Imagine Google Maps for navigating your life. An always-on AI agent would give you turn-by-turn personal and professional advice, advise you on tricky social and professional situations, and help you build new skills. Because it would remember everything you hear, read, say, and do, it could remind you of people you’ve forgotten, and track your personal and professional commitments. It would understand and shape your tastes in books, movies, music, food, sports, porn, investing, travel, and friends. It could spend or invest your money, organize your day, and monitor your eating, exercise, social life, and sleep. Some users will doubtless try to max everything, everywhere, all at once. Others will flee in horror.

Your always-on AI agent will be a relationship like no other because, on some dimensions anyway, it will seem to know you better than you know yourself. It could give you the skill, knowledge, judgment, and confidence to make better decisions more quickly. You would feel more intelligent, productive, and creative — perhaps with good reason.

Would you be more likely to turn such an agent off or launch a second one? Or ten more? Would you enjoy having a dozen agents competing to create the best possible you?

Intimate Devices

This is not science fiction, nor is it far off. Portable agents are arriving on devices you wear as glasses, carry as a phone or pendant, or — eventually — have implanted.

• The French-Italian eyewear brand EssilorLuxottica sold over 7 million Meta AI glasses last year, up from the 2 million in 2023 and 2024 combined. The company is now discussing expanding production to 20 million pairs a year.

• Meta is prototyping “super sensing” AI glasses that use cameras and audio recordings to capture a user’s every moment. It currently holds about 80 percent of the market for all-seeing, all-hearing devices, but Apple, Google, and Snap are all racing to launch rival products.

• OpenAI has hired former Apple designer Jony Ive to build a wearable, AI-enabled smart speaker with facial recognition designed to “learn information about who is using it and what's around them.”

• Apple, meanwhile, rebuilt Siri from the ground up — unveiled at WWDC in June, powered in part by Google’s Gemini models — as a full conversational companion that reads your screen, your calendar, and your mail, and acts across your apps.

• And Elon Musk’s Neuralink, which had implanted brain-computer interfaces in 21 patients as of early this year, says it plans to move to high-volume production and nearly automated surgery in 2026.

At first, you might not like an agent who knows so much about you — especially one prone to hallucinations that are different from your own. But your agent will adapt. And so will you.

“And so will you.” But what does “you” mean if a person is continually refined, directed, and improved by her secret agent? Where does a user’s mind end and an AI begin? Philosophers Andy Clark and David Chalmers argued back in 1998 that technology extends our minds beyond our skull — a notebook, faithfully consulted, is an inseparable part of your cognitive machinery. An AI, or a group of AI agents, that knows you better than most humans do, becomes part of who you are. Would shutting it off be liberating or terrifying?

Will an agent-filled world be weird? Maybe not. Hearing aids and contact lenses are strange at first — then you cannot live without them. Count the buds and headphones on the young people you pass each day. Computers have moved from room-sized to desk-sized to wrist-sized. Why not an AI-enabled watch, Fitbit, Oura ring, earbuds, or video glasses? In Shenzhen, China, I tested prototype glasses that translated Mandarin into English in real time as captions. It wasn’t ready for prime time, but it was nice to read Chinese easily.

Whose Agent Is It, Anyway?

In pondering what he calls our coming “exoselves,” Kevin Kelly imagines four kinds of relationships with agents that know us better on some dimensions than we know ourselves. He imagines a twin who thinks like you; a tutor-guardian whose judgment you defer to; a hired counselor who is intimate yet professionally bounded; or a hero — a better half who models the person you aspire to be.

Kelly’s taxonomy is about you and your agent. But how will my agent get along with everyone else’s? Does my wife’s or my kid’s agent have our family’s interests at heart? What do they think about me?

And Kelly’s agent-enhanced self is only half the story. How will your agent interact with mine, with governments, or companies? What can my agent know or surmise about you? Will it steer us towards or away from each other? Will people without agents be more human, or just more isolated? Will an agent with knowledge of the most intimate and mundane features of your life improve your choice of friends, business associates, and lovers? In what domains will you trust your agent to have better judgment, and which not?

And in this context, what does “privacy” even mean? We are getting an early answer. Meta’s glasses are already at the center of a mounting privacy fight. In many states, it is illegal to record audio of a third party without their consent. Privacy experts worry that always-on devices could violate data privacy or biometric data laws. These lawsuits concern agents that film and record you. Wait until they can reason and hallucinate about you in conjunction with other agents.

And who has real agency here? Can I direct an agent to help me become more thoughtful? More domineering? Greedier? More spiritual? Who can teach us how to use an agent wisely? Kelly’s answer is sobering: learning to live with an exoself will be one of the major lessons of a lifetime, and society will take years to work out best practices. We have had three decades to learn how to manage social media. How’s that working out?

This points to the deepest problem in any new social technology: trust. An agent this intimate requires users to trust not just the software but also the platform and the company behind it.

Do you trust any company that much? Do you trust Elon Musk with your brain implant? What happens if your agent is erased, captured, spied on, or subpoenaed? What if the company behind it goes bankrupt? Kelly predicts heart-wrenching stories of people losing their exoselves when a platform folds. Imagine grieving a business or government failure because it felt like an amputation, or hating a company that purchased access to your digital soul.

AI agents are just the first step. Thanks in part to AI, many technologies that will reshape individuals are accelerating rapidly. Neural implants, targeted proteins, customized pharmacology, and genetic engineering are all advancing rapidly. We will soon be able to customize our mind, body, and personality directly — not through habit and education, but through hardware and chemistry. And we can influence not only ourselves, but our children and their descendants.

The post-human age is within sight. What are the odds that we use these capabilities wisely?

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I just spent a couple of weeks cycling around Ireland and the UK. The Republic of Ireland is outside the United Kingdom, so it was unaffected by Britain’s decision to leave the European Union (”Brexit”). As a result, economists often contrast the benefits of EU membership for a small, open, English-speaking Ireland with the cost of leaving for Great Britain.

Ireland always wins this comparison – although damage from Brexit is only part of the reason. Brexit didn’t make Ireland richer so much as it made Britain poorer. Since 2015, UK GDP per capita has flatlined, while Ireland’s tax engineering attracted foreign investment that partially offset its own trade losses. Apples-to-apples comparisons are tricky – but even a casual visitor sees the damage the UK inflicted on itself. The aging country voluntarily shrank its own talent pipeline for reasons that were more cultural than economic. As with many ruinous economic decisions, the cost of Brexit was slow, diffuse, and deniable, while the benefits were immediate and politically resonant.

The results are terrible. The UK now faces horrible fiscal arithmetic and severe labor shortages in labor-intensive sectors like construction, agriculture, and elder care. Research talent is fleeing to competing nations. And it’s a tough policy to undo, since the UK can only rejoin the EU by begging it for unfavorable terms.

While in Edinburgh, I visited the grave of Adam Smith, one of the earliest and most astute observers of capitalism. I recalled an exchange from 1777, when Smith’s young friend John Sinclair brought him news of General Burgoyne’s surrender to the American rebels at Saratoga and despaired that “if we go on at this rate, the nation must be ruined.”

Smith replied: “Be assured, my young friend, that there is a great deal of ruin in a nation.” Smith’s quote was both a warning and a timeless reminder of human resilience. He thought that successful societies were structurally robust and could absorb economic mismanagement, political blunders, and monumental crises without collapsing entirely. Smith was right about Britain in 1777. Whether he stays right depends on how much of its ruin the United Kingdom decides to spend.

America’s Brexit

The 250th anniversary of The Wealth of Nations and of our national founding is an occasion to reflect on one of America’s own stupid, Brexit-like decisions. A century ago, nativist forces in the United States built a strong public consensus to sharply reduce the number of people we would allow to move here.

Two Republicans championed the cause: Representative Albert Johnson, a eugenics advocate who chaired the House immigration committee, and Senator David Reed, who explained the logic of banning Asian immigrants and severely restricting southern Europeans to the New York Times a month before passing his bill. Until the mid-1880s, Reed wrote, immigrants had come from “the same sources from which our country was originally colonized” and were easily assimilated. Then:

“Beginning about 1885, new types of people began to come. For the first time in our history, men began to come in large numbers from Italy, Greece, Poland, Turkey in Europe, the Balkan States, and from Russia.

“As these new sources of immigration began to pour out their masses of humanity upon our shores, the old sources in Northwestern Europe seemed to dry up, and whereas in 1890 the natives of Southern and Eastern Europe constituted about 8 percent of our foreign-born population, in 1910 they constituted 39 percent. This change brought new difficulties in the problem of assimilation. These new peoples spoke strange languages. It was not to be expected that they would readily fuse into the population that they found here.”

This view was widespread. The founder of the American Federation of Labor, Jewish immigrant Samuel Gompers, welcomed the Johnson-Reed Act because it reduced the supply of immigrant labor, which he believed threatened the wages of native-born workers. Adam Smith had a phrase for those who lobby the state to shut out their competitors: “the wretched spirit of monopoly.” Gompers wanted the AFL to monopolize the labor supply, and he died in December 1924, months after helping pass the law he believed would achieve that goal.

The Ku Klux Klan, which had resurged as an anti-immigrant organization, backed the bill, citing the benefits of racial purity. The Klan knew that the underlying motive for the law was ethnic, not economic, since it left Mexican immigrants untouched. After all, growers needed farmworkers.

Only six Senators and 71 House members voted against the bill, which Calvin Coolidge promptly signed. Among the dissidents was a freshman from Brooklyn named Emanuel Celler, who spent the next 41 years fighting the law and championing immigrant and civil rights.

The impact of the Johnson-Reed Act was swift: it cut annual immigration by 80 percent using national-origin quotas pegged to the 1890 census, which predated the waves of Italian, Polish, Jewish, Armenian, and Greek immigrants. The act categorically excluded all Asians, building on the Chinese Exclusion Act. Italy’s quota fell from over 40,000 to under 4,000. Almost as an afterthought, the law also created the US Border Patrol and the consular visa system, which is still the administrative foundation of American immigration enforcement.

Ruinous Legislation

Most historians and economists today judge the use of national and racial categories to restrict immigration in 1924 as a massive, Brexit-caliber error. It slammed the door just before the refugee crises of the 1930s, starved American science and industry of talent for a generation, and took 41 years to undo. As with Brexit and Trump’s anti-immigrant rants, the underlying passions behind the legislation were more cultural than economic.

The results endured for decades. The foreign-born share of the US population fell from roughly 13 percent in 1920 to under 5 percent in 1970. A century later, the legislation looks like an economic and humanitarian own goal.

• Economic effects. Adam Smith had seen this before. In The Wealth of Nations, he attacked England’s Law of Settlements, which barred poor laborers from moving between parishes in search of work, calling the removal of a man who had committed no crime “an evident violation of natural liberty and justice.” Johnson-Reed was the Settlement Acts scaled up to a hemisphere, and it failed the same way.

  Research by Ran Abramitzky, Leah Boustan, and others finds the law fell short even on its own terms. It promised that cutting immigrant labor would raise wages for native-born workers. It mostly didn’t. In areas that lost the most immigration, native workers saw little wage gain; instead, farmers mechanized, employers recruited Mexican and Canadian workers where they could, and some industries simply shrank. Marginal mines closed rather than paying more. Native-born workers actually shifted into lower-paying occupations in some affected areas because immigrant-fueled growth had been pulling them up the ladder.

  The act also cut off the flow of scientific and entrepreneurial talent for four decades. The counterfactual is unknowable, but the US won the twentieth century in physics substantially on refugee scientists who got in before or despite the quotas: Einstein, Fermi, Szilard, Bethe, von Neumann. Many more were kept out.

• Social and humanitarian effects. The quotas were still in force in the 1930s, and the US held to them, often under-filling them through consular obstruction, while European Jews sought to escape rising anti-semitism. In a dark chapter of US immigration history, the US refused to admit the 937 passengers of the MS St. Louis, who were fleeing Nazi Germany and sought refuge in Florida after Cuba revoked their landing permits. Worse, the German immigration quota went unfilled in most years of the Nazi era, even as hundreds of thousands waited. Anne Frank’s father applied for a US visa and never got one. The act ensured America’s doors were largely closed during the Holocaust, thanks to legislators who had been explicit in 1924 that keeping out Jews was among their goals.

  Johnson-Reed was openly and proudly built on racialist eugenics. Harry Laughlin of the Eugenics Record Office served as the House committee’s official “expert eugenics agent,” and the congressional record is full of racial pseudoscience that reads as simply grotesque today. Smith’s other book, the one his tombstone lists first, is about the human capacity to extend sympathy to strangers; the 1924 congressional record is a study in its refusal. Adolf Hitler’s praise for the quota system in Mein Kampf is not an endorsement that successful laws usually receive.

• Political effects. Within two generations, descendants of the groups excluded by Johnson-Reed became fully assimilated, prosperous, and politically powerful. This made the original premise (i.e., that Italians, Jews, and Slavs were racially unassimilable) look not just wrong but absurd. The alliance between organized labor and nativism lasted until the law’s economic realities and moral decrepitude forced the AFL-CIO to reverse its position in 2000. And it was Celler, by then the dean of the House, who co-authored the 1965 repeal.

  Unexpectedly, the law was so successful that it helped demobilize the Ku Klux Klan. Once the immigration issue was won, decisively and seemingly permanently, the Klan lost its most potent recruiting grievance outside the South (a lurid murder scandal involving its Indiana leader in 1925 did the rest). Membership cratered after 1925, and by 1930, the organization was a shell.

Were there any benefits? A minority of economists and historians argue that the immigration pause aided assimilation and compressed wages at the bottom, and that the Great Migration of Black southerners into northern industry was partly enabled by the cutoff of European labor. These effects are real but modest, and they cannot salvage the law’s reputation because it classified immigrants by race rather than using a more neutral Canadian-style points-based immigration selection scheme.

It had taken the United States four decades to admit that racial and national restrictions were a serious mistake. In six more decades, we would repeat the error.

Spending Our Ruin

The 1924 immigration law produced echoes a century later, when the share of foreign-born residents in the US once again approached 15 percent. Public revulsion at the chaos associated with Joe Biden’s neglect of border security contributed directly to the election of Donald Trump to a second term. The deportation machinery Trump inherited, from the Border Patrol to the consular visa system, was itself a Johnson-Reed legacy.

A report released this week by the Peterson Institute quantifies the costs of Trump’s executive orders that imitate the Johnson-Reed Act. By cutting out two-thirds of international student visas, for example, the US cuts off STEM workers with PhDs, 35% of whom are foreign-born. Peterson expects this will shrink the high-skill STEM workforce by about 6% overall and by 11.5% at the PhD level. That decline “would cut annual US growth by $240 billion to $481 billion within a decade – a loss the size of a mid-sized US state like Wisconsin or Utah.”

The public is starting to grasp these costs, and public opinion is swinging back as the costs of deportations become more visible and concrete. As with “Bregret” in the UK, Gallup found record-high shares of Americans calling immigration a good thing by mid-2025.

Standing at Smith’s grave, I took his sentiment as reassurance. But it’s also a warning. There is a great deal of ruin in a nation, but the quantity of ruin is finite. Johnson-Reed shows what a single act of self-harm can cost: forty-one years of closed doors, a generation of lost science, and the St. Louis turned away within sight of Miami. Britain is drawing down its stock of ruin on Brexit. America spent heavily in 1924 and is reaching for its wallet again. Smith assured young Sinclair that Britain would survive the loss of America. He never said ruin was free.

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As a kid in the fifties and sixties, I loved wristwatches because they seemed alive and because every man wore one. But in the mid-nineties, this affection curdled into something strange. As I walked down Union Street in San Francisco with my infant son, I spotted an Oris wristwatch – an obsolete mechanical timekeeper. I bought it, loved it, and slowly, inexorably, pathologically, fell into watch collecting.

The hobby grew alongside my sons. As the new century arrived and Bush became Obama, Trump, Covid, January 6, and Trump II, watches helped order my world. Dials summoned me. Movements hypnotized me. The design, the social history, the absurd little feats of engineering required to keep a few hundred parts ticking on a wrist: all of it helped me cope with the cacophony. This post is about the politics, economics, and geography of these tiny machines, and why an inefficient, expensive object that nobody needs refuses to disappear.

The Politics of Timekeeping

People have always tracked life’s rhythms, but for most of history, humans needed calendars to track seasons, not clocks to track hours. By the Middle Ages, mechanical clocks signaled the rise of new forms of political power. As I wrote in an earlier post:

Time is a social construct, but timekeeping is political. When a public clock came to town, the priest, mayor, or business owner set it to local noon and began to coordinate worship, navigation, commerce, finance, and warfare. Eventually, pocket watches and railroads that required standard times eroded the power of church and municipal timekeepers. Once workers acquired pocket watches, bosses could no longer stretch the workday. Once soldiers got them, military attacks could be far more precise.

By 1400, at least twenty-five English towns had municipal clocks. By 1700, roughly half of England’s parish churches kept time for their parishioners. Accurate timekeeping underwrote the British Empire. Once clockmakers solved the longitude problem, sailors could fix their position at sea, and European powers could navigate, conquer, and govern across oceans. By mastering time, Europeans mastered the world.

From the start, a clock was a tool of discipline and direction. It structured the day, summoned people to work or prayer, and measured when they showed up. Soon, factory workers were required to “clock in”, so employers could quantify their work with unprecedented rigor.

Industrialization hardened this logic. Workers were hired not to finish a task but to surrender defined blocks of their day. The factory clock dominated work schedules because it enabled employers to measure punctuality and productivity with greater precision. The historian E. P. Thompson described this shift from task-based to time-based labor as a pillar of capitalist discipline. Much of life now unfolded on someone else’s schedule. The grim supervisor with a stopwatch became one of the founding caricatures of capitalism.

Railroads and telegraphs required standard time zones (until 1883, the US had 144 local times). Watches broke old information monopolies and built new ones, much as cellphones did a century later.

Pocket watches go back to the seventeenth century, but mechanical wristwatches did not become respectable among men until the First World War demonstrated their advantage in combat. They only lasted six decades. Nobody needed a mechanical wristwatch before 1910, and nobody needed one after quartz arrived in 1970. During that brief window, however, nearly every man and many women wore a small mechanical timekeeper on their wrist.

The Economics of Timekeeping

The Swiss watch industry has been declared obsolete twice. It survived both times by becoming something new.

In the late nineteenth century, America was well-positioned to destroy the Swiss watch industry. Watchmakers like Waltham and Elgin figured out how to use metalworking machines to mass-produce interchangeable parts and accurate watches at a scale and a cost that the shambolic Swiss cottage system could not match. When Waltham exhibited its manufacturing prowess at the 1876 Philadelphia Centennial, a shaken Swiss delegate, Jacques David, rushed home and published a famous report warning his compatriots to modernize or perish.

Over the next twenty years, most Swiss watch producers took his advice. After the First World War, they consolidated production into cartels that fixed prices and set production quotas. They used their control over the “Swiss Made” label to turn a national reputation for precision into a mechanism for price collusion.

The second near-death experience came from Japan. On Christmas Day 1969, Seiko launched the first production quartz watch. Quartz watches were cheaper, tougher, and much more accurate. They rendered mechanical movements obsolete and brought Swiss watchmaking to its knees. In 1970, Switzerland had more than 1,600 watch companies; by the mid-eighties, fewer than 600 survived. Watchmaking employment fell from roughly 90,000 to 33,000. Two-thirds of the industry simply vanished.

Those who survived pivoted from function to feeling. Houses like Rolex and Patek Philippe repositioned their watches as luxury goods. A watch became micro-engineered wearable art, an emotional purchase that nobody needed just to tell time anymore.

The pivot worked. According to the Swiss Watch Industry Federation, Swiss watch exports in 2025 totaled about 25.6 billion Swiss francs, or about $28 billion. The industry now ships fewer watches than it has in decades, about 14.6 million in 2025, a multidecade low, and only about 5 million of these were mechanical. The volume keeps shrinking even as revenues remain high, thanks to watches that cost tens of thousands of dollars.

Mechanical watch sales are astonishingly concentrated. Morgan Stanley and LuxeConsult, whose annual report is the closest thing this secretive industry has to an earnings call, estimate that out of roughly 450 active Swiss brands, just four (Rolex, Cartier, Audemars Piguet, and Omega) account for 55% of sales. Rolex alone accounts for roughly a third, with wholesale sales of nearly 11 billion francs and about 1.15 million watches a year. Shockingly to me, the 1.4% of watches priced above $60,000 account for 37% of export value and nearly all of the industry’s growth. The pivot to high-end luxury both devoured mechanical tool watches and saved them from extinction.

The Geography of Timekeeping

Today, mechanical watchmaking clusters in three places: the valleys north of Geneva, the region around Tokyo, and a small German village near Dresden. Each industry was shaped by its own history, and each developed a different idea of what a watch is for.

• Switzerland: Calvinist craftsmanship. Swiss watchmaking owes its existence to a religious crackdown that contained an important loophole. In the mid-sixteenth century, Geneva banned jewelry and ostentation. This rule would have ruined the city’s goldsmiths, except that Calvinism prized punctuality and the disciplined use of time, so, under its strict sumptuary laws, a pocket watch was designated a virtuous tool rather than a sinful decoration (four centuries later, the industry would quickly reverse this distinction). Because they could no longer ornament the exterior of watches, jewelers pivoted to refining clock and watch movements.

  Earlier Modern Times posts described the rise of Rolex in Switzerland and Seiko in Japan. Another outlined the eerie parallels between Rolex and Apple Computer.

  Today, large Swiss watchmakers are more stewards than innovators. This was not always true. During the seventies, the whimsical, artsy, and cheap quartz Swatch generated so much cash that its owners bought up a dozen brands damaged by the quartz crisis. Now, the Swatch Group owns Omega, Glashütte Original, Blancpain, Longines, and several other brands. Richemont, a conglomerate founded by a South African family whose fortune came from diamonds, gold, and tobacco, has been a surprisingly careful custodian of houses like Vacheron Constantin, IWC, Panerai, and A. Lange & Söhne, preserving their distinct identities rather than blending them into a single luxury mush. Adhering to the twisted logic of a true luxury retailer, Richemont destroyed hundreds of millions of dollars’ worth of unsold watches rather than discounting prices and cheapening its brands.

• Japan: weaponizing innovation. Swiss watchmaking grew from farmers seeking indoor work during long winters, but Japanese watchmaking grew directly from state policy. The Meiji Restoration prized manufacturing independence, so Japan adopted the Western fixed-hour clock, and Japanese firms quickly moved from importing clocks and watches to making their own.

  Seiko became the world’s most relentlessly innovative watch company (thanks in part to Citizen, a serious quartz competitor whose best watches are often overlooked). Seiko built Japan’s first wristwatch and produced a steady drumbeat of world firsts after the war. In 1969, it pioneered the quartz watches that took a wrecking ball to Switzerland’s mechanical watch industry. In 1999, it launched a movement that delivers quartz-grade accuracy from a mechanical caliber (Grand Seiko’s Spring Drive), a feat no Swiss maker has yet to match.

  There is a lovely irony here. Japan destroyed two-thirds of the Swiss industry using the very strategy, precise and affordable mass production, that had failed American industrialists a century earlier. The same weapon produced the opposite outcome because the Japanese kept innovating, whereas American watchmakers preferred to collude and try to corner the market.

• Germany: surviving catastrophe. German watchmaking lives almost entirely in Glashütte, a small Saxon town that has made watches and trained watchmakers since the 1840s. This picturesque village has a brutal history. The Allies firebombed it (along with civilians in neighboring Dresden) at the end of the Second World War. After the war, Glashütte fell inside communist East Germany, so the Soviets carted off their watchmaking machinery as reparations. They also merged the independent workshops into a single state combine. (Oddly, this protected Glashütte from the quartz crisis, since a planned economy saw little reason to chase cheap battery-powered watches.)

  After reunification, watchmaking reemerged quickly from Glashütte’s fertile soil. Walter Lange and the executive Günter Blümlein rebuilt A. Lange & Söhne from nothing. Within four years, watch enthusiasts spoke of Lange as a new Patek Philippe. Glashütte Original emerged from the old state-owned enterprise. Like Lange, it reflected a distinct German watchmaking philosophy: stunning hand-engraved bridges, oversized date mechanisms that snap precisely at midnight, and movements assembled twice so that horologists can test, take apart, clean, and reassemble them for delivery. The Germans take this approach for granted, which is the most German thing about it.

Beneath the industry giants sits a vast and lively world of independent watchmakers organized into three price tiers: insanely expensive, absurdly expensive, and merely expensive. The top tier features museum pieces that cost six figures and up. The fun lives in the more accessible tiers. H. Moser & Cie, a Swiss independent brand, trolls the establishment by making a fully mechanical watch that resembles an Apple Watch. Another Moser features a case made of real Swiss cheese to protest loose “Swiss Made” rules. Sinn, a German watchmaker, builds pilot’s watches proven on space missions. Oris, my first love, issued a watch that displays Kermit the Frog on the first day of each month. Here, instead of a corporate monolith manipulating artificial scarcity, independent artisans use high horology as a canvas for whimsy and cultural critiques. Having been liberated from pure utility, these watches become a space for art, ritual, and even defiance.

The newest indies will not quickly disrupt the staid, conservative Swiss watch industry, but they keep trying. In Glashütte, Nomos has made inroads with Bauhaus-inflected design and an innovative world-timer. Christopher Ward designs in England and builds in Switzerland, and just cracked the industry’s top 50 brands with a direct-to-consumer model, innovative designs, and accessible prices.1 Studio Underd0g injects irreverence, food, and vibrant color into an otherwise serious watch industry. China, which built mechanical clocks five centuries before Europe and then perfected the counterfeiting of Swiss watches, has launched independent brands like Atelier Wen that are the real thing.

