I feel like this entire column distilled is basically Matt calling Bezos’ bluff “you say your moves are about steering WaPo in a more libertarian direction? Prove it. Because I saw you at Trump’s inauguration. Because if this is sincere, a whole of lot your newspaper should remain firmly anti-Trump if from a different angle than before. And quite frankly, I don’t believe you”.
Given Matt’s writing style, he of course is going to put something together more intellectually high minded and well thought out. But it’s hard for me to read this and not think my summation above is accurate.
Been following the Wapo opinion section closely since the announcement and they’ve published stuff criticizing Trump, Elon, and the tariff policy. So, so far so good.
I’m not worried about the policy change as long as the smart opinion columnists (Megan McArdle, Phillip Bump, Fareed Zakaria) stick around
I am on the center left and mostly agree with Fareed Zakaria and Phillip Bump. I respect though often disagree with Megan McArdle -- though she has probably successfully changed my mind on a few issues or helped me see something from a perspective that I had not considered. I am happy that they all appear in the Post, and I am happy that the opinion section of the Post is diverse enough that those writers will get the attention of many readers who are further left than I. If the WaPo opinion section turns into the WSJ opinion section, I fear that will never happen. In the long run, that's probably not good for free markets or for individual liberty.
I think it's smart for Bezos to try to take closer control of the reigns of the Post and run it as a project he really believes in rather than something he just vaguely patronizes. And I want to be optimistic that Jeff Bezos really wants to compete with Elon Musk in rocketry and cares about personal freedom and all these other things that he says he cares about.
Do we really need/want more media organs that are both in fact and in theory the mouthpiece for a specific billionaire's viewpoints? Musk has Xitter so Bezos gets WaPo? What happens when Bezos changes his mind about something big? Fire all the columnists and replace them with a new set?
If Bezos wants to set up a new organization to promote his rockets or ideas or whatever, that seems fair. Trying to launder those through the imprimatur of the Washington Post is a different story.
I didn't say in my post, but also thinking about how Bezos killed WaPo's Presidential endorsement. I'm 99.9% positive the endorsement wasn't going to swing the election one or another and is honestly pretty outdated for high profile elections (different story for local). But that's a pretty huge editorial intervention for Bezos to make nonetheless. And is a big red flag that he's going to drive a lot of what does or doesn't get printed beyond hiring people with more libertarian bent.
"I'm 99.9% positive the endorsement wasn't going to swing the election one or another and is honestly pretty outdated for high profile elections"≠ "pretty huge editorial intervention."
All sorts of news topics on all sorts of stories get mountains of news coverage and probably have negligible to no impact on an election; especially Presidential.
Take all the campus protests in 2023. I've been on record as saying that the focus on these protests was excessive in the extreme. And if anything this protests most direct impact was it led to a number of Arab-American voters to either vote Trump or keep the top of their ballot empty (personally know one). Bring up because coverage of the protests (if not the conflict itself) was in the main quite negative from MSM
But if came out that the New York Times covered the protests in a particular way because Arthur Sulzberger personally intervened due to an impending business deal with an Israeli businessman, I would say that would have been an absolutely outrageous thing to do and a big scandal for the paper. Even if the net effect of all the mostly negative coverage of protests seems to very possibly had an opposite effect electorally if anything.
If Bezos had intervened and said they were going to endorse Trump then I think this might be more reasonable comparison. But that's not what happened. Bezos said he wanted to get out of the endorsement business. Which I think was smart because as you said, it convinced almost nobody to vote differently, but generated ill will with a large number of the public. What exactly was the positive that doing an endorsement here would have accomplished?
If pulling the endorsement was a matter of principle rather than kowtowing to Trump then he could have coupled it with his own personal criticism of Trump
Honestly I'm not sure what the "right" level of his fingerprints on belief should be for Bezos and the Post. Shouldn't be propaganda, shouldn't be rudderless regurgitation of she said he said and stuff happened. Not gonna lie though, I do think there is a need for prejudice against Trump/Rs in their current iteration because they are illiberal and don't seem to be able to self regulate even w a really low bar attached and have power
I don't see it quite that way. Lots of things Trump wanted to happen the first time around didn't. The media was united against him and in favor of stopping most of those things, maybe it's just correlation, but maybe it was also causative. And really critically, he lost the mid-terms and his re-election bid.
Trump appears to be doing better this time, but it's early and not at all clear how much will stick, although it will be some. But I don't see less criticism, especially in prominent places as good. It seems counterintuitive to me that less criticism impedes him more.
I’m quite convinced by what Matt says in another post (actually, I already believed this), that there’s a big difference between “Trump Wrongly Ramps Up Deportations, Which Is Racist”, where you’re making people more aware of something popular Trump is doing but telling them what to feel about it (which hurts you two ways: by raising the awareness of Trump’s popular action and hurting your own credibility), versus making people aware of unpopular Trump stuff that they otherwise wouldn’t be. I think Trump’s unpopularity has been due to the latter media treatment, not the former.
I was talking with someone yesterday and was reminded that this came with a cost. There is an increasing amount of the public that has lost trust in media as a result of this united front.
I think the best and simplest way to do it, as Matt said [https://x.com/mattyglesias/status/1894764896501252172] and someone I immediately thought of as well when I read Bezos's statement, is to just look in-house and put Megan McArdle in charge of the venture. She's toned down from her Jane Galt days, and has been consistently anti-Trump. I think she'd run an accurate message of personal liberty and free markets as Bezos is stating.
I agree. I find myself exasperated with a lot of her takes, but that's because I'm not a libertarian and so therefore would have some pretty fundamental disagreements if Megan or a random writer at Reason made the same argument.
My suspicion as to what will happen is that on most topics the Editorial Board will have a pretty decent amount of independence. WSJ editorial board (usually pretty big Trump cheerleaders) have been pretty scathing regarding tariffs and Ukraine. The Fox News talking heads are essentially doing "We've always been at war with Eurasia" propaganda for whatever deranged crap comes to Trump's head but Murdoch doesn't seem interested in intervening with WSJ editorial board to do the same.
No I think the real worry is when Bezos (I think inevitably) cuts some sweetheart and horrendously corrupt deal to exempt Amazon from upcoming tariffs. For a variety of reasons, I don't think tariffs will be long lasting; certainly not the promised 25% tariffs on Mexico and Canada given how damaging they would be long term. But the mechanism by which those tariffs are watered down? Seems very likely it's going to involve astonishingly blatant bribery such as buying a bunch Trump coin in exchange for loopholes.
So say this happens with Bezos. Does WaPo editorial board stick to it's libertarian guns and call out how this would be blatantly anti-free market with a dose of "this is why big government is bad"? My suspicion is the Editorial Board will remain noticeably silent.
I could see a world in which both become true, that Amazon gets a sweetheart deal, and they still attack non-Amazon related nonsense. But we shall see.
"the real worry is when Bezos (I think inevitably) cuts some sweetheart and horrendously corrupt deal to exempt Amazon from upcoming tariffs"
If we see Trump doing things like this, it'll be just begging the courts to start invalidating these very broad and standardless statutory delegations of tariff power to the President, under the major questions/nondelegation doctrines. There would be plenty of aggrieved parties that didn't get exemptions with standing to file suit.
She definitely has many who have developed a derangement syndrome against her. Between she, Matt, and Nate Silver, I know I'm in a good place reading all three of them when they annoy the people that need to be annoyed.
I think you are trying to re-interpret Matt's post away from its literal interpretation, because read in its literal form, Matt's post is hyper-timid weak-tea bullshit.
ETA: if in 2025 your diagnosis is "we just need the Democrats to be more friendly to huge business interests and billionaires," you're just summarizing the past two decades of policy that got us to Trump. There is really no way we can keep going with a situation where every term or two the Dems do nothing but reinforce the status quo, and then fascists come in with vast billionaire funding and media control and try to centralize all power under their banner. That's not at all a sustainable equilibrium.
I think he’s doing what u say but also sounds genuinely like he isn’t cynical about bezos’s intentions. Personally I think it’s a good idea for the owner to say what the principles of the editorial section are. I’m going to read it and if he does a good job it will be a bit of a miracle but it’s not impossible.
"I think the ... fetishization of small business in general is dumb."
Agreed that fetishizing this or almost anything in a policy context like this is dumb.
But what you're missing here is that an economy that's hospitable small businesses is itself an important component of personal liberty. There's more to life than maximal efficiency in the allocation of capital. A world where the vast majority of people spend their lives as cogs in or subjects to decisions made elsewhere by others in large organizations, be they corporations or govt bureaucracies, is not one where the lived experience of most people is one with a lot of personal liberty and agency.
"an economy that's hospitable small businesses is itself an important component of personal liberty"
I mean I don't think the economy should be *hostile* to small businesses. I actually own and operate a small business! But I don't think the regulatory environment should be geared around protecting small businesses from competition.
This gets to the question of whether, left untended, the natural dynamics of a market based economy are, over time, themselves hostile to small and upstart businesses?
Will it remain in perpetuity a field where a thousand flowers bloom, or will economies of scale, etc, inexorably tend in the direction of greater concentration and monopolization, where once a few competitors break out from the pack they can entrench themselves and take over more and more areas?
The historical evidence seems pretty strong that a broadbased, competitive economy that's realistically open to many participants and new entrants is not a set-it-and-forget-it thing, but a garden that requires regular, thoughtful tending, pruning and weeding -- not fetishistic but thoughtful. How much is the right amount is the hard question, but more a political/cultural one than an economic one, I'd say.
I'm on holiday in Europe and the way that there are 10 bakeries within a 10 minute walk is a beautiful example of small business competition. And my favorite one is a chain with 5 locations, so the small business are still allowed to grow.
There are also 50 bodegas and 100 souvenir shops in that radius that are all equally bad. And there's an amazing kebab shop with 5 copycats committing trademark infringement. So it's a mixed bag I guess.
Small business is great for the agency and liberty of the person running it, but they often involve less personal liberty and agency for their employees than working for big corporations.
I always see small business as high variance: the good ones being *really* good, and the bad ones being *really* bad--and it's to the whim of the owners as to what type of variance they want to take on.
Yeah. Small businesses are much more authoritarian than large corporations. But the thing about authoritarianism is that it's a good system as long as the person in charge is benevolent and competent.
Saying it’s the whim of the owners makes it sound like they all know how to run a welfare-enhancing business and how to run a harmful one, and they choose which to do. I think it’s much more up to the *vagaries* of whether the ideas the owner has about how to run a business are in fact good for people or in fact bad for them, rather than whims about whether they want to treat people well or poorly.
The other point on the bad ones -- at least they're small. When the big ones are bad (e.g., Enron, Theranos), the scale of the disaster creates a far bigger wake.
If you mean "an individual big business being Bad is going to have a greater impact than an individual small business being Bad," sure, that makes sense.
If you mean "the aggregate harm from big businesses being Bad is greater than the aggregate harm from small businesses being Bad," I'm not so sure. Did Holmes defrauding her investors and partners cause more harm than 10,000 instances of hucksters sweet-talking acquaintances and distant relatives into putting $50k into some pretended small business?
Not to mention that small businesses by and large (sometimes by ignorance and sometimes by malice) routinely violate labor laws (e.g. misclassifying as contractors, requiring work off the clock, improper docking/out-and-out wage theft) at a scale that big corporations know they can't get away with.
Part of the appeal of franchising is the effective regulatory arbitrage.
It's also fairly likely that the median Amazon shareholder's partisan inclination (thanks to index funds) is a few points to the left of the median small business owner who has more than, say, 3 employees.
I think the point is that franchising allows what is actually a big business to be run as a bunch of small businesses, many of which are violating labor laws that the big business would never get away with violating.
* Owning enough of AMZN directly or having enough VOO/SPY/QQQ/etc. to be in contention for the median owner likely correlates fairly right
* The employee cutoff matters. 33+% owners of a 10+ employee business probably went for Trump by 40+. But with a 3+ employee cutoff, there are a lot of professional services firms (law, accounting, design, consulting) that bring that margin in substantially
It’s interesting to see, ya know. One of my good friends did a really dumb, destructive, dangerous thing in college and paid the price by serving a couple years hard time and having a permanent record that basically precludes him from employment. And this guy is by inclination very far left, a gay vegan Marxist hippie.
But without any other options he had to start his own business, which has been relatively successful. So he’s a member in good standing of the Chamber of Commerce of his small Southern town, he employs people and has to deal with shitty workers that don’t do their jobs, etc. it’s been interesting watching his political evolution as he’s become a full-fledged member of the petit bourgeoisie. He’s definitely not become a Republican or anything, but living in the real world has definitely been a moderating force!
Maybe, but the other option for lots of small business employees is not 'working a good job for a big corporation', it's 'working the worst job at a big corporation' or working for a franchise of a big Corp.
Probably for most people, the jobs would be pretty similar, except the big corporation would pay more and have actual HR policies and have to follow labor laws.
Not really. Small businesses tend to have a lot of jobs that don’t exist in larger ones. Sales at farmers markets, giving riding lessons, making homemade jam for the aforementioned farmers market, giving cooking lessons, teaching dog agility or rally, leading rafting outings - all local small business jobs that do not usually have corporate equivalents.
Growing and selling vegetables and making jam and teaching of various kinds are all things that are obviously also done in big business as well. Of course those have different character (that's why I shop at farmers markets) but that's also part of the point.
Farmers markets typically do require that items sold be made locally, including jams, with the definition of local varying with the specific market. The number of large corporations that give riding lessons or cooking lessons or canine agility lessons is either zero or close enough to it to not matter. I have taken all three and I can’t think of a big corporate example offering them.
Yes. Best way public policy can enhance "agency and liberty" in terms of economis is (1) provide the conditions for a robust labor market (lets workers head for greener pastures more easily) and (2) maintain a strong safety net (ditto). Like, America's practice of tying healthcare to the timeclock isn't great for liberty.
It’s a very old-fashioned concept of “liberty”: making sure that, say, 10% of the population has a great deal of personal autonomy even if that reduces freedom and prosperity for everyone else.
I would say in general that’s incorrect. Small businesses tend to have more flexibility, although they’re highly variable. If you want to work a few hours for extra money, for example covering phones for a plumbing business or doing retail sales at a farmers market, you are more likely to be able to find something at a small business than a large. A small business is also much less likely to have the brutal rotating schedules associated with larger retail businesses.
I don't think that's true actually, in areas where workers have a fair amount of power like pharmacy and medical practices the trend has been to close up the sole proprietorship and go work for a big company, largely because working for a big company allows you to take vacation in a way running your own shop doesn't.
there are two different trends, one is doctors leaving group/solo practices to work for hospitals... this is driven by a preference among most doctors to not own their own business. The other is hospitals buying each other, which to your point is mostly about getting maximum negotiation power with insurance companies.
Why do you think they don’t want to own their own businesses? It’s pretty trivial to have enough providers in an independent group practice to cover vacations and whatnot. It’s because the overhead involved has ballooned due to the need to hire multiple people to handle billing, to be part of a group insurance negotiation structure (like you mentioned), the desire to bill for in-house lab and X-ray (and to pay those people), to spread the risk pool of liability insurance, and the need to offer benefits packages to all the allied health employees (which I admit does relate to employment benefits, but it’s less for the doctors and more so that you can compete for staff).
Long gone are the days when a doctor, nurse, and receptionist was enough to staff a practice!
True true. I think this what mentioned more in the context that Lina Khan and the New Brandeis brigade think that everything big is bad and everything small is good. When in fact, small businesses can do bad things too!
It's also an important component of free markets. If small companies can compete with big ones it means there's low barriers to entry in the form of low regulations.
The more regulated an industry, the more overhead needs to be spent on non efficient resources like lawyers, compliance, accounting, etc and the harder it will be for new entrants.
Totally agree. People are people, not aggregated units of productivity. Small businesses are also amazing engines of individual career growth. Careers grow on two dimensions: (1) vertical expertise and (2) horizontal experiences. Small business offer far more of these horizonal experiences that large corps. just don't have the flexibility to offer. For example, if you want to run / buy a business -- you need reps.; you gotta start small.
This is objectively untrue. Small businesses offer less horizontal and vertical opportunities to employees. Most employees will leave their job doing the exact same thing as when they started.
Nope, it's objectively true. You - specifically - can probably buy a $1M company today. You cannot buy a $1B company today. Owning / running a $1M company offers the full responsibility of a P&L that would never scale down in a $1B company and the lack of scale stretches all roles horizontally.
EDIT: Because I don't think this was clear enough. It's precisely the *lack* of scale of small businesses that require roles to expand across multiple functions. For example, the GM of our $5M business also individually drove our SEO lead generation. He's a better leader now because of the experience.
lol. Of course I have a lot of agency. I’m a partner in a law firm. Yes, I could buy some company and treat its employees however I like.
You are objectively wrong about the situations of the vast majority of Americans, who are not in a position to overpay for some HVAC company in a bidding war against a PE fund rolling them up, nor would you make them GM of one of the little companies you rule with an iron fist. The dishwashers and secretaries are far better off never working for you or any other small business.
Ok. As a lawyer, it sounds like you don't have any experience with small businesses and / or PE roll-ups. Very strong opinions though. Hilarious that you think a levered-up PE is able to offer higher wages. The #1 synergy in any model is labor. The only thing a PE roll-up is thinking about post-acquisition is how the fire the dishwashers and secretaries.
Small business owners are: much more likely to have engaged in illegal conduct towards their employees; much more likely to have engaged in outright fraud against customers and vendors; much more likely to breach contracts; much more likely to take overly aggressive and outright frivolous litigation positions.
