil we know" since he's been in power once and we know what he'd be like as a president, but in reality, him being in power once nearly broke the democracy. him being in power twice will finish the job.

the anger at the biden-harris administration resulting in people not voting for kamala harris will only punish american citizens for generations to come.

[mostlysignssomeportents]

It's pretty easy to cut $2 trillion from the federal budget, actually

Picks and Shovels is a new, standalone technothriller starring Marty Hench, my two-fisted, hard-fighting, tech-scam-busting forensic accountant. THIS IS THE LAST DAY to pre-order it on my latest Kickstarter, which features a brilliant audiobook read by Wil Wheaton.

If Elon Musk wants to cut $2t from the US federal budget, there's a pretty straightforward way to get there – just eliminate all the beltway bandits who overcharge Uncle Sucker for everything from pharmaceuticals to roadworks to (of course) rockets, and then make the rich pay their taxes.

There is a ton of federal bloat, but it's not coming from useless programs or overpaid federal employees. As David Dayen writes in a long, fact-filled feature in The American Prospect, the bloat comes from the private sector's greedy suckling at the government teat:

https://prospect.org/economy/2025-01-27-we-found-the-2-trillion-elon-musk-doge/

The federal workforce used to be huge. In 1960, federal employees were 4.3% of all US workers; today, it's 1.4%. Zeroing out the entire federal payroll would save $271b/year (while beaching the US economy!), a mere 4% of the federal budget.

On the other hand, zeroing out the budget for federal contractors would save over a trillion dollars – the US spends 4 times more on private sector contractors than it does on its own workers, and while some of those contractors are honest folks giving good value for money, the norm is for federal contractors to pick the public's pocket and then use the proceeds to lobby for more fat contracts.

One key job we ask our federal employees to do is root out private sector fraud in federal contracting. We should hire more of these people! Private contractors steal $274b/year from the public purse – nearly enough to pay for all the employees in the federal government:

https://www.gao.gov/assets/gao-23-106285.pdf

Musk doesn't know any of these, and he doesn't care to know. As Dayen writes, he's doing "policy by anecdote." Take Ashley Thomas, the director of climate diversification for the US International Development Finance Corporation. Musk sicced a mob on her, decrying her for doing a "fake job" that was somehow related to "DEI." But Thomas's job isn't employment diversification – it's crop diversification.

If Musk wanted to run DOGE as a force for waste-elimination, he wouldn't be attacking the Corporation for Public Broadcasting and PBS (whose budget accounts for 0.012% of federal spending). He wouldn't be attacking federal fiber subsidies (he's mad that he can't get more subsidies for his dead-end satellite service that caps out at one ten-millionth of the speed of fiber). He wouldn't be attacking high-speed rail (which competes with his Tesla swasticars). He wouldn't be fighting with the SEC (which defends the public from costly stock swindles, which is why they've been investigating Musk for seven years).

He could, instead, go after private sector Medicare waste. 33 million seniors have been suckered into switching from federally provided Medicare to privately provided Medicare Advantage. Overbilling from Medicare Advantage (whose doctors are ordered to "upcode" patients to generate additional bills) costs the public $83b/year:

https://www.medpac.gov/wp-content/uploads/2024/03/Mar24_ExecutiveSummary_MedPAC_Report_To_Congress_SEC.pdf

Medicare Advantage patients are, on average, healthier than Medicare patients (Medicare Advantage giants like Unitedhealtcare cream off the cheapest-to-service patients). Yet, this healthy cohort costs more to treat than their sicker cousins on the public plan – the fraud costs us about 11-14% of the total Medicare bill, and we could save $140b/year by zeroing that out:

https://pnhp.org/system/assets/uploads/2023/09/MAOverpaymentReport_Final.pdf

Zeroing out Medicare Advantage overbilling would pay for "an out-of-pocket spending cap, a public drug benefit, and dental, hearing, and vision benefits" for every Medicare patient with tens of billions to spare.

Of course, as Dayen points out, the guy in charge of Medicare is Dr Oz, who has spent years shilling for Medicare Advantage, while holding massive amounts of stock in Unitedhealthcare, the nation's largest Medicare Advantage provider, and the worst offender for Medicare Advantage overbilling.