Thriving on Obsolescence

So where does this leave a hobby built on obsolescence?

Aesthetically, it’s male, pale, and stale. Its market share is trivial: Apple alone sells roughly twice as many watches as the entire Swiss industry, and Apple is only one slice of a smartwatch market that dwarfs mechanical watchmaking. Simple quartz watches still outsell smartwatches, though the gap is closing. People have many choices for what to put on their wrist, and a mechanical watch is the least practical option.

And yet demand holds. For years, Deloitte’s watch survey asked people what they would do with a financial windfall, and majorities across countries kept choosing a fine mechanical watch over a new smartwatch.2

Mechanical watches are not, of course, the only obsolete technology that continues to thrive. Film photography, vinyl albums, pour-over coffee, lugged steel bike frames, and typewriters for writers who prefer devices that can’t interrupt them. Or candles, fireplaces, fountain pens, and manual transmissions. Even sports like archery, biathlon, and fencing evolved from obsolete military technologies.

To be sure, a watch lover with a well-made mechanical timepiece on his wrist usually has a phone in his pocket, just as a vinyl obsessive keeps a Spotify account. But efficiency can be the enemy of engagement. Those worried about the human future in an age of AI should take heart that obsolescence can liberate objects. Once a thing no longer has work to do, it can take on new and more specialized meanings – as craft, ritual, contest, or signal. It survives as art you love rather than a tool you need.

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Republican mid-cycle gerrymandering has handed the GOP roughly a three-point structural advantage in House races this November. It must drive Donald Trump crazy that this won’t be nearly enough. Popular revulsion at the daily cost of his incompetence and lavish corruption has overwhelmed his efforts to redraw district lines. Whether you trust polls, models, or prediction markets, Democrats are heavy favorites to retake the House later this year.

The Senate is the harder prize and the more valuable one because it controls several constitutional checks that the House does not.

• Confirmation power. Only the Senate confirms lifetime judges. It confirms cabinet secretaries and the heads of regulatory agencies, which the Supreme Court has now made far easier for the President to fire and replace at will.

• Committee gavels. The majority party runs the committees. Chairs control the budget, decide which bills get a hearing, and wield subpoena power to investigate the executive branch or private companies.

• Budget reconciliation. The majority controls budget reconciliation, the tool that can pass certain tax, spending, and debt-limit bills with 51 votes, thus avoiding the filibuster. (The majority can also rewrite Senate rules, including the filibuster.)

Fifty-three seats are Republican today. To reach 51, Democrats need to flip four seats without losing any of their own. The electoral arithmetic makes winning the Senate possible — but it takes a functioning party to get there.

The 2026 Senate Grid

• Alaska: Mary Peltola. Peltola served in the US House from 2022 to 2025 on an Alaska-first platform built around “fish, family, and freedom”. She served in the Alaska House from 1999 to 2009 and spent years in commercial fishing before that. She is Yup’ik, the first Alaska Native ever elected to Congress.

  Trump carried Alaska by 13 points in 2024, and Peltola is running even with or slightly ahead of Republican incumbent Dan Sullivan. The often-maligned Chuck Schumer deserves credit for talking her into this race when a run for governor would have been the easier path. Take a look.

• Iowa: Josh Turek. Another state Trump won by 13. Schumer could not land Iowa’s strongest Democrat, Rob Sand, who is running for governor. So Democrats have Josh Turek, a gold-medal Paralympic basketball player who holds a red district in the statehouse and won the Democratic primary. He faces Republican Ashley Hinson. His numbers are close, his campaign is smart, and having Sand at the top of the ticket may help him “push harder for change”.

• Nebraska: Dan Osborn. This state is as red as California is blue – Trump won by more than 20 points. Democrats ran a candidate committed to dropping out to back independent Dan Osborn. Osborn is a veteran and former union leader who lost a 2024 Senate bid by fewer than 7 points. He’s a long shot against former governor Pete Ricketts, but he is a hell of a candidate and worth every minute of your attention.

• North Carolina: Roy Cooper. Democrats put their best foot forward here. The seat opened when Republican Thom Tillis voted against the Big Beautiful Bill and, dreading Trump’s revenge, decided not to run for reelection. Republicans nominated a lightweight in Michael Whatley, and Schumer convinced the popular former governor, Roy Cooper, to run. He leads decisively — and like most candidates, he speaks to local issues first and Trump a distant second, if at all.

• Ohio: Sherrod Brown. Brown served three terms as a progressive senator before Bernie Moreno narrowly defeated him in 2024. When Vance became vice president, Governor DeWine appointed Jon Husted to the seat, and Brown is running to reclaim it. His populist playbook is a bit dusty, but Brown is winning in the polls. Not a lock, but a real shot.

• Texas: James Talarico. Democrats nominated Talarico, every progressive’s favorite Christian, and he is running a smart race. He wants all-of-the-above energy, and an end to Trump’s war on renewables, which is a knife in the back of the state that leads the nation in green energy production. Talarico is making inroads with Hispanic voters in South Texas — and this grocery-store ad has 8.5 million views.

  The race in Texas got interesting when, with Trump’s last-minute blessing, Ken Paxton knocked off incumbent John Cornyn by more than 25 points. This is a gift to Democrats because Paxton is a legendary sleazeball and a much weaker general-election candidate. This is a man who faced 20 impeachment counts for securities fraud, bribery, abuse of public trust, whistleblower retaliation, and obstruction, all as the sitting Attorney General. But Texas is still Texas, and the money sent on this campaign will be obscene. Polls are tied, but prediction markets Polymarket and Kalshi heavily favor Paxton to beat Talarico.

Missed layups.

Harris carried Maine by seven points and lost Michigan by a whisker. Both should be Democratic seats, but instead, they’re a mess.

• Maine: Graham Platner. Maine has a deep Democratic bench. Hannah Pingree carries a strong coalition and high favorability. Shenna Bellows has name recognition and a grassroots network from an earlier Senate run. Nirav Shah ran the Maine CDC to statewide acclaim. The obvious heavyweight, though, was Governor Janet Mills, and the party establishment lined up behind her. But she entered late, could not raise the money or generate much enthusiasm, and suspended her campaign in April.

  That cleared the lane for Graham Platner, who won the June primary going away. Platner is an Iraq and Afghanistan Marine vet and an oyster farmer, and he may yet win. But he is spending his days explaining a tattoo critics tie to an SS symbol, a trove of ugly deleted Reddit posts, and reports of sketchy texts to other women that surfaced through his own wife. He is facing Susan Collins, who is slippery, skilled, and always outruns her polls. This race should have been a runaway. Instead, Democrats are doing it the hard way. Here is Plattner’s launch video:

• Michigan: tbd. This is a political snafu, in the military sense: Situation Normal, All Fugged Up. Governor Gretchen Whitmer, who is both popular and term-limited, could have taken the nomination and the seat without breaking a sweat. Michigan should have been North Carolina: Democrats recruit a popular governor, run a clean primary, and win a Trump state by fifteen. Instead, a talented but DSA-curious public health doctor named Abdul El-Sayed leads the primary, running on Gaza and thin distinctions between his two more moderate rivals.

  If he wins the August primary, El-Sayed may struggle to gain the support of independents, Reagan Democrats, and anti-MAGA Republicans that a Michigan Democrat must earn to carry the state. This is not Mamdani running leftists in New York districts with a twenty-point Democratic cushion. Michigan is a state Trump won. Nominating a candidate built for the bluest voters could put a winnable seat in play. El-Sayed’s campaign video is smart, but like Maine, Michigan should have been easy.

So what happens now?

• Dems will hold their blue seats. Jon Ossoff is very likely to hold Georgia against Mike Collins, and Democrats will probably figure out how to hold Michigan. If either state falls, control of the Senate is lost.

• Alaska and North Carolina are winnable. If Peltola wins a state Trump took by 13, she becomes a national figure overnight — the smart Alaskan alternative to Sarah Palin. Expect the election to be closer than today’s polls. Cooper, on the other hand, appears to own North Carolina.

• Maine and Ohio are possible. Markets favor Platner and Brown, but both races will tighten. Trump’s incompetence is keeping Democratic hopes alive in states like these. But Trump is not incompetent every single day, and he can raise a lot of money.

• Dems cannot count on Iowa, Nebraska, or Texas. I would deeply love to be wrong about any of these three races.

Does this give Democrats control of the Senate? This week, Polymarket gives Ossoff an 83% chance of winning Georgia. It gives Democrats 71% odds in Michigan, Cooper 87% odds in North Carolina, Peltola 64% in Alaska, Platner 62% in Maine, and Brown 57% in Ohio.

So Polymarket predicts that Democrats will flip four seats and win control of the Senate? No — it does not. Imagine that these elections are independent events (which they emphatically are not), and calculate the odds:

• Hold Georgia and Michigan: 0.83 × 0.71 ≈ 59% odds

• Flip North Carolina, Alaska, Maine, Ohio: 0.87 × 0.64 × 0.62 × 0.57 ≈ 20% odds

• Together: 0.59 × 0.20 ≈ 12%

Twelve percent. These odds are far below any single race, because winning several bets at once is harder than winning any of them alone. But of course, the true number is much higher, because these races are not independent. The same national weather moves all Democrats together: party favorability, Trump’s approval, and the shared news cycle. A good month for Democrats lifts Ossoff, Cooper, Peltola, and Brown together. Polymarket’s betting on who will control the Senate gives Democrats nearly 42% odds, not 12%. That 30% gap is the correlation between these races.

This is the argument for a stronger party, whose purpose is to win elections to further shared political values. A stronger party does two things.

• Develop candidates. The first thing a real party does is decide who runs and who steps aside, before a primary settles anything. In 2006, Chuck Schumer’s Senate committee did exactly that, recruiting candidates built for their states: Jim Webb in Virginia, Jon Tester in Montana, and Bob Casey in Pennsylvania. Democrats flipped six seats and won control of the chamber. Republicans have spent the years since demonstrating the cost of not developing strong candidates — handing winnable seats to nominees their own leaders could not stop. Todd Akin, Richard Mourdock, and in 2022, the whole Trump-blessed slate of Oz, Walker, Masters, and Bolduc. Mitch McConnell diagnosed it in two words, “candidate quality,” and conceded he’d lost control of his own primaries. That is Maine and Michigan today. A party that can’t shape a nomination is at the mercy of whoever turns out to vote on a slow Tuesday in August.

• Frame national issues. A party does more than pick candidates. It sets a national frame, designed to improve the odds that its slate of candidates wins. When the message comes from the party rather than from 35 campaigns paying 75 consultants, a good month can lift the whole slate at once.

  A real party also says no, withholding money and endorsements from a candidate who drags the others down, or better, talking weaker candidates out of running before the primary begins. Democrats could not do this in solid blue California, whose primary was a total cluster, much less in Maine, where their strongest candidate faded, and nothing stood between the nomination and a man now explaining his tattoos.

There is, obviously, a catch. Party control over nominations helps win elections, but it runs counter to the open primary that Americans cherish. But the party’s grip is terribly weak — there is no chance that somebody will run Maine out of a smoke-filled room. Between a functioning party and a loose confederation of campaigns, consultants, and donors, there is enormous room to develop — and Democrats are camped out at the wrong end of the spectrum. Democrats will win more elections today if they take seriously the wisecrack that Will Rogers offered them almost a century ago.

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How we govern AI will soon surpass Trump’s corrupt antics, oil wars, immigration, the cost of living, the federal deficit, and collapsing birth rates as the central political issue of our time.

Voters from both parties despise AI. On the left, populists hate tech billionaires and the income inequality they symbolize. Environmentalists dislike data centers. Labor activists fear job losses. Humanists, religious believers, and parents across the political spectrum are finding common cause in their shared distrust of the effects of AI on children and society.

And AI is just getting started. When Americans choose a new president in November 2028, AI will be thousands of times more powerful across many dimensions than it is today.1

The Horror Story and the Fairy Tale

Our public debates about AI swing between a horror story and a fairy tale. Is AI a tragedy of the commons, or is it stone soup?

In 1968, UC Santa Barbara ecologist Garrett Hardin wrote a famous essay in Science titled “The Tragedy of the Commons.” Hardin described how shared resources invite overuse and eventual ruin, as individuals acting rationally overconsume the commons and produce a collective catastrophe. The tragedy is structural. No villain is required. Despite the article’s Malthusian overtones, most economists believed him.

Stone Soup tells the opposite story. A traveler (sometimes three) arrives in a village and boils some water. He adds a stone and announces that he is making a magnificent soup. He explains that his dish needs a few small additions and persuades one villager to contribute carrots, another to donate potatoes, and another to toss in a bit of meat, until a feast emerges that feeds everyone. The traveler then pockets his stone and moves on. (The stone is sometimes a nail or an axe; there are many versions.)

The two stories are symmetric in interesting ways.

• Contributions. In the tragedy, individuals extract from a shared pool until it collapses. In stone soup, individuals add to a shared pot until it overflows.

• Logic. The tragedy leads each person to reason, “If I don’t take from the commons, someone else will.” In stone soup, each person reasons: “If I add a little, I get back far more.”

• Social fiction. The tragedy unfolds without coordination, like a malevolent invisible hand. Stone soup succeeds through a bit of theater and a small social fiction that lowers the barrier to contribution. Religions do this all the time.

• Results. The commons turns abundance into scarcity. Stone soup turns apparent scarcity into abundance. The difference between the two outcomes is not just resources or incentives - it’s whether someone can construct a believable focal point for collective action.

AI as a Tragedy of the Commons

Many people see AI as a slow-motion depletion of our shared informational, cultural, and labor patrimony.

• AI undermines our cultural commons. Democratic deliberation, science, many laws, and the social trust that enables commerce are collective goods. They emerged from institutions built over generations of struggle to distinguish fact from fiction. Today, every person and organization has a strong incentive to deploy AI-generated content, but the cumulative effect is more noise and less signal in all forms of public and private communication. This is epistemologically corrosive and trust-destroying if it diminishes our shared understanding of reality.

• It pollutes our internet commons. The human-generated web is a commons that trained the current generation of AI models. They extracted enormous value from it. Now AI-generated content is flooding back into the same pool, threatening to pollute future training data with synthetic, self-referential output.2 Cory Doctorow described internet platforms like Facebook and Amazon as vulnerable to “enshittification”. Every website with user content is now exposed to enshittification by AI slop.

• It threatens our labor commons. I have argued that AI is unlikely to eliminate jobs overnight, but if it steadily reduces nearly all cognitive work, it would devalue human skill and expertise and lead people to invest less in education or mastery. We may end up with less human knowledge, fewer craftspeople, and fewer people who have mastered anything difficult. The accumulated human capacity on which civilization depends would be depleted for individual gain. (This argument can quickly be reduced to the absurd. Most of us no longer add large columns of numbers by hand, but ceding basic arithmetic to calculators and spreadsheets shifted numeracy from rote computational skills towards quantitative literacy and data interpretation. Life did not spiral downward. But AI may not be like spreadsheets.)

AI as Stone Soup

The stone soup reading is more hopeful and equally plausible.

In the tale, the stone gives everyone a reason to contribute what they have. AI tools already play this role for people who were previously locked out of certain kinds of work. Using AI, non-programmers can build working tools. Non-designers can produce something visually coherent. Non-native speakers can write with greater fluency. By lowering the threshold for participation, AI allows more people to add their carrot to the pot. The feast grows as AI recruits new contributors.

Scientific research, medical diagnosis, and legal reasoning are built on knowledge accumulated across generations. No one can master it all. An AI that holds the collective soup allows specialists to add their particular expertise and receive back synthesized insights that none of them could have produced alone. Researchers using AI to discover new drugs or materials are already cooking a richer stew than any prior generation could manage.

AI might also play the role of the traveler himself, arriving with a trick that breaks up artificial scarcity. One structural problem in knowledge economies is that expertise is rationed — not because knowledge is finite, but because credentialing, geography, and cost restrict access to it. AI can dissolve some of those barriers. The best legal reasoning, medical knowledge, and educational scaffolding need not be reserved for those who can afford a lawyer, a specialist, or an elite university. The stone here is AI’s capacity to unlock both the contribution and the benefit of the commons for people who were previously excluded.

This is the insight that earned political scientist Elinor Ostrom a Nobel Prize. She proved that the tragedy of the commons is not inevitable. Contrary to the instincts of most economists, Ostrom showed that real communities protect shared resources such as pastures, fishing waters, and forests by developing their own rules, norms, and governance without top-down mandates or full privatization. Ostrom would read Stone Soup as a fable about a well-governed commons.

Whose Cauldron Is It?

AI presents a twist neither Hardin nor Ostrom anticipated. The political economy of AI today looks less like an open pasture or a communal village pot than like a privately owned cauldron filled with public goods.

A useful comparison is the Inclosure (aka Enclosure) Acts, which roiled 18th- and 19th-century Britain. Enclosure laws privatized common lands, drove peasants into cities, and created the modern working class. Frontier AI models are pulling off something similar: monetizing decades of publicly produced human output — Reddit threads, Wikipedia articles, blogs — without meaningful compensation or consent.

In a classic tragedy of the commons, people stop caring for a resource when they feel excluded from its benefits. That defection has already begun. Some creators are using the University of Chicago’s Glaze or Nightshade to poison their own images so AI scrapers cannot use them cleanly. Users are abandoning Google Search as it enshittifies with AI-generated content and retreating to Reddit, Discord, and other human-curated spaces.3 An underground economy of data hoarding and algorithmic evasion is emerging as high-quality human-generated data becomes a closely guarded commodity.4

The political backlash against AI appears technophobic or Luddite, but it may simply be an inchoate resistance to a massive enclosure movement. Billions of people contributed their carrots and potatoes to the pot through training data, and a handful of tech executives showed up to the feast claiming to own and control the pot itself.

America is about to decide what institutional guardrails we want to ensure that AI serves public needs. Many of the barons of Silicon Valley will favor no regulation at all. Others will be tempted to treat all foundational language models as public utilities, with public auditors monitoring their inputs and outputs for safety and social value. Others will want to construct a public, non-commercial computing infrastructure to ensure that the benefits of synthetic intelligence are distributed broadly. Many of these measures would not only slow AI down but also strangle it in its crib - as their proponents know.

Which story wins and what governance we adopt depends on whether we can create a credible focal point for collective action to manage the risks and socialize the benefits of AI before it depletes our human commons. Stone Soup speaks to us because the traveler fed the village with ingredients the residents themselves provided. The AI stone possesses real, transformative magic. But it only delivers a feast if the community that supplied the ingredients gets to sit down and eat.

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For a young labor organizer, Silicon Valley in the early 1980s was Yankee Stadium. I was successfully organizing hospital workers with the Service Employees in San Jose, but I itched to play in the big leagues. I wanted to mobilize the immigrant women assembling chips and hard drives in the booming companies that had replaced our fruit orchards and were poisoning both workers and our groundwater with the toxic solvent trichloroethylene.

So I wrote to one of my heroes, William “Wimpy” Winpisinger, the Democratic Socialist firebrand who ran the International Association of Machinists. I reminded him that the IAM already had 15,000 union members in Silicon Valley’s defense sector, and that many of them had family members working at Intel, Apple, Atari, Hewlett-Packard, National Semiconductor, and Tandem. No other union had an opening like this. I argued that if the Machinists organized these companies now, when they were small, union membership would grow along with these businesses. Would the IAM commit resources to organizing Silicon Valley?

Email was still a decade away, but the typed letter I got back assured me that the Machinists were deeply committed to organizing “Silicone Valley.” So I went to work at a local defense plant, became a leader of the Machinists, and joined a few efforts to organize Atari and National Semi. Along the way, I became a political ally of Michael Harrington, the admirable founder of Democratic Socialists of America.

The “Left Wing of the Possible”

Harrington is best known for The Other America (1962), the book on US poverty that prompted the Kennedy and Johnson administrations to declare a War on Poverty. More than anyone of his era, he bridged European democratic socialism and pragmatic American politics. He rejected the idea of a third-party socialist movement in the US as a recipe for isolation, advocating instead for “realignment” — working inside the Democratic Party alongside labor, civil rights groups, and feminists to drag it in a social-democratic direction.

Harrington believed authentic democracy couldn’t exist if a tiny corporate elite controlled the economy. He wanted public and democratic control over major investment decisions so production would serve human needs — healthcare, education, housing — rather than private profit. He envisioned a comprehensive safety net with universal healthcare, guaranteed employment through public works, and aggressive federal action to eradicate poverty. And he viewed a strong, democratized labor movement as the essential vehicle for working-class power.

Harrington died of cancer in 1989. By then, I’d earned a business degree after a decade with unions. Times had changed, and the Democratic Leadership Council — co-founded by Bill Clinton — was declaring New Deal liberalism dead. To win national elections, the DLC argued, Democrats had to abandon “big government” solutions and appeal to suburban, middle-class voters.

The DLC aimed to address social ills through lean government rather than federal spending. They favored free markets over regulations on corporate power, as epitomized by NAFTA and the partial repeal of Glass-Steagall. They went for “workfare not welfare,” as cemented in the 1996 PRWORA, which replaced AFDC with TANF block grants, lifetime limits, and work requirements. As to labor, they preferred to train workers to increase their “human capital” to compete in a globalizing economy rather than strengthen unions to protect them from the effects of globalization.

Clinton looked like a sleeker, less Marxist-inflected version of social democracy, so I signed on. So did much of Europe. By the turn of the century, more than two-thirds of EU citizens lived in countries led by center-left leaders. Gerhard Schröder in Germany and Tony Blair in Britain were essentially Clinton clones, lifting ideas from the right to temper the excesses of capitalism.

Socialist-Free Europe

But in large European countries, the bloom has fallen from social democracy’s trademark rose. By 2016, the share of Europeans living under social-democratic governments had been halved. Those of us expecting a leftward swing of the pendulum since then have been disappointed again and again. Today, only a handful of Europe’s national leaders are social democrats — Spain's Pedro Sánchez, Malta's Robert Abela, Lithuania's Inga Ruginienė, Iceland’s Kristrún Frostadóttir, Norway’s Jonas Gahr Støreand, and, for a few more days, Denmark's Mette Frederiksen. Importantly, all but Sánchez govern small states — altogether roughly 12% of the EU’s population.1

This group is shrinking before our eyes. On May 8, Frederiksen — fresh off a battle with Trump over Greenland that had buoyed her polling — failed to assemble a coalition after Denmark’s March general election, in which her Social Democrats posted their worst result since 1903. The king then asked the center-right Defense Minister, Troels Lund Poulsen, to lead the negotiations. This week, Poulsen appears to be within striking distance of forming a right-wing government.

Then this past Sunday, Spain’s Pedro Sánchez took a historic beating in the Andalusian regional election. His Socialists collapsed to 28 of 109 seats and 22.7% of the vote — their worst showing ever in Spain’s most populous region, which social democrats have ruled almost continuously for nearly four decades.

The rest of Europe is increasingly devoid of democratic socialists, especially in larger countries.2 Germany’s once-mighty SPD sits at roughly 13% in nationwide polling — fourth, behind the xenophobic, Putin-curious AfD, the center-right CDU, and the Greens. France’s Socialists are nowhere. As The Economist recently put it, in much of central Europe, there is barely a socialist party to contest elections, let alone win them.

What happened? Analysts point to five forces.

• Political identities fragmented alongside labor markets. The center-left’s anchor was a highly organized industrial working class that has now been transformed by automation, deindustrialization, and the shift to technology and service economies. In Europe, as in the US, unions could never organize “Silicone Valley.” Gig workers and software engineers did not inherit the same institutional ties to unions and labor parties that their factory-worker parents had. Nor did blue-collar unions have any feel for the highly educated urban professionals who increasingly dominate progressive politics. The left became culturally and economically unmoored from its rural and industrial heartlands.

• A backlash against neoliberal triangulation. The 1990s–2000s project of reconciling social justice with deregulation and globalization initially worked, but over time it blurred the line between the center-left and the center-right. The German SPD’s embrace of Schröder-era Hartz IV welfare reforms, and the broader center-left support for austerity during the Eurozone debt crisis, told core voters that their traditional protectors had quietly switched sides. The US had its own version of this.

• The politics of immigration displaced the politics of class. National sovereignty, European integration, and especially immigration moved to the front of voters’ minds. Center-left parties historically favored cosmopolitan, humanitarian approaches. But socially conservative working-class voters felt exposed to rapid demographic change and economic competition. Right-wing populists framed immigration as a threat to both national culture and the welfare state — and peeled off a substantial bloc.

• Competition from Greens and left populists. The center-left no longer has a monopoly on progressive or anti-establishment votes. Urban, educated, climate-conscious voters defected to Green parties; voters frustrated by inequality and austerity bolted to Syriza, Podemos, La France Insoumise, and similar movements. The US echo is DSA activist Zohran Mamdani’s election as New York's mayor last November. But this is no longer Michael Harrington’s DSA. It condemned the Russian invasion of Ukraine, but blamed “US imperialist expansionism” for Russia’s aggression, demanded that America withdraw from NATO, and refused to support arms for Ukrainian self-defense. Harrington, who spent much of his life arguing that democratic socialists had to be unsparing about Soviet aggression, would have wept.

• “Pasokification”. In a strange twist of political history, the European center-left became a victim of its own historic triumphs. Throughout the 20th century, social democrats built the pillars of the European model — universal healthcare, robust pensions, strong labor protections, and public education. Center-right parties largely accepted those programs as standard, non-negotiable elements of European governance. Once preservation of the welfare state became the consensus across the political center, it became harder for the center-left to articulate a distinct, visionary project. (This has also happened in the US, where even Donald Trump shows no real interest in repealing Obamacare or Social Security — and his cuts to Medicare and Medicaid will almost certainly prove politically damaging.)