Also, I don’t consider PE funds to be any better than small businesses. Basically they have exactly the same mentality as a second generation business owner or some sucker who bought the business with an SBA loan, but can do math.
In all instances, median employees are better off working for large standalone businesses with real HR departments, management that is concerned about public image, etc.
You are factually incorrect. When in a small business you wear a lot of hats. I've worked at multiple different companies from those with $3m a year in revenue to those with $5 billion a year in revenue.
Small companies you doing many different jobs. Big companies you do one job but there's more depth to that job.
For example, in a small company your whole finance team might be one person that does AR, AP and accounting. That person probably does payroll as well.
In a large company you have departments for each of those roles and that's ALL you do.
The book Battle Cry of Freedom has a great discussion of how working for yourself was viewed as a central aspect of freedom for like the first 100 years after the founding. Working as a salaried employee for another person was viewed as fundamentally servile and undignified. From the Wiki page on Wage Slavery (which is worth a read):
‘Abraham Lincoln and the Republicans argued that the condition of wage workers was different from slavery as long as laborers were likely to develop the opportunity to work for themselves, achieving self-employment. The abolitionist and former slave Frederick Douglass initially declared "now I am my own master", upon taking a paying job. However, later in life he concluded to the contrary, saying "experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other"’
When the alternative to employment is subsistence farming it looks different from the modern world, where the alternative to employment is unemployment.
IIRC, the model Lincoln had in mind wasn’t that everyone should be a subsistence farmer, but that everyone should go through an apprenticeship stage before setting themselves up as a small businessperson. Some sectors of the economy still work like this, e.g. dentists and plumbers.
It may be true that many parts of a modern economy can’t work like this, but it also may be true that a modern economy isn’t compatible with widespread freedom and human dignity, as Lincoln or Douglas would have understood those terms.
Right but I think a world where the vast majority of people are one generation from subsistence farming is one in which a lot of people have stronger ideas about running their own proprietorship.
Countries like Norway, Sweden, and Korea today, where a handful of companies control just about the entire economy, are probably freer in practice though then the US in the 19th century. And that's just not about slavery or the lack of female suffrage, but also about things like violent suppression of strikes, widespread illiteracy, and just the way material poverty limits your options. I'm not saying having Nokia control your economy is good for freedom, but that it was impossible for Lincoln to have more context for the possibilities of freedom that would be out there in the future.
Sure, but these countries have huge welfare states (well, not SK, but I think you’re underestimating the ubiquity of small businesses in SK). Unless your big businesses are mandated to employ the entire population, which I’m not against, you need either a flourishing small business economy or a generous safety net.
Also note that big business is a big customer of small business. For example, at the lower tiers of the aerospace industry supply chain are mom-and-pop machine shops making precision parts that will find their way into a 737. So it’s not a question of big vs small, both have their place.
I don't have the numbers right in front of me, but one of the biggest issues driving our politics is that there is a big discrepancy between the companies that make up our GDP and the companies that make up our employment. This is partly why economic benefits of growth don't get more widely shared through market forces: you can't get a raise from a large company you don't work for when the small company you work for is struggling. You either need redistribution or just accept that the numbers are bad.
I think ideally a strong democratic society has a healthy mix. It's fine to have (really) big successful companies but there is a point where they create tensions and inequalities that undermine the rule of law leg.
While not really apples to apples I think a lot of current political problems, right and left, are a result of anger lingering over wall street being bailed out in 2008-2009 while regular people lost their houses. Which isn't to say that the bailout was not the technical right thing to do, but a recurring theme of right and left populism is the risk of the wealthiest being socialized while risk to regular people and smaller businesses being private.
If you think a large corporation acts as an authoritarian towards its employees, wait until you discover how a small business owner treats his employees.
I don’t know any. I assumed the close relationship would instigate a more ethical, humane approach towards employees but I suppose it depends on the owner and the competitiveness of the business.
Unfortunately, the biggest differences are that a low level employee often answers to someone who is unaccountable to anyone else in the organization (e.g. is the owner) or so close to the owner that they are effectively unaccountable (sometimes a long serving manager, often a relative of the owner). And not only do these organizations generally not have a structure to force some level of compliance, they are often entirely exempt from some labor laws.
Add in the fact that business decisions are being made by the person who is responsible for paying for everything, and you get much worse outcomes for employees: lower pay, fewer benefits, more discrimination and harassment, etc. Obviously this isn’t universally true, but the absolute worst cases of employee treatment I’ve seen have all come from small, privately owned businesses, usually at the hands of the owner themselves.
Your perspective seems to be based on a lot of experience, but is that experience specifically from litigation surrounding these bad actors? If that's the case, it stands to reason that there's some heavy selection bias in the types of small business owners you come across.
I'm trying to weight your experience appropriately because this is an interesting data point to me.
At one small business I worked at, the day after the CEO fired someone, he then proceeded to publicly make fun of the fired employee to the rest of us since they were a rape survivor.
I think there is a large rural-urban split regarding small businesses. It is, on net, not good for rural communities to get a Walmart or a Dollar Tree. Money that used to recirculate the local economy instead flees. It can be very extractive.
I don't know how you possibly would regulate the situation to get a better outcome for a rural community, but I think a ton of the collapse of these communities is due to large corporations replacing small businesses.
There are two main things that undercut the point that you are trying to make:
1) Not every single employee of a Walmart in a rural community is local to that community. Because Walmart is a corporation, a significant number of tasks are handled by people who work at corporate headquarters. So those small businesses that employed their own bookkeepers and used a local CPA and lawyer are now spending those dollars outside of the community.
2) Walmart stores generate profit. The profit that was generated by the small businesses that existed previously was accrued to a local resident. Profits for Walmart are accrued to Arkansas.
This doesn't even get into the fact that Walmart is probably using national and international suppliers for many things that a local business sourced locally.
On point 1, the corporate employees are key to the low prices Walmart offers. The benefits therefore accrue largely to the local community.
You’d have to show that Walmart’s margin (typically 3% - 4%) is greater than the difference in price offered at a mom & pop store to Walmart’s price. And it’s not even close.
This paper indicates that the savings that Walmart claims are dwarfed the drop in wages locals experience: “Specifically, we find evidence of a $4,230 (6 percent) decline in annual earnings for individuals in counties where Supercenters opened.”
Bezos, Zuckerberg, CEOs across the spectrum, et al, crave acceptance and approval**. It is a big part of what drives them to do what they do. I would argue their support for left wing causes and DEI was just them doing what they thought would be lauded. But, as Matt notes, the Biden administration took the Everything Bagel approach to the left and that includes the stridently anti-business, anti-profit part.
So now those CEOs are searching for something else that will allow them to grow their businesses and garner acceptance and approval. Some, like Musk, are going all-Trump. The more staid (and emotionally stable) personalities are still looking. Here's to hoping the Democratic Party welcomes them before the Republicans figure it out.
** Including Trump. The 2016 [edit: actually, 2011] WHCA Dinner will be seen by historians as an important turning point in our country's history.
Everyone craves acceptance and approval. It's past time for folks across the anti-Trump coalition to be more mindful of that, and it goes way beyond Biden or indeed the left. I still remember reading some Trumper say "Hillary called me a deplorable, Trump called me an American". To this day the host of one of the Bulwark's flagship podcasts constantly calls American voters dumb.
BTW I believe the pivotal WHCA dinner was 2011 not 2016.
hard to believe historically speaking the most significant fallout of the 2011 WHCA Dinner *Wasn't* the Bin Laden raid approved just beforehand and happening mere hours later lol.
That was maybe popular among Democrats, but the deciding factor was more like “Mitt Romney is a plutocrat and Paul Ryan wants to take away your grandma’s healthcare”
I completely agree. But it makes sense and isn't surprising at all to me that Americans cared more if they had a job and healthcare than if a bad man on the other side of the world who killed some people in a city they've been to once was dead, or merely in hiding
And it is entirely reasonable for voters to assume that some who insults them is not going to push for policies that are in those voters’ interests. Every now and then I will bring up how certain democratic politicians or activists express contempt for certain voters and my more left acquaintances will claim that the Republicans hold those voters in contempt at least as much and then point to some policy that is allegedly bad for those voters. But it’s not the same. Someone who insults a type of voter on a personal level is doing so consciously and there’s every reason to assume they willl not act in your interest
Especially if you think of how Trump has actively scammed working class people or refused to pay contractors. "I love the poorly educated" would probably go down as the most condescending thing a presidential candidate ever said if anyone else said it. Trump's insults to the working class just don't have salience among the working class, which is a long way from saying he doesn't insult the working class.
And even with Clinton, no one ever points to anything else she says as expressing that kind of disrespect - it’s only a *single* off-the-cuff remark. Similarly with Obama and the “bitter… clinging to their guns” line.
It’s not like Trump who explicitly insults the professional class on a regular basis!
Yeah, but politically, that “basket of deplorables” line is going down in history as just stunningly stupid. I have friends and family back in PA that were more than likely hold their nose and vote for her - Trump was not particularly popular as a person amongst these folks as we’ve been exposed to his nonsense since the 80s - who instantly were incensed by that comment. Hell, *I* was incensed and I didn’t even live there anymore.
The difference is that Clinton alienated possible Clinton voters. We white collar center/libs were never really in play to vote for Trump. The SALT limits were a big middle finger to folks who make good money via W2 but
The professional class is just much smaller than the working class. In a democracy, you can afford to piss off the smaller group to win the larger group.
Trump has plenty of political under-performance to his name. Lagged the fundamentals in '16, first first-time President to lose in 40 years in '20, won narrowly in '24 while incumbents around the world got crushed. He's also had very poor popularity while in office.
Two wrongs don't make a right. Your opponent campaigning suboptimally isn't a license to make mistakes. Especially when your opponent is as dangerous as Trump increasingly seems to be.
I think many tech moguls are trying to figure out how to get back the societal esteem they had in 2010 when everyone thought Google and Amazon were awesome. But that's not going to happen -- they are now the biggest and most important companies in the world; of course people are going to yell at them. As the mad men line goes, that's what the money is for.
Hasn't Gates already shown them exactly how? Visibly quit any role in the management of your company and go loudly spend your time giving away a bunch of your money, but not so much that it might imperil your power or influence, let alone something so tiny as your standard of living, hahaha.
People literally believe he’s the antichrist. His unfavorables are almost as large as his favorables. As Matt points out in his article, powerful people think they have to pick sides. Increasingly, I think they are right and Matt is wrong, at least insofar as they continue to be in the limelight at all.
Half the country hates the guy and thinks has ulterior motives on vaccines, climate, meat, etc. I bet Elon and gates have similar polling numbers right now
Huh I didn’t expect this, but apparently you’re right - Bill Gates is the fourth most popular business figure, but Elon Musk is second (behind Warren Buffett). Two Trump children are in the top ten, as is the MyPillow guy, while Jeff Bezos is just outside the top ten.
I think he is much less popular than he was in the Microsoft heyday, when he was seen as both brilliant and leading the next generation of American companies. His company just became huge and important much earlier than Google or Facebook.
That’s so interesting. My opinion of him went through the opposite trajectory. In the late 1990s I thought he was the devil incarnate. I don’t remember when he started his foundation, but it took many years before that made me favorable to him.
Do you mean before his anti-competitive practices became obvious? Because Nadella has the advantage of not having to have the knives out in as obvious a fashion for the general public to see.
I don't think this is that complicated really. I think a certain set of tech moguls have internalized ideas related to Randian objectivism or believe they are Nietzschean supermen and should not be constrained by society or rules in any way.
This experiment is done if the entirety of politics ends up being the appeasement of oligarchs. But maybe that was the inevitable end of the Madisonian system.
That's kinda my point. Maybe you can joke about it, but the people being affected by DOGE, by the changes at WaPo, by the dismantling of affirmative action programs at company after company don't have the same luxury.
I had a thought this morning. Both the right and left have adopted some form of extreme blood and soil politics with a form of innate race essentialism at it's core. Whether it's Vance's nonsense about ancestorial Americans or the DEI crowd's anti-racism hogwash, both are very much about the color of one's skin and not the content of their character.
No wonder so many of these extremist advocates are so lacking in character.
Most of the left hasn’t adopted any of the blood and soil stuff that a segment of the DEI crowd endorses. But I suppose it’s also true that most of the right hasn’t adopted any of the blood and soil stuff of the alt-right.
I think the current journalist conventions underplay the personal nature of politics. Policy and political loyalty is often downstream of personal rivalries and friendships, even if it's not considered polite to admit it.
A point that I think is both endlessly discussed and incredibly underrated is that people’s “politics” are, at least in part, ex post facto rationalizations of their emotional lives.
This is not a new or original insight at all - Jonathan Haidt’s “The Righteous Mind,” etc. - but it seems to be one of those things that you have to say and get out of the way before moving onto talking about “real” issues of politics: “we’re all tribal,” etc.
This is not to say that principles don’t exist or that there aren’t principled people out there. But I think that there’s often a binary drawn between “principles” and “emotional reaction” that obscures how politics works.
Obviously you have to treat complex topics like politics in terms of its component parts at least some of the time, or you risk just repeating abstract truisms. So I’m not entirely sure what I’m saying, other than it’s entirely possible that Jeff Bezos (and Zuckerberg, etc.) are more just exhausted than anything and just sort of throwing up their hands and saying “whatever, I guess this is what you want” and that in and of itself is significant.
Bezos and Zuckerberg in particular went pretty hard on the resistance the first time and I think reasonably feel like the results were bad for them on all levels:
* They weren't seen warmly by the left
* The whole resistance project at least arguably was a failure since now we have Trump 2, This Time Worse
* They may reasonably feel like it kinda messed up their companies
* And also it maybe just degraded the social milieu in general?
And, like, if you're inclined to nitpick that a lot of that isn't exactly the fault of the resistance, okay, sure. But I'm not surprised that both want to move decisively into a new modality of response to Trump -- not just fine tune a little.
It'll be disappointing if the new modality is Musk-like crazy MAGA though.
Exactly - I totally agree. This is what I’m saying: they feel like they got burned, and so they’re giving their erstwhile allies the *doigt d’honneur*. Which is probably what I’d feel like doing! I’m saying that “feelings of personal betrayal” is underrated as a potent political force.
What I'm saying is more that it's both. Like, it's feelings of personal betrayal AND feeling that it was all for nothing AND feeling that their businesses are targeted AND feeling that just like overall society seems kinda sick?
Maybe they would've swallowed a feeling of personal betrayal! But why would you swallow a feeling of personal betrayal on top of all the rest of that?
On Bezos, I think Democrats have a hard time realizing that many former Dems didn't join them for good reason. They joined the flock without thinking, the same way children join their parent's religion. It's a cultural thing, not a well-reasoned thing.
So it shouldn't be surprising when these people get red-pilled and just kinda flop into the Republican camp. They listen to a few podcasts, or some friends start asking questions, and their shallow thinking is unstable.
When someone goes from near-100% Democrats to near-100% Republican in the course of a year or two, that's a sure-fire sign of shallow thinking. There are no principals or core beliefs keeping them on-sides.
This is a straw man - 100% Democrat to 100% Republican. The tech bros are still culturally on the left. Show me one - even Elon - who advocates restricting abortion.
If they've fallen into the Republican camp, it's because of the anti-capitalist staff who were running Biden's office. Read Marc Andresson on the White House meeting that he walked out of shaking his head in wonderment. That doesn't mean Andresson is on the right. His natural home is with the Democrats.
America didn't embrace Trump. It revolted against Democratic activists. And the dishonesty of pretending Biden was sharp, followed by the coronation of a woman who thought platitudes and word salad was policy.
Trump is awful. But he's here because of Democratic missteps. I hope they've learned something.
I'm gonna call this the "The Free Press Fallacy"—this pervasive idea that Democrats are the only ones with agency while Republicans, conservatives, or other, are merely responding to the actions of Democrats and/or progressive activists.
A good many people have found fame and fortune recently flogging this dead horse, but it doesn't make it any more true, and it absolves the mass of folks who have thrown their lots in with a group of people who represent most of the things they purport to be against.
I've seen far more criticism of Trump, et al.'s performance in that meeting in mainstream media than I've seen criticism of Zelensky. (That said, Zelensky was, in fact, the only one with agency in that room in any practical sense other than maybe Vance.)
Zelensky was the one who wanted something from the meeting though, so yes, the pressure was on him. I'm really not sure if Trump et al. cared about how it went.
Fair point, but then Zelensky must have known that too. So I still can't figure out how much of what happened was real and how much was theater. I guess we'll never know for sure.
It's worth keeping in mind that Andreessen is long-term Republican and was a fundraiser for the Romney 2012 campaign. His recent claims that he was radicalized by the BLM/woke left are largely a myth. Andreessen, like a lot of tech CEOs, fits quite naturally in the Romney Republican mold: tax cuts, deregulation, high-skill worker visas, and a patrician take on culture.
Yeah, if someone wrote that Peter Thiel's natural home was with the Democrats, it would be obvious the writer was either a liar or didn't know what they were talking about. Saying the same thing about Andressen is similarly kinda dumb.
Matt wants you to think this and always cites Romney but he supported more Democrats than Republicans over the past few decades. He really was radicalized by the woke and anti-business left; that’s why he supported Trump 2024 after not supporting Trump 2016.
What we know publicly about Andreessen is that he was a key fundraiser for Romney and then pretended like it never happened and he only went Republican after Biden. His claims about supporting other Democrats don't add up to much until he stops being misleading.