Then there's Medicare itself. Rates for Medicare doctor reimbursement are set by committees of specialists, who award themselves sky-high rates while paying rock-bottom wages to the frontline general practitioners who do the heavy lifting. Lowering specialists rates to match the rates paid in Canada and Germany would save the federal government $100b/year:

https://cepr.net/rfk-jr-physicians-pay-schedules-and-the-elites-big-lie/

Then there's Big Pharma. For years, Congress legally forbade Medicare and Medicaid from negotiating drug prices, which is why the US government pays the highest rates in the world for drugs developed in the US, with US federal subsidies. US drug prices are 178% more than other wealthy countries, and many drugs are sold at 20-30x the cost of production:

https://aspe.hhs.gov/reports/comparing-prescription-drugs

A few of these drug prices are going to come down in the coming years, thanks to timid, but long overdue action from the Biden administration. To really tackle a source of government waste, the US government could use its "march in rights" to federalize production of the most expensive drugs:

https://prospect.org/day-one-agenda/force-drug-companies-to-lower-prices/

One possibility floated by economist Dean Baker is for the US government to invest $100b/year in clinical trials, keeping the patents for itself and licensing multiple manufacturers to compete to produce these publicly owned drugs, which would save an estimated $500b/year:

https://cepr.net/financing-drug-development-what-the-pandemic-has-taught-us/

Then there's price-gouging, useless middlemen like Group Purchasing Organizations who soak the public purse for $20b/year – a "moderate" enforcement action could cut that to $10b. Speaking of eliminating middlemen, community health centers are a way cheaper source of care than big hospitals – $2371/year cheaper per patient, per year. By subsidizing these, the US government could save another $20b/year:

https://www.ohiochc.org/news/310956/Landmark-Study-Confirms-Medicaid-Cost-Savings-at-Health-Centers.htm

Next, Dayen moves onto the Pentagon, which pulled in $841b last year but has failed seven consecutive audits:

https://thehill.com/policy/defense/4992913-pentagon-fails-7th-audit-in-a-row-but-says-progress-made/

The DoD firehoses money over private sector contractors, like the $3.6b it hands over to Musk's Spacex every year – a number Musk hopes to grow through Spacex's participation in a new consortium:

https://www.ft.com/content/6cfdfe2b-6872-4963-bde8-dc6c43be5093

Military contractor wastage is the stuff of legend, like the $2t F-35 Joint Strike Fighter, a lemon that has over 800 outstanding defects and was just greenlit for another year's worth of full funding:

https://www.bloomberg.com/news/articles/2021-07-13/lockheed-f-35-s-tally-of-flaws-tops-800-as-new-issues-surface

This kind of wasteage isn't merely shameful, it's illegal. The Nunn-McCurdy Act requires that these large-scale boondoggles be reviewed with an eye to shutting them down. But when beltway bandits like Northrop Grumman’s produce expensive lemons like Sentinel, the DoD continues to hand public money to them, citing "national security":

https://www.defense.gov/News/Releases/Release/Article/3829985/department-of-defense-announces-results-of-sentinel-nunn-mccurdy-review/

The DoD contracts out so much of its essential functions that it literally doesn't know what it has. It pays contractors and subcontractors to produce parts for its systems, but has no way to know if those parts have actually been produced. Meanwhile, private equity rollups like Transdigm have merged every single-source aerospace supplier and jacked up the price of spare parts for existing military systems, pulling down 4,500%+ markups:

https://theintercept.com/2019/05/28/ro-khanna-transdigm-refund-pentagon/

To estimate the easy military savings – the ones that won't require shutting down jobs programs scattered in every key Congressional district – Dayen takes the CBO's estimate and cuts it in half, to get an annual savings of $150b/year.

Then there's general prodcurement, where the GAO estimates the US loses $150b/year to bid-rigging and another $521b/year to fraud (the USG also spends $70b/year on management consultants who do no discernible useful work). Dayen estimates the annual savings from "stringently enforcing fraud and abuse, insourcing operations, and no longer paying for bad advice" at $150b/year.