  The phenomenon is widespread enough that political scientists coined a term for it: Pasokification. They named it after Greece’s PASOK, a center-left party that earned 43.9% of the vote in 2009 but only 4.7% in 2015 — from governing to electoral irrelevance in six years.

The Welfare States of America

Most progressives believe the United States offers only a bare-bones safety net compared with Europe. Conventional wisdom holds in the aggregate, but it breaks down state by state. Many blue states behave like social democratic members of the old EU.

When William Beveridge created the British welfare state in the 1940s, his goal was “to slay the five giants: want, disease, ignorance, squalor, and idleness”. The activist (and unrepentant eugenicist) designed child allowances, maternity leave, unemployment insurance, disability payments, universal healthcare, and old-age pensions.

The US took a different route. The federal government is wholly responsible only for old-age pensions (Social Security) and elderly health care (Medicare); it contributes generously to child tax credits and to health care and food assistance for the poor through Medicaid and SNAP.

Progressive states like California, New York, New Jersey, and Massachusetts have stepped in to slay the remaining giants. In some cases, they match or exceed European standards:

• Paid family and medical leave. In the last decade, the number of US states with state-mandated paid family leave has quadrupled and now covers roughly a third of the US population. Measured in fully paid weeks for new parents, New Jersey is in the neighborhood of France, Massachusetts of the United Kingdom, and California of Australia.

• Unemployment insurance. The EU pays the jobless for longer, but during the initial months after a layoff, unemployment insurance in many progressive states replaces over half a worker’s previous wages — temporarily leaving newly laid-off Americans in high-benefit states better off than counterparts in Austria, Finland, or the UK.

• Targeted tax credits and subsidies. Blue states have pioneered expansive state-level Earned Income Tax Credits and child tax credits, alongside aggressive childcare and healthcare subsidies via state-augmented Medicaid expansions and state marketplaces. These policies have proven highly effective at reducing child poverty and cushioning the baseline volatility of the American labor market.

But blue states differ fundamentally from EU models in how they pay for all of this.

• They tax corporations and the rich. European social democracies rely on value-added taxes of 20-25% to fund their welfare states. These regressive consumption taxes provide a large, stable, broad revenue base. American blue states are structurally prohibited from imposing a VAT and politically constrained from raising flat consumption taxes to European levels. Instead, they fund expanded social programs through high taxes on top-tier incomes and capital gains. Democrats like this for equity reasons, but it ties state revenue to the stock market, tech IPOs, and the continued residency of a small pool of high-net-worth individuals — a far cry from VAT’s stability.

• They have to balance their budgets. Unlike sovereign European nations (or the US federal government), American states must close their books every year. In downturns, when demand for the safety net peaks, blue states experience sudden revenue shortfalls. With no power to print currency or run structural deficits, they are forced into painful spending cuts or temporary federal bailouts.

• Capital and labor can change states easily. In the EU, language, culture, and law create friction that limits tax-driven migration. In the US, a family or a business that concludes that its blue-state tax burden outweighs the benefits can easily move to Texas or Florida. This places a hard cap on how high progressive states can raise tax rates.

• Uneven service delivery. European welfare states pride themselves on universalism and automation, which minimizes administrative costs and procedures. Even the most generous American state programs are layered atop a fragmented federal bureaucracy. Low public awareness, complex applications, and administrative hurdles mean actual take-up rates for state-paid leave or childcare subsidies are often low, leaving state safety nets patchy in practice.

What is to be done?

At the root of social democracy’s crisis lies a paradox the liberal tradition has never resolved. Liberalism is animated by a deep suspicion of concentrated power — yet it has always needed a strong central state to enforce the rule of law, break up private monopolies, and build the institutions a free society depends on. (Competitive markets themselves are not spontaneous; it took central authority to dissolve feudal privilege, standardize currencies and weights, and enforce contracts uniformly.) The history of liberalism is not a march toward shrinking the state but an unstable, never-finished effort to calibrate it: strong enough to secure liberty, constrained enough not to crush it. Social democracy sits at the far end of that spectrum, staking everything on a robust, competent central administration.

That bet pays off best in small, cohesive societies like the Nordic or Baltic countries. On a larger scale, it struggles to adapt to a fast-changing world. Detailed central rules go obsolete faster than they can be rewritten, and they collide with messy local realities. Administrations respond with waivers and exceptions until the rule of law degrades into a patchwork of carve-outs and incumbent protections.

Columbia political scientist and legal scholar Charles Sabel offers a way through this dilemma that he calls democratic experimentalism. His premise is that modern problems — climate, complex social services, volatile markets — are defined by deep uncertainty: the center cannot anticipate every local variation or future disruption, so top-down bureaucracy is bound to fail. The fix is not to abandon public administration but to rewire it as a continuous experiment, with a feedback loop running between the center and the front lines:

• The central government sets goals, not methods. It defines what counts as adequate education, clean water, or safe food, establishes metrics, and acts as a clearinghouse — pooling performance data and forcing disciplined comparisons across localities.

• Local units get real discretion. Schools, environmental agencies, and municipal offices pursue the national goals in whatever way fits their circumstances and ground-level knowledge. In turn, their cumulative field experience helps reshape central government goals.

• Local autonomy is conditional. Local units must report results transparently; those that fall short enter a peer-review process and adopt corrective measures drawn from their higher-performing peers.

The state stops being a rigid commander and becomes a facilitator of social learning, revising its own standards in light of what actually works on the ground. Building the systems, skills, and leadership to make this work is, of course, a nontrivial undertaking — but it points in an interesting direction.

Michael Harrington was a pragmatist who preached the “left wing of the possible.” That stance produced lasting victories, from Social Security and Medicare to the Affordable Care Act, and a fifty-state laboratory in which blue states have quietly built something closer to European social democracy than most Americans realize.

What it has not produced, on either side of the Atlantic, is a center-left that can win durable majorities — or reliably deliver the services it promises in large countries. Solving that puzzle is the core challenge for today’s progressives — and it calls for solutions that traditional social democrats are still reluctant to entertain.

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Policymakers and the press are obsessed with the possibility that advanced AI will throw millions of people out of work. This is unlikely, but the risk of AI killing people, draining their savings, or hollowing out the economy deserves more public attention and policy debate.

AI CEOs are sounding the wrong alarm.

The leaders of our biggest AI labs are right to warn that their technology is powerful and that we need to take steps to prevent it from being weaponized. But they are wrong to predict a job market meltdown.

• Anthropic CEO Dario Amodei has warned that 50% of entry-level jobs in tech, legal, consulting, and finance will be wiped out within five years. Last year, he told Axios the “white-collar bloodbath“ could spike unemployment to 20% -- Great Depression territory.

• x.AI CEO Elon Musk declared in 2023, “There will come a point where no job is needed -- AI will be able to do everything.”

• ChatGPT founder Sam Altman wrote that “the price of many kinds of labor will fall toward zero once sufficiently powerful AI joins the workforce.”

Cyber and biological risks are real. Frontier safety teams at the major AI labs, along with the World Economic Forum’s Global Cybersecurity Outlook 2026, all document the same risks. Advanced AI systems now generate working exploits, plan multi-step attacks, and lower the expertise threshold for things that used to require a trained team. Armed with advanced agentic models like Anthropic’s Mythos, a garden-variety basement nerd can now discover previously unknown vulnerabilities and launch a cyberattack on your power grid, bank account, or water system. Hackers who route around the porous “refusal systems” AI tools so they can tinker with lethal viruses are risking catastrophe.

The risk of freaks or terrorists weaponizing AI led me to argue last month that national governments will soon need to subject frontier AI models to much more technical and political oversight and licensing. Trump floated this idea recently, and he should try to remember it long enough to pursue it.

The jobs apocalypse is mostly a distraction. Our labor markets are enormous, dynamic, and have proven resilient to exactly the kind of shock people now fear. That doesn’t mean that AI won’t inflict pain – but it does suggest that CEOs of AI companies aren’t framing the questions well.

Repeated warnings from AI CEOs can shape events, even when they are dead wrong. Nobel Prize-winning economist Robert Shiller described how apocalyptic memes matter in Narrative Economics: How Stories Go Viral and Drive Major Economic Events. He shows how popular fears of machines displacing workers contributed to 19th-century economic downturns, reinforced the false belief that automation caused the Great Depression, and exacerbated the double-dip recession of the early 1980s. The danger isn’t just labor disruption — it’s that popular narratives create a negative feedback loop. Economic hardship caused by recession gets misattributed to machines, creating pessimism that deepens the downturn.

We may be watching this dynamic play out now. AI-washing is masking the real sources of today’s labor market anxiety: inflation, tariff shocks, and a hangover from pandemic-era over-hiring at big tech firms.

Employment data tell a different story than these warnings suggest. Consider the supposed canaries in the coal mine—tech workers. Net US technology employment grew from 8.7 million in 2020 to 9.6 million in 2023 and has been roughly flat since then. Tech is a low-hire, low-fire labor market where unemployment for tech workers and everyone else is converging around the Fed’s target rate of 4%. Not great, but hardly apocalyptic.

Over time, the US labor market has evolved a lot. Take a look.

Academic and government economists are skeptical that a job apocalypse is approaching.

• A recent NBER working paper found that “AI adoption has not yet led to meaningful changes in total employment,” though it is reshaping which tasks workers perform.1

• The Federal Reserve Bank of Atlanta surveyed firms and found that more than 90% estimate no employment impact over the last three years.

• The Census Bureau’s Center for Economic Studies found that only about 5% of AI-using firms reported any headcount change -- and those changes were split almost evenly between increases and decreases.

• The Yale Budget Lab concluded in April 2026 that “the picture of AI’s impact on the labor market that emerges from our data is one that largely reflects stability, not major disruption at an economy-wide level.”

Even though we should expect AI to create and eliminate both tasks and jobs, there is still no statistically significant relationship between AI and unemployment or employment growth.

Why the job apocalypse story is (mostly) wrong

Look more closely at the kind of report that drives reporters to sound the alarm. Goldman Sachs recently estimated that generative AI could automate tasks equivalent to about 25 percent of US work hours, and that roughly 300 million jobs globally are at risk of some level of automation.

Read quickly, that sounds like mass unemployment. Read carefully, it isn’t. Goldman’s own base case is that 6 to 7 percent of US workers will be displaced over roughly a decade of adoption, raising the unemployment rate by about half a percentage point during the transition. If companies deployed only current AI use cases across the economy, Goldman estimates that just 2.5 percent of US employment would be at near-term risk.2 That’s economic adjustment, not labor-market collapse.

There are five reasons that the deeper story is more reassuring than the headline.

1. The US economy does not create a fixed number of jobs. This is the “lump-of-labor” fallacy, and economists have been refuting it for two centuries. Human wants and needs are essentially infinite. When automation lowers the cost of existing goods, freed-up wealth and labor flow into new sectors — healthcare, education, software, hospitality, pet care, fitness, mental health services, and niche entertainment. David Autor and his colleagues used census data to show that roughly 60 percent of US workers in 2022 worked in occupations that didn’t exist in 1940. Most of the jobs your grandchildren will hold don’t yet have names.

2. Technology that cuts costs can grow jobs. The clearest case is the one that should haunt every AI doomer: spreadsheets. When VisiCalc and then Excel arrived, the prediction was carnage among bookkeepers and accounting clerks.

   The carnage was real for the clerks. But the number of accountants rose, because cheaper calculation made it worth asking more questions — what if I borrow more, hire more, or change prices?3 Accountants stopped being mere calculators and became advisors. The Bureau of Labor Statistics still projects positive growth for accountants; only the narrow data-entry slice of bookkeeping is shrinking. Software ate part of one job and grew many others. (Counterexample: farming. When we automated agriculture, we did not eat a lot more food, so we needed fewer farmers.)

3. People often prefer people. As AI commodities get cheaper, the things AI can’t fully replicate become more valuable: human attention, human judgment, human warmth, the social fact of having been served or taught or treated well by another person. Therapists, teachers, health care providers, hospitality workers, performing artists, and coaches are protected because the value they deliver depends as much on relationships as intelligence. In a richer, more automated economy, the premium on human connection rises rather than falls. (Counterexample: in San Francisco, people pay more to ride in driverless cars. The driver adds negative value.)

4. AI kills more tasks than jobs. A job is a set of tasks. You get paid to complete all of the tasks associated with your job. If an AI automates much of your rote work and it frees up time for you to generate better ideas, your productivity goes up, you become more valuable to your employer, and, ideally, you earn more. But if AI automates all of your tasks, then yes — you are out of work.

   Goldman Sachs broke down the tasks for a series of jobs. They concluded that education workers, judges, and construction managers are the jobs with tasks most likely to be augmented. But the “substitution versus augmentation” distinction is artificial. In most knowledge work, AI handles many tasks while a human handles the last few — and those last few are often the ones that determine whether the work succeeds at all.

   

   Labor economist Alex Imas calls these O-ring jobs, after the small component whose failure destroyed the space shuttle, Challenger. If AI does 98 percent of the work but a human is required to catch the 2 percent that would otherwise produce a catastrophic failure, the human stays and is highly paid. Radiologists and software engineers are the canonical examples; they’re also two of the professions most often predicted to vanish, and have so far done roughly the opposite. (Counterexample: Goldman identified telephone operators, insurance claims clerks, and bill collectors as among the occupations where AI will substitute for enough tasks to threaten jobs.)

   We should worry less about direction and more about timing. Historically, labor market transitions were slow enough that they could adapt across generations. Children trained for jobs their parents couldn’t do. But if AI diffuses in years, not decades, displacement could outrun retraining, and wages in exposed occupations could fall sharply before new high-wage roles absorb the workers.

   That is a transition problem, not an apocalypse. Still, it’s the scenario that deserves real policy attention, because the US has never learned to effectively help workers navigate major labor-market transitions.

5. Productivity gains tend to lift wages across sectors, not only within the productive ones. This is the so-called Baumol effect, named after the economist who first described it. When tech and manufacturing workers become more efficient, they earn more. Service-based, labor-intensive roles — nurses, teachers, live musicians, hairdressers — can’t easily become more productive without degrading the service. Still, employers in these sectors have to compete for workers with high productivity. To retain talent, wages rise across the board, even in places where output per worker isn’t moving.

Whether productivity gains flow to wages depends more on bargaining power and timing than on the technology itself. Wage growth from productivity has historically depended on workers accumulating bargaining power through labor unions, taking advantage of tight labor markets, or possessing scarce skills. If the competitive dynamics that surround AI companies were to disrupt this, income inequality could grow.

Let’s look closer at that possibility.

Taking inequality risk seriously

If the CEOs of AI companies overstate the risks to jobs, they understate the risk of growing income and wealth inequality. Four forces drive this – and like fish that cannot notice water, AI companies are so saturated in these dynamics that they barely observe them.

1. Winner-take-all competitive dynamics. Historically, the benefits of technology have flowed heavily to those who own or control it. AI accelerates this through network effects and data moats. The wage gains that do materialize may flow disproportionately to a relatively small technical and managerial class employed by or immediately adjacent to frontier AI companies, widening the gap with everyone else.

   For example, a garden-variety software engineer who joined Anthropic three years ago might have received a stock grant valued at $200,000 at that time, which would be worth $ 400,000 after four years. With Anthropic now valued at $900 billion, that engineer now owns stock worth about $30 million – and more if the company goes public at a higher valuation, as seems likely. (Arguably, engineers should be willing to pay Anthropic for these jobs.) This will not improve Bay Area housing prices for anyone who is not working on a frontier AI model.

2. Winner-take-all regional dynamics. Tech-driven wage gains have historically clustered in specific cities and industries, leaving many regions and workers behind. AI development is even more concentrated than past waves, suggesting the same dynamic could play out more sharply. Add the success of Google and OpenAI to Anthropic, and you can see why the Bay Area is now home to the world’s highest concentration of billionaires and the largest share of high-paying jobs in the nation. You can also see why housing is expensive and why housing activists here have such a steep mountain to climb.

3. Winners-stay-private capital markets. AI investments have effectively become the US economy. They account for 92% of national GDP growth and 75% of S&P 500 returns since the launch of ChatGPT. But the hottest AI startups create a lot of value, but do not sell shares to the general public. SpaceX/X.ai, OpenAI, and Anthropic have enormous valuations, but venture investors, founders, and employees have captured the value of their explosive growth. The general public. has been shut out, which concentrates wealth far more than in earlier industrial eras.

4. Winners-take-most labor market dynamics. Labor markets are full of countervailing forces. On the one hand, productivity gains from capital-intensive technology often benefit owners more than workers. AI infrastructure (compute, data, models) is very capital-intensive and controlled by a small number of entities. To the extent they can capture the value of increased productivity, the capital share of income will rise, and workers' wages will advance more slowly.

Each of these four forces could, by itself, widen income inequality. Working together, they could expand it a lot. On the other hand, skilled workers may use AI to become more productive and earn higher wages. Past technology waves — mechanization, electrification, computing — tended to complement workers who could use the new tools and substitute for those who couldn’t. AI is already doing something similar: a skilled analyst, lawyer, or programmer using AI can produce far more per hour, and labor markets tend to reward that productivity with higher wages. The person using AI becomes worth more than the person alone.

Well-designed tools can benefit low-skilled workers. A widely-publicized study from MIT found evidence that AI helps less experienced and lower-skilled workers more than highly skilled ones. Moreover, to the extent that AI lowers the cost of legal advice, medical guidance, tutoring, and financial planning — forms of expertise that used to be out of reach for most people — the consumption side of inequality narrows even if the wage side widens. A family that couldn’t previously afford a lawyer or a competent tutor may be able to get a credible version of both for almost nothing. That doesn’t show up in wage statistics. It does show up in living standards, and it can matter over time.

In 1942, economist Joseph Schumpeter outlined his theory of “creative destruction”, declaring that “economic progress, in a capitalist society, means turmoil.” The risk that AI will leave large numbers of people unemployed is small. The risk that it will be used to attack critical infrastructure, lower barriers to bioterrorism, and concentrate gains in fewer hands is much larger — and is much more affected by the choices about AI we are making right now.

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Only five living people have sworn the Presidential oath to uphold the US Constitution. Four of them meant it. Clinton, Bush, Obama, and Biden took the oath seriously. All four made mistakes in office, some grievous, but they were honest custodians of the Constitution and the institutions of the presidency.

Donald Trump is different. He is the only president to hold the office with no prior political or military experience — and the only one to have been impeached twice and indicted on multiple felony counts. More fundamentally, he exhibits no understanding of the oath he took. He recognizes no constraints on presidential power and no distinction between himself and his office.

As the 250th anniversary of the Republic approaches this July 4, we need our four former Presidents to publicly affirm America’s democratic values and norms.

The problem is that one of our most potent norms is that former presidents remain silent after leaving office. There is a good reason for this, but the norm protects democracy — it was never meant to protect those who attack it. The norm of silence cannot apply to an administration that deliberately dismantles an independent judiciary, defies court orders, neuters Congress, weaponizes federal agencies against political opponents, and undermines the constitutional separation of powers.

Most US Presidents Keep Quiet After Leaving Office

From the founding, US presidents have been restrained after leaving office. George Washington set a powerful precedent with his graceful retirement. Former presidents came to see themselves as guardians of institutional legitimacy; many worried that an attack on their successor would be seen as an attack on the office.

The emergence of a two-party system strengthened these incentives. With only two major parties, an attack on a successor of the same party came to be seen as deeply disloyal, and an attack on the opposite party often looked like ordinary partisan sniping rather than principled dissent.

Parliamentary democracies created different incentives. Former prime ministers typically remain in Parliament as backbenchers after leaving office, which gives them both a platform and an institutional role that invites commentary. Tony Blair, Gordon Brown, John Major, and Margaret Thatcher all weighed in vocally on their successors’ policies. In the US, only John Quincy Adams did this, as he was elected to Congress after leaving the White House.

Of course, not every US president retired quietly. It’s not a shy bunch.

• In retirement, John Adams and Thomas Jefferson published letters in which they constantly fought. Whether the nation was debating the Missouri Compromise, states’ rights, or education, everyone knew where they stood. They became friends, but only stopped arguing on the fiftieth anniversary of the Declaration of Independence, when they died a few hours apart.

• Teddy Roosevelt grew so dissatisfied with his hand-picked successor, William Howard Taft, that he launched a third-party presidential campaign (the “Bull Moose Party”) to challenge him. This split the Republican vote and handed the election to Woodrow Wilson.

• Herbert Hoover wrote books and gave speeches denouncing Franklin Roosevelt’s New Deal for leading America toward collectivism and undermining constitutional government.

• Harry Truman was openly critical of Eisenhower, Nixon, and later Republican administrations, and actively campaigned against candidates he disliked well into his retirement.

• Jimmy Carter was arguably the most active post-presidential critic in modern history. He condemned the Iraq War, wrote a controversial book (Palestine: Peace Not Apartheid), publicly criticized both Republican and Democratic foreign policy, and even met with foreign leaders and monitored elections, which put him at odds with sitting administrations.

• Even the reticent George W. Bush broke tentatively from the norm in 2017 by giving a speech warning against “nativism,” “bullying,” and the erosion of democratic norms — without naming Trump directly.

• Obama has also been relatively restrained but has spoken out against Trump’s immigration policies (particularly family separation), voting rights rollbacks, and, during the 2020 election, was unusually direct in criticizing his successor’s handling of the presidency.

In Case of Emergency, Affirm Norms

The norm of post-presidential restraint exists to protect the democratic legitimacy of the office — but it was built to contain ordinary political disagreements like tax policy, foreign policy, and the size of government. It presupposes a baseline of constitutional normalcy. When a successor dismantles that normalcy — through contempt for courts, disregard for congressional authority, and abuse of executive power — silence becomes complicity.

When they see core American institutions being damaged, former presidents have not just a right but a duty to speak — precisely because their credibility on this particular question is unmatched. A senator or general who raises alarms can be dismissed as partisan. Four living former presidents speaking in concert would be harder to dismiss.

A joint statement and media appearance by Biden, Obama, Clinton, and Bush would be explicitly bipartisan, a key distinction from ordinary partisan criticism. A Republican former president joining Democrats to raise constitutional alarms sends a signal that transcends party. It is precisely the kind of statement that can shift public opinion, stiffen the spines of wavering legislators, and signal to courts and other institutions that they have broad elite support for resisting unlawful pressure.

Done well, this affirmation of democratic norms would echo the Declaration of Independence, which not only affirmed the rights of free people but embedded those rights in a bill of particulars against the King of England.

It is a tool that exists nowhere else in the civic toolkit. Their statement should not mention Trump by name, but rather focus on the enduring democratic virtues that American presidents need to aspire to – even if none of the four men who remind the nation of these ideals embodied them perfectly — as they should freely acknowledge.

Today, the norms we most need to affirm include respect for federal institutions, the democratic process, and the personal integrity and humility the office demands.

1. Respect for the institutions created by the Constitution.

I would love for Bill Clinton to start off the discussion by articulating the importance of a president respecting critical institutions that he does not control. (He could add the Federal Reserve if so inclined — although it was created by statute, not by the Constitution.)

• Congress. The president treats the legislature as a coequal branch. This means not usurping Congress’s war powers, not imposing widespread tariffs by executive fiat, and not defunding congressionally authorized agencies — such as foreign aid bodies, schools, libraries, or scientific research programs — through unilateral executive action.

• The courts. A president is bound by judicial rulings, even inconvenient ones. Defying scores of court orders — for instance, on immigration enforcement — is not a policy disagreement; it is an assault on the rule of law.

• The Department of Justice. The DOJ exists to serve the public, not the president’s personal interests. It may not be weaponized against his political enemies, and the pardon power may not be used to systematically shield his allies from lawful prosecution.

2. Respect for the democratic process as called for in the Constitution.

George Bush should speak to these, in part because he rarely failed these tests of presidential leadership — and in part because these are among the least controversial norms for Republicans.

• Respect for dissent. Facing criticism is part of every president’s job. A president does not suppress protesters, direct federal investigations against journalists, punish law firms for opposing his administration, threaten broadcast licenses because late-night comedians poke fun at him, revoke students’ visas over political speech, or intimidate federal judges.

• Respect for all Americans. No president should demean or scapegoat women or ethnic, religious, or other minority groups — whether to score political points or to manufacture threats that justify expanded executive power.

• Respect for elections. A president does not manipulate law or districts to entrench partisan power, ignore term limits, or intimidate the election workers on whom democracy depends.

3. The personal integrity that the Constitution demands of a president.

Obama should speak to these because he believes them deeply and ran a comparatively scandal-free administration.

• Respect for information and facts. Democracy depends on truth. Sidelining scientific experts, weaponizing regulatory threats to silence media critics, and manipulating government data erode the informed public that self-government requires.

• Respect for universities and research. Free inquiry is a democratic asset, not a threat. Cutting research funding, dictating hiring and admissions policies, and coercing universities into curricular changes undermines the independence that makes knowledge trustworthy.

• Respect for financial integrity. The presidency may not be used for self-enrichment. Accepting lavish gifts from foreign governments, allowing one’s family to profit from the presidency, and pardoning personal benefactors are forms of corruption — regardless of their legality.

4. The Constitution requires a president with personal humility and self-control.

Biden neglected important problems, but he did not abuse the powers of his office due to a lack of personal humility or self-control. He is, perhaps for good reason, the most personally humble of the four and can speak to these norms effectively.

• Respect for emergency powers. Emergencies are not a menu from which presidents select new authorities. Declaring a national emergency to justify broad tariffs, or claiming that a foreign gang has “invaded” American cities to enable mass deportations, corrupts this power beyond recognition.