That arc is, in my opinion, also fairly reflective of what's happening in Silicon Valley. You had a bunch of people who were economically conservative but didn't like the anti-gay/conservative culture issues. Trump moves the party away from these issues while effectively retaining the conservative economic policies and adding some gross anti-immigrant fear mongering and corruption. People like Andreesen sit on the side lines because they are bothered by the fear mongering and corruption. Biden, as this article explains, moves the party further to the left on economic / anti-corporate issues. So then people like Andreessen decide that they don't mind the gross anti-immigrant sentiment and corrupt after all.
Wait a minute - explain to me again how nominating Kamala Harris who “thought platitudes and word salad was policy” made people feel like Trump was a better choice?
What exactly is the “word salad” that Harris was guilty of? And aren’t “platitudes” clearly better than random tariffs and extortion, which is what Trump was promising? Or is there something deeper that you didn’t like about Harris?
Hey Kenny. I don't want to be snarky, but Google Kamala and word salad and you'll get hundreds of pages of quotes. The woman can't put a sentence together. Her inheritance of the nomination was as self-inflicted wound. The Democrats had a deep bench of potential candidates who had won over Trump voters in reddish or purple states. Why they turned to her is beyond me.
Have you ever tried the same with her opponent? I’ve seen people make some claims that her “coconut tree” line is word salad, but that seems to me to reflect poorly on people who aren’t used to thinking about context.
“The democrats” didn’t choose her any more than they chose not to run Hillary Clinton in 2020. The primary process is set up in a way such that the party can’t decide, and it’s up to individual candidates to choose whether to run or not. Clinton chose not to run in 2020, and because Biden delayed so long, there wasn’t really a chance for anyone other than Harris to choose to run in 2024.
I wasn't referring to coconut tree. Please don't make assumptions about what I had in mind. There are plenty of examples.
Obama clearly didn't want Kamala. He wanted a selection process rather than an anointing. Candidates didn't volunteer because they weren't given the opportunity. A word from the current patron saint of the party would have been plenty.
Absolutely this. There is no one someone like Tulsi Gabbard, to grab a recent annoying example, had deep ideological principles that tied her to the Democratic Party, or else there is no way she would have had the recent oath she's had.
Like, there's stuff I disagree with Democratic Party orthodoxy on, but it would never push me to join the Republican Party, because there are 99 other salient issues I disagree with them on, and that seems silly.
We're in the midst of world-historical changes to media technologies that are obliterating entrenched gatekeepers and possibly watching an enduring political realignment unfold.
This is not an era of ideological consistency. The Harris campaign had only two inviolate principles in 2024: 1) Orange Man Bad and 2) no restrictions on abortion. If those weren't your highest priorities, it wasn't clear whether Democrats would stand up for you.
I think, "No significant cuts to entitlements and social welfare programs" was a pretty inviolate principle for Harris too? I certainly can't remember any indication from the campaign that there would be any Clinton-style, "Ending welfare as we know it" type reforms if she won.
Hello from Seattle! It may be helpful for folks here to remember, and folks elsewhere to know that Jeff Bezos was one of the earliest and definitely the largest donor to R-74, our gay marriage campaign. He gave 2.5 million out of 10 million raised total, based on a single email to him. He’s also talked passionately about immigration and his dad coming from Cuba. So on personal liberties, I think we’re good.
On whether the owner of one of the worlds largest companies, which he built from scratch in his garage, as a total self-made man, the son of a teen mom, is a free market zealot? I don’t know his personal views, but I bet we can all guess.
Frankly, given the meetings he’s been in with Trump and Elon, I’ve found his decision to lead a national conversation on free markets and personal liberties pretty unsettling. Why do we need that? I think we’re about to find out.
One of the major things I learned from this election and everything after is that I was wrong and the 'Bigness is Bad because Big' people were much more right than I thought, if for no other reason than because big corporations threaten the whole project of self-governance.
This all sort of plays into a larger theme here - American politics has forever changed, but Matt is still writing articles that he could easily have written last year, or in 2019, and it leaves me feeling like his work isn't as important anymore.
I agree. My perspective on big business is that while it may be economically the most efficient, which Matt eloquently argues for, the downsides are not worth it. The downsides, at least in the US with Citizen's United (a reality we must reckon with):
- Concentration of political power (via direct donation, control of news and social media)
- Exfiltration of expertise from smaller communities. When there were independent hardware stores, drug stores and grocery stores in every community, there had to be a local ecosystem to support them of accountants and lawyers and other white collar jobs. But if all you have is Home Depot, CVS and Stop & Shop they can take care of all that back at HQ. Yeah it's efficient, but it's textbook hollowing out of 'main street' America.
- Homogenization of culture. I don't like that whether I drive around Texas or Maryland I could be visiting 75% of the same businesses. Different places deserve their own unique culture!
- Physical relocation of urban-oriented small storefronts to "big boxes" on the outskirts of town and in many ways the creation of car culture. Why do big businesses go outside town? I'm not entirely sure but I think a few reasons are saving money on architecture, more capital so they can have more inventory, so they want a bigger location than what is available on 'main street'
- I think some of the economic advantages are overstated because big businesses have essentially unfair advantages that in other context would be considered antitrust issues: I can't prove this is widespread but I heard an anecdote from an drugstore owner in Wisconsin that when Walmart came to his small town, they dumped medicines at far below market price until he went out of business. And then of course they were free to sell them at or slightly above market price again. Here's an anecdote I heard from an urban planner: Chain restaurants tend to have much more starting capital and can afford much higher rents than most local restaurants. This is why new-urbanist 'town centers' like we see in Maryland and Virginia are usually stocked with Buffalo Wild Wings and Applebees and the local restaurants are relegated to the strip malls. The high rents are literal rent seeking from the developers and big businesses are happy to oblige and encourage them.
My one surprisingly big pro big business take? They're probably on the whole good for the climate. Especially ecommerce and Amazon. I suspect it is much more efficient to have a truck deliver a high efficient route than have each individual person drive their own car to each store.
I think you’re running together several different types of big business and several different eras of big business. The big box stores that damaged main streets are being killed be e-commerce - which is bringing back main streets (if only for bars and yoga studios). Stripe and Shopify and so on are allowing small businesses to compete on these functions with big business.
My thinking at the moment is parallel to what I learned in history classes about the relationship of nobles and royals and commoners. Often, by reigning in the nobles, the royals were operating in the interests of the commoners. But sometimes, by reigning in the dukes, the royals operated in the interest of the barons, and thus against the commoners.
Of course feel how you’re inclined to feel, but I think this attitude misses two things. First, when you’re in the middle of a big upheaval I think two of the most important qualities to have are a sense of history and a sense of imagination. Matt has a lot of both, and I think makes him one of the more important writers moving forward. Second, things are bad but, I don’t know, change is just really really hard and really tendentious? I think we might look back at this moment in six months and feel like this was the apex of the Trump admin, when they haven’t had to govern and everything is symbolic and Dems can’t buy a first down like they’re the Chiefs in the Super Bowl. But that stuff isn’t forever. Or even very long-lived. There’s just this irresistible force of society that evens things out more than you might think. The Chiefs are still gonna be a good football team. At least, I hope so.
My biggest worry is that business leaders have each individually decided that they should publicly support Trump/Republicanism for Pascal’s Wager type reasons. Democrats will mostly set policy based on ideology, so doesn’t matter if you publicly support them, while Trump will set policy in large part based on personal grievances, so the rational decision for many business leaders is to support him publicly. This is obviously very detrimental to liberalism and democracy.
This kind of waves away all the non-Trumpian elements of Trump governance, specifically conservative tax and regulatory policy. That’s the real “get” for billionaires and the business community, the corruption and grievance stuff is comparatively unimportant. IMO.
Thank you for the article. I take exception with the point on “misallocation of capital for political purposes” point though. Chinese companies (SOEs and private) misallocate capital all the time. CCP pressure, opportunity to take local or national subsidies etc push them into creating new production lines that arent profitable, and into selling products below manufacturing value. And yet, China is THE manufacturing powerhouse of the world and might be running it in 20-30 years. Your idea of how economy should work runs into real constraints when put against what is best for the country overall (including social peace, security etc). Japanese companies have kept some manufacturing in Japan even when not as profitable for social peace reasons. Companies are part of society and making 5% less profit might be more valuable if it increases security of the country, keeps unemployment low etc.
Two things can be true. China is a major manufacturing powerhouse which has grown tremendously the last 30 years and Chinese government economic policy has done a lot stupid things to that has actively harmed further economic growth and the average Chinese person.
I give you first and foremost the Chinese property market. Forget neighborhoods that shouldn’t exist (like what happened in the US circa 2007), there are practically entire cities that shouldn’t exist. And the collapse of the Chinese property market has be enormously harmful to millions of Chinese people (buying real estate was basically a lot of people’s retirement plan. Equivalent to all the Enron employees who put all their 401K in Enron stock in 2001. But countrywide) and more important still ongoing. I’ve argued in a mailbag question before that the collapse of the Chinese property market is the most underrated long term story given how it’s coinciding with when China is rapidly aging in part to one child policy.
Now add to to this that China’s economic policy is over indexed on manufacturing growth at expense of consumer spending and it’s really not clear how much at all the current average Chinese citizen is benefiting for Xinping economic policy (oh yeah. Take official Chinese stats on economic growth with huge grain of salt)
If you haven’t noticed, despite my utter alarm at Trump’s economic/tariff/lets cultivate Russia plans I’m still long term bullish US stays ahead of China.
One last thing. I actually think we underestimate how horrid Mao Zedong was to China. There is the human costs of course. But it would be hard to do worse to a county’s economy than what he did for 20-25 years. Think we underestimate how much Chinese growth in the 80s and 90s was accelerated catch up growth from not having a complete psycho in charge.
None of what you said is wrong. However, it might not matter. In the next 20-40 years, China’s low fertility is irrelevant, thats a long term threat. secondly, the property market collapse hasnt slowed down their manufacturing, seems they are doubling down. And three, China aint US or Europe, we should stop assuming that a country w different culture which has been a police state for 70+ years will lead to a liberal change. So they suffer economically sometimes, like w real estate crisis but they dont protest like we would. And if they do, they end up in prison. Anyway, point is that letting the market just “do” and correcting its mistakes through minimum wage laws and such as Matt proposes might not be enough for the current situation.
Basically, between China and the “West” we are the ones closer, much closer, to social disunity than China is. And losing good manufacturing jobs and related capacity is a big part of it. I sometimes think Matt is still too “elite” in his thinking and doesnt understand how an average person thinks. For too many people, closing factories and small businesses, and related death to small towns, spell disaster for their country. So if Trump is needed, so be it. Easy to miss it when living in a nice part, less crime-y part of US.
China has most of the same social fissures, only worse. Rural areas are demographically even more shattered and often more economically moribund than in the US, there are deep resentments on both sides of the urban-rural divide, with migrant workers in for particular fire from urbanites, and in turn often particularly hateful of their exploitation in urban areas. The divide in attitudes and resentments between young and old is also significantly worse than here, and with far more systemic policy implications to boot.
Yes i have set foot in China. Point is, their system doesnt allow for same type of obvious division and social unrest that we have. Neither do they have immigration challenges. Stop pretending the systems are the same. Protest in China and u end up in jail. The fissures are beneath the surface and might take decades to come up, if ever. Its the “China will liberalise” bullshit all over again.
Since we've never spoken on the matter I'll politely point out that I lived in China for most of a decade for grad school (domestic program, taught in Mandarin, Chinese classmates) and work, my wife is from China, I have family and friends there, and I speak/read/write Mandarin fluently.
Consider it *possible* you may be overestimating China's degree of social cohesion, dramatically.
There are the policy mistakes of the past (rapid initiation of frictionless trade with China and subsequent decline in NA manufacturing) and there are the policy choices of today, right?
Will Trump tariffs restore American manufacturing in the rust belt? I think not.
Biden’s industrial policies had everything bagel problems and room for improvement but seemed more strategic, thoughtful and intentional — and precipitated a lot of factory building especially in Republican-leaning states.
But were Biden's industrial policies really flawed because of their "everything bagel" approach? The poster child of this was the chip fabs, with their requirements for daycare etc. And yet the big TSMC fab went up pretty quickly and is producing tons of highly advanced chips. Maybe when you're talking about gobs of value being produced worth tons of money, having the company also be required to offer daycare turns out not to be the killer that people like Klein think.
Odd Lots had a great episode talking about the global devaluation vs. the USD on a trade weighted basis. China being a currency manipulator is a major driver but the devaluation of the peso and CAN are also major factors. I don't know why tariffs can't used to offset this macro currency imbalance to favor US manufacturing. It's not our workers who are less productivity - it's just the currency.
"Will Trump tariffs restore American manufacturing in the rust belt? I think not."
Why not, specifically?
We can say the trade-offs aren't worth it, but mechanistically we have a very clear understanding of how tariffs work and they absolutely can do exactly this if sufficiently large.
Hmm, I guess if you hold everything else constant but in reality would you anticipate a lot of manufacturing jobs given the high degree of automation that’s likely to be implemented?
He’s not saying China will have a liberal change. He’s saying that life in China is worse than life in the United States, and is improving more slowly.
China isn't just relying on manufacturing to make up for the real estate collapse; they're relying on exports of manufacturing. That is, they're dependent on foreign markets to keep their economy afloat. That may pay off, but it's one helluva bet.
Can you imagine what China could have accomplished without the pressures to misallocate capital! The state run companies! The overinvestment in real estate! China's success is due mainly to good macroeconomics that promotes investment over consumption with the effect of raising the returns to tradable goods over non tradable goods, the exact opposite of US policy.
Can u imagine that a state has more purposes than just allocation of capital? Fact that so many smart people dont drives me insane. 5% less GDP growth on return for Taiwan is a trade most Chinese would likely make. Thats the world u live in, not the imaginary world of perfect rational economics. You know how i know that? I come from Croatia and short term pain of separation (10 lost years while all of u were growing in the 90s) was seen as acceptable by majority to achieve national aims (ie independence). And we wouldnt trade for all the bloody perfect economics ever. You can live in Chicago school of economics world or u can live in the real world. Not in both. And the real
They might vote for taking Taiwan rather than having a better life, but they would be happier with a better life than living in a country whose borders include Taiwan.
??? I said nothing about the CCP being willing to give up growth for political ends.
I was replying to a comment that implied that China’s economic success stemmed from departures from “good policy.” I think that China woud be richer and more powerful if they had not mixed in so much state control with their economic reforms.
China's party-state misallocates capital in ways that make the citizenry much worse off and which basically everyone opposes in some form, even if it's the rural migrant decrying the fact that their county seat had EV chargers but no new hospitals the last time they went home, without an understanding of why. The CCP offers no one an outlet for such complaints so they stay unvoiced.
We can discuss how much the US should be willing to spend or sacrifice to maintain manufacturing capacity here, and I'd even argue that the number is pretty significant, not least because in the long run a lot of our high-value-added services economy relates back to the real world and requires a robust manufacturing ecosystem to maintain our world-beating R&D... but that's not to say we should be using China as an example.
China's fiscal repression, inability to develop a social safety net, underinvestment in soft public goods (i.e. everything but power and transport infrastructure), and capital misallocation collectively have denied balanced growth that would have given its median household $6-8k more in annual income by present.
In turn, sure, it'd have invested less in manufacturing, but it would consume a hugely larger fraction of what it makes, meaning its manufacturing boom would be both more beneficial to the people powering it and more sustainable globally. And other places would have seen more manufacturing investment because the ROIC on such investments wouldn't be *negative.*
Today, there is simply no path by which the CCP might pivot and make all these "investments" actually pay off, because the ROIC is demand-constrained and roughly half of that demand is foreign and subject to geopolitical constraints. There's a looming debt overhang that will make it extremely difficult to jumpstart a proper consumer economy and require the allocation of huge losses on investments, which will be politically contentious even if the Party somehow manages to conduct the debate behind closed doors.
Just to be clear, im not using China as example to follow, but as a competitor which clearly shows that “market is all” is as unhelpful as any type of communism.
A very large part of the reason the US needs to make interventions of the sort we're discussing is *because* of China's insane (~10% of GDP) transfers from the citizenry to export-oriented industry.
If there were no neo-mercantilist powers, free trade as articulated would work fine. Since there are, we have to deal with the world as it is, which I very much agree MY ignores in favor of the "gotcha" line on China tariffs when it comes to Trump.
Even without China, allowing for a complete hollowing out of your base industry (steel, aluminium etc) is plain stupid. Some industries are strategic and yes there will be some stupid losses but u never know when u might need them. Trick is to discern what is rightfully strategic and what isnt. Example - shipyards which US never cared about except WW2 but are now an issue. While some other industries that are deemed strategic arent really. Coming back to original point, only disinterested academics get to play the “ideal markets” game. Not someone who is supposed to be read by and giving advice to actual political staffers. Which is why i disagree w Matt on this one.
Sure, defense procurement needs should be taken into account, but in the main it's very obvious that American (and to a lesser extent Euro) underinvestment in industry has occurred because other powers have subsidized industrial capacity so much that the global ROIC is near-zero and the globe as a whole is constrained not by investment or supply of capital goods but by consumer demand.
In the absence of those subsidies and market manipulations, largely taking place in East Asia, there's no reason to believe that other locales would have huge numbers of "uncompetitive" industries that need to be protected, because what they need to be protected from is foreign subsidies that amount to very large fractions of GDP!
On shipbuilding in particular I will just remind you that American civilian shipbuilding has never had a day in which it was competitive since roughly 1870! Our current policy regime props up the capacity-in-waiting just as it did prior to WWII; if we get into a war we have a bunch of yards with a fair number of employees that are currently miserably inefficient but could be whipped into shape.
So? The SOEs are profoundly bad for China — they are substantially less productive than private enterprises. You need to think of the counterfactual, and also do any research at all. Suggested starting point below.