Then there's tax cheating. The IRS estimates that it undercollects about $606b/year in taxes. The top 1% account for $163b/year of that (Elon Musk's own effective tax rate is just 3.27% as of the five years preceding 2021, the year for which we have his leaked tax return; he paid no taxes in 2018). Every dollar the IRS spends on auditing brings in $2.17 in tax, and every dollar the IRS spends auditing the wealthy generates $6.29 in tax. A dollar spent auditing the top 10% brings in $10:

https://www.timesfreepress.com/news/2024/dec/01/opinion-the-irs-shows-what-government-efficiency/

Audits are durable sources of tax. People who've been burned by an audit are far more honest in the decade after that audit.

The GOP has zeroed out Biden's IRS increases. The CBO estimates that a fully funded IRS could easily increase the taxes it collected by a net figure of $200b/year.

There's also new sources of tax. Dayen likes Dean Baker's proposal for taxes on stock returns: just add dividends and stock appreciation at the end of the year, then multiply by the tax rate. Baker says this is a loophole-free way to bring the effective corporate tax rate up from 20% to 25%, generating $65b/year:

https://cepr.net/winning-the-tax-game-tax-stock-returns/

This would be especially hard on heavily financialized companies with "impossibly high stock price/earnings ratios" – e.g. Tesla.

Dayen also proposes rejigging the tax rate on retirement and health insurance plans, where nearly all the tax breaks are scooped by the highest earners. The Tax Policy Center has $1.12-$1.38t/year worth of other tax reforms that would shift the tax burden from working people to the idle rich:

https://taxpolicycenter.org/briefing-book/what-are-largest-tax-expenditures

Dayen says, "let's ask for about 20% of that" and ballparks the tax income at $200b/year.

How about subsidy cuts? $10b/year in fossil fuel subsidies. Eliminating the notorious sources of fraud in crop insurance would save $5b/year:

https://www.gao.gov/assets/gao-06-878t.pdf

There's $7b/year in subsidies to the Home Bank Loan system and $5b/year lost to pass-through entity loopholes.

Add it all up and you're saving $1.4215t/year without even breaking a sweat, just by tacking (some of) the country's worst looting and tax evasion. Dayen points out US expenditures will fall even more than this, because it won't be paying as much T-bill interest if it doesn't spend this money. We could also just make the Fed stop using the blunt, expensive tool of interest rate hikes to manage inflation. There's plenty of scenarios where interest payments result in the remaining $580b/year in savings, bringing the total up to $2t.

Now, sucking $2t/year out of the US economy all at once – even $2t in waste and fraud – would not be good for America! That kind of economic shock would bring the US economy to its knees, for years to come. All that money still fuels the demand side of the economy. But a slow rampup, and more public spending on useful programs (say, climate resiliency and retrofitting), would strengthen the economy while still bankrupting the fraud sector.

DOGE is wildly unpopular with the American electorate – even large pluralities of Republicans think its stupid. Campaigning on cutting fraud and profiteering would be a wildly popular way for Democrats to separate themselves from Republicans. Few Democrats are rising to the occasion, though.

Check out my Kickstarter to pre-order copies of my next novel, Picks and Shovels!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2025/01/27/beltway-bandits/#henhouse-foxes

Image: Steve Jurvetson (modified) https://www.flickr.com/photos/jurvetson/52005460639/

CC BY 2.0 https://creativecommons.org/licenses/by/2.0/

[thoughtportal]

Progressives and Democrats were cheered last week when New York state’s highest court tossed out the 2022 congressional district map and ordered the state’s Independent Redistricting Commission to draw a new one. A fairer map could flip as many as five seats back to Democratic.

But what sort of Democrat? In New York’s 16th District, a nasty primary fight is brewing between incumbent Congressman Jamaal Bowman, an African American progressive, and Westchester County Executive George Latimer, who is white and centrist. Before the 2022 redistricting, more of Bowman’s district was in the Bronx, which is heavily Black and Latino. Now, most of the seat is in affluent, largely white Westchester County.