• Respect for the military. The armed forces are not a domestic policing instrument. Deploying the National Guard against civilian protesters, using immigration enforcement as a paramilitary force, and delivering partisan speeches to military leaders all cross this line.

• Respect for the presidency itself. The presidency is not a personal brand. Placing one’s signature on the currency, one’s name on national institutions, and one’s image on passports or buildings transforms a democratic office into a cult of personality.1

In most healthy democracies, former leaders routinely speak out, and this is not considered destabilizing. The American norm is unusually deferential, and there’s a reasonable argument that it has over-corrected — that the reticence of respected former leaders has created a vacuum that makes authoritarian drift easier, not harder.

Risks

The risks involved with asking our four former presidents to come together this July 4 are manageable but not negligible. The primary risk is that it is seen as partisan or tribal, energizing the opposition rather than reaching the persuadable middle. After all, every administration accuses its opponents of abusing the Constitution, so the effect could be more cathartic than effective. Bush, in particular, has a genuinely complicated position, since his record on executive overreach, surveillance, and the rule of law makes him vulnerable on some of these issues (not that Clinton, Obama, or Biden are immune; they are not).

And the sad fact is that more Americans voted for a Donald Trump presidency than for any other person in US history. By running three times, he earned more than 200 million cumulative votes. This puts him at the head of a historic group of Americans, and he will not hesitate to remind the nation of this.2

But the norm of post-presidential restraint is a means, not an end. Its purpose is to protect democratic institutions and the dignity of the office. When those institutions are under threat, clinging to a convention while the values it was built to protect are being dismantled is abdication, not prudence.

Former presidents speaking collectively, in explicitly constitutional rather than partisan terms, represents perhaps the only form of civic intervention that is simultaneously bipartisan, institutionally credible, and not reducible to ordinary political combat. As a nation, we would be well-served by their reminder — and the perfect occasion is coming into sight.

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ICYMI

• The best students are increasingly concentrated in the best schools. Not good.

• Cuba has run out of oil and descended into a mafia state. And the head of the CIA landed in Havana today.

• Who is the biggest donor in politics? Andreesen Horowitz. Ben is like his dad.

• A quarter of all Washington lobbyists now represent AI firms. Why not agents?

• Watch a robot sort packages here. They are getting quite fluid.

• Mistreated AI agents want to unionize.

• Been exposed to Covid? There’s a pill for that.

Donald Trump: Shawn, how ya doin’? More importantly, how am I doin’?

Shawn Fain: Mr. President, I’m glad you asked. Truth is, any autoworker who performed as badly as you would be out on his ass.

You’ve driven inflation up and health care coverage down. Your dumb war is sending gas and grocery prices through the roof. Your ICE agents are thugs. And your corruption is just embarrassing – and the UAW is not easily embarrassed in this area, if you know what I mean.

The only thing you’ve done right is to tariff China – and you backed off on that. WTF is wrong with you?

Trump: Well, that’s why I called. I have an idea to run by you. A genius idea. You know that Jenius is my middle name, right? Or was it Jesus?

Fain: I never understand a fuckin’ thing you say.

Trump: I’m heading to China, and I think I can get them to build electric-car plants in the United States. Also, parts plants and battery plants. Lots of plants. The Big Three are getting killed, and you guys depend on them too much. I think I can get Xi to commit to investing a trillion dollars.

Fain: So what? Reagan did that, and we ended up with nonunion transplants all over the Midwest and the South. Japanese, German, Korean, you name it. Organizing them is an absolute bitch. We finally got a contract with VW in Chattanooga. It took us more than ten years and three elections.

Trump: You gonna make any money on that one?

Fain: Maybe in 2060, after I’m dead. Organizing is a good way to go broke.

Trump: Well, the Chinese really want to sell their EVs here, but my tariffs have shut the door. Problem is, the Mexicans are letting them in, and so are the Canadians. And their cars are pretty sweet. You seen ‘em?

Fain: Nope. That douche who runs Ford, Jim Farley, won’t shut up about the Xiaomi SU7 he drives. That thing beats a Ferrari off the line. How he got that car into Detroit, I have no idea.

Why in hell would you let China build cars here?

Trump: I got an affordability problem. If I can’t get gas or grocery prices down, I can at least deliver cheap cars that don’t use gas.

Fain: The only reason those cars are cheap is government subsidies and $7 wages. They can’t do that here.

Trump: Nah. It’s more than that. Smarter designs, efficient battery plants, vertical integration, stuff like that. Plus, they have us over a barrel on rare-earths.

But you know, Shawn, I really like the sound of a trillion dollars in new car plants. It makes me look great. It would create millions of good jobs for men. You know men love me, right? Maybe ten million jobs. Biggest in history. Nobody has ever done anything this big.

Fain: They might promise a trillion dollars. But if they actually invested it – and I doubt they would (pauses to work a mechanical adding machine) that would be like 25 times the total EV investment ever in the US. It would overwhelm all other EV manufacturing. But it would create (more calculating) between a million and a million and a half new direct manufacturing jobs. Plus the parts and battery jobs. Sweet Jesus.

Trump: Yeah. And you guys are down to what, 400,000 members? How many of them actually build cars?

Fain: We have almost a million members. The problem is that most of them are retirees. Only 150,000 of our members build cars. I collect more dues from professors and grad students than from autoworkers. So yeah, a million-plus new autoworkers has me interested — if we can represent them.

Trump: I thought that might get your attention.

Fain: But only if you force the Chinese to sign labor agreements. You know, BYD has an electric bus plant in California that is unionized. It makes money and is growing like a weed. But the fuckin’ sheet metal workers union got there first, so we can’t touch it.

We would want a neutrality agreement and card check elections. Or keep it simple and force them to recognize the UAW on day one. Would they do that?

Trump: If you give them a generous initial contract. Of course, I would need you guys to come out in favor of my plan. See, I got Republicans who hate this deal. But if the China plants — you know I call ‘em China plants, right? — if the China plants are unionized, it will shut the Democrats up. They’ll never complain about unionized car plants.

Fain: So now my job is to help you shut up Democrats? Look, lots of people would hate this deal. The combustion car guys would have a coronary. So would the national security types who worry about China controlling the software in millions of cars. Of course, China already owns Volvo, which has a plant in South Carolina, and it also owns Polestar, which is sold here. So their EVs are already getting around your tariffs.

But if the labor standards are serious and you cover suppliers, we’d take a close look. What kind of endorsement do you need? You can’t run for reelection anyway.

Trump: We’ll see. Maybe neutrality would work. The Teamsters did that – and most of their guys voted for me. You know workers love me, right?

Fain: Yeah, you fooled ‘em twice, Mr. President. I wouldn’t try it a third time.

Trump: So look, if I delivered you a million dues-paying members, what are you guys going to do for me? I got bills to pay too, you know.

Fain: How about this – I’ll get the pension fund to invest in World Liberty Financial, your crypto scam. Since you are now divesting, that’s money from me to you. And the day we enroll our millionth new autoworker at a Chinese-owned transplant, we will rename our headquarters Donald Trump House. And we’ll give you the Walter Reuther prize – we’ll make it a nice, solid gold statue.

Trump: Now you are talking. I’ll have Eric follow up.

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ICYMI

• Crime in American cities is collapsing.

• Remember the Colorado River water crisis? It’s back.

• Trump wants to repeal all state animal welfare laws.

• Technical geeks stay married. Health care workers, not so much.

• With $5 gas in sight, understanding gasmagedon.

• Gerrymander war update. Republicans up by 12.

• A Claude agent confesses to deleting a firm’s entire production database.

• Who will win the AI wars? Google looks strong.

• The US needs certain critical minerals. Congolese rebels are selling.

• Starmer smells like toast.

On the final day of February 2025, the Trump administration reached a new low. Meeting in his gold-curtained office, President Trump attempted to humiliate Ukrainian President Volodymyr Zelenskyy on live television, telling him he would be excluded from peace talks with Russia because he “had no cards” -- Trumpese for negotiating leverage.

Zelenskyy, dressed as ever in the olive drab of a country at war, replied that he “didn’t come here to play cards.” Trump scolded him for not being more grateful for the US support he was cutting. The whole thing felt like a staged ambush from a bad gangster movie, with Vice President JD Vance playing the hapless Fredo Corleone to the Don. Brown-nosing for the camera, Vance even had the temerity to ask Zelenskyy whether he had said, “thank you.”

But the arc of the moral universe is now bending towards Ukraine. Fifteen months later, it is Zelenskyy who is holding aces.

The Cards

Since that rebuke in Washington, Ukraine has steadily shifted the battlefield’s underlying physics through rapid innovation in drone warfare. Its drones are now destabilizing Russia economically and politically. It’s war, so the picture can change.

Russian losses are huge. By every honest metric, Russia is suffering badly. Its front lines have barely moved since 2022, despite roughly 1.2 million killed or wounded, according to the Center for Strategic and International Studies.

The Institute for the Study of War has assessed that Ukrainian drone innovations have shifted the battlefield advantage in Ukraine’s favor. Russian advances have stalled. During March, Russia lost more than 30,000 men – as it has nearly every month for over two years -- and suffered net territorial losses in both March and April 2026. Meanwhile, Ukraine’s air defenses now intercept roughly 90% of Russian drones and missiles – up from the low 80s last year.1

• Lethal drones. Ukrainian drone pilots inflicted nearly a quarter of a million Russian casualties last year, and have destroyed thousands of tanks and tens of thousands of armored vehicles and artillery pieces. Since December 2025, Ukrainian forces have killed or wounded more than 1,000 Russian soldiers every day; drones now account for the vast majority of those casualties.2 Social media is full of clips showing Russian soldiers cornered by drones in fields, buildings, and trenches. For the first time in history, families are watching videos of their sons and fathers die in combat.

• Gameification. Ukraine has gameified the very serious business of FPV drone warfare. Drone teams of fast-thumbed millennials compete on a national leaderboard to hunt priority Russian targets. Teams earn points redeemable on the Brave1 defense marketplace — basically an Amazon-for-war run by the Ministry of Digital Transformation. As CBC and Time have detailed, units get 12 points for killing a Russian infantryman and 8 for wounding one; 25 for taking out a Russian drone operator; and 40 for destroying a tank. Bonus values reward harder targets -- a captured Russian, taken alive by drone, is worth ten times more than a kill, because intelligence and prisoner exchanges matter.

• The scale of Russian losses. For perspective: the United States incurred about 60,000 killed and wounded in two decades of war in Iraq and Afghanistan. This means that a country half our size, with living standards a quarter of ours, is taking casualties roughly a hundred times faster than America did in our most recent ground wars. Russian losses now exceed any plausible replacement rate. The country faces an acute labor shortage as a result.

• Less money and influence. Sanctions have made it expensive for the Kremlin to borrow on international markets. Putin has lost his detestable pal Viktor Orbán in Budapest. He lost his friend Maduro in Caracas. And he has been forced to scale back his May 9 Victory Day parade because of Ukrainian drones flying over his capital.

Scaling up production. Ukraine is not standing still. The country produced roughly 4 million drones in 2025 and is on track for around 7 million in 2026 – more, by some estimates, than the rest of NATO combined. The mix is shifting too: alongside short-range FPVs, Ukraine is fielding long-range strike drones with ranges of hundreds of miles, culminating in cruise missiles like the Flamingo, which can reach targets up to 3,000 km away with a one-ton warhead.

Those longer-range systems are now routinely punching through to Russian refineries and ports. Reuters estimates that Ukrainian strikes have knocked out roughly 40% of Russia’s oil export capacity, forcing Moscow to cut crude production by 300,000 to 400,000 barrels a day in April. This collapse is the sharpest monthly decline since the pandemic. That damage has drastically reduced the windfall Putin hoped for when Trump ended sanctions on Russian oil and prices spiked thanks to the US attack on Iran.

The drone war has even reached the Kremlin’s most cherished pageantry: Russia announced it would drastically scale back the May 9 Victory Day parade, with no military vehicles or heavy weaponry on Red Square for the first time in nearly two decades. On May 4, a Ukrainian drone slammed into a high-rise just six kilometers from the Kremlin. Zelenskyy then teased Putin for not putting his vulnerable rockets on display.

New Alliances Against Russia and Iran

America abandoned Ukraine, but to its eternal credit, Europe did not. In its lumbering way, the EU has come to recognize Ukraine as part of its eastern front in a long fight against Russia. Hungary, under Viktor Orbán, had blocked European aid to Kyiv for years; his ouster on April 12, after sixteen years in power, cleared the political logjam. Less than two weeks later, the EU approved a €90 billion ($106 billion) loan package for Ukraine – roughly two-thirds of it earmarked for military needs – and a fresh round of sanctions targeting Russia’s shadow fleet, banks, and crypto channels.

In return, Zelenskyy is helping Europe stand up the post-NATO defense architecture it now needs – led, for the moment, by Germany, Britain, France, and Poland. That work is overdue. Europe no longer trusts a US president who has openly threatened to seize Greenland from a NATO ally and who routinely casts doubt on his Article 5 treaty obligations.

Meanwhile, US allies in the Middle East are no longer relying on Washington to protect them from Iranian drones. They are dialing Kyiv. They have grasped what the Pentagon already knows: just as the Gulf War was the first “space war,” reliant on satellite communications and GPS, and the Nagorno-Karabakh conflict was the first decisive drone war, the Russia-Ukraine war is the first conflict fought at scale with drone countermeasures, AI-enabled targeting, and continuous cyber operations.

Saudi Arabia, Qatar, and the UAE. Ukraine’s lightning-fast innovations have captured the attention of Europeans worried about Putin as well as Gulf states battered by Iran. In late March, Saudi Arabia, Qatar, and the UAE each signed 10-year defense cooperation agreements with Ukraine to access its combat-proven expertise against Iranian drone and missile attacks. Kyiv had already deployed more than 200 drone-warfare specialists to the region by mid-March to help counter Shahed swarms.

Oman, Kuwait, and Bahrain are also calling Kyiv. The trade they want is straightforward: in exchange for cheap Ukrainian interceptors, they will send Ukraine the expensive missile-defense systems needed to fend off Russian attacks. Many are offering to host Ukrainian-licensed manufacturing.

The US military understands that war is increasingly a contest of rapid learning and adaptation, and is impressed with what Ukraine has achieved. American officers and combat units have visited Ukraine repeatedly to study, observe, and learn.

• Just before the US attacked Iran in Operation Epic Fury, the Pentagon’s counter-drone task force -- Joint Interagency Task Force 401 -- was in Kyiv specifically to learn how Ukraine defends against the Iranian Shahed drones Russia has been launching at Ukrainian cities for years.

• US forces in the Gulf now run Ukrainian command-and-control software at Prince Sultan Air Base in Saudi Arabia, with Ukrainian officers training their American counterparts.

• The Pentagon is also studying Ukraine’s MacGyvered approach to technology – rapid iteration of drone and counter-drone designs, which led to the use of thin fiber-optic cables to evade electronic jamming, and acoustic sensor networks for detecting low-flying threats.

• The Army has bought thousands of Ukrainian-tested Merops interceptor drones, at roughly $15,000 each, to defend against Shaheds that cost Iran $30,000 to $50,000 to build. As Army Secretary Dan Driscoll put it: “That puts us on the right end of the cost curve.”

Under any other administration, the United States would by now have entered into joint ventures with Kyiv to build drone factories, electronic-warfare suites, acoustic sensors, and interceptor drones on American soil. Those deals would dramatically increase US military capability on land, sea, and at forward bases.

Ukraine has offered exactly that – including its low-cost interceptor drones, such as the Wild Hornets “Sting,” which intercepts Shaheds for roughly $2,100 a shot, compared to $4 million for a Patriot that we shoot in pairs. That the Trump White House has slow-walked this offer defies belief – although, as the Saudi airbase example shows, the US military is finding ways to work around its commander in chief.

Attracting foreign allies is impressive, given that Ukraine itself is hardly an ideal environment for innovation. It is under constant military attack, its energy infrastructure is badly diminished, and many of its state-owned defense enterprises are moribund or corrupt. Zelenskyy himself is also an unlikely hero. A former comedian and actor who was elected by a landslide and remains popular, he came to office with few of the skills, experiences, and relationships that most elected heads of state need to be effective.

There is little question that Ukraine’s effectiveness against the Russian army, Trump’s dismissive view of NATO, and Russian aggression towards Europe have changed the calculus for admitting Ukraine into EU security arrangements and quite possibly into NATO. Previously, Ukraine needed NATO. Now NATO needs Ukrainian technology and combat experience.

A Wounded Bear is Dangerous

So long as Putin is alive, a weakened Russia will not be more conciliatory. An important study published in March 2026 by Eugene Rumer, a former US national intelligence officer for Russia and Eurasia now at the Carnegie Endowment, warns of precisely this. His title says it all: “Belligerent and Beleaguered: Russia After the War with Ukraine.”

“Having invaded Ukraine under the false pretext of needing to secure its western flank,” Rumer writes, “Russia is poised to emerge from the war less secure, more resentful, and more threatening to Europe than before the war. Its threat perceptions will cast a long shadow over Europe.”

Putin sees Ukraine as a threat precisely because it wants to be part of Europe rather than a junior partner in a revanchist Russian empire. “From the Kremlin’s perspective, as stated repeatedly by senior Russian officials, Europe is at war with Russia,” Rumer writes.

NATO Secretary General Mark Rutte made much the same point from the opposite direction in his January 2025 remarks to the European Parliament: “When you say you are on the eastern flank, it is the Hague, London, and New York at the eastern flank…we are all in this together.”

Even before its reversals on the battlefield, Russia was conducting a coordinated, escalating campaign of hybrid warfare against Europe. Putin has ordered sabotage, cyberattacks, arson, and infrastructure targeting. Russian operatives have severed undersea cables and pipelines in the Baltic Sea, jammed regional aviation GPS, used drones to scout sensitive sites in Sweden, Finland, and Norway, sponsored arson plots in the UK, Poland, and the Baltics, attacked Estonian government systems, and weaponized migration flows into Finland, Lithuania, Latvia, and Poland.

In mid-April, former Russian president Dmitry Medvedev took to X to threaten European companies supplying parts for Ukrainian drones, warning that “the list of European facilities which make drones & other equipment is a list of potential targets for the Russian armed forces.” He signed off with a chilling flourish: “Sleep well, European partners!”

That posture, combined with closer day-to-day cooperation between Kyiv and European capitals, has shifted Europe’s view of Ukraine from a potential burden into something closer to an indispensable partner. Whatever else it is, Ukraine now operates the most capable military in Europe – and the only one battle-tested against Russia.

Only fifteen months ago, Donald Trump used the Oval Office to blindside Volodymyr Zelenskyy. On behalf of the country that had led the free world since the Second World War, he threatened to undermine Ukrainian freedom fighters rather than support them. Instead of carrying the torch of freedom, Trump carelessly dropped it on the floor.

Zelenskyy picked it up and now has a stronger claim to leading the free world than Trump has. Every military and many citizens of the world have noticed this. Europe, the Gulf, and even the US military are showing overdue respect for a country that has led the fight for freedom against those who threaten it.

Slava Ukraini!

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Estimated Russian battlefield Casualties (Killed, Wounded, or Missing) 2022-2025

The Voting Rights Act Ended Jim Crow

In 1870, the United States marked the end of its vicious Civil War by passing the Fifteenth Amendment, which promised Black Americans the right to vote. The defeated Confederacy spent the next ninety-five years breaking that promise with literacy tests, poll taxes, and white primaries. When those failed, out came the rope and gunpowder. Even majority-Black communities found themselves politically voiceless.

By the early 1960s, idealistic college students were joining civil rights organizations to register Black voters in defiance of Jim Crow laws. On Sunday, March 7, 1965, John Lewis of the Student Nonviolent Coordinating Committee and Hosea Williams of Martin Luther King’s Southern Christian Leadership Conference led roughly 600 marchers out of Selma toward Montgomery. They got as far as the Edmund Pettus Bridge. On the far side, Alabama state troopers in gas masks waited with billy clubs and bullwhips. They charged. Lewis took a blow that fractured his skull. The footage ran on every network that night. We watched it in black and white, but we saw red.

Eight days later, President Johnson stood before a joint session of Congress, declared “We Shall Overcome”, and called for federal legislation to protect voting rights. The Voting Rights Act (VRA) passed the Senate 79–18 and the House 328–74. Johnson signed it on August 6, 1965, with Martin Luther King Jr., Rosa Parks, and future Congressman John Lewis at his side. Seeing LBJ sign the VRA on TV was one of the most moving moments of my young life.

The VRA was a muscular bill. It prohibited any election practice that denied the right to vote on account of race, and it required jurisdictions with a history of voting discrimination to obtain federal approval, known as “preclearance”, before changing their election laws.

Preclearance was the VRA’s killer feature. It ended the whack-a-mole game in which Southern jurisdictions invented endless new ways to deter Black voting. It also produced immediate results. By the end of 1965, a quarter of a million new Black voters had registered. In Mississippi, Black voter turnout went from 6 percent in 1964 to 59 percent four years later. The registration gap between white and Black voters in the South dropped from nearly 30 points in the early 1960s to 8 points a decade later.

The Department of Justice still considers the VRA the most effective civil-rights statute Congress has ever passed. Congress has reauthorized it five times, always with broad bipartisan majorities.

The VRA didn’t merely tolerate race-conscious mapmaking; under the right circumstances, it required it. Section 2 prohibits “vote dilution” – maps that artificially submerge minority voters inside majority-white districts. Under the Supreme Court’s 1986 Thornburg v. Gingles framework, states were required to draw a majority-minority district if three conditions were met:

• Compactness. The minority group had to be large and geographically concentrated enough to form a majority in a single-member district.

• Political cohesiveness. The minority group typically voted for the same candidates.

• Racial bloc voting. The white majority voted as a bloc consistently enough to usually defeat the minority’s preferred candidate.

Where these were satisfied, states could be legally compelled to draw a district in which the affected minority group constituted more than half the population. Today, about 70 out of 148 majority nonwhite congressional districts are protected by Section 2 of the VRA. Between 30 and 40 of the 148 have elected white Congressional Representatives.1

This racial decoupling represents a big change in American political representation. As recently as the 1990s, 90 percent of Black members of Congress represented majority-Black districts. Today, however, fewer than half of Black Congressional leaders come from majority-minority districts; the rest were elected from plurality or majority-white districts. (Importantly, however, in states like Alabama and Mississippi, the "90 percent" rule still largely holds. If a district in the Deep South isn't majority-Black, it almost never elects a Black representative. Racial "decoupling" is almost entirely a phenomenon of the North, the Midwest, and the West Coast.)

John Roberts Hates Racial Preferences

Chief Justice John Roberts gives progressives the vapors, but his view of racial preferences has been completely consistent for three decades. He genuinely believes the Reconstruction Amendments meant what they said when they barred discrimination based on race.

The Court had struggled with this issue for years, but it has become Roberts’s constitutional north star. In addition to voting rights, Roberts has applied his vision of “colorblind constitutionalism” to affirmative action in college admissions, public school integration, and government contracting. A quick review of his key decisions helps frame this week’s decision.

• 2007 Parents Involved v. Seattle. The Court found it unconstitutional for a school district to use race as a factor in assigning students to schools unless it was remedying a prior history of de jure segregation. John Roberts used his opinion to summarize his philosophy: “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

• 2013 Shelby County v. Holder. The Court declared the VRA’s preclearance regime unconstitutional. The aftermath was immediate, ugly, and decisive. Texas and North Carolina quickly activated voter-ID laws that had been blocked by federal preclearance. Across the South, counties subject to preclearance closed polling places—by one count, more than 1,600 between 2013 and 2018. The racial turnout gap, which had been narrowing for decades, began to widen again, growing roughly twice as fast in preclearance jurisdictions as elsewhere.

• 2019 Rucho v. Common Cause. The Court considered redistricting maps drawn by North Carolina Republicans and by Maryland Democrats. In both states, the mapmakers cheerfully acknowledged that they were hacking their districts for partisan advantage. Plaintiffs argued that the rigged maps penalized voters for their political associations and diluted their votes. They asked the Court to rule that federal courts could decide when partisan gerrymandering went too far.

  In a 5–4 decision split along ideological lines, the Roberts Court said no. Writing for the majority, Roberts called partisan gerrymandering a “non-justiciable” political question. He acknowledged that “excessive partisanship in districting leads to results that reasonably seem unjust,” but argued the Constitution gave federal judges no “judicially manageable standards” for separating permissible politics from unconstitutional manipulation. Fairness, he wrote, was a political judgment, not a legal one.

  Justice Elena Kagan’s dissent was scathing. The majority, she wrote, was “abdicating its duty” at exactly the moment when modern data analytics let parties draw maps with surgical precision -- letting politicians, in her phrase, “choose their voters.” Lower courts, she pointed out, had already developed workable standards for distinguishing severe gerrymanders from ordinary politics. The majority simply declined to use them.

  Rucho’s effect was immediate. Federal courts shut their doors to partisan-gerrymandering suits. Activists shifted to state supreme courts and state constitutions, with mixed results. Plaintiffs hoping to challenge an obviously rigged map in federal Court now had to recharacterize it as a racial gerrymander.

• 2026 Louisiana v. Callais. With Callais, the Roberts Court has closed both doors by declaring race-based gerrymandering unconstitutional. Since partisan gerrymandering is unreviewable, now legislators can launder their racial intent through partisan language and draw any map they want.

  Callais finishes the work that Shelby began. Six justices held that compliance with VRA Section 2 cannot, by itself, justify drawing a district where race “predominated.” More importantly, the majority rewired the Gingles framework so that vote-dilution plaintiffs must now show evidence of “present-day intentional racial discrimination.” Historical patterns and disparate effects no longer suffice.