One other point that I'll make is that great articles like this are why I appreciate Matt being a very literal person. Like Matt, I know way too many people who read Bezos's statement and immediately assumed that it meant that he was going to roll over to Trump. Maybe he will, but actually reading what he's saying, and providing a challenge to actually live up to those statements, holds a lot more worth than what the people jumping to conclusions are doing.
It is striking that so many CEOs appear afraid to irk Trump. On its face it seems crazy—in Putin’s Russia, it’s CEOs and other VIPs that seem to fall out of windows or die under mysterious circumstances, so it seems obviously in CEO’s interest to have the rule of law upheld. Perhaps they are unsure what effective action looks like: since Bezos’ Post, while impressive under Trump’s first term, didn’t really move the needle of general public opinion much. So I agree the best use of philanthropists money now is to build an energetic center, something that isn’t as personally risky as going up-and-in on Trump directly, and which would doubtless be more effective than funding Leftist pet projects that end up coming back to bite Dems next cycle.
It’s a collective action problem at minimum. As a CEO you might highly value rule of law, but that doesn’t mean it pays to stick your head up—doing so it’s guaranteed to get you the rule of law you want, but is virtually guaranteed to get you a costly reprisal. And if you win, your reward might be an increasingly leftist Democratic Party who wants to take your stuff and regards your existing as a “policy failure”.
Accordingly, your default assumption shouldn’t be courageous stands against government overreach, but squirmy collaboration.
Agree this makes sense and is why they should start writing checks either to cover lost Pepfar dollars or to effective centrists instead of pointlessly virtue signaling and getting their asses kicked by Trump and their shareholders.
It woud be nice to have a major American newspaper that advocates for garden variety good economic policy. [And that is NOT the WSJ which is the epicenter of tax cuts for the rich and deficits.] I'd like to believe, but have no way of knowing that Bezos is honest about his stated intentions and even if he is, does his understanding of "free markets" extend to Pigou taxation and _smart_ regulation of externalities?
If he is, however, WaPo will be a huge thorn in Trump's side and a boon to revival of the Democratic party.
The WSJ as the epicenter of calling for deficits? I can tell you don't read it. They've been sounding the alarm for years, while other mainstream publications have remained silent. As far as tax cuts, their editorials have advocated cuts across the board - not just for the rich - and bringing the corporate tax rate down to the global average. Combined, of course, with restraining the growth of spending. Not the Musk/Milei chainsaw approach - slowing down the growth rate.
Definitionally, if your read of their editorial stance is true, they are calling for increased deficits. Broad tax cuts now, at a time when we're already running deficits, in exchange for restraining the growth of future spending.
Not necessarily. If we had a flat tax system, this might be correct. However if we have a progressive tax code, like the US does, then as the economy grows we're going to see an *increase* in revenue as a fraction of the economy. So in order to have a stable revenue side, any center-right party would regularly trim taxes to keep the % GDP revenue from growing. The progressive nature of our tax code coupled with real growth is crucial to why budget analysis can project %GDP revenue staying constant even with TCJA fully renewed.[1]
Now, if the deficit was due to an unprecedented fall in % GDP revenue since Reagan, there might still be a definitional case here. Perhaps the deficit persists due to an unprecedented fall in revenue. But it turns out % GDP revenue has been steady since the Korean war and %GDP spending is mostly due to growing public healthcare spending[2]. So the WSJ's take is we should slow that healthcare spending growth. Now, we can debate how politically realistic that is, if it's a good or bad idea, etc. But definitionally, this is not a call for increasing deficits.
"However if we have a progressive tax code, like the US does, then as the economy grows we're going to see an *increase* in revenue as a fraction of the economy."
For one, this only holds true if we do not regularly adjust the income tax brackets to maintain their relationships to median income as the latter changes.
For another, this isn't actually a rejoinder in the least!
If you are proposing changes to the legal regime which will hold tax revenue steady instead of it increasing as currently required by law, with no corresponding cuts to spending which already exceeds revenue, you are calling for an increase in the deficit relative to what it otherwise would be.
You can tell me with a straight face that preventing federal receipts from growing beyond 20ish percent of GDP *should* be the goal of the center-right, and while I think the center-right is wrong, given the public demand for services which exceed that cost... I can understand that you think this is necessary. Fine.
But unless you are actually prepared to cut spending by as much as you're proposing to constrain revenue, the mechanistic result *must* be an increase in the deficit relative to what is currently projected.
Fucking own it, this isn't Reason, the commentors here can read.
Your position is the WSJ is definitionally for *increased deficits*. I said no, by their definitions they are for cutting the spending on healthcare, which is what is driving the deficit increase in every impartial budget projection I've seen.
Again, you may protest and say the WSJ *shouldn't* hold this view, but I'm responding to what you wrote and it's pretty cut and dry. Either the WSJ is for the public healthcare cuts or they're not. You seem to think actually they're not; "with no corresponding cuts to spending."
You're welcome to believe the WSJ doesn't actually think Medicare and Medicaid are growing too fast, but please, do check with the WSJ first before arguing what their definitions lead to.
Would passing the GOP's mooted extension of the TCJA with the mooted pay-fors cause an increase in the 2026 deficit relative to what is currently projected, or not? There's an extraordinarily clear, plain-English answer to this question.
I am happy to have the long-term healthcare discussion if and only if you can answer that question without sophistry.
I’m not a scholar of the paper or anything, but I thought they supported significant entitlement reform (privatization of SS for example, and cuts to Medicaid and Medicare spending (by another name “market based reforms”) and other Bush-Ryan camp proposals).
That's still, ultimately, a restraint in growth of future spending, not a step change in spending of the sort that we'd need to lower the deficit without tax increases.
I think if you installed a personification of the WSJ editorial line as king, you’d see slashed entitlements as well as lower taxes, and a balanced budget.
In practice, the tax cut half is popular and the entitlement slashing is political poison, so the real world result of their advocacy is deficit explosions, on that we agree. I am just saying that’s not what their object is, it’s what they can get.
Even their editorial line now smacks of the "No pain now, pain later" ethos which has dominated Republican policymaking since 1980, every time I've looked. That's admittedly not that often so maybe its an unrepresentative sample...
I'm sure that if I gave them absolute power they'd *just fucking do it* already, but in the real world where the electorate won't tolerate it they're just as bad on can-kicking as the Democrats, and even worse on actual direct impacts of policy.
When push comes to shove they will take deficits to get tax cuts. It is certainly conceivable that tax cuts could be engineered in such a way at to favor the lowest and income tax payers — a much larger EITC woud probably be involved — but what is under discussion is always reductions in top rates. But whoever is taxed we need to raise something like 6% of GDG, much of it preferably with a progressive personal consumption tax. [Even slashing good things like research and USAID I’ll bet Muck doe not find 0.5% of “waste.”]
On the surface I really support saying hey a lot of the online opinion space is left wing. We don’t want to be right wing but we are going to stake out a sort of underrepresented majoritarian space in the moderate camp infused with some of the values of the business mogul who owns this paper. The biggest issue I have is that I don’t think this is something that the NYT has neglected. Go to their opinion section right now it’s a video about how dems need to stop gloating about maga missteps and looking down on republicans, a piece by rattner about what business leaders say about Trump and how he understands the frustration with Biden admin but going full Trump is a big mistake. There’s an article about a need for Democrat project 2029 advocating for some regulatory reforms. It’s really not a left wing section a lot of the time.
The problem with the NYT is that their political coverage is very balanced which pisses off liberals, but the rest of the articles are very “upscale urban liberal” which alienates conservatives. So no one’s happy, but NYT keeps chugging along
Chris Lee article from today is basically just urging liberals to take a Reid/pelosi approach to winning back power. I think it’s just a level headed article. Good opinion section in my view, much better than wapo as well. In fact a better letter from bezos would read “I’ve been reading our opinion section lately and I think we just need to be a little more like NYT.” Also IMO NYT opinion section has actually gotten higher quality last couple years.
Oh yeah, I have no problem with NYT opinions and politics coverage being level-headed and center-left. It’s probably good that our premier national newspaper isn’t too ideological. But that’s how you get a bunch of progressives complaining that the NYT is right-wing bc they won’t straight up call Trump a fascist every time
"The entire population of Venezuela obviously cannot move to the US. But as a lover of human freedom, don’t you feel kind of bad about that?"
I hope this doesn't make me a hater of human freedom, but no, I don't feel bad about that, and it has nothing to do with being a racist who doesn't want brown immigrants polluting the pure blood of Real Americans(TM).
Most immigrants aren't motivated by a burning love of the United States. The immigrate out of desperation - their home country is too violent/unstable/oppressive/dirt-poor, and their best chance of a decent life is immigrating to a richer, stabler country. It doesn't mean they're not sad about it. Nostalgia exists for a reason. My native country, Poland, has both a long history of immigration and of sad stories/poems/songs about how the immigrant misses their native land and how the elderly grandparents, left behind in Poland, now have no one to look after them (sure, the immigrant child/grandchild sends some dollars in an envelope regularly, but it's just Not The Same).
Where am I going with this? I'm guessing the majority of Venezuelan immigrants would much rather stay in their own country *if* that country were more peaceful, stable, and prosperous. It's kind of ironic that I have to point it out, because people like me are accused of being rootless cosmopolitans, but I understand the concept of patriotism and attachment to your native city/region. There is a sense of loss accompanying most migration. If literally ALL of Venezuelans wanted to immigrate to the US, that would mean that Venezuela has become a completely unlivable hellhole, and that would be bad!
Bezos and Zuckerberg both strike me as guys who spent their lives laser-focused on the growth of their businesses and aren’t really all that interested (in the intellectual sense) in having a broader social impact or even in the externalities of their businesses’ activities. They’re different from say, Elon Musk, Bill Gates,Warren Buffet, Michael Bloomberg, George Soros, the Koch brothers, Ken Griffin, Julian Simon, Dustin Moskovitz, or other billionaires whose overall portfolio of activities reflects a pretty clear vision and set of values.
I actually think that the Bezos/Zuckerberg mode is pretty typical for business types (the modal large philanthropic donation, public statement of values by a business type, or non-pecuniary motivated political intervention is generally not particularly thought through), but Bezos and Zuck are so rich and their businesses have such a pervasive reach that they can’t really avoid getting involved in at least some sense, even if deep down they’d really prefer not to. But because the motivator is “got too big, gotta do something” rather than an intrinsic set of principals that they really care about in a deep way, their interventions are pretty sloppy and incoherent.
Another thing that the typical business types of their wealth get involved in is buying sports teams, and it's been heavily rumored for a long time that Bezos is going to buy an NFL team. He probably would have had the Commanders already by now, had the odious Dan Snyder not refused to sell to him due to petty resentment over WaPo's coverage of him. Now the heavy rumors are on the Seahawks, who are believed to be holding out on selling until they go past a date where some proceeds of the sale aren't legally required to go to the city of Seattle.
Yeah, like, I definitely think that outside of work, Jeff would really rather be partying with his model girlfriend in Miami and having fun owning a sports team than like, thinking about politics at all.
The Atlanta Fed is now forecasting Q1 GDP growth numbers of -1.5%. There is going to be more uncertainty regarding consumer confidence, investment, adverse price shocks, and fiscal austerity coming from this administration (though the deficit blowing tax cuts counteract this somewhat but much of those cuts will not target populations that buy goods and services.)
Things are about to get worse. In that there is an opportunity to push back against the insane post-reality politics of our time.
Wards has automotive production down last month and sales are down too. I am waiting for more information on durable goods and the next jobs report. My trader buddy is very antsy about prospective February numbers.
I've seen reasonably informed speculation that the drop is at least partially accounted for by firms moving up major purchases of imported inputs ahead of anticipated tariffs, so there's potentially a large "time shifted" accounting element to this particular drop.
OK, you may be correct. I just offered that observation because I've seen it made by some people who otherwise seem to be solidly anti-Trump. (While one of my undergraduate degrees is in economics, I don't have a feel for how quickly, e.g., "M" updates versus "I" in modern Fed stats.)
I am an PhD economist and have seen people make this comment.
I would be very skeptical that the timing of surveys and indicators would cause the Fed’s forecast to drastically swing. I doubt they would publish something like this without first doing a smell test. There is definitely a temporal weighting formula too.
Similarly, when everyone claimed there was a recession last year due to inventory sell downs during Q1 2024. Those sell downs didn’t correspond with a reduction in imports so you got a net negative effect on GDP.
I don't have confidence that enough Trump voters will value their own economic interests over Trump's.
There was a graph about republican voters feelings about the economy, during Obama in the gutter, then suddenly confident during Trump and then right back down again under Biden. Dem and independent voters perceptions were more tied to inflation and consumer confidence.
Republican voters believe what they're told to believe. Their post-reality bubble is impenetrable, anyone that contradicts the narrative is just a shitlib to them.
I think you're mostly correct. It depends a bit on how you define Trump voters. There is certainly a hardcore 40% who will never change their mind about him. That number might be as high as 45% or at least is sticky for the 40-45% such that their minds would only change slowly. The next roughly 5% are susceptible to changing their mind and votes or at least growing indifferent and staying home.
What this would lead to is a good mid term for democrats, taking back the house, maybe taking the senate or cutting it to 50-50 where the Republicans have to negotiate with Murkowski and Collins. But what it doesn't lead to is a real governing majority that clearly has the mandate to stop Trump dead in his tracks through his final two years in office.
I feel like this entire column distilled is basically Matt calling Bezos’ bluff “you say your moves are about steering WaPo in a more libertarian direction? Prove it. Because I saw you at Trump’s inauguration. Because if this is sincere, a whole of lot your newspaper should remain firmly anti-Trump if from a different angle than before. And quite frankly, I don’t believe you”.
Given Matt’s writing style, he of course is going to put something together more intellectually high minded and well thought out. But it’s hard for me to read this and not think my summation above is accurate.
Been following the Wapo opinion section closely since the announcement and they’ve published stuff criticizing Trump, Elon, and the tariff policy. So, so far so good.
I’m not worried about the policy change as long as the smart opinion columnists (Megan McArdle, Phillip Bump, Fareed Zakaria) stick around
I am on the center left and mostly agree with Fareed Zakaria and Phillip Bump. I respect though often disagree with Megan McArdle -- though she has probably successfully changed my mind on a few issues or helped me see something from a perspective that I had not considered. I am happy that they all appear in the Post, and I am happy that the opinion section of the Post is diverse enough that those writers will get the attention of many readers who are further left than I. If the WaPo opinion section turns into the WSJ opinion section, I fear that will never happen. In the long run, that's probably not good for free markets or for individual liberty.
I think one thing all people on both sides can agree on is that Jen Rubin was the worst WaPo opinion writer of all.
Oof, rough spelling of McMegan's name. But I agree with your point!
lol, I wrote it on my phone. Edited!
See my response below as to what I suspect will actually happen and why this announcement on part of Bezos is pretty foreboding.
I wouldn't characterize it as a "bluff" exactly.
I think it's smart for Bezos to try to take closer control of the reigns of the Post and run it as a project he really believes in rather than something he just vaguely patronizes. And I want to be optimistic that Jeff Bezos really wants to compete with Elon Musk in rocketry and cares about personal freedom and all these other things that he says he cares about.
Smart for Bezos, or smart for us?
Do we really need/want more media organs that are both in fact and in theory the mouthpiece for a specific billionaire's viewpoints? Musk has Xitter so Bezos gets WaPo? What happens when Bezos changes his mind about something big? Fire all the columnists and replace them with a new set?
If Bezos wants to set up a new organization to promote his rockets or ideas or whatever, that seems fair. Trying to launder those through the imprimatur of the Washington Post is a different story.
Given that without Bezos WaPo would already be out of business this seems reasonable.
If it’s Soros, sure
I hope you're right.
I didn't say in my post, but also thinking about how Bezos killed WaPo's Presidential endorsement. I'm 99.9% positive the endorsement wasn't going to swing the election one or another and is honestly pretty outdated for high profile elections (different story for local). But that's a pretty huge editorial intervention for Bezos to make nonetheless. And is a big red flag that he's going to drive a lot of what does or doesn't get printed beyond hiring people with more libertarian bent.
"I'm 99.9% positive the endorsement wasn't going to swing the election one or another and is honestly pretty outdated for high profile elections"≠ "pretty huge editorial intervention."
I don't see how both of these can be true.
All sorts of news topics on all sorts of stories get mountains of news coverage and probably have negligible to no impact on an election; especially Presidential.
Take all the campus protests in 2023. I've been on record as saying that the focus on these protests was excessive in the extreme. And if anything this protests most direct impact was it led to a number of Arab-American voters to either vote Trump or keep the top of their ballot empty (personally know one). Bring up because coverage of the protests (if not the conflict itself) was in the main quite negative from MSM
But if came out that the New York Times covered the protests in a particular way because Arthur Sulzberger personally intervened due to an impending business deal with an Israeli businessman, I would say that would have been an absolutely outrageous thing to do and a big scandal for the paper. Even if the net effect of all the mostly negative coverage of protests seems to very possibly had an opposite effect electorally if anything.
If Bezos had intervened and said they were going to endorse Trump then I think this might be more reasonable comparison. But that's not what happened. Bezos said he wanted to get out of the endorsement business. Which I think was smart because as you said, it convinced almost nobody to vote differently, but generated ill will with a large number of the public. What exactly was the positive that doing an endorsement here would have accomplished?