[houseofbrat]

What’s more frightening at the moment is what will be done accidentally. One misstep with code could blow up the ordinary, smooth functioning of four million payments a day, with dire consequences almost across the board. This testimony in a federal lawsuit gives you some sense of the stakes. A nonprofit in West Virginia with five employees, which does nothing but serve individuals in the community with disabilities—getting them to health treatments or the grocery store, building ramps in their homes so they can get around, helping them live on their own—gets 70 percent of its budget through the Administration for Community Living at the Department of Health and Human Services. They have no cushion or advance payout from the government; they can only draw down to pay immediate bills, a total hand-to-mouth operation. When the Office of Management and Budget memo froze all grants, including their funds, within two days they had to lay off three of their five staffers, or 60 percent of payroll. State grants allowed them to rehire two of the staffers, but without the federal funds they are weeks away from collapse. Multiply this by, I don’t know, hundreds of thousands, or tens of millions if you’re talking about benefit payments for things like Social Security. That’s what we’re talking about. But it’s important to note that the previous example is from an organization that still lacks access to a federal grant, even though OMB rescinded the memo that started the broad pause on such grants, and even though there are now two temporary restraining orders on that conduct. Just yesterday, D.C. District Court Judge Loren AliKhan issued the second order, days after she issued an administrative stay in the case. In that order, AliKhan cites White House Press Secretary Karoline Leavitt’s comment that the funding freeze was not rescinded along with the memo, and highlights numerous entities that still cannot get funding that was clearly appropriated by Congress and approved by the particular agency. “The funding pause remains in effect—at least for some recipients—despite OMB’s rescission of [the memo],” AliKhan writes. “Destroying the paper trail of allegedly illegal activity means nothing if the activity persists.”

Where are the people who fly pro-police flags? They're going to cut funding for police?

Who are the people who like firefighters? They're going to cut that?

Who are the people who like kids getting an education? Do you not realize they're going to put teachers out of work?

Veterans can say goodbye to VA healthcare! The CULT of Elon & the GOP do not care about you!

We can draw two conclusions from this. One, when you set something in motion in the federal government, it’s nearly impossible to roll it back quickly. And we know from this testimony that even a short-term hiccup in funding has real consequences: People will lose their jobs, and services will not be delivered, mostly to the poorest and most vulnerable members of society. The second, inescapable conclusion is that an active impoundment of federal spending is happening, across several nodes of the government. In many cases, agencies are deriving separate authority than the OMB memo, from executive orders for example. This is no less unconstitutional: You can’t just stop payments approved by Congress because the president doesn’t like the recipient.

Somehow the Republicans who "love" their country so much aren't lifting a finger to protect it or the Constitution.

[oncanvas]

Terrace, Prospect Park, William Merritt Chase, circa 1887

Pastel 9 ⅛ x 13 ⅞ in. (23.3 x 35.2 cm) Smithsonian American Art Museum, Washington, DC, USA

[lgbtqreads]

Happy Jewish American Heritage Month 2024!

Happy Jewish American Heritage Month! As always, we’re celebrating with books! For even more recs, check out previous years’ posts! Middle Grade Just Shy of Ordinary by A.J. Sass Thirteen-year-old Shai is an expert problem-solver. There’s never been something they couldn’t research and figure out on their own. But there’s one thing Shai hasn’t been able to logic their way through: picking at the…

[postcard-from-the-past]

Entrance to Ocean Parkway in Prospect Park, New York City, NY, US

American vintage postcard

[medouse]

at some point you begin to Consider Secondary Locations

[mostlysignssomeportents]

“The Fagin figure leading Elon Musk’s merry band of pubescent sovereignty pickpockets”

This week only, Barnes and Noble is offering 25% off pre-orders of my forthcoming novel Picks and Shovels. ENDS TODAY!.