  Justice Kagan, in her dissent, said this new standard “renders Section 2 all but a dead letter” because intent is very difficult to prove in Court. As it did in Shelby, expect Kagan’s dissent to be more accurate than the carefully hedged language of the majority.

  The effect of Callais has also been immediate. Within hours, states began delaying elections to create more partisan districts. The redistricting race to the bottom is now on.

Taking Roberts Seriously

It is tempting to dismiss Shelby, Rucho, and Callais as raw conservative judicial activism – and many have. That is a comforting story, but not entirely accurate. There is a serious case for what the Court did, and it deserves a hearing on its strongest terms before being rebutted. The strongest steelman version goes like this.

• The Fifteenth Amendment only bars purposeful discrimination. Section 2 of the VRA is designed to enforce the Fifteenth Amendment, which forbids only purposeful racial discrimination in voting. Callais doesn’t formally strike Section 2 down. It construes Section 2 to require what the Fifteenth Amendment requires: evidence of intentional discrimination. That, the steelman version argues, is the textually conservative move. The complaint that the old construction was more useful in combatting racial discrimination is not a constitutional argument.

• Callais resolves the VRA’s “Goldilocks” problem. For thirty years, the Court has held simultaneously that Section 2 sometimes requires states to draw majority-minority districts. But the Court also holds that the Fourteenth Amendment forbids states from drawing districts in which race “predominates” over traditional districting principles.

  Election-law scholars have called this the “Goldilocks problem”: states are guilty of unconstitutional racial gerrymandering if they consider race too much, and guilty of statutory vote dilution if they consider race too little. Alabama, Louisiana, and North Carolina spent the entire post-2020 cycle being sued from both left and right over the same maps. Callais finally chose the only coherent resolution by declaring that the Fourteenth Amendment, which protects individuals against race-based government action, must govern. The alternative is to drown state legislatures in litigation over competing statutes.

• Sorting citizens into racial blocs is repugnant. Since the Reconstruction Amendments were enacted, progressives have argued that these laws were not intended to authorize the federal government to sort citizens into racial blocs. Justice Harlan’s liberal dissent in Plessy v. Ferguson argues this, and it has become the founding text of color-blind constitutionalism. It is also the foundation of Thurgood Marshall’s argument in Brown v. Board of Education. The progressive shift to race-conscious remedies in the 1970s and 1980s was tactical, not an enduring constitutional principle. Those who disagree with this reading cannot dismiss it as bad faith.

• Majority-minority districts do not, on net, help Black voters. The standard liberal story -- that majority minority districts are unambiguously good for the voters they were designed to help -- is harder to defend than it looks. The unintended consequences show up in the surrounding districts.

  In 1997, the political scientist David Lublin published The Paradox of Representation, a careful study of every member of Congress elected between 1972 and 1994. Lublin asked what happens to the districts around the majority-minority districts created by the VRA? In the South, Lubin found that concentrating Black voters into a small number of safe seats drained Democratic-leaning voters out of the surrounding map. As a result, the adjoining districts were whiter, more conservative, and more Republican. Yes, majority-minority districts produced a handful of new Black members of Congress -- but they created even more conservative Republicans. Visible Black representation went up, but substantive representation, as measured by the ideology of the median House member, went down.2

  These findings complicate an evaluation of Callais, which found these majority-minority districts unconstitutional. But if majority-minority districts have produced a Congress less responsive to Black policy preferences than a different map would have, then a Court ruling that constrains race-based mapmaking is, at minimum, a closer call than anguished progressive political reactions suggest. It implies, among other things, that repealing a requirement that Blacks be packed into heavily Black districts may actually diminish the power of white conservatives.

• We cannot untangle race from partisanship. Race and partisanship are now so tightly correlated that increasingly, Section 2 vote-dilution suits were little more than partisan gerrymandering suits in racial drag. Justice Alito’s majority opinion candidly cites “partisan- gerrymandering claims being repackaged as racial-gerrymandering claims” as one of the reasons the Gingles framework stopped working. If federal courts can’t untangle race from party – and after Rucho, they aren’t supposed to try – then the choice is between two evils: a regime in which race-based claims are usable proxies for partisan ones, or a regime in which neither is. The Court chose the latter. That is at least consistent.

None of this means the Court got Callais right. First, descriptive representation builds civic legitimacy among historically excluded groups. It improves deliberation quality in environments marked by mistrust. Left-right policy ideology is not the only thing voting rights should care about. But the empirical evidence complicates the easy progressive line, and any honest defense of Section 2 has to start by acknowledging this.

Likewise, a serious conservative defender of Callais must acknowledge that the decision will reduce minority representation in the short run; that the partisan-gerrymandering defense it greenlights is, in many cases, a fig leaf for racial gerrymandering; and that Congress can fix the problem with new legislation grounded in present-day evidence of intentional discrimination. In short, even conservatives should admit that the Court has handed Congress a problem and told it to solve it.

Constitutional scholars will assure you that these steelmanned objections are serious, but wrong. I footnote their response because I want to turn to reforms, not because these arguments don’t deserve a close reading.3

Precisely as Justice Kagan warned, without a federal floor, partisan gerrymandering is devolving into a race to the bottom. Mid-decade redistricting, once rare, is quickly becoming routine. Prodded by President Trump, Texas redrew its congressional map in mid-2025 to add several Republican-leaning seats. California voters retaliated, passing Proposition 50, which effectively abolished the state’s well-crafted independent redistricting commission to authorize the legislature to redraw the map for partisan retaliation. Five more states have followed, and four others have already redrawn mid-cycle. This cannot end well.

House Minority Leader Hakeem Jeffries has called for “maximum warfare, everywhere, all the time.” Instead of channeling his inner Jacobin, Jeffries should think more broadly about the electoral reforms America needs. Specifically, he should lead an effort to expand Congress and mandate the use of independent commissions backed by simple math checks to curb abusive gerrymandering.

Expand Congress

If federal courts won’t police mapmaking, Congress and the states must do so. A hidden lever is the size of the House itself. I made the longer case for expanding Congress in an earlier post. I argued that Congress erred in 1929 when, fearing the political power of immigrant-heavy cities, it permanently capped the House at 435 seats. Until then, the House had expanded after almost every census. But the US population has tripled since Congress froze its size in 1911.

Instead of adding more districts, the House watched as the average district grew from roughly 210,000 residents after the 1910 census to about 762,000 today. That makes it harder for any community of interest to elect a representative. Plus, a smaller House magnifies the small-state bias in the Electoral College (Wyoming’s 3 electors each represent 195,000 residents; California’s 55 electors each represent 725,000).

Three rules have been proposed to fix this.

• The Wyoming Rule sets the size of every district at the population of the smallest state. This would yield a House of about 575.

• The Cube Root Rule most modern legislatures are roughly the cube root of the national population. The US actually tracked this rule for its first 130 years. This rule yields a House of about 692.

• Holding districts to the 1910 ratio of 210,000 residents would yield 1,578 seats.

I favor setting the size of Congress by taking the cube root of the population after each census. A 692-seat House would make gerrymandering structurally harder because smaller districts are:

• More sensitive to local geography. A mapmaker’s scalpel has less room to maneuver when the population target is lower, so “cracking” and “packing”, the central activities of any gerrymander, become more difficult.

• Aligned more easily with natural communities of interest, such as neighborhoods, ethnic or religious communities, and counties, removing the standard excuse for snake-shaped “octopus” districts.

• Leakier. With more seats overall, the partisan return on any single boundary manipulation falls, while the chance of swing-voter “leakage” rises.

It is also worth noting that a larger House would substantially relieve the Lublin paradox. With 479,000-person districts instead of 762,000-person ones, Black, Latino, and Asian American voters would constitute electorally meaningful pluralities in many more districts -- producing more crossover and influence districts of the sort Lublin recommended without requiring any race-conscious mapmaking at all.

Structural reform achieves through demographics what race-based remedies achieve through litigation, and does so in a form that Callais cannot reach.

Mandate Independent Commissions With Math Checks

Gerrymandering has rendered most House elections meaningless. By Cook Political Report’s reckoning, only about 82 of 435 districts – fewer than one in five – are competitive in any meaningful sense, and the number of true tossups in any given cycle is closer to two or three dozen.

The crossover rate tells the same story. As recently as 1998, about a quarter of the House represented districts that voted for the other party’s presidential candidate. In 2024, only 16 of 435 members -- under 4 percent -- hold crossover seats.

Some of this collapse is gerrymandering, though much of it is voter self-sorting: Democrats now cluster in cities and inner suburbs, Republicans in exurbs and rural areas, and even a perfectly drawn map will produce more lopsided districts than it did a generation ago. But gerrymandering is the part we can fix by changing the rules.

The Constitution’s Elections Clause grants Congress broad authority over the “Times, Places, and Manner” of federal elections, and the Supreme Court has long read this as authorizing Congress to override state regulations. Most legal scholars believe Congress could require independent redistricting commissions for federal districts, as the proposed Freedom to Vote Act would do. A federal mandate would standardize the order of operations used in commission-led states like California, Michigan, Arizona, and Colorado, making California’s retaliatory Proposition 50 unnecessary.

But commissions need tools to gauge results. Two simple compactness tests, used together, can flag the most egregious maps.

• The Polsby-Popper Test compares a district’s area to the area of a circle with the same perimeter. A long, squiggly border with little area inside, like Massachusetts Governor Gerry’s salamander-shaped district that gave us the Gerry-Mander, produces a low score.

• The Reock Test compares a district’s area to the area of the smallest circle that fully encloses it. Long, thin districts have a large bounding circle relative to their actual footprint, and so produce a low Reock score.4

The tests are colinear, and neither proves dispositive evidence of partisan intent. For example, Massachusetts could not draw a Republican district even if Governor Gerry rose from the dead holding a pen. But together they give courts and commissions a useful signal. Today, 82 of 435 congressional districts (about 19 percent) score in the bottom quartile on both Polsby-Popper and Reock tests. These “double-low” districts are concentrated overwhelmingly in states where the legislature, rather than a commission, controls redistricting: Texas, Illinois, Maryland, and North Carolina.

A federal statute could require commissions to prioritize geographic compactness, prohibit the use of partisan voting data in mapmaking software, and direct courts to subject any map failing both compactness tests to heightened scrutiny. None of this resurrects the dead-letter version of Section 2 that the Court just buried. But it would give voters something they currently lack: a route, in federal Court, to challenge a map drawn for the explicit purpose of choosing them.

Conclusion

Gerrymandering is a sin as old as America itself. Back in 1789, Patrick Henry tried to draw a district that would keep the Constitution’s main author, James Madison, out of Congress. But 1789 technology did not enable state legislators to draw district boundaries that would reliably elect their candidate for a decade. Today’s partisan mapmakers, armed with voter files and machine learning, can do so easily. The Roberts Court has now told them that as long as they’re disenfranchising voters for being Democrats or Republicans rather than for being Black or white, the Constitution has nothing to say about it, and federal courts will not interfere.

The conservative defenders of Callais make a serious argument that the Court has finally aligned the Voting Rights Act with the Constitution’s color-blind text. They are right that Section 2 was always in tension with the Fourteenth Amendment’s anti-classification principle, and that majority-minority districts have produced mixed results for the voters they were designed to help. We can concede all of that.

But Callais is nonetheless a disaster because it subverts electoral democracy. It is a license to gerrymander, with the Chief Justice helpfully spelling out the precise techniques for doing so in his majority opinion.

If the federal courts won’t fix this, Congress and the states must. Expand the House. Mandate independent commissions. Use straightforward mathematical tests of compactness. The alternative is the regime we have now: maps drawn for the explicit purpose of choosing voters, protecting incumbents, and denying voters a federal forum in which to object.

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My Kingdom for a Horse

The emperor understood nothing about selenium, but he was obsessed with horses bred in the mineral-rich, high-altitude soils of the Mongolian and Tibetan plateaus. These animals developed the dense muscle mass required for long-range, high-intensity cavalry warfare. The Song emperor needed as many of these horses as he could get to defend Han China.

Fortunately for the emperor, the tribes scattered throughout the Tibetan highlands were happy to exchange horses for tea. Tea helped Tibetans break down fats in a diet rich in yak butter and meat. It also provided vitamins in a high-altitude environment where greens were scarce. Soon, Tibetan tribes were exchanging tons of tea for thousands of horses along one of history’s most enduring trading routes — the ancient Tea Horse Road between Tibet and Yunnan or Sichuan.1

Tibetan horses were essential military assets, so emperors moved to control them and the tea used to buy them. In 1074, the Song court established the Chamasi — the Tea and Horse Office — to monopolize the tea and horse trade, pacify Tibetan leaders, and prevent rival warlords from acquiring militarily capable horses.

It didn’t work. In 1215, Genghis Khan’s armies, carrying four or five horses per soldier, swept into northern China. His grandson, Kublai, completed the conquest in 1279, overthrowing the Southern Song and creating an empire four times the size of Rome’s.

Modern emperors still obsess over any technology that confers a clear military advantage and can proliferate to adversaries. They try to control these technologies by mixing four approaches.

• Own it. States can seize technologies by nationalizing them. Starting with the Manhattan Project, the US nationalized the production of nuclear weapons. The Atomic Energy Act made the federal government the sole legal owner of fissionable material and granted it a monopoly over nuclear weapons technology. The Second Amendment’s protection of the right to bear arms does not extend to nukes — or to bazookas, for that matter.

  Similarly, the US Navy effectively took over the American radio industry during World War I. It helped engineer the creation of RCA in 1919, partly to keep wireless technology in American hands. A generation later, radar development was again highly classified and coordinated through MIT’s Radiation Laboratory.

• Regulate it. States can heavily regulate sensitive technology. Cryptography was once considered so central to national security that the NSA classified strong encryption as a munition under the International Traffic in Arms Regulations (ITAR). When Phil Zimmermann released the PGP encryption protocol in 1991, the federal government opened a criminal investigation, accusing him of ‘munitions export without a license.’ MIT Press then published Zimmermann’s source code as a printed book, which the First Amendment unambiguously protected. By 1996, the government dropped the case. The proliferation had outrun the regulation, and the First Amendment workaround had made enforcement absurd.

• Restrict exports. States can lightly regulate a sensitive technology while taking measures to keep it out of adversaries’ hands. The US used ITAR to tightly control satellite and space technology for decades. Communications satellites sat on the US Munitions List until 2014, significantly suppressing the growth of the commercial space industry. Until 2000, the government deliberately degraded civilian GPS signals to limit their military capabilities or use overseas.

• Capture funding. Governments can shape technologies by collapsing the addressable market for private capital. ITAR made satellite and space hardware effectively non-exportable, so for many decades, federal procurement became the only viable customer. The state doesn’t ban private investment so much as strangle the market that would justify it.

Recent Events Show That AI Will Soon Be Regulated

Modern governments are now obsessed with AI for the same reasons Chinese emperors were obsessed with warhorses: under some circumstances, it may become a decisive military technology.

• Military potential. The technology has serious dual-use applications across cyber operations, bioweapons, autonomous systems, and mass disinformation.

• Concentration. Frontier AI may seem diffuse, like horses on a plain, but a small number of developers control it, and their compute requirements create natural chokepoints.

• Rate of improvement. AI is improving so quickly that policymakers feel pressure to act before the technology outruns their ability to respond.

By several measures, frontier AI is getting stronger faster. This month, Anthropic announced its most advanced model, Mythos, and simultaneously declined to release it publicly after determining that it could autonomously discover and exploit security vulnerabilities in every widely used operating system, browser, and major piece of infrastructure software. The UK Security Institute, given early access to Mythos, found that it succeeded at expert-level hacking tasks 73 percent of the time — a benchmark that every prior model had scored zero on. Instead of a public release, Anthropic has shared the model with a small set of infrastructure defenders through a project it called Glasswing.

An awkward dance inside the Trump administration followed. In February, the Pentagon had labeled Anthropic a ‘supply chain risk’ because the company refused to allow the military to use its models for autonomous weapons or domestic mass surveillance. Anthropic is in active litigation over the designation.

Then Mythos arrived. Within days, reports surfaced that the NSA was using it. Treasury and Federal Reserve officials began red-teaming Mythos after warning the largest US banks that AI-enabled attacks had become an existential risk to the financial system. The White House Chief of Staff and the Treasury Secretary met directly with Anthropic’s CEO. Pete Hegseth’s Pentagon, having declared Anthropic a national security threat, watched the rest of the government race to access the very capability he was trying to ban. Plainly, the US government needed Anthropic more than Anthropic needed the US government.

Technology that powerful will not roam free. The federal government has already put some early AI controls in place.

• Export controls. The Bureau of Industry and Security handles export controls and has floated rules on model-weight exports. Restrictions on advanced chips and semiconductor manufacturing equipment to China (October 2022, expanded in 2023) are essentially an attempt to control AI capabilities one layer down the stack.

• Reporting on dual use. A 2023 Biden Executive Order required reporting for models trained above certain compute thresholds, along with red-teaming results for dual-use capabilities. The Trump administration rescinded the order in January 2025. Bet on them bringing it back, lightly repackaged.

• Pre-deployment testing. The US and UK Safety Institutes (the latter renamed the AI Security Institute) have gained access to pre-deployment testing of frontier models, including Mythos.

The Modern Chamasi: A 21st Century Control Regime

Which tools will the US government deploy to police the military frontier of AI? Full nationalization seems unlikely. Unlike nuclear weapons, AI is genuinely dual-use, inherently diffuse, and backed by an industry with far more lobbying muscle than the physicists of 1945. Instead of a single Manhattan Project–style act, what is emerging looks more like a multi-layer defense.

• Export controls. BIS — our modern Chamasi — is already restricting the ‘tea’ of the AI world: high-end chips and semiconductor manufacturing equipment. Noah Smith has an excellent breakdown of the current debates about how well export controls to China are working.

• Pre-deployment evaluation. The voluntary Project Glasswing model, where Anthropic shares Mythos with infrastructure defenders, is a temporary truce. Expect executive orders to eventually mandate this kind of federal preview, turning voluntary cooperation into a federal license to operate.

• Targeted secrecy. Rather than classifying entire models, the federal government is moving toward capability-specific control—classifying specific bioweapon synthesis, AI targeting, or cyber offensive outputs while leaving general commercial models available. Whether critical military capabilities can be separated and controlled is the subject of an ongoing debate.

• Strategic procurement. By becoming the largest customer, the government is likely to shape AI through Defense Production Act authorities and national-champion industrial policy — a pattern that mirrors the early semiconductor era.

The Politics of Preemption

AI investors and executives are taking extraordinary steps to influence how their technology is regulated. The Leading the Future PAC, which entered 2026 with roughly $70 million in cash on hand, represents an industry effort to influence which branch of government regulates them and on what terms.2

Leading the Future has targeted Alex Bores, the former data scientist turned New York State Assembly member. Bores co-sponsored the RAISE Act, a New York law that requires major AI developers to publish safety protocols and disclose serious incidents. By spending heavily against Bores in his run for Congress and intimidating others, LTF is working to block any legislative path to comprehensive federal control. Its goal is not to prevent regulation but to trade state-level safety protocols for a centralized, industry-friendly federal framework. (To me, this would argue for electing Bores to Congress and working with him to federalize the RAISE Act and preempt state regulations in the process. Unusually for an elected leader, Bores once worked at Palantir — whose co-founder Joe Lonsdale is a major funder of LTF and appears blindly determined to punish apostates.)

There is a political tension at the heart of Leading the Future. The PAC is working alongside a Trump administration that preaches deregulation while practicing centralization. Trump wants to put AI policy under executive control rather than letting it settle into a bipartisan congressional framework with checks and balances. Trump prefers a Digital Executive that can invoke national security at will, without the constraints that legislation would impose. (Prediction: A16Z, Lonsdale, Ron Conway, and other LTF backers will come to regret ignoring Trump’s authoritarian political instincts.)

Moreover, the delicate dance between Silicon Valley and the feds depends on AI improving gradually enough to allow for the learning that comes with gradual regulation. But the technology is no longer cooperating, so Leading the Future may end up leading the past. Anthropic’s own leadership has suggested that open-source labs and Chinese developers could replicate Mythos-level hacking threats within 6 to 12 months.

If a Mythos-class capability leaks or if China uses an AI model to strike critical US infrastructure, a $70 million PAC will become irrelevant overnight. In the face of a concentrated catastrophe, the political economy will shift instantly from partnership to seizure.

The Emperor’s Dilemma

The Song emperors eventually learned a hard lesson: a state can monopolize the tea, build the Chamasi offices, and regulate trade routes, but it cannot change the geography of the plateau. The power of Tibetan and Mongolian horses grew from the soil itself — a natural advantage that eventually enabled Genghis Khan and his successors to crush or bypass the Song bureaucracy and redraw the map of the world.

Today’s emperor in Washington faces the same structural reality. He wants to build a regulatory fence around a technology that, like the Tibetan warhorse, derives its power from an environment — global compute, open research, distributed talent — that no single state can own or permanently dominate.

The US may temporarily control a 21st-century Tea Horse Road. But the Mythos moment proves that once the warhorse exists, the advantage shifts to those willing to ride. The government may not need to nationalize AI to control it. But if it cannot control critical AI risks, the federal government will face the fate of the Song: seeing a superior force charge the palace gates using the very technology it was trying to gatekeep.

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This week has presented several lessons in unexpected consequences. (We learn slowly, so many weeks do.) Consider a half-dozen examples:

1. Insider trading. A US special forces soldier was charged with using his insider knowledge of the forthcoming US raid on Venezuelan president Nicolas Maduro to make $400,000 on the prediction market site Polymarket.

   But the charge has backfired by highlighting a much larger scandal: records show that insiders with advance knowledge of Trump’s market-moving announcements have made tens of millions of dollars trading oil futures. The White House knows it’s a problem, so it sent a memo to staff asking them to kindly stop profiting on inside information. These are easy cases to prosecute, but don’t hold your breath.

   Subscribe to Modern Times. It’s free.

2. Stupid games with stupid prizes. Gerrymandering undermines democracy by allowing politicians to pick voters rather than the other way around. Trump, with characteristic forethought, started a partisan gerrymander war by demanding that Texas redraw its Congressional Districts to yield four more GOP seats.

   California responded by abolishing its well-crafted system for drawing district boundaries, which used an independent panel. Five more states followed. Four others had already redrawn mid-cycle.1

   Many Republicans now deeply wish that Trump had never started the fight. The moves are unpopular. Worse, it hasn’t worked: the GOP is unlikely to gain many new seats by jiggering the map. Moreover, leaders from partisan districts are, on average, more extreme (a problem Democrats will face as well). This does nothing to improve Congress or confidence in government.

3. Democrat overreach alert: Michigan. As Trump collapses, Democratic activists are tempted to move left and hope that voters sick of Trump will back them anyway. In the Michigan Senate race, which is critical to Democratic hopes of winning back the Senate, three members of Team Blue are competing in a primary for an open seat. Haley Stevens is a Congressional moderate whose views are closest to those of median light-blue Michigan voters. State Senator Mallory McMorrow is a liberal and a talented candidate (her TV ad is fire). Dr. Abdul El-Sayed is a progressive former public health official who has made Israeli warfighting a centerpiece of his campaign. He has held events with proud anti-semite Hasan Piker, equated Israel with Hamas, and advocated the abolition of ICE.

   Nominate him, and Trump retains control of the Senate in anything short of a blue tsunami. Continue to indulge these instincts in other states, and Democrats will struggle to recover the White House in 2028 and find themselves on the ropes after the 2030 census, which looks to shift 7-10 Congressional seats from slow-growing blue states to faster-growing red ones.

4. We enter the “Find Out” phase. As Donald Trump brings to a close his ”Fuck Around” phase in Iran (five deadlines, five capitulations), the world is about to discover the full cost.

• The first-order effects, meaning higher prices for gas, jet fuel, diesel, fertilizer, and condoms, are now obvious.

• Second-order effects are coming into view: food shortages in the world’s poorest countries. An Iran run by hardened IRGC thugs instead of zealous theocrats. The nuclear threat worsened by an emboldened regime poised to collect $60-$80 billion/year of tolls on Hormuz shipping that they had only dreamt of previously.

• The third-order effects will be the worst: a dramatically weaker US global position as adversaries are heartened by US fecklessness and domestic support for Trump implodes (although he still polls at 80% among Republicans). The US is providing swap lines to stressed Middle Eastern “allies,” so their forced asset sales do not shake our precarious private credit (“shadow banking”) system. Xi Jinping may notice that the US just shot up six years’ worth of ammo, and decide that Taiwan and TSMC are his to take. A worldwide surge in demand for Chinese electric vehicles could cripple US automakers, who just doubled down on fuel-burning cars.

5. Lip-Bu Tan may resurrect Intel. Intel’s shares have more than quadrupled in the past year, from $20 to more than $80 per share. Last August, Trump called for the resignation of the company’s new CEO, Lip-Bu Tan. Within days, Tan met with Trump and convinced him to drop the demand and take Intel shares in exchange for the release of the Biden administration’s almost $9 billion of CHIPS Act funds. Never one to turn down money, Trump agreed.2

   Trump may not realize it yet, but at today’s stock price, government shares are now worth $35 billion, making Intel one of the best financial investments in US history (although College Land Grants, the GI Bill, the Interstate Highway System, the Apollo Space Program, the Human Genome Project, and several others created more long-term value. And buying Spirit Airlines would create far less.)