If pulling the endorsement was a matter of principle rather than kowtowing to Trump then he could have coupled it with his own personal criticism of Trump
Honestly I'm not sure what the "right" level of his fingerprints on belief should be for Bezos and the Post. Shouldn't be propaganda, shouldn't be rudderless regurgitation of she said he said and stuff happened. Not gonna lie though, I do think there is a need for prejudice against Trump/Rs in their current iteration because they are illiberal and don't seem to be able to self regulate even w a really low bar attached and have power
But the existing prejudice in the media against Trump (including the Post until just recently I guess) doesn't seem to have impeded Trump very much.
I don't see it quite that way. Lots of things Trump wanted to happen the first time around didn't. The media was united against him and in favor of stopping most of those things, maybe it's just correlation, but maybe it was also causative. And really critically, he lost the mid-terms and his re-election bid.
Trump appears to be doing better this time, but it's early and not at all clear how much will stick, although it will be some. But I don't see less criticism, especially in prominent places as good. It seems counterintuitive to me that less criticism impedes him more.
I’m quite convinced by what Matt says in another post (actually, I already believed this), that there’s a big difference between “Trump Wrongly Ramps Up Deportations, Which Is Racist”, where you’re making people more aware of something popular Trump is doing but telling them what to feel about it (which hurts you two ways: by raising the awareness of Trump’s popular action and hurting your own credibility), versus making people aware of unpopular Trump stuff that they otherwise wouldn’t be. I think Trump’s unpopularity has been due to the latter media treatment, not the former.
"The media was united against him"
I was talking with someone yesterday and was reminded that this came with a cost. There is an increasing amount of the public that has lost trust in media as a result of this united front.
Also strategically unpaywalled. Well played!
I think the best and simplest way to do it, as Matt said [https://x.com/mattyglesias/status/1894764896501252172] and someone I immediately thought of as well when I read Bezos's statement, is to just look in-house and put Megan McArdle in charge of the venture. She's toned down from her Jane Galt days, and has been consistently anti-Trump. I think she'd run an accurate message of personal liberty and free markets as Bezos is stating.
I agree. I find myself exasperated with a lot of her takes, but that's because I'm not a libertarian and so therefore would have some pretty fundamental disagreements if Megan or a random writer at Reason made the same argument.
My suspicion as to what will happen is that on most topics the Editorial Board will have a pretty decent amount of independence. WSJ editorial board (usually pretty big Trump cheerleaders) have been pretty scathing regarding tariffs and Ukraine. The Fox News talking heads are essentially doing "We've always been at war with Eurasia" propaganda for whatever deranged crap comes to Trump's head but Murdoch doesn't seem interested in intervening with WSJ editorial board to do the same.
No I think the real worry is when Bezos (I think inevitably) cuts some sweetheart and horrendously corrupt deal to exempt Amazon from upcoming tariffs. For a variety of reasons, I don't think tariffs will be long lasting; certainly not the promised 25% tariffs on Mexico and Canada given how damaging they would be long term. But the mechanism by which those tariffs are watered down? Seems very likely it's going to involve astonishingly blatant bribery such as buying a bunch Trump coin in exchange for loopholes.
So say this happens with Bezos. Does WaPo editorial board stick to it's libertarian guns and call out how this would be blatantly anti-free market with a dose of "this is why big government is bad"? My suspicion is the Editorial Board will remain noticeably silent.
I could see a world in which both become true, that Amazon gets a sweetheart deal, and they still attack non-Amazon related nonsense. But we shall see.
"the real worry is when Bezos (I think inevitably) cuts some sweetheart and horrendously corrupt deal to exempt Amazon from upcoming tariffs"
If we see Trump doing things like this, it'll be just begging the courts to start invalidating these very broad and standardless statutory delegations of tariff power to the President, under the major questions/nondelegation doctrines. There would be plenty of aggrieved parties that didn't get exemptions with standing to file suit.
She's not remotely anti-Trump. She's anti-anti-Trump all the way through.
I don't pay her much attention except in the negative, that is to say, I'm aware of her because she triggers all the right people.
That alone cliches it for me!
She definitely has many who have developed a derangement syndrome against her. Between she, Matt, and Nate Silver, I know I'm in a good place reading all three of them when they annoy the people that need to be annoyed.
I think you are trying to re-interpret Matt's post away from its literal interpretation, because read in its literal form, Matt's post is hyper-timid weak-tea bullshit.
ETA: if in 2025 your diagnosis is "we just need the Democrats to be more friendly to huge business interests and billionaires," you're just summarizing the past two decades of policy that got us to Trump. There is really no way we can keep going with a situation where every term or two the Dems do nothing but reinforce the status quo, and then fascists come in with vast billionaire funding and media control and try to centralize all power under their banner. That's not at all a sustainable equilibrium.
I think he’s doing what u say but also sounds genuinely like he isn’t cynical about bezos’s intentions. Personally I think it’s a good idea for the owner to say what the principles of the editorial section are. I’m going to read it and if he does a good job it will be a bit of a miracle but it’s not impossible.
Which frankly makes it very boring.
"I think the ... fetishization of small business in general is dumb."
Agreed that fetishizing this or almost anything in a policy context like this is dumb.
But what you're missing here is that an economy that's hospitable small businesses is itself an important component of personal liberty. There's more to life than maximal efficiency in the allocation of capital. A world where the vast majority of people spend their lives as cogs in or subjects to decisions made elsewhere by others in large organizations, be they corporations or govt bureaucracies, is not one where the lived experience of most people is one with a lot of personal liberty and agency.
"an economy that's hospitable small businesses is itself an important component of personal liberty"
I mean I don't think the economy should be *hostile* to small businesses. I actually own and operate a small business! But I don't think the regulatory environment should be geared around protecting small businesses from competition.
This gets to the question of whether, left untended, the natural dynamics of a market based economy are, over time, themselves hostile to small and upstart businesses?
Will it remain in perpetuity a field where a thousand flowers bloom, or will economies of scale, etc, inexorably tend in the direction of greater concentration and monopolization, where once a few competitors break out from the pack they can entrench themselves and take over more and more areas?
The historical evidence seems pretty strong that a broadbased, competitive economy that's realistically open to many participants and new entrants is not a set-it-and-forget-it thing, but a garden that requires regular, thoughtful tending, pruning and weeding -- not fetishistic but thoughtful. How much is the right amount is the hard question, but more a political/cultural one than an economic one, I'd say.
I'm on holiday in Europe and the way that there are 10 bakeries within a 10 minute walk is a beautiful example of small business competition. And my favorite one is a chain with 5 locations, so the small business are still allowed to grow.
There are also 50 bodegas and 100 souvenir shops in that radius that are all equally bad. And there's an amazing kebab shop with 5 copycats committing trademark infringement. So it's a mixed bag I guess.
Small businesses also employ about half of all Americans. It's not clear what would happen if they aren't protected.
Small business is great for the agency and liberty of the person running it, but they often involve less personal liberty and agency for their employees than working for big corporations.
I always see small business as high variance: the good ones being *really* good, and the bad ones being *really* bad--and it's to the whim of the owners as to what type of variance they want to take on.
Yeah. Small businesses are much more authoritarian than large corporations. But the thing about authoritarianism is that it's a good system as long as the person in charge is benevolent and competent.
Saying it’s the whim of the owners makes it sound like they all know how to run a welfare-enhancing business and how to run a harmful one, and they choose which to do. I think it’s much more up to the *vagaries* of whether the ideas the owner has about how to run a business are in fact good for people or in fact bad for them, rather than whims about whether they want to treat people well or poorly.
The other point on the bad ones -- at least they're small. When the big ones are bad (e.g., Enron, Theranos), the scale of the disaster creates a far bigger wake.
If you mean "an individual big business being Bad is going to have a greater impact than an individual small business being Bad," sure, that makes sense.
If you mean "the aggregate harm from big businesses being Bad is greater than the aggregate harm from small businesses being Bad," I'm not so sure. Did Holmes defrauding her investors and partners cause more harm than 10,000 instances of hucksters sweet-talking acquaintances and distant relatives into putting $50k into some pretended small business?
Not to mention that small businesses by and large (sometimes by ignorance and sometimes by malice) routinely violate labor laws (e.g. misclassifying as contractors, requiring work off the clock, improper docking/out-and-out wage theft) at a scale that big corporations know they can't get away with.
Part of the appeal of franchising is the effective regulatory arbitrage.
It's also fairly likely that the median Amazon shareholder's partisan inclination (thanks to index funds) is a few points to the left of the median small business owner who has more than, say, 3 employees.
Franchising is really bad and needs many reforms, but FWIW I associate that with large businesses rather than small ones.
I agree about everyone's points regarding small business fetishization being bad, though.
I think the point is that franchising allows what is actually a big business to be run as a bunch of small businesses, many of which are violating labor laws that the big business would never get away with violating.
Probably more than a few points - small business owners are on average extremely conservative.
Two points:
* Owning enough of AMZN directly or having enough VOO/SPY/QQQ/etc. to be in contention for the median owner likely correlates fairly right
* The employee cutoff matters. 33+% owners of a 10+ employee business probably went for Trump by 40+. But with a 3+ employee cutoff, there are a lot of professional services firms (law, accounting, design, consulting) that bring that margin in substantially
It’s interesting to see, ya know. One of my good friends did a really dumb, destructive, dangerous thing in college and paid the price by serving a couple years hard time and having a permanent record that basically precludes him from employment. And this guy is by inclination very far left, a gay vegan Marxist hippie.
But without any other options he had to start his own business, which has been relatively successful. So he’s a member in good standing of the Chamber of Commerce of his small Southern town, he employs people and has to deal with shitty workers that don’t do their jobs, etc. it’s been interesting watching his political evolution as he’s become a full-fledged member of the petit bourgeoisie. He’s definitely not become a Republican or anything, but living in the real world has definitely been a moderating force!
Maybe, but the other option for lots of small business employees is not 'working a good job for a big corporation', it's 'working the worst job at a big corporation' or working for a franchise of a big Corp.
Probably for most people, the jobs would be pretty similar, except the big corporation would pay more and have actual HR policies and have to follow labor laws.
FMLA is a big reason to work at a company that at the least has more than 50 employees
Not really. Small businesses tend to have a lot of jobs that don’t exist in larger ones. Sales at farmers markets, giving riding lessons, making homemade jam for the aforementioned farmers market, giving cooking lessons, teaching dog agility or rally, leading rafting outings - all local small business jobs that do not usually have corporate equivalents.
Growing and selling vegetables and making jam and teaching of various kinds are all things that are obviously also done in big business as well. Of course those have different character (that's why I shop at farmers markets) but that's also part of the point.
Farmers markets typically do require that items sold be made locally, including jams, with the definition of local varying with the specific market. The number of large corporations that give riding lessons or cooking lessons or canine agility lessons is either zero or close enough to it to not matter. I have taken all three and I can’t think of a big corporate example offering them.
Purely anecdotal, but my worst job at a large corporation granted me far more freedom than my best job at a small business.
Then you start your own competing business.
God, no. Not everyone is cut out for entrepreneurship, and I am one who is not.
Yes. Best way public policy can enhance "agency and liberty" in terms of economis is (1) provide the conditions for a robust labor market (lets workers head for greener pastures more easily) and (2) maintain a strong safety net (ditto). Like, America's practice of tying healthcare to the timeclock isn't great for liberty.
It’s a very old-fashioned concept of “liberty”: making sure that, say, 10% of the population has a great deal of personal autonomy even if that reduces freedom and prosperity for everyone else.
I would say in general that’s incorrect. Small businesses tend to have more flexibility, although they’re highly variable. If you want to work a few hours for extra money, for example covering phones for a plumbing business or doing retail sales at a farmers market, you are more likely to be able to find something at a small business than a large. A small business is also much less likely to have the brutal rotating schedules associated with larger retail businesses.
I don't think that's true actually, in areas where workers have a fair amount of power like pharmacy and medical practices the trend has been to close up the sole proprietorship and go work for a big company, largely because working for a big company allows you to take vacation in a way running your own shop doesn't.
The trend toward consolidation in healthcare has everything to do with insurance and legal and practically nothing to do with employment benefits.
there are two different trends, one is doctors leaving group/solo practices to work for hospitals... this is driven by a preference among most doctors to not own their own business. The other is hospitals buying each other, which to your point is mostly about getting maximum negotiation power with insurance companies.
Why do you think they don’t want to own their own businesses? It’s pretty trivial to have enough providers in an independent group practice to cover vacations and whatnot. It’s because the overhead involved has ballooned due to the need to hire multiple people to handle billing, to be part of a group insurance negotiation structure (like you mentioned), the desire to bill for in-house lab and X-ray (and to pay those people), to spread the risk pool of liability insurance, and the need to offer benefits packages to all the allied health employees (which I admit does relate to employment benefits, but it’s less for the doctors and more so that you can compete for staff).
Long gone are the days when a doctor, nurse, and receptionist was enough to staff a practice!
Could be a local maximum. Given that the dominance of large firms is a new trend, we’ll probably have to wait 50 years to be sure.
True true. I think this what mentioned more in the context that Lina Khan and the New Brandeis brigade think that everything big is bad and everything small is good. When in fact, small businesses can do bad things too!
It's also an important component of free markets. If small companies can compete with big ones it means there's low barriers to entry in the form of low regulations.
The more regulated an industry, the more overhead needs to be spent on non efficient resources like lawyers, compliance, accounting, etc and the harder it will be for new entrants.
Totally agree. People are people, not aggregated units of productivity. Small businesses are also amazing engines of individual career growth. Careers grow on two dimensions: (1) vertical expertise and (2) horizontal experiences. Small business offer far more of these horizonal experiences that large corps. just don't have the flexibility to offer. For example, if you want to run / buy a business -- you need reps.; you gotta start small.
This is objectively untrue. Small businesses offer less horizontal and vertical opportunities to employees. Most employees will leave their job doing the exact same thing as when they started.
Nope, it's objectively true. You - specifically - can probably buy a $1M company today. You cannot buy a $1B company today. Owning / running a $1M company offers the full responsibility of a P&L that would never scale down in a $1B company and the lack of scale stretches all roles horizontally.
EDIT: Because I don't think this was clear enough. It's precisely the *lack* of scale of small businesses that require roles to expand across multiple functions. For example, the GM of our $5M business also individually drove our SEO lead generation. He's a better leader now because of the experience.
lol. Of course I have a lot of agency. I’m a partner in a law firm. Yes, I could buy some company and treat its employees however I like.
You are objectively wrong about the situations of the vast majority of Americans, who are not in a position to overpay for some HVAC company in a bidding war against a PE fund rolling them up, nor would you make them GM of one of the little companies you rule with an iron fist. The dishwashers and secretaries are far better off never working for you or any other small business.
Ok. As a lawyer, it sounds like you don't have any experience with small businesses and / or PE roll-ups. Very strong opinions though. Hilarious that you think a levered-up PE is able to offer higher wages. The #1 synergy in any model is labor. The only thing a PE roll-up is thinking about post-acquisition is how the fire the dishwashers and secretaries.
lol. Who do you think my clients are?
Small business owners are: much more likely to have engaged in illegal conduct towards their employees; much more likely to have engaged in outright fraud against customers and vendors; much more likely to breach contracts; much more likely to take overly aggressive and outright frivolous litigation positions.
Also, I don’t consider PE funds to be any better than small businesses. Basically they have exactly the same mentality as a second generation business owner or some sucker who bought the business with an SBA loan, but can do math.
In all instances, median employees are better off working for large standalone businesses with real HR departments, management that is concerned about public image, etc.
You are factually incorrect. When in a small business you wear a lot of hats. I've worked at multiple different companies from those with $3m a year in revenue to those with $5 billion a year in revenue.
Small companies you doing many different jobs. Big companies you do one job but there's more depth to that job.
For example, in a small company your whole finance team might be one person that does AR, AP and accounting. That person probably does payroll as well.
In a large company you have departments for each of those roles and that's ALL you do.
Having owned and co-owned multiple small businesses, he is in fact correct. Owners and employees typically have to wear multiple hats. No choice.
The book Battle Cry of Freedom has a great discussion of how working for yourself was viewed as a central aspect of freedom for like the first 100 years after the founding. Working as a salaried employee for another person was viewed as fundamentally servile and undignified. From the Wiki page on Wage Slavery (which is worth a read):
‘Abraham Lincoln and the Republicans argued that the condition of wage workers was different from slavery as long as laborers were likely to develop the opportunity to work for themselves, achieving self-employment. The abolitionist and former slave Frederick Douglass initially declared "now I am my own master", upon taking a paying job. However, later in life he concluded to the contrary, saying "experience demonstrates that there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery, and that this slavery of wages must go down with the other"’
https://en.m.wikipedia.org/wiki/Wage_slavery
The Wiki article also details how the idea of wage slavery lived on in the anti-capitalist left into the 20th century, which I didn’t know.
Working for wages seems to be one of those things we all got used to, but people from the relatively recent past would be horrified by.
When the alternative to employment is subsistence farming it looks different from the modern world, where the alternative to employment is unemployment.
IIRC, the model Lincoln had in mind wasn’t that everyone should be a subsistence farmer, but that everyone should go through an apprenticeship stage before setting themselves up as a small businessperson. Some sectors of the economy still work like this, e.g. dentists and plumbers.
It may be true that many parts of a modern economy can’t work like this, but it also may be true that a modern economy isn’t compatible with widespread freedom and human dignity, as Lincoln or Douglas would have understood those terms.
Right but I think a world where the vast majority of people are one generation from subsistence farming is one in which a lot of people have stronger ideas about running their own proprietorship.
I see. That makes sense. I am only a few generations removed from subsistence farming, so this ethic is very intuitive to me :)
Countries like Norway, Sweden, and Korea today, where a handful of companies control just about the entire economy, are probably freer in practice though then the US in the 19th century. And that's just not about slavery or the lack of female suffrage, but also about things like violent suppression of strikes, widespread illiteracy, and just the way material poverty limits your options. I'm not saying having Nokia control your economy is good for freedom, but that it was impossible for Lincoln to have more context for the possibilities of freedom that would be out there in the future.