While we truly live in an age of ascendant monsters who have hijacked our country, our economy, and our imaginations, there is one consolation: the small cohort of brilliant, driven writers who have these monsters' number, and will share it with us. Writers like Maureen Tkacik:

https://prospect.org/topics/maureen-tkacik/

Journalists like Wired's Vittoria Elliott, Leah Feiger, and Tim Marchman are absolutely crushing it when it comes to Musk's DOGE coup:

https://www.wired.com/author/vittoria-elliott/

And Nathan Tankus is doing incredible work all on his own, just blasting out scoop after scoop:

https://www.crisesnotes.com/

But for me, it was Tkacik – as usual – in the pages of The American Prospect who pulled it all together in a way that finally made it make sense, transforming the blitzkreig Muskian chaos into a recognizable playbook. While most of the coverage of Musk's wrecking crew has focused on the broccoli-haired Gen Z brownshirts who are wilding through the server rooms at giant, critical government agencies, Tkacik homes in on their boss, Tom Krause, whom she memorably dubs "the Fagin figure leading Elon Musk’s merry band of pubescent sovereignty pickpockets" (I told you she was a great writer!):

https://prospect.org/power/2025-02-06-private-equity-hatchet-man-leading-lost-boys-of-doge/

Krause is a private equity looter. He's the guy who basically invented the playbook for PE takeovers of large tech companies, from Broadcom to Citrix to VMWare, converting their businesses from selling things to renting them out, loading them up with junk fees, slashing quality, jacking up prices over and over, and firing everyone who was good at their jobs. He is a master enshittifier, an enshittification ninja.

Krause has an unerring instinct for making people miserable while making money. He oversaw the merger of Citrix and VMWare, creating a ghastly company called The Cloud Software Group, which sold remote working tools. Despite this, of his first official acts was to order all of his employees to stop working remotely. But then, after forcing his workers to drag their butts into work, move back across the country, etc, he reversed himself because he figured out he could sell off all of the company's office space for a tidy profit.

Krause canceled employee benefits, like thank you days for managers who pulled a lot of unpaid overtime, or bonuses for workers who upgraded their credentials. He also ended the company's practice of handing out swag as small gifts to workers, and then stiffed the company that made the swag, wontpaying a $437,574.97 invoice for all the tchotchkes the company had ordered. That's not the only supplier Krause stiffed: FinLync, a fintech company with a three-year contract with Krause's company, also had to sue to get paid.

Krause's isn't a canny operator who roots out waste: he's a guy who tears out all the wiring and then grudgingly restores the minimum needed to keep the machine running (no wonder Musk loves him, this is the Twitter playbook). As Tkacik reports, Krause fucked up the customer service and reliability systems that served Citrix's extremely large, corporate customers – the giant businesses that cut huge monthly checks to Citrix, whose CIOs received daily sales calls from his competitors.

Workers who serviced these customers, like disabled Air Force veteran David Morgan, who worked with big public agencies, were fired on one hour's notice, just before their stock options vested. The giant public agency customers he'd serviced later called him to complain that the only people they could get on the phone were subcontractors in Indian call centers who lacked the knowledge and authority to resolve their problems.

Last month, Citrix fired all of its customer support engineers. Citrix's military customers are being illegally routed to offshore customer support teams who are prohibited from working with the US military.

Citrix/VMWare isn't an exception. The carnage at these companies is indistinguishable from the wreck Krause made of Broadcom. In all these cases, Krause was parachuted in by private equity bosses, and he destroyed something useful to extract a giant, one-time profit, leaving behind a husk that no longer provides value to its customers or its employees.

This is the DOGE playbook. It's all about plunder: take something that was patiently, carefully built up over generations and burn it to the ground, warming yourself in the pyre, leaving nothing behind but ash. This is what private equity plunderers have been doing to the world's "advanced" economies since the Reagan years. They did it to airlines, family restaurants, funeral homes, dog groomers, toy stores, pharma, palliative care, dialysis, hospital beds, groceries, cars, and the internet.

Trump's a plunderer. He was elected by the plunderer class – like the crypto bros who want to run wild, transforming workers' carefully shepherded retirement savings into useless shitcoins, while the crypto bros run off with their perfectly cromulent "fiat" money. Musk is the apotheosis of this mindset, a guy who claims credit for other peoples' productive and useful businesses, replacing real engineering with financial engineering. Musk and Krause, they're like two peas in a pod.