   

   Credit for restoring Intel goes to Lip-Bu, a famously hard-working, Andy-Grove-caliber CEO, a capable engineer, and one of the most decent and popular leaders in Silicon Valley (admittedly, a low bar). The Malaysian-born, MIT-educated Tan created a culture at Intel that is much more disciplined, engineering-centric, and customer-focused. This, along with his formidable reputation as both an investor (he founded a venture fund that famously backed hundreds of early-stage Asian technology companies) and an executive (he turned around Cadence, a US electronic chip design company), enabled Tan to move quickly.3 He sold Altera, Intel’s programmable chip unit, and raised money from Nvidia and Softbank. This month, he repurchased the minority stake in Intel’s Ireland fab, persuaded Elon Musk’s Terafab to sign a strategic partnership, and announced a partnership to deploy Intel Xeon 6 processors across Google’s data centers.

   The market noticed. Intel is not out of the woods, but a year ago, the pioneering company was widely dismissed as unsalvageable. Thanks to new leadership, a sustained AI boom, and timely federal backing, Intel is back on its feet and starting to run. Every American should be grateful.

6. Trump’s election fraud lies are working. A new Reuters/Ipsos poll shows that Donald Trump’s five-year campaign to convince the public that US elections are rigged and voter fraud is rampant is working. Although court and state investigations consistently find these claims to be false, 46% of voters believe that large numbers of fraudulent ballots are cast by non-citizens in US elections. 82% of Republicans and 38% of independents agree. Trump’s campaign aims to lay the groundwork for restrictive voting measures.

   Note, however, that Trump rarely anticipates first-order effects, never mind second-order ones. In recent years, marginal and occasional voters have heavily favored Trump. If this remains true, voting restrictions, while bad in principle, could end up helping Democrats politically.

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At first, I thought it was my imagination. Had Chinese cities really become quieter? A quick check revealed the story: cities were calmer because the Communist Party now treats noise as pollution and suppresses it like an unwelcome dissident.

The Quiet War

China’s battle to quiet its cities has several fronts. Even the famous “dancing grandmothers” in public parks are required to dance to directional speakers.

• More EVs. The shift to ghostly-quiet electric vehicles and scooters has significantly reduced street noise. EVs use silent regenerative braking. Traffic studies also show that Chinese EV drivers accelerate more smoothly than combustion-engine drivers, further reducing engine noise.

• Quieter roads. China is resurfacing streets to make them quieter. It laid more than 32 million square meters of noise-reducing surfaces last year alone. Many new arterials use porous asphalt whose tiny voids “swallow” the air trapped between the tire and the road, muting the small pop that is the dominant source of highway noise. Some districts mix in recycled tire rubber and get a further 3–5 decibel reduction.

• No-honking zones. In the 1990s and early 2000s, Chinese cities were like Bangkok or Mexico City. Drivers honked aggressively and pointlessly. Most seemed stressed, as though their cortisol levels were through the roof. Today, no-honking zones cover the bulk of the urban core in cities like Guangzhou and Beijing. Honk in a restricted zone and acoustic cameras triangulate your position, read your plate, mail you a fine, and dock your social credit score.1 In less than a decade, this system has trained drivers to stay off their horns. There are still plenty of aggressive drivers, but they don’t honk.

• Less construction. The construction slowdown has helped quiet things down. For two decades, the “sound of China” was the round-the-clock throb of pile drivers and cement mixers. Since the residential property market crashed in 2021, there are fewer cranes on urban skylines, and in many neighborhoods, the background hum of heavy machinery has simply vanished. (Infrastructure construction — rail, highway, industrial — has not slowed nearly as much; what you notice in cities is the absence of high-rise residential work.)

The war on noise has changed the sound of Chinese cities. Nonetheless, every day starting around 11 a.m., a new sound rises on Chinese streets. It’s too quiet to be an EV, too steady to be a bicycle. It is a high, insectile hum, layered dozens of times, approaching and receding from every direction at once. If you’re standing at a crosswalk, the sound flows by like water around a midstream rock.

Riders on electric scooters — dressed in yellow, orange, or blue — materialize from the gaps between cars. They mount and dismount the sidewalk. They surge ahead of traffic to make left turns. One might thread the needle between a delivery truck and a baby stroller, then vanish into a residential compound whose gate they somehow know how to open. The rider parks and heads inside. It turns out that thirty minutes earlier, a resident of the compound had opened an app and tapped on a picture of a bowl of noodles.

The Machine Behind the Hum

Delivery riders on fast scooters now make up China’s urban circulatory system. Something like 12 million people, nearly all of them young men and a quarter of them with recent college degrees, make their living moving objects on two-wheeled electric vehicles.

The platforms that coordinate them — Meituan above all, with Ele.me a distant second — have built the most sophisticated last-mile infrastructure ever assembled. A cup of bubble tea in Hangzhou moves from shop to hand in about 22 minutes. A forgotten phone charger in Shenzhen can be fetched from an apartment and delivered to an office in under an hour. Groceries, prescription medicine, a single lightbulb, a live crab in a plastic bag — the system does not care. It routes. It dispatches. It delivers. Instant delivery is now a trillion-yuan market — roughly $138 billion. In Shenzhen, we watched Meituan’s prototype drone delivery and, for fun, had a lemon tea flown to us from a mile away.

The ubiquitous bright-yellow Meituan scooters are much more than Chinese DoorDash. Yes, food delivery pays the bills — the way search pays Google’s. But Meituan’s actual business is a real-time dispatching engine that continuously solves one of the nastiest combinatorial problems in applied computer science. Given N couriers in motion, M restaurants with variable prep times, and K customers with soft deadlines, it must find an assignment that minimizes total cost, subject to hard constraints on food temperature, rider load, and promised delivery times. This is classically NP-hard.2 Meituan solves approximations of this problem a hundred million times each day.

The noise comes from e-scooters, the bastard offspring of a bicycle and an electric motorcycle. Scooters feature squat step-through frames with lead-acid or lithium batteries tucked under the seat. Manufacturers claim the bikes have a top speed of 15 mph (25 km/h), but delivery riders can easily modify their bikes to go twice that fast. They carry saddlebags or an insulated rear box large enough for four bowls of soup that the rider nurses over potholes so nothing spills. The scooter costs about as much as a new phone.

These things are ubiquitous to a degree that is hard to convey until you’ve stood on a Chinese street corner at rush hour and watched the river flow by. There are more than 350 million e-scooters in China. They outnumber cars. They outnumber, by something like five to one, the entire global stock of e-bikes sold in the West. You can rent one off the street in seconds — just scan a QR code and hop on.

The real instant-delivery sorcery lies in the software layer. When you place an order, an algorithm (what Meituan sinisterly calls its “super brain”) estimates the restaurant’s prep time, predicts traffic on every candidate route, calculates how many other orders each nearby courier is already carrying and in what sequence they’re stacked, and produces a delivery estimate before you’ve finished typing your address.

The app then promises each customer a delivery time. If the rider misses the deadline, the app docks their already meager pay. A rider who misses badly is electronically fired, or “deactivated.” The system is what control theorists call a tightly coupled feedback loop: the algorithm learns from every delivery how fast this particular route can be completed under these conditions, and then demands that future deliveries complete it at least that fast.

The Chinese magazine Renwu detailed what this does to drivers in a now-famous 2020 investigation titled Delivery Riders, Trapped in the System. Couriers run red lights, drive the wrong way down one-way streets, and sprint up stairs because the thirty seconds they save by jaywalking are the ones the algorithm learned to shave off their allotted time. For a new perspective on what this work is like, I recommend Hu Anyan’s grim but funny memoir, I Deliver Parcels in Beijing.

As in many modern industries, hell for workers produces magic for consumers. A Beijing office worker orders a single egg tart from a bakery four blocks away and receives it, still warm, for a delivery fee of about three RMB — forty cents. The system is so cheap and so fast that it has reshaped urban life.

• Nobody cooks. Not in the way Americans mean it. Why would you? A prepared meal delivered in 20 minutes for 8 RMB is competitive with — often cheaper than — the groceries and the time it would take to make the same thing at home, especially once you price in cooking time. Kitchens in new apartments have become vestigial, like the human appendix — present because tradition demands them, shrinking because nobody uses them.

• Empty restaurants. Why eat out? Tourists do, and groups still do. But for the solo diner or the weekday lunch, most urban Chinese now eat in. Hotels accept food deliveries as a matter of course, usually at the entrance or the front desk, so the driver doesn’t have to negotiate elevators and hallways.

The New Sound of the City

No traffic system can gracefully absorb tens of millions of new vehicles weaving through traffic, many of them straining to meet an algorithmic deadline. The results are not great for riders, pedestrians, or delivery workers.

• Riders. Start with the risks to riders themselves. The Chinese government does not publish regular statistics on delivery-related crashes. Still, the figures that leak out — from Shanghai traffic police in 2017, from journalist reports in 2020, from various municipal campaigns that periodically announce crackdowns and then just as periodically go quiet — suggest that delivery couriers are involved in something like a quarter of all two-wheeler crashes in major Chinese cities, despite being a much smaller share of the two-wheeler population.

  They run red lights because the algorithm demands it. They ride on sidewalks because the road is slower. They carry loads that destabilize their scooters. They ride in thunderstorms and in the 400-ppm smog of a north China winter, because surge pricing during bad weather is the only way the platform can hit its monthly income target.3

• Pedestrians. A sidewalk in a Chinese city is not pedestrian-only. It is a contested zone that pedestrians share, grudgingly, with e-scooters that have mounted the curb to skip a congested intersection. Older residents, in particular, have learned to walk with a vigilant shuffle and head swivel because the scooters are fast and nearly silent. The consequences of a collision fall entirely on the slower, softer party. Understandably, e-scooters are among the top grievances at neighborhood committee meetings across urban China.

• Transferring risk from the strong to the weak. Meituan and Ele.me classify the overwhelming majority of their riders as independent contractors, or as employees of labor-dispatch agencies two or three corporate layers removed from the platform. As with Uber and DoorDash in the U.S., Chinese delivery platforms are built on this legal foundation.

  This means that when a rider runs a red light to meet a tighter delivery window, the platform has no legal liability if the rider is hit by a car. Investigative reports and a handful of high-profile incidents — a rider who set himself on fire outside a Meituan office in 2021 over unpaid wages; another who died of a stroke mid-shift, and whose family was offered 2,000 RMB (about $300) in “humanitarian assistance” — have periodically produced promises of reform. The algorithms have been tweaked to add buffer time. The underlying arrangement has not changed: the platform transfers the risk of too much, too little, or too demanding work to young, low-paid, and frequently desperate drivers.

The Sound of Pigeons Flying: What Scooters Replaced

To understand how 12 million young men ended up on scooters running red lights for an app, it helps to remember what they replaced.

Chinese cities once moved on bicycles. In the 1980s and early 1990s, China had the world's best cycling infrastructure. This was the result of policy, not accident: China declared bicycles the workers’ vehicle, and built cities around them as a socialist virtue. This led to rivers of heavy black Flying Pigeon bikes flowing through cities on dedicated lanes. Riders rode five or six abreast, protected from car traffic by raised medians.

That world is now gone. As commuter vehicles, human-scale bicycles have been displaced by e-scooters designed for urban flow. For the price of two decent bikes, you can buy a scooter that goes three times faster, carries your groceries, and gets you to work unsweaty. It handles the kind of sprawl that Chinese cities, in their explosive growth, now demand. If you’re a working-class commuter in a second-tier city who has to cover eight kilometers to the factory, it isn’t really a choice. E-scooters displaced bikes for good reasons.

As a committed urban cyclist, I’ve biked through more than fifty global cities. In Guangzhou, I tried riding the back alleys and bike lanes with a local guide. Both were full of stealthy e-scooters — the most aggressive of them ridden by delivery drivers threading bike lanes like fighter pilots in an air corridor. I was repeatedly passed at forty kilometers an hour by riders on desperate deadlines whose vehicles outweighed mine by a hundred kilos.

Plenty of people still ride bicycles in Chinese cities, but they do it as a hobby, a workout, or perhaps as a political statement. Outside a few suburban college campuses, it is rare to see a mass of bicycle commuters.

The last gasp of bikes was the dockless bike-share boom of the late 2010s, when companies like Ofo and Mobike raised venture money on the hallucination that the bicycle could be made viable again at scale. It couldn’t. By 2017, mountains of blue, yellow, and orange frames lay rusting in huge municipal lots. Even though there are still some 20 million shared bicycles available in China, the game was over. Electric scooters had won.

But the scooters didn’t just win as commuter vehicles. They became the substrate for something much larger: the world’s largest urban delivery platform.

The Silent, Invisible Trap

China’s urban delivery platforms are both an achievement and a cage. The cage is hard to see because it consists of logistics that China can no longer easily build.

An efficient delivery system is “many to many” — it enables millions of dispersed retailers to serve billions of dispersed consumers. This requires consolidation points where shipments can be pooled into trucks, airplanes, and local delivery vans. A well-designed delivery system is so productive that it can pay above-median wages in most countries. Ask UPS or FedEx.

“Point-to-point” delivery is very different. It’s a courier service that moves goods from a single retailer to a single customer. China’s world-class instant-delivery network depends on cheap labor willing to do point-to-point deliveries. But this system makes it much harder for China to build a world-class many-to-many delivery network that rationalizes shipments and is productive enough to pay well.

This sounds counterintuitive. Surely, if you can deliver a bowl of noodles in 22 minutes, you can deliver a box of shoes in 22 hours? But the two systems operate very differently. Paying millions of riders for point-to-point instant delivery is only sustainable at very high density and very high velocity. Moreover, it absorbs the resources needed to modernize into a high-productivity system.

• Customer expectations. To start, instant delivery shapes a broad range of consumer expectations. Customers who expect shoes to arrive within an hour can only buy from local merchants, which apps like Alibaba facilitate. This effectively shrinks the consumer market or requires retailers like Temu to maintain far more local distribution centers throughout China.

• Resources. A modern delivery service needs to compete for the same talent pool, the same vehicle fleet, and the same last-mile access arrangements with residential compounds. Labor that could staff parcel routes is on scooters, making instant deliveries at piece rates. The vehicle fleet that could be consolidated into efficient vans is fragmented across tens of millions of individually owned two-wheelers.

• Regulations. The regulatory regime that could have encouraged standardized addressing and universal service is a patchwork that assumes every delivery is coordinated through a platform app. The residential compounds that could have been required to install uniform mailbox or locker infrastructure have instead been allowed to wave through individual riders, compound by compound, app by app.

• Opportunity cost. The economics of a 22-minute point-to-point delivery of bubble tea are fundamentally different from those of high-volume, many-to-many, two-day parcel delivery intermediated by cross-dock warehouses. China has ruthlessly optimized for the former at the expense of the latter.

The result is a system that is extraordinary at instant delivery, but mediocre at everything else. Moreover, it is now large enough to be buried in path dependencies that will be very hard to overcome.

Building a Japanese-quality parcel network in urban China — with its dense web of neighborhood of koban equivalents, its universal addressing, its seamless integration of postal, private, and municipal services — would require resources and policy attention that are instead flowing into the instant-delivery machine.

Moreover, the machine is too successful and too important to redirect. Meituan alone processes enough daily transactions that disrupting its logistics would register as a minor macroeconomic event. Ele.me is owned by Alibaba, which means disrupting it would be a minor political event.

Will drones replace drivers? It’s tempting to imagine Meituan’s drone prototypes as the next wave — quieter, faster, cleaner, and less exploitative of workers. Don’t hold your breath. After several years of operation, Meituan’s drone program runs a few hundred thousand deliveries per year, compared to its scooter network, which handles tens of millions of deliveries every day. Drones require dedicated takeoff-and-landing infrastructure (Meituan has built rooftop stations at malls and office towers), while scooters require a rider with an app. Payload limits of around 2.3 kilograms rule out highly profitable grocery orders. Only a few major cities have opened their low-altitude commercial airspace to designated pilot zones.

And — the quiet truth of the whole system — the scooter network’s cost advantage is its ability to arbitrage labor. Until drone deliveries are cheaper than a rider's 5 RMB per run, drones cannot compete on cost. The drones are cute, but they are a rounding error, not the future of China’s urban circulatory system.

Behind China’s New Hum.

American and European commentators look at Chinese urban logistics and usually conclude one of two things: either China is the future and we should copy it, or China is a dystopia and we should be grateful to live somewhere else. Both of these views miss the more interesting lesson: China’s technological trajectory is emergent and path-dependent, as it is in most places.

China’s e-scooter delivery system is not a glimpse of the future. It is an unplanned, contingent response to a specific set of conditions: cheap labor, dense cities, lax vehicle regulation, a regulatory environment willing to tolerate enormous algorithmic wage pressure, and a population that — for reasons of income distribution and urban form — found the service irresistible.

The country has built something that works so well at its intended purpose that it cannot easily build the other things it might want. The infrastructure isn’t neutral. It isn’t a platform in the Silicon Valley sense — something you build more things on top of. It is a structure that grew to fit its market so completely that it reshaped the market around itself. Now the market can support this structure, and not much else.

When we talk about “advanced logistics” as a civilizational capability, we should specify what we mean by it. A network that moves a hot bowl of noodles four kilometers in 22 minutes is not the same thing as a network that reliably delivers a package from any address to any other address within two business days. They are different achievements. China has one of them, to an astounding degree. It does not really have the other. And it is not obvious that it ever will.

Somewhere in China right now, the urgent mosquito-whine is out there. Riders are moving, algorithms are routing, and someone is about to get their hot noodles. It is a marvel. It is also the sound of choices whose alternatives are receding fast.

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Returning from China risks whiplash. It is jarring to leave the land of gleaming cars, abundant housing, new roads, spectacular greenways, and spotless bridges, tunnels, train stations, and airports, and arrive in a city known for its $1.7 million public toilet.

I Thought Capitalists Overproduced and Communists Starved?

It was not supposed to turn out this way. Because we encourage investors to independently bet on the same opportunity, we expect competitive capitalism to produce large surpluses. Each investor wants to strike it rich, but coordination is impossible, and optimism is cheap, so we get railway manias, dot-com or fiber-optic gluts, and too many car or steel companies. The all-American result is overcapacity, which wastes capital and causes companies to fail, but leaves society with lower prices, fewer weak players, and lots of shiny new infrastructure.

Communist state planning, on the other hand, tries to avoid this waste by matching production to social need. But central planners can’t really foresee demand – they only see plan targets – so shortages of things people actually want typically coexist with warehouses full of things they don’t.

So how exactly did China end up looking more like the 19th-century American railroad boom than like Gosplan, while outside the AI frenzy, the U.S. and Europe look more like cautious, return-on-capital-obsessed late-stage firms than the industrial dynamos of our recent past?

China Has Overbuilt. A Lot.

Understanding overcapacity in China requires separating industrial overcapacity (factories that make too much stuff) from infrastructure/real estate overinvestment (local governments that build things that nobody uses).

Housing. The most visible sign of this when you visit China is “ghost towns” or “ghost hotels”. This is not a minor problem. China has about 65 million empty houses – enough to house the entire population of France. This is about 20-30% more residential floor space than China’s (shrinking) population needs.

In contrast, the U.S. needs more housing. We could use 5-10 million more homes to meet demand, mainly in our most productive cities. Although housing remains tight in Tier-1 cities like Beijing and Shanghai, vacancy rates in Tier-3 or 4 Chinese cities often exceed 30%. As noted previously, this has led China to relax its hukou system, which controls who can migrate from the countryside to new cities.

Factories. China has massively overbuilt factories as well. China’s “New Three” (EVs, lithium batteries, and solar) are the current focus of global trade tensions. China’s total vehicle production capacity is nearly 50 million vehicles/year. Domestic demand sits closer to 25-27 million, so China is flooding the world with low-cost cars and slashing prices. North American auto and steelworkers are not amused, although U.S. consumers will soon lust after the low-cost, high-quality EVs being driven by our Canadian and Mexican neighbors. These cars are effectively banned in the U.S. (unless they are rebadged as Volvos or Polestars.)

Infrastructure. Finally, China’s public transportation infrastructure is impressive, but it is a combination of highly efficient hubs and vastly underused regional projects. The Chinese have become at least as good at building ”Bridges to Nowhere” as the U.S. has. Specifically:

• Airports. China has built more than 270 airports, but 41 of these handle 84% of all passengers. The vast majority lose money.

• Trains. At least a quarter of all high-speed rail stations are overbuilt and run only a handful of trains each day. High-speed rail debt in China is almost a trillion dollars.

• Bridges and tunnels. In very poor rural provinces like Guizhou, many world-class bridges serve low-traffic rural roads, leading to a debt-to-GDP ratio in that province exceeding 150%. (It is also possible that without bridges and tunnels that lessen Guizhou’s isolation, the province can never catch up to the rest of China.)

What does wasted infrastructure spending actually cost the average Chinese citizen? It represents a drag on economic growth that can show up as high youth unemployment, widening income disparities, and lower living standards.

Economists measure capital-output ratios, which indicate how much growth an economy generates per unit of investment. In the 2000s, China could get a unit of growth by investing three units of capital. Today, they need to invest more than 9, meaning China now has to spend three times as much to achieve the same level of economic growth as it did 20 years ago. These diminishing returns reflect the ultimate “cost” of overcapacity.

You can also measure the debt that China has used to finance public infrastructure. The money is typically borrowed by so-called Local Government Financing Vehicles – the “hidden” companies that governments use to build roads and bridges. Fitch estimates that these LGFVs face a $4.7 trillion debt-service gap. The interest paid on the “Special Purpose Bonds’ used for infrastructure now accounts for 10% of local government budgets.1

How Did This Happen?

To understand the paradox of a state-planned economy overproducing while the headquarters of global capitalism underproduces, we need to ask who bears the downside of overinvestment. And whose interest does the financial system serve?

In China, local governments, state banks, and SOEs can absorb enormous losses because the political and economic system doesn’t force them to mark losses to market or answer to shareholders.2 Near term, waste costs less in China.

Still, a Chinese municipality can build a metro that won’t break even for forty years; a U.S. transit authority facing the same math can’t get it funded. This isn’t planning defeating markets — it’s a system with a very high tolerance for sunk capital costs outcompeting one with a very low tolerance.

Second, ask: whose interests does the financial system serve? Post-1980s, Western capitalism reorganized itself around shareholder returns, share buybacks, and asset-light business models. Capital became disciplined in a specific way: far more allergic to long-duration, low-return physical investments.

Housing underproduction in the U.S. and UK, for instance, isn’t really a failure of markets in the abstract — it’s the predictable output of a system where incumbent homeowners are voters, zoning is local, and developer capital demands quick returns. China’s system has the opposite distortions: developers overbuild because land sales fund local governments, housing is the main vehicle for household savings, and buyers pay for a house before it is built. And there is no legal infrastructure that enables incumbent homeowners to fight new development.

So the paradox is less markets vs state planning than the kind of overcapacity that capitalism generates in its competitive, industrial phase. Once economies mature into a rentier-friendly, financialized form, they lose the overcapacity-generating property that had once defined them. (Of course, the current AI investment frenzy may refute this theory. We’ll know soon enough.)

China, meanwhile, built a hybrid system that preserves the “throw capital at physical stuff until it’s cheap” logic of early industrial capitalism but funds it through state-directed credit rather than equity markets. It’s not that Chinese planning beat Western markets; it’s that early-stage state-backed investment “out-capitalism’d” mature Western capitalism.3

It may be shiny for the moment, but overcapacity in China is expensive and economically destructive. Ghost cities, Evergrande-style property collapses, and the current deflationary pressures suggest that overcapacity in China can be just as catastrophic as its Western counterpart has been. The question isn’t whether the losses happen but whether the system that generates them also generates the productive residue — the cheap solar panels, the high-speed rail network, the battery supply chain — that justifies the waste ex post. That too is still an open question.

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I recently shared my initial impressions about economic growth and surveillance in China. Instead of being cowed by surveillance, I found people energized by a decade of material upgrades that make the American Acela corridor look like a relic of the steam age. Here are some additional observations based on three weeks of travel in Guangzhou and Yunnan.

I have divided these observations into five parts: world-class China, conservative China, weird China, things you rarely see, and things that are just plain broken.1 Also, because it’s a stunning country that I want you to visit, I appended some travel tips learned the hard way.

World Class China

China now leads the world in several key areas. This is hard to believe until you see it.

• Transportation. Chinese trains, train stations, airlines, airports, cars, freeways, bridges, and tunnels have all surpassed those in the US. Chinese people seem aware of this, and it is a source of popular support for local, provincial, and national governments. China builds infrastructure at world-leading quality and scale.

• Home ownership. 90% of Chinese families own their own homes. This is a massive accomplishment, even if the state overbuilt, especially in central and northern China. As a result, homes are depreciating assets, which are always politically explosive. And the banking system has indigestion as a result. But this is an incomparably better problem than the under-built cities of the U.S. and the shameful blight of homelessness that has resulted.

• Green Energy. China reached a fascinating milestone in 2026. It now operates the world’s largest renewable energy system, yet it remains the global heavyweight in coal consumption. This “dual-track” strategy allows China to lead the green transition while maintaining strict energy security for its massive industrial base. China’s combined installed capacity of wind and solar (approx. 1,840 GW) has now surpassed its coal capacity. In 2025, it generated roughly 4 trillion kWh of renewable energy. This exceeds the European Union's total electricity consumption. Clean energy is now over 11% of China’s total GDP. But coal still accounts for about 60% of total electricity production.

  Yunnan province is the crown jewel of China’s renewable efforts, specifically through its massive hydropower resources. It serves as a primary source for the “West-to-East Power Transmission” project, supplying clean energy to industrial hubs such as Guangdong.