Sure, but these countries have huge welfare states (well, not SK, but I think you’re underestimating the ubiquity of small businesses in SK). Unless your big businesses are mandated to employ the entire population, which I’m not against, you need either a flourishing small business economy or a generous safety net.
Also note that big business is a big customer of small business. For example, at the lower tiers of the aerospace industry supply chain are mom-and-pop machine shops making precision parts that will find their way into a 737. So it’s not a question of big vs small, both have their place.
I don't have the numbers right in front of me, but one of the biggest issues driving our politics is that there is a big discrepancy between the companies that make up our GDP and the companies that make up our employment. This is partly why economic benefits of growth don't get more widely shared through market forces: you can't get a raise from a large company you don't work for when the small company you work for is struggling. You either need redistribution or just accept that the numbers are bad.
That sounds like an interesting discrepancy I hadn’t heard about! Now I want to see these numbers. Any chance you can recall where you found it?
Awhile back someone, a Geoffrey perhaps, made an incisive comment about the authoritarian sociopathy of large corporations that I wish I had saved.
I think ideally a strong democratic society has a healthy mix. It's fine to have (really) big successful companies but there is a point where they create tensions and inequalities that undermine the rule of law leg.
While not really apples to apples I think a lot of current political problems, right and left, are a result of anger lingering over wall street being bailed out in 2008-2009 while regular people lost their houses. Which isn't to say that the bailout was not the technical right thing to do, but a recurring theme of right and left populism is the risk of the wealthiest being socialized while risk to regular people and smaller businesses being private.
If you think a large corporation acts as an authoritarian towards its employees, wait until you discover how a small business owner treats his employees.
I don’t know any. I assumed the close relationship would instigate a more ethical, humane approach towards employees but I suppose it depends on the owner and the competitiveness of the business.
Unfortunately, the biggest differences are that a low level employee often answers to someone who is unaccountable to anyone else in the organization (e.g. is the owner) or so close to the owner that they are effectively unaccountable (sometimes a long serving manager, often a relative of the owner). And not only do these organizations generally not have a structure to force some level of compliance, they are often entirely exempt from some labor laws.
Add in the fact that business decisions are being made by the person who is responsible for paying for everything, and you get much worse outcomes for employees: lower pay, fewer benefits, more discrimination and harassment, etc. Obviously this isn’t universally true, but the absolute worst cases of employee treatment I’ve seen have all come from small, privately owned businesses, usually at the hands of the owner themselves.
Your perspective seems to be based on a lot of experience, but is that experience specifically from litigation surrounding these bad actors? If that's the case, it stands to reason that there's some heavy selection bias in the types of small business owners you come across.
I'm trying to weight your experience appropriately because this is an interesting data point to me.
At one small business I worked at, the day after the CEO fired someone, he then proceeded to publicly make fun of the fired employee to the rest of us since they were a rape survivor.
Brutal.
I think there is a large rural-urban split regarding small businesses. It is, on net, not good for rural communities to get a Walmart or a Dollar Tree. Money that used to recirculate the local economy instead flees. It can be very extractive.
I don't know how you possibly would regulate the situation to get a better outcome for a rural community, but I think a ton of the collapse of these communities is due to large corporations replacing small businesses.
“Money that used to recirculate the local economy instead flees”
That’s not how it works. Every single employee in a Walmart is local, and spends most of their wages locally.
There are two main things that undercut the point that you are trying to make:
1) Not every single employee of a Walmart in a rural community is local to that community. Because Walmart is a corporation, a significant number of tasks are handled by people who work at corporate headquarters. So those small businesses that employed their own bookkeepers and used a local CPA and lawyer are now spending those dollars outside of the community.
2) Walmart stores generate profit. The profit that was generated by the small businesses that existed previously was accrued to a local resident. Profits for Walmart are accrued to Arkansas.
This doesn't even get into the fact that Walmart is probably using national and international suppliers for many things that a local business sourced locally.
On point 1, the corporate employees are key to the low prices Walmart offers. The benefits therefore accrue largely to the local community.
You’d have to show that Walmart’s margin (typically 3% - 4%) is greater than the difference in price offered at a mom & pop store to Walmart’s price. And it’s not even close.
This paper indicates that the savings that Walmart claims are dwarfed the drop in wages locals experience: “Specifically, we find evidence of a $4,230 (6 percent) decline in annual earnings for individuals in counties where Supercenters opened.”
https://docs.iza.org/dp17323.pdf
Bezos, Zuckerberg, CEOs across the spectrum, et al, crave acceptance and approval**. It is a big part of what drives them to do what they do. I would argue their support for left wing causes and DEI was just them doing what they thought would be lauded. But, as Matt notes, the Biden administration took the Everything Bagel approach to the left and that includes the stridently anti-business, anti-profit part.
So now those CEOs are searching for something else that will allow them to grow their businesses and garner acceptance and approval. Some, like Musk, are going all-Trump. The more staid (and emotionally stable) personalities are still looking. Here's to hoping the Democratic Party welcomes them before the Republicans figure it out.
** Including Trump. The 2016 [edit: actually, 2011] WHCA Dinner will be seen by historians as an important turning point in our country's history.
Everyone craves acceptance and approval. It's past time for folks across the anti-Trump coalition to be more mindful of that, and it goes way beyond Biden or indeed the left. I still remember reading some Trumper say "Hillary called me a deplorable, Trump called me an American". To this day the host of one of the Bulwark's flagship podcasts constantly calls American voters dumb.
BTW I believe the pivotal WHCA dinner was 2011 not 2016.
hard to believe historically speaking the most significant fallout of the 2011 WHCA Dinner *Wasn't* the Bin Laden raid approved just beforehand and happening mere hours later lol.
The most amazing thing about the success of the Bin Laden raid was how little it mattered.
I think it had some impact on the 2012 campaign.
Remember "bin Laden is dead and GM is alive!"
That was maybe popular among Democrats, but the deciding factor was more like “Mitt Romney is a plutocrat and Paul Ryan wants to take away your grandma’s healthcare”
I completely agree. But it makes sense and isn't surprising at all to me that Americans cared more if they had a job and healthcare than if a bad man on the other side of the world who killed some people in a city they've been to once was dead, or merely in hiding
That didn’t affect the trajectory of a decade of US politics
And it is entirely reasonable for voters to assume that some who insults them is not going to push for policies that are in those voters’ interests. Every now and then I will bring up how certain democratic politicians or activists express contempt for certain voters and my more left acquaintances will claim that the Republicans hold those voters in contempt at least as much and then point to some policy that is allegedly bad for those voters. But it’s not the same. Someone who insults a type of voter on a personal level is doing so consciously and there’s every reason to assume they willl not act in your interest
Especially if you think of how Trump has actively scammed working class people or refused to pay contractors. "I love the poorly educated" would probably go down as the most condescending thing a presidential candidate ever said if anyone else said it. Trump's insults to the working class just don't have salience among the working class, which is a long way from saying he doesn't insult the working class.
You are right. I will edit.
And even with Clinton, no one ever points to anything else she says as expressing that kind of disrespect - it’s only a *single* off-the-cuff remark. Similarly with Obama and the “bitter… clinging to their guns” line.
It’s not like Trump who explicitly insults the professional class on a regular basis!
Yeah, but politically, that “basket of deplorables” line is going down in history as just stunningly stupid. I have friends and family back in PA that were more than likely hold their nose and vote for her - Trump was not particularly popular as a person amongst these folks as we’ve been exposed to his nonsense since the 80s - who instantly were incensed by that comment. Hell, *I* was incensed and I didn’t even live there anymore.
Because the "enemy within" voters aren't optimally distributed relative to the "deplorable" voters in the US electoral system?
The difference is that Clinton alienated possible Clinton voters. We white collar center/libs were never really in play to vote for Trump. The SALT limits were a big middle finger to folks who make good money via W2 but
The professional class is just much smaller than the working class. In a democracy, you can afford to piss off the smaller group to win the larger group.
Trump has plenty of political under-performance to his name. Lagged the fundamentals in '16, first first-time President to lose in 40 years in '20, won narrowly in '24 while incumbents around the world got crushed. He's also had very poor popularity while in office.
Two wrongs don't make a right. Your opponent campaigning suboptimally isn't a license to make mistakes. Especially when your opponent is as dangerous as Trump increasingly seems to be.
“Trump called me the enemy within, Kamala called me an American”
Probably not, but whatever.
I mean Trump probably didn't call you the enemy within.
I think many tech moguls are trying to figure out how to get back the societal esteem they had in 2010 when everyone thought Google and Amazon were awesome. But that's not going to happen -- they are now the biggest and most important companies in the world; of course people are going to yell at them. As the mad men line goes, that's what the money is for.
Hasn't Gates already shown them exactly how? Visibly quit any role in the management of your company and go loudly spend your time giving away a bunch of your money, but not so much that it might imperil your power or influence, let alone something so tiny as your standard of living, hahaha.
I think "no one ever yells at Bill Gates or thinks he's a bad influence on the country" seems a little lacking in evidence.
He's a hell of a lot more popular than he was when he was running Microsoft...
People literally believe he’s the antichrist. His unfavorables are almost as large as his favorables. As Matt points out in his article, powerful people think they have to pick sides. Increasingly, I think they are right and Matt is wrong, at least insofar as they continue to be in the limelight at all.
I think he was probably at that level of popularity a decade ago before the conspiracy theorists zeroed in on him.
Half the country hates the guy and thinks has ulterior motives on vaccines, climate, meat, etc. I bet Elon and gates have similar polling numbers right now
Huh I didn’t expect this, but apparently you’re right - Bill Gates is the fourth most popular business figure, but Elon Musk is second (behind Warren Buffett). Two Trump children are in the top ten, as is the MyPillow guy, while Jeff Bezos is just outside the top ten.
At least according to the YouGov methodology: https://today.yougov.com/ratings/economy/popularity/business-figures/all
I think he is much less popular than he was in the Microsoft heyday, when he was seen as both brilliant and leading the next generation of American companies. His company just became huge and important much earlier than Google or Facebook.
That’s so interesting. My opinion of him went through the opposite trajectory. In the late 1990s I thought he was the devil incarnate. I don’t remember when he started his foundation, but it took many years before that made me favorable to him.
Do you mean before his anti-competitive practices became obvious? Because Nadella has the advantage of not having to have the knives out in as obvious a fashion for the general public to see.
I don't think this is that complicated really. I think a certain set of tech moguls have internalized ideas related to Randian objectivism or believe they are Nietzschean supermen and should not be constrained by society or rules in any way.
This experiment is done if the entirety of politics ends up being the appeasement of oligarchs. But maybe that was the inevitable end of the Madisonian system.
"So now those CEOs are searching for something else that will allow them to grow their businesses"
I note that while Joe Biden was President, Meta's share price increased 250%, from about 270 to 620.
I'm drowning in my tears for poor Mark Zuckerberg.
All the other big corporations did just fine under the anti-capitalist Democrats too.
Something tells me they won't do as fine under Trump's management of the economy.
"grow their businesses AND GARNER ACCEPTANCE AND APPROVAL". I put it in all caps this time so you don't ignore it as you did in your response.
My comment is about them wanting to do more than merely get rich. They already have wealth; their actions are about something more than that.
Yes, it’s true that their feelings were hurt.
That's kinda my point. Maybe you can joke about it, but the people being affected by DOGE, by the changes at WaPo, by the dismantling of affirmative action programs at company after company don't have the same luxury.
https://www.slowboring.com/p/trump-threatens-personal-liberty/comment/97754748
I had a thought this morning. Both the right and left have adopted some form of extreme blood and soil politics with a form of innate race essentialism at it's core. Whether it's Vance's nonsense about ancestorial Americans or the DEI crowd's anti-racism hogwash, both are very much about the color of one's skin and not the content of their character.
No wonder so many of these extremist advocates are so lacking in character.
Most of the left hasn’t adopted any of the blood and soil stuff that a segment of the DEI crowd endorses. But I suppose it’s also true that most of the right hasn’t adopted any of the blood and soil stuff of the alt-right.
A lot of the left has adopted a version of inherited blame. It is sort of a reverse blood and soil viewpoint.
Guilt by blood. Inherent and immutable taint.
That is very true. It’s really just the most obnoxious types that we all see on social media spewing most of this nonsense.
Most of the anti-DEI people seem to be all about the content of one's rolodex in terms of what 'merit' or 'character' means.
It’s because they are craven nepotists without out when shred of character.
Nothing the democrats have done since they lost in 2024 indicates they have a clue though
I hate starting off the week by agreeing with Francis and acknowledging that he's making a good point.
i do make some good points!
I think the current journalist conventions underplay the personal nature of politics. Policy and political loyalty is often downstream of personal rivalries and friendships, even if it's not considered polite to admit it.
I think you mean the 2011 WHC Dinner? I believe Trump was already in the ring by the time the 2016 dinner took place.
A point that I think is both endlessly discussed and incredibly underrated is that people’s “politics” are, at least in part, ex post facto rationalizations of their emotional lives.
This is not a new or original insight at all - Jonathan Haidt’s “The Righteous Mind,” etc. - but it seems to be one of those things that you have to say and get out of the way before moving onto talking about “real” issues of politics: “we’re all tribal,” etc.
This is not to say that principles don’t exist or that there aren’t principled people out there. But I think that there’s often a binary drawn between “principles” and “emotional reaction” that obscures how politics works.
Obviously you have to treat complex topics like politics in terms of its component parts at least some of the time, or you risk just repeating abstract truisms. So I’m not entirely sure what I’m saying, other than it’s entirely possible that Jeff Bezos (and Zuckerberg, etc.) are more just exhausted than anything and just sort of throwing up their hands and saying “whatever, I guess this is what you want” and that in and of itself is significant.
Bezos and Zuckerberg in particular went pretty hard on the resistance the first time and I think reasonably feel like the results were bad for them on all levels:
* They weren't seen warmly by the left
* The whole resistance project at least arguably was a failure since now we have Trump 2, This Time Worse
* They may reasonably feel like it kinda messed up their companies
* And also it maybe just degraded the social milieu in general?
And, like, if you're inclined to nitpick that a lot of that isn't exactly the fault of the resistance, okay, sure. But I'm not surprised that both want to move decisively into a new modality of response to Trump -- not just fine tune a little.
It'll be disappointing if the new modality is Musk-like crazy MAGA though.
Exactly - I totally agree. This is what I’m saying: they feel like they got burned, and so they’re giving their erstwhile allies the *doigt d’honneur*. Which is probably what I’d feel like doing! I’m saying that “feelings of personal betrayal” is underrated as a potent political force.
What I'm saying is more that it's both. Like, it's feelings of personal betrayal AND feeling that it was all for nothing AND feeling that their businesses are targeted AND feeling that just like overall society seems kinda sick?
Maybe they would've swallowed a feeling of personal betrayal! But why would you swallow a feeling of personal betrayal on top of all the rest of that?
On Bezos, I think Democrats have a hard time realizing that many former Dems didn't join them for good reason. They joined the flock without thinking, the same way children join their parent's religion. It's a cultural thing, not a well-reasoned thing.
So it shouldn't be surprising when these people get red-pilled and just kinda flop into the Republican camp. They listen to a few podcasts, or some friends start asking questions, and their shallow thinking is unstable.
When someone goes from near-100% Democrats to near-100% Republican in the course of a year or two, that's a sure-fire sign of shallow thinking. There are no principals or core beliefs keeping them on-sides.
There's no reason to listen to these people.
Elon is the poster child of this, of course.
Regarding Elon: being a junkie is generally not conducive to deep thinking.
This is a straw man - 100% Democrat to 100% Republican. The tech bros are still culturally on the left. Show me one - even Elon - who advocates restricting abortion.
If they've fallen into the Republican camp, it's because of the anti-capitalist staff who were running Biden's office. Read Marc Andresson on the White House meeting that he walked out of shaking his head in wonderment. That doesn't mean Andresson is on the right. His natural home is with the Democrats.
America didn't embrace Trump. It revolted against Democratic activists. And the dishonesty of pretending Biden was sharp, followed by the coronation of a woman who thought platitudes and word salad was policy.
Trump is awful. But he's here because of Democratic missteps. I hope they've learned something.
I'm gonna call this the "The Free Press Fallacy"—this pervasive idea that Democrats are the only ones with agency while Republicans, conservatives, or other, are merely responding to the actions of Democrats and/or progressive activists.
A good many people have found fame and fortune recently flogging this dead horse, but it doesn't make it any more true, and it absolves the mass of folks who have thrown their lots in with a group of people who represent most of the things they purport to be against.
Also known as Murc's Law, which long predates The Free Press.
Learn something new every other day, here.
It's one of those things where I knew I didn't come up with it, but I couldn't remember where I got it from
Whatever one calls it, it's been said that once you see it, you can't unsee it.
If you live and work in certain milieus, the Democrats are the only ones with agency. Or rather, were.
That's certainly true of the primary voter. But only 15-20% of people are primary voters (which infuriates me but that's a different conversation).
The vast majority of people just wait till they see who the options are and pick the lessor of two evils come election day.
The Biden/Harris administration made a LOT of bad policy decisions. So voters rolled the dice again on Trump
You haven't heard of "never-Trump" Republicans?
I've seen far more criticism of Trump, et al.'s performance in that meeting in mainstream media than I've seen criticism of Zelensky. (That said, Zelensky was, in fact, the only one with agency in that room in any practical sense other than maybe Vance.)