That's why – according to anonymous DOGE employees cited by Tckacik – DOGE managers are hired for their capacity for cruelty: "The criteria for DOGE is how many you have fired, how much you enjoy firing people, and how little you care about the impact on peoples well being…No wonder Tom Krause was tapped for this. He’s their dream employee!"

The fact that Krause isn't well known outside of plunderer circles is absolutely a feature for him, not a bug. Scammers like Krause want to be admitted to polite society. This is why the Sacklers – the opioid crime family that kicked off the Oxy pandemic that's murdered more than 800,000 Americans so far – were so aggressive about keeping their association with their family business, Purdue Pharma, a secret. The Sacklers only wanted to be associated with the art galleries and museums they put their names over, and their lawyers threatened journalists for writing about their lives as billionaire drug pushers (I got one of those threats).

There's plenty of good reasons to be anonymous – if you're a whistleblower, say. But if you ever encounter a corporate executive who insists on anonymity, that's a wild danger sign. Take Pixsy, the scam "copyleft trolls" whose business depends on baiting people into making small errors when using images licensed under very early versions of the Creative Common licenses, and then threatening to sue them unless they pay hundreds or thousands of dollars:

https://pluralistic.net/2022/01/24/a-bug-in-early-creative-commons-licenses-has-enabled-a-new-breed-of-superpredator/

Kain Jones, the CEO of Pixsy, tried to threaten me under the EU's GDPR for revealing the names of the scammer on his payroll who sent me a legal threat, and the executive who ran the scam for his business (I say he tried to threaten me because I helped lobby for the GDPR and I know for a fact that this isn't a GDPR violation):

https://pluralistic.net/2022/02/13/an-open-letter-to-pixsy-ceo-kain-jones-who-keeps-sending-me-legal-threats/

These people understand that they are in the business of ripping people off, causing them grave and wholly unjust financial injury. They value their secrecy because they are in the business of making strangers righteously furious, and they understand that one of these strangers might just show up in their lives someday to confront them about their transgressions.

This is why Unitedhealthcare freaked out so hard about Luigi Mangione's assassination of CEO Brian Thompson – that's not how the game is supposed to be played. The people who sit in on executive row, destroying your lives, are supposed to be wholly insulated from the consequences of their actions. You're not supposed to know who they are, you're not supposed to be able to find them – of course.

But even more importantly, you're not supposed to be angry at them. They pose as mere software agents in an immortal colony organism called a Limited Liability Corporation, bound by the iron law of shareholder supremacy to destroy your life while getting very, very rich. It's not supposed to be personal. That's why Unitedhealthcare is threatening to sue a doctor who was yanked out of surgery on a cancer patient to be berated by a UHC rep for ordering a hospital stay for her patient:

https://gizmodo.com/unitedhealthcare-is-mad-about-in-luigi-we-trust-comments-under-a-doctors-viral-post-2000560543

UHC is angry that this surgeon, Austin's Dr Elisabeth Potter, went Tiktok-viral with her true story of how how chaotic and depraved and uncaring UHC is. UHC execs fear that Mangione made it personal, that he obliterated the accountability sink of the corporation and put the blame squarely where it belongs – on the (mostly) men at the top who make this call.

This is a point Adam Conover made in his latest Factually podcast, where he interviewed Propublica's T Christian Miller and Patrick Rucker:

https://www.youtube.com/watch?v=Y_5tDXRw8kg

Miller and Rucker published a blockbuster investigative report into Cigna's Evocore, a secret company that offers claims-denials as a service to America's biggest health insurers:

https://www.propublica.org/article/evicore-health-insurance-denials-cigna-unitedhealthcare-aetna-prior-authorizations

If you're the CEO of a health insurance company and you don't like how much you're paying out for MRIs or cancer treatment, you tell Evocore (which processes all your claim authorizations) and they turn a virtual dial that starts to reduce the number of MRIs your customers are allowed to have. This dial increases the likelihood that a claim or pre-authorization will be denied, which, in turn, makes doctors less willing to order them (even if they're medically necessary) and makes patients more likely to pay for them out of pocket.

Towards the end of the conversation, Miller and Rucker talk about how the rank-and-file people at an insurer don't get involved with the industry to murder people in order to enrich their shareholders. They genuinely want to help people. But executive row is different: those very wealthy people do believe their job is to kill people to save money, and get richer. Those people are personally to blame for the systemic problem. They are the ones who design and operate the system.