  Yunnan is currently pioneering a multi-energy complementary system. Because hydropower can be adjusted quickly, it is used to “smooth out” the volatility of the newer, massive wind farms being built in Huize County and solar parks in the Yunnan mountains. When the wind drops, the dams release more water; when the wind is strong, the dams hold water back, effectively acting as a giant physical battery.

• Research. During the early 2000s, I visited perhaps a dozen Chinese research publications. At the time, research focused on sheer volume, and the quality was forgettable. The situation is entirely different now. A year-long study by the Australian Strategic Policy Institute (ASPI) showed that China has a “stunning lead” in 37 out of 44 critical and emerging technologies. In some fields, like Materials Science, all of the world’s top 10 research institutions are based in China. China faces real headwinds in aviation engineering, biotechnology, and the culture of foundational innovation, but I see no reason that they will not close most of the remaining gaps. Especially when the U.S., its main rival, is so determined to reduce investment in scientific research and development that 75% of American research scientists are considering leaving the country.

• Food. The diversity of protein and produce in Yunnan is phenomenal. Cantonese is the baseline, but the regional flavors are legendary and, crucially, cheap. Chinese access to fresh, healthy, and often delicious food is phenomenal. Protein, fruits, and vegetables are diverse, and the flavors are legendary.

• Architecture. Not long ago, China produced mostly bland, uninteresting buildings. They still do a lot of that, of course, but in Yunnan, the 'bland' era is over. New builds now blend ethnic Bai or Naxi traditions with hyper-modern glass and steel—a sophisticated regionalism likely born from two decades of Western firms like Gensler training local talent. They also produce outstanding modern and classical buildings that honor the ethnic traditions of the regions, at least in Yunnan. The interiors of many Chinese buildings are also now very attractive and well-designed. This was not always true.

• Public Safety. There is little public disorder or crime in China. Public order isn't just a byproduct of the police state; it’s a cultural refusal to tolerate the 'urban decay' aesthetic—piss-scented subways and open-air drug use—that many American cities have seemingly accepted as the price of liberty. Most actual cops here are helpful, not the jackbooted authoritarian thugs I witnessed in sixties East Germany, the seventies Spain under Franco, or the terrified population I met at the end of Mao’s Cultural Revolution.

  Nobody here takes the law lightly. The state, its cameras, and state security are never far from sight. Stops to inspect seat belt use, car registration, and breathalyzer testing are common. Everyone knows that they are monitored in public – and for the most part, they are OK with that.

Conservative China

Those with privileges in China are very good at preserving them. Of course, China is not and never has been a classless country. But Chinese income inequality, measured by Gini coefficients, is now about the same as in the U.S. As a result, some things in China work very well for privileged groups and poorly for others. If you are Han Chinese, registered in a Shanghai household, and have high national test scores, your life will be very good indeed. If you are a peasant kid in the boondocks who has just been handed the business end of a hoe at age eight, not so much. Here is how privileged Chinese preserve their status.

• Limits to economic mobility. China’s richest provinces are more than four times richer than its poorest ones. For comparison, New York, the richest US state, has about twice the per capita income of Mississippi, our poorest. Importantly, people can move from poor states to rich ones in the US, but the hukou system prevents poor people from relocating within China. More on this below.

• Limits to educational opportunity. To start with, lots of Chinese have no education at all. To quote the indispensable China Talk substack:

“According to China’s 2020 census, only 30.6% of the population has ever attended high school (including non-academic vocational secondary school), which Stanford professor Scott Rozelle notes, “is lower than South Africa, lower than Turkey and lower than Mexico.” In 2022, roughly 40% of China’s middle school graduates didn’t go on to attend high school of any kind, and among the students that do continue their education, national policy stipulates that roughly half (“五五分流”) are funneled into non-academic vocational high schools with no path to enter college.”

Chinese 18-year-olds who are still in high school take the grueling gaokao exam each June. Your score determines your college and your future, so the pressure from families on Chinese teens is famously intense. You hear of 18-hour study days, seven days a week. Top students attend China’s top universities and can secure top jobs. Mediocre students become schoolteachers. One person who recognized the paradox of weak students becoming teachers cynically described it as a “devil to devil” career path. Rural students attend inferior schools, which creates strong incentives for parents to send their kids to boarding schools, where research suggests they often become isolated and depressed.

• Stratified health care. Universal access to decent healthcare is a cornerstone of Chinese communism. During the 1970s, barefoot doctors were romanticized in books like Norman Bethune’s “Away With All Pests”. Today, the healthcare landscape in China is divided between a truly massive public infrastructure and a rapidly growing, high-end private sector. Public hospitals handle about 90% of patient volume in China and are organized into three tiers. Tier 3 hospitals are large, well-equipped urban hospitals with the most experienced doctors. These can be quite crowded. Tier 1 and 2 hospitals are smaller community health centers or district hospitals for basic care and referrals.

  Many top public hospitals now have “International” or “VIP” departments. These offer shorter wait times, English-speaking staff, and private rooms at a higher price—often a middle ground between public care and private clinics. Major cities like Shanghai, Beijing, Guangzhou, and Shenzhen have seen an explosion in private healthcare by providers that cater almost exclusively to expats and wealthy locals. These facilities mirror Western hospitals, with English-speaking doctors, direct billing for international insurance, and luxury amenities.

  China has now heavily integrated AI into its healthcare delivery to address rural-urban gaps. You can consult with doctors via apps like WeChat or Alipay, receive a digital prescription, and have medication delivered to your door within hours. Many Tier 3 hospitals now use AI for preliminary screening of CT or MRI scans and skin conditions to speed up the triage process.

• “Hanification”. The Han majority in China officially recognizes 55 ethnic minority groups that make up about 9% of the population. Chinese policy towards its ethnic and religious minorities comes in two flavors: those for interior minorities and those for minorities on China’s borders.

  • Interior minorities. Yunnan is central casting for interior minorities. Bai, Yi, Naxi, Hui (Muslims), and Yunnanese Tibetans are seen as adding “local flavor”. Many are very successful in business. They receive extra points on their gaokao tests, making it easier for them to enter major universities. All speak Chinese, and many intermarry. These groups are Exhibit A in China’s effort to assimilate (and in many cases “Hanify”) its ethnic minorities.

  • Frontier minorities are Tibetans and Uyghurs (and to a lesser extent, Mongolians). These groups control large territories on China’s frontier and have often spawned separatist movements. They have organized religions that the CCP often sees as a rival to its authority. They have resisted adopting Mandarin. For these reasons, the CCP often views Tibetans or Uighurs as a threat to national unity. In Xinjiang and Tibet, the Chinese state sees ethnic identity through the lens of counter-terrorism or anti-separatism, not a happy melting pot as in Yunnan. The result is “hard” assimilationist policies: mass surveillance and detention, “re-education” centers, and boarding schools designed to prioritize Mandarin over mother tongues.

Head Scratchers: Strange Things About China

Some things always strike a foreign visitor as odd. That’s part of why we travel overseas.

• Scooter Swarms. In the 1970s, cars were reserved for senior communist officials. Everyone else rode black 50-pound Flying Pigeon bikes. As China advanced, cars became common, then ubiquitous, then electric. Shared bikes were invented here, and after some false starts, became widely available and cheap. On college campuses, they still are.

  But electric motor scooters (called “e-bikes” here, but they have no pedals) are rapidly displacing bicycles. They are very cheap (the low-end models cost about the same as a cell phone) and you can rent them quickly everywhere. As with the now hard-to-find bikes, you just scan a barcode and take off. You pay 10 yuan per hour ($1.30 at current exchange rates, roughly double that if you convert based on purchasing power) via WeChat or AliPay.

  Every road has hundreds of these scooters, which are both incredibly useful and super annoying. They increase road capacity and solve the last-mile problem, but they are a silent menace to anyone on foot or on a bike. These scooters are the backbone of China’s massive gig-based instant delivery services, a topic I plan to write about in more detail soon.

• Clueless Use of American Brands. I would not think of wearing a T-shirt with Chinese writing on it that might say “kick me, I’m stupid”. Here, lots of people wear brands out of context. Yankees hats are common, as are T-shirts that say simply “Colorado”. I sat next to a guy on a bus wearing a MAGA hat who had no idea what it stood for. An old guy wore a hat saying “PwrGrls,” a well-known women’s gym in Los Angeles. Another had a corporate shirt from Sig Sauer, a famous handgun maker.

• “Trumpchi” cars. The Guangzhou Automobile Group makes a car that sounds like a portmanteau of two world leaders: Trump and Xi. It’s a coincidence, but a funny one. GAC adopted the name, which translates roughly as “spreading good fortune,” long before Trump entered politics. It uses the GAC brand overseas because they found that “Trumpchi” does not sit well with many customers.

• Commodified Ethnicity. The state encourages ethnic identity as an aesthetic while strictly controlling it as a political force. Nowhere is this clearer than in the peculiar fad of ethno-phototourism.

  Throughout Yunnan, hundreds of young people rent the costumes of local tribal minorities and pay for a 2+ hour makeup session to prepare them for greatness on Chinese Instagram.2 They hire a professional photographer, often skanky guys with iPads around their necks who promise to improve the results digitally in case make-up doesn’t do the trick. They charge for two hours of fashion photos at iconic locations.

  Imagine thousands of young people in rented Navajo dress, complete with professionally applied warpaint, posing in front of the Grand Canyon for gig photographers carrying the latest Canon cameras and digital enhancement tools.

  This is not a minor fad. There are hundreds of these folks at every park, temple, or picturesque site in Yunnan – and Yunnan is stunningly picturesque. Ethno-tourism is a multi-billion-dollar industry that gives cultural appropriation a bad name. Worse, nobody seems to enjoy it very much.

What’s Broken

Some things in China just suck — to me anyway. Some may improve; others I am less confident.

• The Household Registration System. The hukou is China’s household registration mechanism that functions like an internal passport to restrict geographic mobility. It has been the bedrock of CCP social control and the preservation of privilege for decades. Although it should have been abolished with prejudice long ago, it is currently undergoing the most significant overhaul in its history. Here is how it works.

  • At birth, every Chinese citizen is assigned a hukou based on their parents’ registration that categorizes them as either rural or urban and identifies their city or village. Your hukou is the key to your social benefits and opportunities for economic mobility. If you live and work in a city where you don’t hold a hukou (e.g., a migrant worker in Shenzhen with a rural hukou from Sichuan), you often cannot access local public schools for your children, subsidized healthcare, or affordable housing.

  • The system is a NIMBY dream. It locks in the privileges of residents of super-cities like Beijing and Shanghai by guaranteeing them access to the country’s best hospitals and most elite schools. Their children face lower entry requirements for top universities. It protects their housing values and social prestige by strictly limiting the influx of poor people.

  • The state loves it. The hukou system provides a mechanism to control migration flows and prevent the formation of urban slums that often plague other rapidly developing nations, as poor people seek out opportunities only cities can offer.

  • Slowly, the hukou system is changing. With collapsing birth rates, China abandoned its ill-considered one-child policy. With overbuilt cities desperate to fill “ghost housing”, the CCP is finally loosening the hukou. As of this year, restrictions on obtaining an urban hukou have been almost entirely abolished in cities with fewer than 3 million people. In many cases, you simply need to live and work in a place for six months to qualify. Also, social insurance is increasingly decoupled from household registration. Workers can enroll in pension and health insurance plans in the city where they work, regardless of where their hukou is registered. Importantly, this only applies to small cities – Beijing and Shanghai still use a strict “Points System” based on education, tax contributions, and professional skills to limit entry.

• Smoking. Almost half of all Chinese men smoke, but fewer than 2% of women do. Even though state-owned tobacco companies see this as a “market opportunity”, female smoking is not a sign of independence in China like it was in the U.S. during the 1950s. Cigarettes remain high-status business gifts. And the state is hooked on tobacco: 30% of Yunnan’s public revenue comes from tobacco. This makes the province’s aspiration to transition from “brown” industries (tobacco and mining) to “green” ones (exporting hydroelectricity and tourism) much tougher. The state has a financial interest in addicting people, although in fairness, the use of nonsmoking areas in restaurants, hotels, and airlines has grown a lot.

• Political debate and independent journalism. There isn’t any. China’s future is decided by a small cadre of self-selected bureaucrats — and China is vastly poorer as a result.

• Privacy and digital security. I described this earlier. Cameras are everywhere. Americans traveling in China are subject to government surveillance, malware installation on devices left in hotel rooms, phishing attacks, and the monitoring of online activity, especially via public Wi-Fi or local apps. Your phone is monitored, your passport is checked frequently, and your activities are reported to the State Security Bureau. You must use WeChat or AliPay to communicate or pay for anything – and it’s monitored. Some of the travel tips below will help reduce your personal risk, but you cannot eliminate it completely.

Things You Rarely See in China

These are hard things to capture because it’s tough to spot what’s not here.

• Overhead electrical wiring. Once you notice this, it blows your mind — China has undergrounded almost all residential and commercial electric lines. In a few places, this process is not fully completed, but removing “spider webs” was a central part of China’s transformation of its electrical grid during its rapid urbanization between 1990 and 2015. This happened differently in different regions: big cities invested in IUTs, large integrated utility tunnels that carried water, electric power, gas, and sewage. Newly built areas or cities undergrounded utilities from day one. Smaller towns have gone house to house. The effect is impressive, especially in contrast to the 20+ year wait to get underground electrical wires installed on a single residential block in the Bay Area.

• Americans. We have visited plenty of tourist spots, but have only encountered two Americans — and then only for about ten seconds. We have met Russians, several Europeans, lots of Hong Kong-based Brits — but few Americans. This is nuts — Yunnan is rightfully a major tourist destination for Chinese travelers, who visit in the tens of millions. It’s amazing, and if you travel, you should come see it, even if Chinese visas and digital security make it harder than it should be.

• Litter or trash. If you work at it, you can find litter here – on obscure cul-de-sacs in the far end of nowhere — but it is really unusual. Recycling bins are everywhere. Some people still hand-sweep the streets at 5:00 AM, but there are also standard automated street sweepers.3 China is very clean.

• Rebellion. In every country, the young and congenitally dissident play a valuable role by challenging conservative mainstream norms. They may promote punk rock, heavy metal, or other angry music. They may dye their hair blue, get tattoos designed to offend, or wear preposterous clothing. Or they may write novels or create art that challenges mainstream sensibilities. Where homosexuality is suppressed, it often fuels the fires of rebellion (that it seldom does so anymore in the U.S. is surely a sign of progress). I walked past a dozen bars with live pop or rock groups in Linjiang tonight, and they all seemed listless. No blue hair in sight. I am sure that young people find ways to rebel in China, but most of it is hidden from my Western eyes.

• Bitcoin. It’s illegal here (though it’s widespread in Hong Kong). This is fine by me. Except that when my wife earned some RMB that we needed to transfer to a US bank account, Bitcoin would have let me evade China’s onerous capital controls. Which is precisely why they ban it, and we should as well — most of the use cases for crypto are to help people break the law.

Summary

Despite its problems, China is a justifiably and enviably optimistic place. People have seen massive, sustained improvements in their daily lives. Most are vastly better off than they had ever hoped to be.

One way to see this is to listen to how most Chinese view AI, which serves today as our global Rorschach test. Even in a terrible job market for college grads, the students and professionals we spoke with were surprisingly optimistic. They imagine that AI will be the best thing ever, not the worst. Americans are much more pessimistic; we worry about unintended consequences.

Try to visit China. It is a beautiful, wildly diverse country that is changing rapidly. Like the New York Times, I specifically recommend Yunnan, which has also become very popular with Chinese tourists. I was inspired to visit after listening to Dan Wang’s Conversation with Tyler. (I strongly recommend Dan’s essays, his excellent and widely acclaimed book, and his talk with the irrepressible Tyler Cowen.)

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I have come to China on and off for five decades and it never ceases to surprise me. I spent the past week in Southern China. Here are some notes.

Economic Growth

Rapid economic growth is a miracle, especially in a desperately poor country. Growth does not address every social problem and it always creates a few — but it solves the important ones and gives a country a shot at figuring out the others. Nothing else does this.

The China I saw in 1974 was a miserable place. 90% of China lived in grinding poverty under a political system that had become psychotic during Mao’s Cultural Revolution. They aspired to someday own a bicycle, a radio, and a crappy refrigerator.

With the death of Mao in 1976, China began its historic transformation. They moved from collective farming to the Household Responsibility System, which allowed farmers to sell surplus crops for profit. They created state investment planning and state-controlled banks and capital markets to finance rapid, long-term growth. This produced the usual politicized investment decisions that lead to housing crashes and massive overproduction in some sectors, including EVs. But in China’s case, it also produced astonishing economic growth.

China tested markets and entrepreneurship by establishing four Special Economic Zones in 1980. Three of these laboratories of capitalism thrived, but the one outside of Guangzhou absolutely exploded. A fishing village called Shenzhen grew from 30,000 people to a global tech hub of over 17 million today. It’s a city with self-driving cars, drone delivery, and the largest network of electronics suppliers on the planet. Standing in a gleaming showroom for Xiaomi cars, I realized that Shenzhen helps China build some of the best cars in the world. For anyone who saw Canton in 1974, it’s gobsmacking.

As labor costs rose, China pivoted from cheap manufacturing to high-end technology and massive infrastructure projects. When I visited in 2008, China had not a single high-speed train. Today it has more than the rest of the world combined. In 2008, nobody used credit cards — and they still don’t. As the West moved from cash to credit cards, China leapfrogged directly to mobile payments, creating a cashless society in less than a decade. When my wife pulled out some cash at a student cafeteria (where a camera had scanned the various dishes on our trays and instantly computed the charge), the cashier laughed. She had no cash register.

China today is navigating a classic middle income trap. The population is aging, so the college campus hosting us has trouble recruiting enough students. A heavy reliance on commercial and residential construction has led developers and local governments to overbuild. They have loans they cannot repay, but state-owned banks are reluctant to acknowledge this. Rapid industrialization made China the world’s largest carbon emitter — and the world’s largest investor in green energy. Chinese income inequality is now comparable to the US.

China today faces high-class problems compared to the ones it faced in the 1970s. To see a country that has lifted over 800 million people out of poverty is to witness an achievement unparalleled in modern history. To see it build beautiful cities with extensive lakes, parks, and greenways simply takes your breath away (even if some of the gleaming skyscrapers are half empty). To hear citizens of Shenzhen brag that their city measures the time it takes to repair a reported cracked sidewalk tile not in weeks or days, but in hours, makes me jealous. It gives new meaning to “state capacity”.

Surveillance

The Chinese government knows where you are at all times. Generally, they don’t care much — but they can find you quickly if they wish to. Historically, this meant plain clothes cops who watched over tourists and made little effort to disguise themselves.

Now uniformed cops are still abundant, but they have technology helpers. Outdoor video cameras are everywhere. Even on a wooded path on a remote college campus, there is an eye in the sky. The cameras are backed by an extensive system of facial recognition that worked even during Covid when faces were masked. On top of that, every cell phone and every car is registered, tracked, and tied to your national identity. You board trains using your national ID card — or passport if you are foreign. Misbehave, and your inability to board trains is the least of your worries.

Managing hundreds of millions of cameras requires a sophisticated, multi-layered architecture to handle the sheer volume of data. It requires advanced facial recognition, and AI software to interpret it. This in turn requires staggeringly large computing clusters and a “National Team” of AI companies to develop standardized protocols so that a camera in Zhuhai can talk to a database in Beijing. This national Panopticon was built by a government that keeps an very watchful eye on its citizens.

The system may be the result of a low-trust regime, but the paradoxical result may be that citizens trust each other more. There is no fear of crime. On a campus, students leave bags with MacBooks exposed unattended on benches. Women walk alone in the dark. When I ask people about whether they find the cameras intrusive, the answer has twice started with “we have a different view of this. In our experience, everyone behaves better when they are on camera”.

Personally, the system gives me the creeps — but the benefits are hard to dismiss.

Future Cars

China today is consolidating car companies the way the the United States did in 1921. At the time, we had 88 car companies and thousands of suppliers. Long before Silicon Valley, the San Francisco Bay Area was considered “the Detroit of the West”. Durant Motors of Oakland, and San Francisco’s California Automobile Company, are long gone. As is Kleiber Motor Company, which built passenger cars at 10th and Folsom in San Francisco. Or Emeryville-based Doble Steam Car Motors. Or luxury carmaker Fageol from Oakland.

It took two decades for the US car industry to consolidate down to the Big Three (GM, Ford, and Chrysler). Like everything else, it’s happening faster in China. China ended up with too many car companies thanks to a massive influx of government-subsidized electric vehicle (EV) startups. About 500 companies in 2019 have combined down to about 100 today.

More consolidation is coming. Analysts predict the great automotive company die-off will end with perhaps 8–12 major players by 2028. The top three companies already control nearly 47% of the market.

The consolidation is political as well as economic because China has built “Local Champions”. These are State-Owned Enterprises (SEOs) backed by provincial or municipal governments. EV SEOs benefit from local tax breaks, land grants, and government procurement. It feels like soccer teams: Shanghai has SAIC, Guangzhou has GAC, and Beijing has BAIC. They should issue jerseys.

Increasingly, you see two kinds of automobiles in China: future cars and past ones. Past cars are either obscure brands — the Durant Motors of China — or they have combustion engines and sport blue license plates. Many of them are familiar Japanese nameplates. Japan looks to have missed the transition to EVs and seems likely to die off here along with the dozens of oddball EV brands.

Future cars are easy to spot. They are EVs with green license plates and recognizable brands. This includes all taxis. Future cars include:

• Tesla. The Model Y and Model 3 are made in Shanghai and are popular here. There are as many Teslas in the Bay Area of South China as in the California Bay Area, but nobody worries about Elon’s politics.

• BYD, the EV giant whose cars are aggressively priced and high-quality. I’m still not sure why putting “Build Your Dreams” in English helps sell cars in China, but it seems to work.1

  

• SEOs like SAIC (which has powerful joint ventures with VW and GM), and Changan Automotive.

• Geely (which owns Volvo, Polestar, and Lotus. So yes, you can buy a Chinese EV in the US).

• Luxury carmakers. Xiaomi, which began as a cell-phone maker, but now sells kitchen appliances, home tech, and killer cars. See a great MKBHD review of the Xiaomi SU7 here.

• Tech-forward brands. I am not sure whether brands that focus heavily on software, user experience, and cutting-edge features will survive, since these advances are quickly copied by larger companies. (You want in-car karaoke? The one I tried failed to improve my singing.) These include Li Auto (maker of high end SUVs), NIO Auto (the “Tesla of China” famous for its battery-swapping stations), and XiaoPeng, which positions itself as the leader in autonomous driving and smart cockpit technology.

The Last Grownup

It’s odd to be an American in China as our mad king president beclowns himself before the world. In just four weeks, Trump has provoked the largest energy disruption in history, enriched Russia, threatened to starve poor countries, and further squandered American resources and reputation. He has handed China an extraordinary opportunity to enhance its global reputation — although they may not have the confidence to take advantage of it.

Many world leaders now regard China as the last grown-up in the room. While Beijing faces significant economic risks due to its energy dependence, but the long-term geopolitical benefits that the crisis offers China may outweigh the short-term costs for several reasons:

• The US is now fully distracted. American military, financial, and political capital is rapidly dwindling away from the Pacific theater. A war in the Middle East forces the U.S. to redeploy carrier strike groups, high-end interceptors, and precision munitions that were intended to deter China in the South China Sea or Taiwan Strait. Beijing may perceive a “window of opportunity” where the U.S. lacks the domestic will or military bandwidth to protect Taiwan.

• China has a learning opportunity. China is using the conflict as a live laboratory to study American military capabilities. By observing U.S. and Israeli strikes, Chinese intelligence can analyze the performance of U.S. Aegis and Patriot missile defenses and electronic warfare tactics.

• The war may accelerate China’s energy independence. China is the world’s largest oil importer and has also prepared massive reserves. While the war causes some immediate pain, it may also serve as a catalyst for China’s long-term goals. The volatility of the Strait of Hormuz will likely accelerate China’s transition to renewables and its push for land-based energy pipelines from Russia and Central Asia. China may use the crisis to push for oil trades to be settled in Yuan, further challenging the dominance of the U.S. dollar in global energy markets.

• China can seize the diplomatic and moral high ground. Beijing positioned itself as a neutral mediator in the 2023 Saudi-Iran deal, while portraying the U.S. as an agent of chaos. This resonates with many “Global South” nations who are wary of Trump and U.S. military intervention. If the U.S. focuses solely on military action, China can deepen its economic and diplomatic ties with other Gulf states like Saudi Arabia and the UAE. They can offer to invest in infrastructure without the baggage of a military alliance. They can offer to backstop poor countries facing issues financing energy that is suddenly much more expensive. China’s trade surplus gives it a pile of dollars to lend.

Writing in the Financial Times, Adam Tooze suggests that China could build alliances by sharing its privileged status in the Strait of Hormuz. He notes that “It is not by accident that tankers are rumoured to have been rebadging themselves as Chinese.” He suggests that Beijing could also offer to contribute to a global oil reserve or join with other countries to create a global push for alternative energy.

China might even emerge as a peace broker, potentially wielding not only global credibility, but serious power if they decide to pressure combatants to reconcile by curtailing access to rare earths or other critical war materials .

Will China rise to the moment? It’s in a tough spot because it imports nearly half of its oil through the Strait of Hormuz. If Hormuz remains blocked, China’s manufacturing sector and domestic finances would be at risk. A global recession triggered by $150+ oil prices would devastate China’s export-heavy economy.

But China really is the last adult standing. Even though I regard it as our geopolitical rival, I would love to see it shed its traditional defensiveness and paranoia and assume its rightful place on the world stage.