OK, but I don't know what to do with that information -- "Biased media is biased" isn't really a story.
Zelensky was the one who wanted something from the meeting though, so yes, the pressure was on him. I'm really not sure if Trump et al. cared about how it went.
Fair point, but then Zelensky must have known that too. So I still can't figure out how much of what happened was real and how much was theater. I guess we'll never know for sure.
It's worth keeping in mind that Andreessen is long-term Republican and was a fundraiser for the Romney 2012 campaign. His recent claims that he was radicalized by the BLM/woke left are largely a myth. Andreessen, like a lot of tech CEOs, fits quite naturally in the Romney Republican mold: tax cuts, deregulation, high-skill worker visas, and a patrician take on culture.
Yeah, if someone wrote that Peter Thiel's natural home was with the Democrats, it would be obvious the writer was either a liar or didn't know what they were talking about. Saying the same thing about Andressen is similarly kinda dumb.
Matt wants you to think this and always cites Romney but he supported more Democrats than Republicans over the past few decades. He really was radicalized by the woke and anti-business left; that’s why he supported Trump 2024 after not supporting Trump 2016.
What we know publicly about Andreessen is that he was a key fundraiser for Romney and then pretended like it never happened and he only went Republican after Biden. His claims about supporting other Democrats don't add up to much until he stops being misleading.
That arc is, in my opinion, also fairly reflective of what's happening in Silicon Valley. You had a bunch of people who were economically conservative but didn't like the anti-gay/conservative culture issues. Trump moves the party away from these issues while effectively retaining the conservative economic policies and adding some gross anti-immigrant fear mongering and corruption. People like Andreesen sit on the side lines because they are bothered by the fear mongering and corruption. Biden, as this article explains, moves the party further to the left on economic / anti-corporate issues. So then people like Andreessen decide that they don't mind the gross anti-immigrant sentiment and corrupt after all.
And yet the economy flourished under the anti-capitalist Biden administration.
These guys are the most incompetent Marxist revolutionaries in history.
voters disagree.
Seeing the value of your wages fall in real dollars isn't flourishing
Wait a minute - explain to me again how nominating Kamala Harris who “thought platitudes and word salad was policy” made people feel like Trump was a better choice?
What exactly is the “word salad” that Harris was guilty of? And aren’t “platitudes” clearly better than random tariffs and extortion, which is what Trump was promising? Or is there something deeper that you didn’t like about Harris?
[I am going to eat you / he tells it like it is] dot gif
Hey Kenny. I don't want to be snarky, but Google Kamala and word salad and you'll get hundreds of pages of quotes. The woman can't put a sentence together. Her inheritance of the nomination was as self-inflicted wound. The Democrats had a deep bench of potential candidates who had won over Trump voters in reddish or purple states. Why they turned to her is beyond me.
Have you ever tried the same with her opponent? I’ve seen people make some claims that her “coconut tree” line is word salad, but that seems to me to reflect poorly on people who aren’t used to thinking about context.
“The democrats” didn’t choose her any more than they chose not to run Hillary Clinton in 2020. The primary process is set up in a way such that the party can’t decide, and it’s up to individual candidates to choose whether to run or not. Clinton chose not to run in 2020, and because Biden delayed so long, there wasn’t really a chance for anyone other than Harris to choose to run in 2024.
I wasn't referring to coconut tree. Please don't make assumptions about what I had in mind. There are plenty of examples.
Obama clearly didn't want Kamala. He wanted a selection process rather than an anointing. Candidates didn't volunteer because they weren't given the opportunity. A word from the current patron saint of the party would have been plenty.
Andreessen contributed significantly to the Romney campaign in 2012. He hasn’t always (or ever?) had a natural home with the Democrats.
Absolutely this. There is no one someone like Tulsi Gabbard, to grab a recent annoying example, had deep ideological principles that tied her to the Democratic Party, or else there is no way she would have had the recent oath she's had.
Like, there's stuff I disagree with Democratic Party orthodoxy on, but it would never push me to join the Republican Party, because there are 99 other salient issues I disagree with them on, and that seems silly.
Some people are more-or-less single issue voters, and so if the parties move on that issue, they'll change parties
*way someone
**path
Jesus. My brain this morning.
We're in the midst of world-historical changes to media technologies that are obliterating entrenched gatekeepers and possibly watching an enduring political realignment unfold.
This is not an era of ideological consistency. The Harris campaign had only two inviolate principles in 2024: 1) Orange Man Bad and 2) no restrictions on abortion. If those weren't your highest priorities, it wasn't clear whether Democrats would stand up for you.
[Edit: d'oh, three, per synerson's comment.]
I think, "No significant cuts to entitlements and social welfare programs" was a pretty inviolate principle for Harris too? I certainly can't remember any indication from the campaign that there would be any Clinton-style, "Ending welfare as we know it" type reforms if she won.
Ah you're right.
Hello from Seattle! It may be helpful for folks here to remember, and folks elsewhere to know that Jeff Bezos was one of the earliest and definitely the largest donor to R-74, our gay marriage campaign. He gave 2.5 million out of 10 million raised total, based on a single email to him. He’s also talked passionately about immigration and his dad coming from Cuba. So on personal liberties, I think we’re good.
On whether the owner of one of the worlds largest companies, which he built from scratch in his garage, as a total self-made man, the son of a teen mom, is a free market zealot? I don’t know his personal views, but I bet we can all guess.
Frankly, given the meetings he’s been in with Trump and Elon, I’ve found his decision to lead a national conversation on free markets and personal liberties pretty unsettling. Why do we need that? I think we’re about to find out.
One of the major things I learned from this election and everything after is that I was wrong and the 'Bigness is Bad because Big' people were much more right than I thought, if for no other reason than because big corporations threaten the whole project of self-governance.
This all sort of plays into a larger theme here - American politics has forever changed, but Matt is still writing articles that he could easily have written last year, or in 2019, and it leaves me feeling like his work isn't as important anymore.
I agree. My perspective on big business is that while it may be economically the most efficient, which Matt eloquently argues for, the downsides are not worth it. The downsides, at least in the US with Citizen's United (a reality we must reckon with):
- Concentration of political power (via direct donation, control of news and social media)
- Exfiltration of expertise from smaller communities. When there were independent hardware stores, drug stores and grocery stores in every community, there had to be a local ecosystem to support them of accountants and lawyers and other white collar jobs. But if all you have is Home Depot, CVS and Stop & Shop they can take care of all that back at HQ. Yeah it's efficient, but it's textbook hollowing out of 'main street' America.
- Homogenization of culture. I don't like that whether I drive around Texas or Maryland I could be visiting 75% of the same businesses. Different places deserve their own unique culture!
- Physical relocation of urban-oriented small storefronts to "big boxes" on the outskirts of town and in many ways the creation of car culture. Why do big businesses go outside town? I'm not entirely sure but I think a few reasons are saving money on architecture, more capital so they can have more inventory, so they want a bigger location than what is available on 'main street'
- I think some of the economic advantages are overstated because big businesses have essentially unfair advantages that in other context would be considered antitrust issues: I can't prove this is widespread but I heard an anecdote from an drugstore owner in Wisconsin that when Walmart came to his small town, they dumped medicines at far below market price until he went out of business. And then of course they were free to sell them at or slightly above market price again. Here's an anecdote I heard from an urban planner: Chain restaurants tend to have much more starting capital and can afford much higher rents than most local restaurants. This is why new-urbanist 'town centers' like we see in Maryland and Virginia are usually stocked with Buffalo Wild Wings and Applebees and the local restaurants are relegated to the strip malls. The high rents are literal rent seeking from the developers and big businesses are happy to oblige and encourage them.
My one surprisingly big pro big business take? They're probably on the whole good for the climate. Especially ecommerce and Amazon. I suspect it is much more efficient to have a truck deliver a high efficient route than have each individual person drive their own car to each store.
I think you’re running together several different types of big business and several different eras of big business. The big box stores that damaged main streets are being killed be e-commerce - which is bringing back main streets (if only for bars and yoga studios). Stripe and Shopify and so on are allowing small businesses to compete on these functions with big business.
Good point! I should think more on this.
My thinking at the moment is parallel to what I learned in history classes about the relationship of nobles and royals and commoners. Often, by reigning in the nobles, the royals were operating in the interests of the commoners. But sometimes, by reigning in the dukes, the royals operated in the interest of the barons, and thus against the commoners.
Do you mean baron as in capitalist or baron as in other type of nobility
I mean “baron” as in the local lord, who may owe fealty to a count or duke, who owes fealty to a king.
Of course feel how you’re inclined to feel, but I think this attitude misses two things. First, when you’re in the middle of a big upheaval I think two of the most important qualities to have are a sense of history and a sense of imagination. Matt has a lot of both, and I think makes him one of the more important writers moving forward. Second, things are bad but, I don’t know, change is just really really hard and really tendentious? I think we might look back at this moment in six months and feel like this was the apex of the Trump admin, when they haven’t had to govern and everything is symbolic and Dems can’t buy a first down like they’re the Chiefs in the Super Bowl. But that stuff isn’t forever. Or even very long-lived. There’s just this irresistible force of society that evens things out more than you might think. The Chiefs are still gonna be a good football team. At least, I hope so.
My biggest worry is that business leaders have each individually decided that they should publicly support Trump/Republicanism for Pascal’s Wager type reasons. Democrats will mostly set policy based on ideology, so doesn’t matter if you publicly support them, while Trump will set policy in large part based on personal grievances, so the rational decision for many business leaders is to support him publicly. This is obviously very detrimental to liberalism and democracy.
This kind of waves away all the non-Trumpian elements of Trump governance, specifically conservative tax and regulatory policy. That’s the real “get” for billionaires and the business community, the corruption and grievance stuff is comparatively unimportant. IMO.
Thank you for the article. I take exception with the point on “misallocation of capital for political purposes” point though. Chinese companies (SOEs and private) misallocate capital all the time. CCP pressure, opportunity to take local or national subsidies etc push them into creating new production lines that arent profitable, and into selling products below manufacturing value. And yet, China is THE manufacturing powerhouse of the world and might be running it in 20-30 years. Your idea of how economy should work runs into real constraints when put against what is best for the country overall (including social peace, security etc). Japanese companies have kept some manufacturing in Japan even when not as profitable for social peace reasons. Companies are part of society and making 5% less profit might be more valuable if it increases security of the country, keeps unemployment low etc.
Two things can be true. China is a major manufacturing powerhouse which has grown tremendously the last 30 years and Chinese government economic policy has done a lot stupid things to that has actively harmed further economic growth and the average Chinese person.
I give you first and foremost the Chinese property market. Forget neighborhoods that shouldn’t exist (like what happened in the US circa 2007), there are practically entire cities that shouldn’t exist. And the collapse of the Chinese property market has be enormously harmful to millions of Chinese people (buying real estate was basically a lot of people’s retirement plan. Equivalent to all the Enron employees who put all their 401K in Enron stock in 2001. But countrywide) and more important still ongoing. I’ve argued in a mailbag question before that the collapse of the Chinese property market is the most underrated long term story given how it’s coinciding with when China is rapidly aging in part to one child policy.
Now add to to this that China’s economic policy is over indexed on manufacturing growth at expense of consumer spending and it’s really not clear how much at all the current average Chinese citizen is benefiting for Xinping economic policy (oh yeah. Take official Chinese stats on economic growth with huge grain of salt)
If you haven’t noticed, despite my utter alarm at Trump’s economic/tariff/lets cultivate Russia plans I’m still long term bullish US stays ahead of China.
One last thing. I actually think we underestimate how horrid Mao Zedong was to China. There is the human costs of course. But it would be hard to do worse to a county’s economy than what he did for 20-25 years. Think we underestimate how much Chinese growth in the 80s and 90s was accelerated catch up growth from not having a complete psycho in charge.
None of what you said is wrong. However, it might not matter. In the next 20-40 years, China’s low fertility is irrelevant, thats a long term threat. secondly, the property market collapse hasnt slowed down their manufacturing, seems they are doubling down. And three, China aint US or Europe, we should stop assuming that a country w different culture which has been a police state for 70+ years will lead to a liberal change. So they suffer economically sometimes, like w real estate crisis but they dont protest like we would. And if they do, they end up in prison. Anyway, point is that letting the market just “do” and correcting its mistakes through minimum wage laws and such as Matt proposes might not be enough for the current situation.
Basically, between China and the “West” we are the ones closer, much closer, to social disunity than China is. And losing good manufacturing jobs and related capacity is a big part of it. I sometimes think Matt is still too “elite” in his thinking and doesnt understand how an average person thinks. For too many people, closing factories and small businesses, and related death to small towns, spell disaster for their country. So if Trump is needed, so be it. Easy to miss it when living in a nice part, less crime-y part of US.
This... seems pretty patently delusional to me.
China has most of the same social fissures, only worse. Rural areas are demographically even more shattered and often more economically moribund than in the US, there are deep resentments on both sides of the urban-rural divide, with migrant workers in for particular fire from urbanites, and in turn often particularly hateful of their exploitation in urban areas. The divide in attitudes and resentments between young and old is also significantly worse than here, and with far more systemic policy implications to boot.
You've never set foot in China, have you?
Yes i have set foot in China. Point is, their system doesnt allow for same type of obvious division and social unrest that we have. Neither do they have immigration challenges. Stop pretending the systems are the same. Protest in China and u end up in jail. The fissures are beneath the surface and might take decades to come up, if ever. Its the “China will liberalise” bullshit all over again.
I love how you think division can be outlawed.
Since we've never spoken on the matter I'll politely point out that I lived in China for most of a decade for grad school (domestic program, taught in Mandarin, Chinese classmates) and work, my wife is from China, I have family and friends there, and I speak/read/write Mandarin fluently.
Consider it *possible* you may be overestimating China's degree of social cohesion, dramatically.
There are the policy mistakes of the past (rapid initiation of frictionless trade with China and subsequent decline in NA manufacturing) and there are the policy choices of today, right?
Will Trump tariffs restore American manufacturing in the rust belt? I think not.
Biden’s industrial policies had everything bagel problems and room for improvement but seemed more strategic, thoughtful and intentional — and precipitated a lot of factory building especially in Republican-leaning states.
But were Biden's industrial policies really flawed because of their "everything bagel" approach? The poster child of this was the chip fabs, with their requirements for daycare etc. And yet the big TSMC fab went up pretty quickly and is producing tons of highly advanced chips. Maybe when you're talking about gobs of value being produced worth tons of money, having the company also be required to offer daycare turns out not to be the killer that people like Klein think.
I should’ve have said may have had. This is something a liberal WaPo could bring a helpful lens to.
Odd Lots had a great episode talking about the global devaluation vs. the USD on a trade weighted basis. China being a currency manipulator is a major driver but the devaluation of the peso and CAN are also major factors. I don't know why tariffs can't used to offset this macro currency imbalance to favor US manufacturing. It's not our workers who are less productivity - it's just the currency.
https://fred.stlouisfed.org/series/TWEXO
https://www.macroisdead.com/p/tariffs-that-reshore-must-create
"Will Trump tariffs restore American manufacturing in the rust belt? I think not."
Why not, specifically?
We can say the trade-offs aren't worth it, but mechanistically we have a very clear understanding of how tariffs work and they absolutely can do exactly this if sufficiently large.
Hmm, I guess if you hold everything else constant but in reality would you anticipate a lot of manufacturing jobs given the high degree of automation that’s likely to be implemented?
You seem to think people care more about social unity than about well-being. Social unity is only one part of well-being.
What people miss is that service jobs surpassed manufacturing jobs back in the 1960s. That was before China's reform era.
He’s not saying China will have a liberal change. He’s saying that life in China is worse than life in the United States, and is improving more slowly.
China isn't just relying on manufacturing to make up for the real estate collapse; they're relying on exports of manufacturing. That is, they're dependent on foreign markets to keep their economy afloat. That may pay off, but it's one helluva bet.
Can you imagine what China could have accomplished without the pressures to misallocate capital! The state run companies! The overinvestment in real estate! China's success is due mainly to good macroeconomics that promotes investment over consumption with the effect of raising the returns to tradable goods over non tradable goods, the exact opposite of US policy.
Can u imagine that a state has more purposes than just allocation of capital? Fact that so many smart people dont drives me insane. 5% less GDP growth on return for Taiwan is a trade most Chinese would likely make. Thats the world u live in, not the imaginary world of perfect rational economics. You know how i know that? I come from Croatia and short term pain of separation (10 lost years while all of u were growing in the 90s) was seen as acceptable by majority to achieve national aims (ie independence). And we wouldnt trade for all the bloody perfect economics ever. You can live in Chicago school of economics world or u can live in the real world. Not in both. And the real
World is winning.
5% less GDP growth on average means a country gets lapped in ~14 years. I agree that GDP can't be everything, but it's most of it.
They might vote for taking Taiwan rather than having a better life, but they would be happier with a better life than living in a country whose borders include Taiwan.
??? I said nothing about the CCP being willing to give up growth for political ends.
I was replying to a comment that implied that China’s economic success stemmed from departures from “good policy.” I think that China woud be richer and more powerful if they had not mixed in so much state control with their economic reforms.
China's party-state misallocates capital in ways that make the citizenry much worse off and which basically everyone opposes in some form, even if it's the rural migrant decrying the fact that their county seat had EV chargers but no new hospitals the last time they went home, without an understanding of why. The CCP offers no one an outlet for such complaints so they stay unvoiced.
We can discuss how much the US should be willing to spend or sacrifice to maintain manufacturing capacity here, and I'd even argue that the number is pretty significant, not least because in the long run a lot of our high-value-added services economy relates back to the real world and requires a robust manufacturing ecosystem to maintain our world-beating R&D... but that's not to say we should be using China as an example.