That's why naming the people who are personally responsible for these immoral, vicious acts is so important. That's why it's important that Wired and Propublica are unmasking the "pubescent sovereignty pickpockets" who are raiding the federal government under Krause's leadership:

https://projects.propublica.org/elon-musk-doge-tracker/

These people are committing grave crimes against the nation and its people. They should be known for this. It should follow them for the rest of their lives. It should be the lead in their obituaries. People who are introduced to them at parties should have a flash of recognition, hastily end the handshake, then turn on their heels and race to the bathroom to scrub their hands. For the rest of their lives.

Naming these people isn't enough to stop the plunder, but it helps. Yesterday, Marko Elez, the 25 year old avowed "eugenicist" who wanted to "normalize Indian hate" and could not be "[paid] to marry outside of my ethnicity," was shown the door. He's off the job. For the rest of his life, he will be the broccoli-haired brownshirt who got fired for his asinine, racist shitposting:

https://www.npr.org/2025/02/06/nx-s1-5289337/elon-musk-doge-treasury

After Krause's identity as the chief wrecker at DOGE was revealed, the brilliant Anna Merlan (author of Republic of Lies, the best book on conspiratorialism), wrote that "Now the whole country gets the experience of what it’s like when private equity buys the place you work":

https://bsky.app/profile/annamerlan.bsky.social/post/3lhepjkudcs2t

That's exactly it. We are witnessing a private equity-style plunder of the entire US government – of the USA itself. No one is better poised to write about this than Tkacik, because no one has private equity's number like Tkacik does:

https://pluralistic.net/2023/06/02/plunderers/#farben

Ironically, all this came down just as Trump announced that he was going to finally get rid of private equity's scammiest trick, the "carried interest" loophole that lets PE bosses (and, to a lesser extent, hedge fund managers) avoid billions in personal taxes:

https://archive.is/yKhvD

"Carried interest" has nothing to do with the interest rate – it's a law that was designed for 16th century sea captains who had an "interest" in the cargo they "carried":

https://pluralistic.net/2021/04/29/writers-must-be-paid/#carried-interest

Trump campaigned on killing this loophole in 2017, but Congress stopped him, after a lobbying blitz by the looter industry. It's possible that he genuinely wants to get rid of the carried interest loophole – he's nothing if not idiosyncratic, as the residents of Greenland can attest:

https://prospect.org/world/2025-02-07-letter-between-friendly-nations/

Even if he succeeds, looters and the "investor class" will get a huge giveaway under Trump, in the form of more tax giveaways and the dismantling of labor and environmental regulation. But it's far more likely that he won't succeed. Rather – as Yves Smith writes for Naked Capitalism – he'll do what he did with the Canada and Mexico tariffs: make a tiny, unimportant change and then lie and say he had done something revolutionary:

https://www.nakedcapitalism.com/2025/02/is-trump-serious-about-trying-to-close-the-private-equity-carried-interest-loophole.html

This has been a shitty month, and it's not gonna get better for a while. On my dark days, I worry that it won't get better during my lifetime. But at least we have people like Tkacik to chronicle it, explain it, put it in context. She's amazing, a whirlwind. The same day that her report on Krause dropped, the Prospect published another must-read piece by her, digging deep into Alex Jones's convoluted bankruptcy gambit:

https://prospect.org/justice/2025-02-06-crisis-actors-alex-jones-bankruptcy/

It lays bare the wild world of elite bankruptcy court, another critical conduit for protecting the immoral rich from their victims. The fact that Tkacik can explain both Krause and the elite bankruptcy system on the same day is beyond impressive.

We've got a lot of work ahead of ourselves. The people in charge of this system – whose names you must learn and never forget – aren't going to go easily. But at least we know who they are. We know what they're doing. We know how the scam works. It's not a flurry of incomprehensible actions – it's a playbook that killed Red Lobster, Toys R Us, and Sears. We don't have to follow that playbook.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2025/02/07/broccoli-hair-brownshirts/#shameless