China's fiscal repression, inability to develop a social safety net, underinvestment in soft public goods (i.e. everything but power and transport infrastructure), and capital misallocation collectively have denied balanced growth that would have given its median household $6-8k more in annual income by present.
In turn, sure, it'd have invested less in manufacturing, but it would consume a hugely larger fraction of what it makes, meaning its manufacturing boom would be both more beneficial to the people powering it and more sustainable globally. And other places would have seen more manufacturing investment because the ROIC on such investments wouldn't be *negative.*
Today, there is simply no path by which the CCP might pivot and make all these "investments" actually pay off, because the ROIC is demand-constrained and roughly half of that demand is foreign and subject to geopolitical constraints. There's a looming debt overhang that will make it extremely difficult to jumpstart a proper consumer economy and require the allocation of huge losses on investments, which will be politically contentious even if the Party somehow manages to conduct the debate behind closed doors.
Just to be clear, im not using China as example to follow, but as a competitor which clearly shows that “market is all” is as unhelpful as any type of communism.
A very large part of the reason the US needs to make interventions of the sort we're discussing is *because* of China's insane (~10% of GDP) transfers from the citizenry to export-oriented industry.
If there were no neo-mercantilist powers, free trade as articulated would work fine. Since there are, we have to deal with the world as it is, which I very much agree MY ignores in favor of the "gotcha" line on China tariffs when it comes to Trump.
Even without China, allowing for a complete hollowing out of your base industry (steel, aluminium etc) is plain stupid. Some industries are strategic and yes there will be some stupid losses but u never know when u might need them. Trick is to discern what is rightfully strategic and what isnt. Example - shipyards which US never cared about except WW2 but are now an issue. While some other industries that are deemed strategic arent really. Coming back to original point, only disinterested academics get to play the “ideal markets” game. Not someone who is supposed to be read by and giving advice to actual political staffers. Which is why i disagree w Matt on this one.
Sure, defense procurement needs should be taken into account, but in the main it's very obvious that American (and to a lesser extent Euro) underinvestment in industry has occurred because other powers have subsidized industrial capacity so much that the global ROIC is near-zero and the globe as a whole is constrained not by investment or supply of capital goods but by consumer demand.
In the absence of those subsidies and market manipulations, largely taking place in East Asia, there's no reason to believe that other locales would have huge numbers of "uncompetitive" industries that need to be protected, because what they need to be protected from is foreign subsidies that amount to very large fractions of GDP!
On shipbuilding in particular I will just remind you that American civilian shipbuilding has never had a day in which it was competitive since roughly 1870! Our current policy regime props up the capacity-in-waiting just as it did prior to WWII; if we get into a war we have a bunch of yards with a fair number of employees that are currently miserably inefficient but could be whipped into shape.
So? The SOEs are profoundly bad for China — they are substantially less productive than private enterprises. You need to think of the counterfactual, and also do any research at all. Suggested starting point below.
https://www.nber.org/papers/w21006
One other point that I'll make is that great articles like this are why I appreciate Matt being a very literal person. Like Matt, I know way too many people who read Bezos's statement and immediately assumed that it meant that he was going to roll over to Trump. Maybe he will, but actually reading what he's saying, and providing a challenge to actually live up to those statements, holds a lot more worth than what the people jumping to conclusions are doing.
It is striking that so many CEOs appear afraid to irk Trump. On its face it seems crazy—in Putin’s Russia, it’s CEOs and other VIPs that seem to fall out of windows or die under mysterious circumstances, so it seems obviously in CEO’s interest to have the rule of law upheld. Perhaps they are unsure what effective action looks like: since Bezos’ Post, while impressive under Trump’s first term, didn’t really move the needle of general public opinion much. So I agree the best use of philanthropists money now is to build an energetic center, something that isn’t as personally risky as going up-and-in on Trump directly, and which would doubtless be more effective than funding Leftist pet projects that end up coming back to bite Dems next cycle.
It’s a collective action problem at minimum. As a CEO you might highly value rule of law, but that doesn’t mean it pays to stick your head up—doing so it’s guaranteed to get you the rule of law you want, but is virtually guaranteed to get you a costly reprisal. And if you win, your reward might be an increasingly leftist Democratic Party who wants to take your stuff and regards your existing as a “policy failure”.
Accordingly, your default assumption shouldn’t be courageous stands against government overreach, but squirmy collaboration.
Agree this makes sense and is why they should start writing checks either to cover lost Pepfar dollars or to effective centrists instead of pointlessly virtue signaling and getting their asses kicked by Trump and their shareholders.
Yglesias once wrote about the need for a “Heritage Foundation but for liberal business owners” and I think that’d be a good idea
It woud be nice to have a major American newspaper that advocates for garden variety good economic policy. [And that is NOT the WSJ which is the epicenter of tax cuts for the rich and deficits.] I'd like to believe, but have no way of knowing that Bezos is honest about his stated intentions and even if he is, does his understanding of "free markets" extend to Pigou taxation and _smart_ regulation of externalities?
If he is, however, WaPo will be a huge thorn in Trump's side and a boon to revival of the Democratic party.
The WSJ as the epicenter of calling for deficits? I can tell you don't read it. They've been sounding the alarm for years, while other mainstream publications have remained silent. As far as tax cuts, their editorials have advocated cuts across the board - not just for the rich - and bringing the corporate tax rate down to the global average. Combined, of course, with restraining the growth of spending. Not the Musk/Milei chainsaw approach - slowing down the growth rate.
Definitionally, if your read of their editorial stance is true, they are calling for increased deficits. Broad tax cuts now, at a time when we're already running deficits, in exchange for restraining the growth of future spending.
The math is not impenetrable here.
Not necessarily. If we had a flat tax system, this might be correct. However if we have a progressive tax code, like the US does, then as the economy grows we're going to see an *increase* in revenue as a fraction of the economy. So in order to have a stable revenue side, any center-right party would regularly trim taxes to keep the % GDP revenue from growing. The progressive nature of our tax code coupled with real growth is crucial to why budget analysis can project %GDP revenue staying constant even with TCJA fully renewed.[1]
Now, if the deficit was due to an unprecedented fall in % GDP revenue since Reagan, there might still be a definitional case here. Perhaps the deficit persists due to an unprecedented fall in revenue. But it turns out % GDP revenue has been steady since the Korean war and %GDP spending is mostly due to growing public healthcare spending[2]. So the WSJ's take is we should slow that healthcare spending growth. Now, we can debate how politically realistic that is, if it's a good or bad idea, etc. But definitionally, this is not a call for increasing deficits.
[1] See page 23 of Jessica Riedl's chartbook (warning, PDF download): https://media4.manhattan-institute.org/wp-content/uploads/Budget-Chart-Book-2024.pdf
[2] CMD+F for first "total outlays and revenues" here, see charts of outlays and revenues by category below it: https://www.cbo.gov/publication/60127
"However if we have a progressive tax code, like the US does, then as the economy grows we're going to see an *increase* in revenue as a fraction of the economy."
For one, this only holds true if we do not regularly adjust the income tax brackets to maintain their relationships to median income as the latter changes.
For another, this isn't actually a rejoinder in the least!
If you are proposing changes to the legal regime which will hold tax revenue steady instead of it increasing as currently required by law, with no corresponding cuts to spending which already exceeds revenue, you are calling for an increase in the deficit relative to what it otherwise would be.
You can tell me with a straight face that preventing federal receipts from growing beyond 20ish percent of GDP *should* be the goal of the center-right, and while I think the center-right is wrong, given the public demand for services which exceed that cost... I can understand that you think this is necessary. Fine.
But unless you are actually prepared to cut spending by as much as you're proposing to constrain revenue, the mechanistic result *must* be an increase in the deficit relative to what is currently projected.
Fucking own it, this isn't Reason, the commentors here can read.
Your position is the WSJ is definitionally for *increased deficits*. I said no, by their definitions they are for cutting the spending on healthcare, which is what is driving the deficit increase in every impartial budget projection I've seen.
Again, you may protest and say the WSJ *shouldn't* hold this view, but I'm responding to what you wrote and it's pretty cut and dry. Either the WSJ is for the public healthcare cuts or they're not. You seem to think actually they're not; "with no corresponding cuts to spending."
You're welcome to believe the WSJ doesn't actually think Medicare and Medicaid are growing too fast, but please, do check with the WSJ first before arguing what their definitions lead to.
Slowing growth in outlays is not cutting outlays!
Would passing the GOP's mooted extension of the TCJA with the mooted pay-fors cause an increase in the 2026 deficit relative to what is currently projected, or not? There's an extraordinarily clear, plain-English answer to this question.
I am happy to have the long-term healthcare discussion if and only if you can answer that question without sophistry.
I’m not a scholar of the paper or anything, but I thought they supported significant entitlement reform (privatization of SS for example, and cuts to Medicaid and Medicare spending (by another name “market based reforms”) and other Bush-Ryan camp proposals).
That's still, ultimately, a restraint in growth of future spending, not a step change in spending of the sort that we'd need to lower the deficit without tax increases.
I think if you installed a personification of the WSJ editorial line as king, you’d see slashed entitlements as well as lower taxes, and a balanced budget.
In practice, the tax cut half is popular and the entitlement slashing is political poison, so the real world result of their advocacy is deficit explosions, on that we agree. I am just saying that’s not what their object is, it’s what they can get.
Even their editorial line now smacks of the "No pain now, pain later" ethos which has dominated Republican policymaking since 1980, every time I've looked. That's admittedly not that often so maybe its an unrepresentative sample...
I'm sure that if I gave them absolute power they'd *just fucking do it* already, but in the real world where the electorate won't tolerate it they're just as bad on can-kicking as the Democrats, and even worse on actual direct impacts of policy.
When push comes to shove they will take deficits to get tax cuts. It is certainly conceivable that tax cuts could be engineered in such a way at to favor the lowest and income tax payers — a much larger EITC woud probably be involved — but what is under discussion is always reductions in top rates. But whoever is taxed we need to raise something like 6% of GDG, much of it preferably with a progressive personal consumption tax. [Even slashing good things like research and USAID I’ll bet Muck doe not find 0.5% of “waste.”]
On the surface I really support saying hey a lot of the online opinion space is left wing. We don’t want to be right wing but we are going to stake out a sort of underrepresented majoritarian space in the moderate camp infused with some of the values of the business mogul who owns this paper. The biggest issue I have is that I don’t think this is something that the NYT has neglected. Go to their opinion section right now it’s a video about how dems need to stop gloating about maga missteps and looking down on republicans, a piece by rattner about what business leaders say about Trump and how he understands the frustration with Biden admin but going full Trump is a big mistake. There’s an article about a need for Democrat project 2029 advocating for some regulatory reforms. It’s really not a left wing section a lot of the time.
NYT is not Pravda, but a centrist Post, IFF that’s what Bezos has in mind is good.
On queue the NYT cover page is “trumps policies have shaken a once-solid economic outlook.” This is the way.
The problem with the NYT is that their political coverage is very balanced which pisses off liberals, but the rest of the articles are very “upscale urban liberal” which alienates conservatives. So no one’s happy, but NYT keeps chugging along
Chris Lee article from today is basically just urging liberals to take a Reid/pelosi approach to winning back power. I think it’s just a level headed article. Good opinion section in my view, much better than wapo as well. In fact a better letter from bezos would read “I’ve been reading our opinion section lately and I think we just need to be a little more like NYT.” Also IMO NYT opinion section has actually gotten higher quality last couple years.
Oh yeah, I have no problem with NYT opinions and politics coverage being level-headed and center-left. It’s probably good that our premier national newspaper isn’t too ideological. But that’s how you get a bunch of progressives complaining that the NYT is right-wing bc they won’t straight up call Trump a fascist every time
"The entire population of Venezuela obviously cannot move to the US. But as a lover of human freedom, don’t you feel kind of bad about that?"
I hope this doesn't make me a hater of human freedom, but no, I don't feel bad about that, and it has nothing to do with being a racist who doesn't want brown immigrants polluting the pure blood of Real Americans(TM).
Most immigrants aren't motivated by a burning love of the United States. The immigrate out of desperation - their home country is too violent/unstable/oppressive/dirt-poor, and their best chance of a decent life is immigrating to a richer, stabler country. It doesn't mean they're not sad about it. Nostalgia exists for a reason. My native country, Poland, has both a long history of immigration and of sad stories/poems/songs about how the immigrant misses their native land and how the elderly grandparents, left behind in Poland, now have no one to look after them (sure, the immigrant child/grandchild sends some dollars in an envelope regularly, but it's just Not The Same).
Where am I going with this? I'm guessing the majority of Venezuelan immigrants would much rather stay in their own country *if* that country were more peaceful, stable, and prosperous. It's kind of ironic that I have to point it out, because people like me are accused of being rootless cosmopolitans, but I understand the concept of patriotism and attachment to your native city/region. There is a sense of loss accompanying most migration. If literally ALL of Venezuelans wanted to immigrate to the US, that would mean that Venezuela has become a completely unlivable hellhole, and that would be bad!
Bezos and Zuckerberg both strike me as guys who spent their lives laser-focused on the growth of their businesses and aren’t really all that interested (in the intellectual sense) in having a broader social impact or even in the externalities of their businesses’ activities. They’re different from say, Elon Musk, Bill Gates,Warren Buffet, Michael Bloomberg, George Soros, the Koch brothers, Ken Griffin, Julian Simon, Dustin Moskovitz, or other billionaires whose overall portfolio of activities reflects a pretty clear vision and set of values.
I actually think that the Bezos/Zuckerberg mode is pretty typical for business types (the modal large philanthropic donation, public statement of values by a business type, or non-pecuniary motivated political intervention is generally not particularly thought through), but Bezos and Zuck are so rich and their businesses have such a pervasive reach that they can’t really avoid getting involved in at least some sense, even if deep down they’d really prefer not to. But because the motivator is “got too big, gotta do something” rather than an intrinsic set of principals that they really care about in a deep way, their interventions are pretty sloppy and incoherent.
Another thing that the typical business types of their wealth get involved in is buying sports teams, and it's been heavily rumored for a long time that Bezos is going to buy an NFL team. He probably would have had the Commanders already by now, had the odious Dan Snyder not refused to sell to him due to petty resentment over WaPo's coverage of him. Now the heavy rumors are on the Seahawks, who are believed to be holding out on selling until they go past a date where some proceeds of the sale aren't legally required to go to the city of Seattle.
Yeah, like, I definitely think that outside of work, Jeff would really rather be partying with his model girlfriend in Miami and having fun owning a sports team than like, thinking about politics at all.
The Atlanta Fed is now forecasting Q1 GDP growth numbers of -1.5%. There is going to be more uncertainty regarding consumer confidence, investment, adverse price shocks, and fiscal austerity coming from this administration (though the deficit blowing tax cuts counteract this somewhat but much of those cuts will not target populations that buy goods and services.)
Things are about to get worse. In that there is an opportunity to push back against the insane post-reality politics of our time.
We'll see what happens! I think that Atlanta Fed estimate may just be too pessimistic.
Wards has automotive production down last month and sales are down too. I am waiting for more information on durable goods and the next jobs report. My trader buddy is very antsy about prospective February numbers.
I've seen reasonably informed speculation that the drop is at least partially accounted for by firms moving up major purchases of imported inputs ahead of anticipated tariffs, so there's potentially a large "time shifted" accounting element to this particular drop.
Those people don’t understand that X-M is there to prevent double counting. Those pre purchases also show up in I as inventories.
The only way this would affect things is if the Federal Reserve didn’t account for inventories going up when imports increased.
OK, you may be correct. I just offered that observation because I've seen it made by some people who otherwise seem to be solidly anti-Trump. (While one of my undergraduate degrees is in economics, I don't have a feel for how quickly, e.g., "M" updates versus "I" in modern Fed stats.)
I am an PhD economist and have seen people make this comment.
I would be very skeptical that the timing of surveys and indicators would cause the Fed’s forecast to drastically swing. I doubt they would publish something like this without first doing a smell test. There is definitely a temporal weighting formula too.
Similarly, when everyone claimed there was a recession last year due to inventory sell downs during Q1 2024. Those sell downs didn’t correspond with a reduction in imports so you got a net negative effect on GDP.
The Trump Slump! If we get a recession wow the midterms are going to be something.
I doubt Republicans have the human capital to manage a recession.
I can’t wait for the excuses.
I doubt you want to listen to such irritating nonsense.
That's one way to get the Fed to cut rates!
I don't have confidence that enough Trump voters will value their own economic interests over Trump's.
There was a graph about republican voters feelings about the economy, during Obama in the gutter, then suddenly confident during Trump and then right back down again under Biden. Dem and independent voters perceptions were more tied to inflation and consumer confidence.
Republican voters believe what they're told to believe. Their post-reality bubble is impenetrable, anyone that contradicts the narrative is just a shitlib to them.
I think you're mostly correct. It depends a bit on how you define Trump voters. There is certainly a hardcore 40% who will never change their mind about him. That number might be as high as 45% or at least is sticky for the 40-45% such that their minds would only change slowly. The next roughly 5% are susceptible to changing their mind and votes or at least growing indifferent and staying home.
What this would lead to is a good mid term for democrats, taking back the house, maybe taking the senate or cutting it to 50-50 where the Republicans have to negotiate with Murkowski and Collins. But what it doesn't lead to is a real governing majority that clearly has the mandate to stop Trump dead in his tracks through his final two years in office.
Bezos read my DWL take and I am wrapping up my time as YDN opinion section editor so maybe he could hire me to run WaPo opinion…