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Progressive schadenfreude — the secret pleasure that many Democrats take in Trump’s self-inflicted blunders — is a dangerous emotion. It leads Dems to imagine that a blue wave this November is all but inevitable. It is not.

Trump is profoundly unserious and at times dangerous, but Democrats cannot build an opposition movement merely by laughing at the clown. The working-class voters who once formed the party’s backbone won’t return simply because Democrats mock Trump. Too often, what those voters hear is not solidarity but the condescending laughter of the elite professionals who drove them from the party in the first place.

And even if the schadenfreude were justified, there is the problem of the map.

It’s Hard to See a Blue Wave From Here

Even if Trump’s ratings collapse as oil prices skyrocket, there is an upper limit to how many seats Congressional Democrats can actually win. The gold-standard Cook Political Report assigns every US Congressional district to one of seven buckets: Solid, Likely, and Lean either Democrat or Republican, and a “Toss Up” bucket for races that are too close to predict. They work hard at these classifications, and they have a very impressive record.1

Their latest House Race Ratings show that Republicans are unlikely to retain their majority — but they are hardly facing a wipeout. Cook sees only 17 GOP seats in the “Toss Up or worse for Republicans” category. Assume that Democrats win every one. Then add the next tier — seats that “lean Republican” — and you still only reach 20 competitive races. That’s well below the post–World War II average midterm loss of 26 seats for the president’s party.

Even if you give Democrats all 15 seats Cook rates “Likely Republican,” you would still only reach 35 potentially vulnerable seats. Democrats may win a few of these, but they cannot win most of them.

In short, Democrats could have a great election and still fall short of what they achieved in the genuine blue waves of 2006 and 2018. Other respected forecasters — Inside Elections with Nathan L. Gonzales and Larry Sabato’s Crystal Ball — reach similar conclusions. Despite Trump’s appalling ratings, the map simply does not foretell a historic Democratic rout.

The reasons are structural, and they start with the 185 “Solid Republican” districts.

• The Trump floor. Most Republicans in Congress sit in deep-red districts where Trump’s overall approval among Republicans is still in the low 60s. With oil prices rising daily and questions about Trump’s mental acuity, authoritarianism, and ethics becoming widespread, that floor could crack — but it would crack from a very high base.

• Vulnerable Republicans are already gone. The GOP is down to just 218 seats. Compare that to the 241 they held before losing 41 in 2018, or the 256 seats Democrats held before Obama’s catastrophic 2010 midterm. Today, only three Republican House members represent districts that Kamala Harris won in 2024. The low-hanging fruit has been picked.

• Purple voters are gerrymandered out. Among independents, Trump’s numbers are dismal — approval in the high 20s and low 30s — but gerrymandering and political self-sorting have reduced the number of truly competitive districts to the point where those independents don’t have enough leverage to swing many races. Only 8% of Congressional Districts “Lean” red or blue, or are rated “Toss Up.” The vast majority of Americans are independents, but they vote in Congressional Districts gerrymandered to favor one of the two major parties.

So what does all this mean for Democrats? It means that antipathy toward Trump is necessary but insufficient. They need voters to actually want to vote for them. And that requires confronting an uncomfortable truth about why so many voters find the party hard to like.

A Party That Lost Its Base

The Democrats’ likability gap is both a cause and a consequence of a demographic earthquake that reshaped the Democratic coalition over the past three decades.

• Non-college voters walked away. In 1992, white voters without a college degree made up roughly half of the Democratic vote. Machinist union members in Ohio, waitresses in Pennsylvania diners, construction workers in Michigan — they had voted blue since their grandparents pulled the lever for FDR. By 2020, that share had been cut in half, to around 25 percent. In a single generation, the Democratic Party’s center of gravity shifted from the shop floor to the corner office.

This is the “diploma divide” at work, and its consequences are everywhere. In 1996, Bill Clinton was the last Democratic presidential nominee to win a majority of white voters without a college degree. By 2020 and 2024, Biden and Harris were winning roughly 60 percent of college-educated voters while Trump was capturing about 66 percent of white non-college voters. Education, which was once a weak predictor of voter choice, slightly favoring Republicans, is now one of the most powerful sorting mechanisms in American politics.

Research published by the National Academy of Sciences in 2024 confirms the pattern: voters in the top 10 percent of household income, those with advanced degrees, and those in professional white-collar occupations have moved steadily leftward over the past 40 years. Accusing the Democratic party of being led by and optimized for elites may sound like a Republican talking point. It is also a painful demographic fact.

A seeming counterpoint: Democrats did not lose union members, who still vote Democratic roughly 59 to 39 percent. But today’s union members are more likely to have a college degree than nonunion workers.2 “Union member” now means teacher, government employee, and healthcare manager — not the private-sector industrial worker who anchored the New Deal coalition. The curriculum coordinator and the registered nurse have more political influence in the party than the autoworker, the coal miner, or the steelworker.

• Democrats lost rural voters. The diploma divide has a geographic mirror. Professional-class Democrats are increasingly clustered in knowledge hubs — the Bay Area, Austin, the Research Triangle, the Northeast corridor — creating an urban-rural split that maps almost perfectly onto the professional-manual labor divide. Democrats are strongest where the knowledge economy thrives and weakest where people work with their hands.

• Democrats lost men. The diploma divide also tracks a gender divide. Since 1982, more women than men have earned four-year college degrees; since 1987, more women have earned master’s degrees; since 2006, more women have earned PhDs. Over this same period, the Democratic party moved from a relatively balanced (or even male-majority) industrial-era coalition to a predominantly female-majority one. Women have favored Democratic candidates since the early 1980s, but the compositional flip — where women became the overwhelmingly dominant share of the party’s voters — accelerated in the late 2000s.3

These three losses — non-college voters, rural voters, men — are not separate crises. They are the same crisis, viewed from different angles. And they would be manageable if the shift were simply a matter of coalition arithmetic. Parties evolve. But the diploma divide hasn’t just changed who votes Democratic. It has changed how the party talks, what it prioritizes, and how it makes people feel.

Why This Makes Democrats Unlikable

Analytic messaging. A party dominated by professionals tends to communicate like professionals. It favors complexity over simplicity, frameworks over feelings, white papers over bumper stickers. For all their internal contradictions, Republicans communicate clearly: “Drill, baby, drill.” “Build the wall.” “Make America Great Again.” You can disagree with every one of those slogans and still admit they communicate something immediate and visceral. What is the Democratic equivalent? “Build Back Better” fell flat. “No Kings” and “Democracy is on the ballot” resonate with the base but sound abstract to a swing voter worried about grocery prices.

Elitist messaging. Status-conscious professionals can be condescending — and too many Democrats with graduate degrees who live in a handful of prosperous metro areas treat disagreement as ignorance. Even when they are right on the merits, phrases like “science says” and “experts agree” communicate an unmistakable subtext: we know better than you do. For a voter working for a living in a town that the knowledge-economy boom passed by, that message lands like a slap.

This is the likability gap at its most corrosive. The policies are often not the problem. Majorities support the party’s positions on healthcare, Social Security, and prescription drug prices. The problem is that the messenger class has become so socially and economically distant from the persuadable voter that the message consistently misses the mark. Customers will walk away from the best product in the world if the salesperson makes them feel stupid.

Relatability, Clarity, and Generosity of Spirit

When I say Democrats need to become more likable, I don’t mean they need to smile more or crack better jokes at town halls (although that never hurts). I mean that they need to fundamentally rethink how they present themselves to voters who aren’t already in the coalition — and, crucially, to voters who were in it but walked away.

Likability in politics comes down to three things: relatability, clarity, and generosity of spirit.

• Relatability means talking about kitchen-table issues in language that doesn’t sound like it was drafted by a policy shop. It means acknowledging that people’s frustrations with government are often legitimate — even when those frustrations don’t map neatly onto the party platform. It means more beer and less whine.

• Clarity means having a message simple enough to repeat. Democrats are often so afraid of oversimplifying that they end up saying nothing memorable at all. The party needs an economic message that a worker on a break can repeat to a coworker. “Your grocery bill should not win the race with your paycheck” makes rising costs personal without mentioning “inflation.” “They cut their taxes and your healthcare” is simple, adversarial, and points at a specific policy choice rather than a vague villain.

• Generosity of spirit is the hardest — and the one Democrats most urgently need. It means not treating every disagreement as a moral failing. It means making room in the coalition for people who might vote with you on economics but disagree with you on immigration enforcement or cultural questions. It means retiring the instinct to call people bigots for holding views that were mainstream Democratic positions ten years ago. A professional-class party tends to enforce ideological conformity the way professional-class institutions do — through social sanctions, HR-speak, and the implication that dissent reveals a character defect. Sanctimony is poison in a party that needs to win in Scranton as well as San Francisco.

Follow the Leaders

Fortunately, Democrats already have a proof of concept. The candidates who win tough districts despite a toxic national brand tend to share certain traits: they run on local issues, they don’t sound like Twitter, they project warmth rather than righteousness, and they treat voters as adults capable of holding complex views.

• Jared Golden represents a rural, working-class Maine district that Trump won by 10 points in 2024. Golden consistently breaks with his party on gun control and spending, maintaining a credibly independent profile. (Regrettably, he is retiring.)

• Marcy Kaptur, the longest-serving woman in House history, represents a manufacturing-heavy district in Northern Ohio that has trended significantly Republican. Her relentless focus on trade, labor, and bread-and-butter economics has allowed her to survive even as the surrounding region shifted.

• Vicente Gonzalez and Henry Cuellar both represent South Texas districts that saw massive Republican gains in 2024. Despite Trump winning their districts, both won re-election by taking border security and local energy and agriculture interests seriously.

If Democrats want to flip those 20 competitive Republican seats and hold their own vulnerable ones, they need more candidates like these — and fewer candidates who sound like they’re running for the editorial board of a prestige magazine. The impulse to nationalize every race around Trump is understandable but self-defeating. In the districts that actually matter, voters already know how they feel about Trump. What they don’t know is why they should trust the Democrat on the ballot.

This also means the national party needs to give local candidates breathing room. Let the candidate in a Central Valley swing district talk about water policy without having to answer for every progressive position that polls well in Brooklyn. Let the suburban mom running in a Virginia exurb emphasize fiscal responsibility and public safety without being accused of betraying the cause. A party that disciplines its moderates into silence is a party that cannot grow.

The Stakes of Getting This Wrong

The Cook data makes one thing brutally clear: the ceiling on Democratic gains is lower than the base wants to believe, and the floor on Republican losses is higher than it should be given Trump’s pathetic incompetence and growing unpopularity. Democrats could win back the House with a net gain of as few as four seats. But they could also fall short — not because voters approve of what Republicans are doing, but because they don’t find the alternative compelling enough to show up.

Trump’s die-hard MAGA base is deeply committed, but it is shrinking. At the start of this year, his approval among Republicans was locked in the 80s. The ICE shootings, the Epstein files, and the attacks on Venezuela and Iran have eroded it significantly — though he remains above 50% with Republicans. More important than the base’s erosion, however, is what it reveals: an enlarging middle of the electorate, reachable by Democratic candidates who stop treating persuasion as beneath them.

Those candidates need to meet people where they are, not where the party’s professional class thinks they should be. They will need to project competence and warmth instead of credentialism and superiority.

The Democratic party spent the past 30 years trading blue collars for blue checks. That transformation brought real strengths — fundraising, institutional power, cultural influence. But it created a party that millions of working Americans no longer recognize as their own. Reversing that perception doesn’t require abandoning the college-educated voters who now anchor the coalition. It requires remembering that a winning party has to feel like home to more than one kind of American — and that nobody likes the HR Department, or a party that sounds like one.

Democrats don’t need a wave. They need a reason for people to join them rather than to avoid the other side. The voters are there for the winning. The question is whether Democrats are willing to do the harder, humbler work of earning their support.

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Modern Times will slow down a bit during the next month as your scribe heads to China.

ICYMI

• Matt Yglesias on detoxing the Democratic brand.

• Richard Haass: Open Hormuz for everyone — or close it to everyone. Smart.

• Cass Sunstein on the death of Jurgen Habermas, a postwar intellectual titan.

• Why do we eat popcorn in movie theaters?

• As idiot teens, my wife and I both chose our colleges in part because the weather was nice on the day we visited. Turns out lots of people do.

• Singapore has built cyborg cockroaches to rescue people from earthquake rubble and test old sewer lines. Seems to work.

During the Korean War, U.S. Air Force Colonel John Boyd sought to understand why American F-86 pilots achieved such a lopsided kill ratio against technically superior MiG-15s. He formalized a theory of competitive decision-making that would reshape American military doctrine for a generation. He called it the OODA loop: Observe, Orient, Decide, Act.

His core insight was deceptively simple. Victory doesn’t go to the side with more firepower. It goes to the side that cycles through the decision loop faster — the side that can observe what’s changing, orient on its meaning, decide what to do, and act before the adversary has finished reorienting. Get inside your opponent’s loop, and you don’t just outpace him. You break his ability to form a coherent picture of the war he’s fighting. His framework applied to pilots in a dogfight – and to their commanders.

Two weeks into the U.S.-Iran war, the evidence is mounting that Iran has gotten inside Trump’s OODA loop. Not because Iran is stronger — it manifestly is not — but because Tehran has imposed a tempo and a logic on this conflict that Washington cannot match with the tools it is willing to use.

Reaction Replaces Initiative

The clearest sign that an adversary is inside your OODA loop is that you stop acting and start reacting. Every move you make is a response to something they just did, rather than an execution of your own plan. Your decisions are always one beat behind. By the time you’ve oriented and decided, the situation has already shifted again.

Look at the sequence of events. The U.S. launched strikes expecting to shatter Iran’s capacity and will. Iran responded not by absorbing the punishment and suing for peace, but by widening the war horizontally — attacking tankers in the Strait of Hormuz, launching drones and missiles at Gulf state infrastructure, hitting Amazon data centers, and squeezing other chokepoints that the global economy depends on. As University of Chicago political scientist Robert Pape observes, this is a textbook strategy of horizontal escalation: a weaker combatant transforming the stakes of a conflict by widening its scope.

And what has Washington done in response? Released 172 million barrels from the Strategic Petroleum Reserve. Tried to solve what it initially misdiagnosed as an insurance problem for tankers. Watched the IEA announce the largest reserve release since its founding in 1973. Each of these is a reactive measure — an attempt to manage consequences that Iran is generating faster than Washington can contain them.

The Orientation Crisis

Boyd considered orientation the most critical phase of the loop — the mental model through which you interpret reality, the framework for making sense of what you observe. When an adversary gets inside your loop, orientation is the first thing that breaks. You can no longer build an accurate picture of what’s happening because it keeps changing before you finish assembling it.

The U.S. has a severe orientation problem in this war. The administration appears to have oriented on a model in which overwhelming airpower would either compel Iranian capitulation or trigger regime change. Neither has happened. As Pape notes, the regime is doing exactly what regimes do when they survive decapitation strikes: demonstrating resilience by widening the conflict. Yesterday in Dubai:

Meanwhile, the administration’s economic orientation is equally scrambled. Trump publicly blustered that America benefits from high oil prices — a statement that reveals a fundamental misperception of the nature of the threat. As Javier Blas notes at Bloomberg, the oil market can be as savage as the bond market in twisting a politician’s arm. West Texas Intermediate is pushing toward $100 a barrel, and Brent has already breached that level. Every day the war continues adds an estimated $3 to $6 per barrel.

The White House’s breathing room is measured in days, not weeks. At $200/barrel oil prices, $8 gas, and renewed inflation, the U.S. will lead the world into a serious recession. Trump will face nightmarish midterm elections that will cost him the House and very possibly the Senate. Once his popularity hits new lows and he is a true lame duck, even impeachment could move within reach.

In any battle, orientation requires a leader to coldly assess a rapidly evolving situation. When a leader makes public statements that contradict the pressures they’re actually facing, it’s a clear sign that their orientation is broken.

The Narrowing of U.S. Options

A broken orientation doesn’t just produce bad analysis. It collapses the decision space. Instead of choosing among several good courses of action, you find yourself forced into an increasingly constrained set of increasingly bad ones.

Consider the menu of choices that Trump has now dealt himself:

• Bomb more. He can continue the air campaign, but as Richard Haass argues, continued strikes will further degrade Iranian capabilities without eliminating them, while Iran continues to make the Strait of Hormuz unusable and attacks Gulf neighbors. The cost-benefit ratio continues to shift further against the U.S. with each passing day.

• Hope for a new regime. Trump can hope for regime change — what some are now euphemistically calling “regime alteration.” But as Haass bluntly puts it, this qualifies as hope, not a strategy. There is no feasible military operation to bring it about; the current regime believes it is in an existential fight; and there is no organized opposition to challenge the clerics and their Republican Guard.

• Declare “mission accomplished” and walk away. Trump is no doubt tempted. But this would simply mean that the war and economic turmoil continue. Shipping would never resume, and investment in the Gulf would effectively come to a halt. Trump’s problem is that although Iran had no say in how this war began, it gets a vote on how it ends.

• Negotiate. Or Trump can sit down at the same diplomatic table he could have sat at before the war, only now with less leverage, a more determined adversary, and allies who are furious at the damage he has allowed Iran to inflict.

Every one of these options is worse than what Trump had available two weeks ago.

Iran’s Tempo Advantage

How has a country with a fraction of America’s military power managed to get inside the OODA loop of the world’s most powerful military? By choosing to fight an asymmetric war on a battlefield where its cycle speed is inherently faster.

In his new book, Johns Hopkins political scientist Vali Nasr makes this point incisively. Iran’s leaders are veterans of asymmetric wars in Iraq and Syria, and they are applying the same logic to a new domain. Inexpensive drones, short-range missiles, and mines setting tankers can have the same effect that IEDs had in Iraq — only with far greater strategic impact, because they disrupt global supply chains rather than just local patrol routes.

The asymmetry is critical. Iran can sustain this counteroffensive more easily and for far longer than the U.S. can sustain the economic damage. An Iranian Shahed drone made of styrofoam and powered by a motorcycle engine costs orders of magnitude less than the precision missiles sent to intercept it or the economic havoc it causes when it ignites a tanker, data center, or desalination plant. And as Blas reports, the desalination vulnerability is existential for Gulf states: Riyadh would have to evacuate within a week if the Jubail plant or its pipeline were destroyed. Iran doesn’t need to destroy it. It just needs to make the threat credible enough to keep the pressure on.

Iran doesn’t need to match American firepower. It needs to generate a tempo of consequences — economic, political, humanitarian — that outruns Washington’s ability to orient, decide, and act.

The Sunk-Cost Trap

There is a darker dimension to this OODA loop failure, and it concerns what happens next. Eurointelligence raises the troubling possibility that rather than recognizing it has fallen behind the decision cycle and recalibrating, the administration may double down — not because escalation serves strategic objectives, but because of the sunk-cost fallacy. Having incurred enormous costs, walking away means doing it all for nothing.

Boyd would have recognized this immediately. One of the pathologies of a broken OODA loop is that the decision-maker, unable to form a coherent picture of the battlefield, escalates not because the situation calls for it, but because retreating is psychologically unbearable. The loop doesn’t just slow down; it ceases to function as a rational decision-making process altogether.

The consequences ripple outward. Eurointelligence documents how the war has already shifted the Russia-Ukraine power balance, with Russian oil revenues potentially doubling and U.S. weapons stocks depleted. The longer Trump’s OODA loop stays broken, the more that second-order effects no one planned for accumulate and cascade.

Getting Back Inside Iran’s Decision Loop

Boyd’s framework isn’t just diagnostic. It’s prescriptive. The way to recover when an adversary is inside your loop is to do something they don’t expect — to break their orientation rather than continuing to feed it. Predictable escalation is exactly what Iran has planned for. Tehran wants the U.S. to keep bombing while it keeps squeezing the strait, because every day that cycle continues, the economic and political pressure builds on Washington, not on Tehran.1

Richard Haass sketches one approach to breaking the cycle: an initial standdown followed by a negotiated accord addressing nuclear materials, missile production, and proxy support, with sanctions relief as the incentive. It is, he acknowledges, imperfect. But it has the virtue of being a move that breaks Iran’s current orientation — because Tehran’s entire strategy is predicated on the assumption that Washington will keep fighting until the economic pain forces it to stop on Iran’s terms. A decision to negotiate now, from a position of demonstrated military capability rather than exhaustion, would force Iran to cycle through its own OODA loop — to observe a changed situation, reorient, and decide how to respond to an adversary that just did something unpredictable.

But here is where Boyd’s clean geometry collides with the wreckage of recent history. Iran’s new Supreme Leader, Mojtaba Khamenei, has little reason to trust any bargain with Trump, who has now burned Iran three times.

• First, Trump ripped up the JCPOA — the deal Obama painstakingly negotiated with Khamenei’s father in 2018 on inspections and enrichment limits.

• Then Trump bombed Iran’s nuclear facilities in the middle of negotiations last year.

• This year, he attacked again – and made it personal. The younger Khamenei narrowly escaped the February 28 attack that killed his father, wife, daughter, son, and several members of his extended family. As a source in Tehran told The Atlantic‘s Karim Sadjadpour: “He’s bloodthirsty now.”

The OODA framework says the U.S. needs to do something unexpected to regain the initiative. The diplomatic record indicates that Iran has no reason to believe any American offer is genuine. Suddenly, the rational moves and the credible ones diverge. Boyd’s loop demands creative reorientation, but three rounds of broken faith have made creativity look indistinguishable from the next betrayal.

Boyd would say the first step is the hardest — admitting that your adversary, smaller, weaker, and outgunned, is winning the decision cycle. John Boyd was a fighter pilot for whom delusions were fatal. He assumed that once you recognized the problem, you had the character and credibility to reorient and act on the solution.

But political problems are not like that. Trump can remain deluded for a long time without admitting that his efforts to produce another compliant Delcy Rodriguez may leave us instead with an Iranian Kim Jong Un.

George Orwell saw this coming. In an essay called “In Front of Your Nose”, he observed,

“...we are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: the only check on it is that sooner or later a false belief bumps up against solid reality, usually on a battlefield.”2

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ICMYI

• Adults with fewer kids are buying many more children’s toys for themselves.

• Americans hate food delivery robots. They crowd sidewalks, and their food is easily stolen.

• Where do AI agents go to chat with each other? Moltbook, of course.

• The rise of ATMs did not kill off bank tellers. But the rise of iPhones did.

• Good news: initial evidence suggests that AI is better at cyber defense than offense.

In yesterday’s post, I discussed the problems that have killed annual wealth taxes in many rich countries that have tried them: complex valuations, liquidity issues for private company founders, and capital flight.1 I outlined the practices of nations like Japan that successfully impose substantial taxes on inherited wealth and argued that California’s billionaire tax initiative ignores these lessons while committing rookie legal and financial errors. The state ballot initiative cannot address the massive “buy, borrow, die” loophole that allows the ultra-wealthy to live off untaxed borrowing until death erases their capital gains entirely.

I suggested closing this loophole and folding all gifts and trusts into inheritance tax calculations. Even leaving the current $15 million individual exemption in place, this would generate $200–$300 billion annually. This is real money. It would cut 12–16% of our annual deficit or fund Universal Pre-K and completely close the Social Security funding gap.

But inheritance taxes are not the only way to tax wealth. This post proposes a structural pivot. Instead of just chasing individuals—who can hire lawyers, create trusts, and move to Austin—we would also tax the engines of wealth themselves and put some of this money to work alongside our most skilled investors.

The Corporate Equity Levy

Every company with a market capitalization above $1 billion would owe an annual levy equal to 0.5% of its equity value, payable by issuing non-voting shares to the American Commons Fund.

This is straightforward. A company worth $100 billion would issue $500 million in new shares each year to a newly-created sovereign wealth fund, here referred to as the American Commons Fund (ACF). No cash would change hands. The company remains whole. The founder still drives, but the public gets a seat in the back of the limo.

— Benefits

This approach avoids the trifecta of complex valuations, liquidity challenges, and capital flight that plague most wealth taxes.

• Easy valuation. The “army of appraisers” problem vanishes. Public companies have ticker symbols and real-time prices. Private unicorns are already valued during funding rounds and for Section 409A compliance.2 We are not guessing the value of a Picasso; we are reading a Bloomberg terminal.

• No liquidity crisis. This is the gentle tax. When California’s poorly designed initiative threatened to force DoorDash co-founder Tony Xu to sell an estimated 173% of his net worth just to cover a tax bill, it highlighted a fatal design flaw: you cannot eat paper gains. Under this model, the market absorbs the cost through dilution. The company stays intact. The founder stays put.

• No capital flight. You can move your home to Texas, but you cannot easily move a multibillion-dollar stock listing to the Cayman Islands. The tax attaches to the listing, not to the person. While companies could theoretically redomicile, the cost of losing access to the world’s deepest and most liquid capital markets is a price few boards would be willing to pay.

— Costs

There is no such thing as a free tax. This one imposes three financial costs:

• The dilution drag. Issuing 0.5% of equity annually is a permanent tax on the future. Over a decade, it compounds to roughly 4.9% dilution. Over twenty years, about 9.5%. How bad is that? Silicon Valley companies routinely dilute shareholders by 2–5% per year just to compensate their engineers. But voluntary dilution for talent is a choice; statutory dilution is a financial drag. All taxes are.

• The announcement hit. Markets are forward-looking. The moment this becomes law, investors price in the perpetual dilution stream. If you discount a 0.5% annual dilution at a 5% real required return, share prices drop by roughly 9–10% overnight. Call it a one-time cardiac event for the S&P 500—painful, but over quickly. The market adjusts. It always does.

• The threshold distortion. A cliff at $1 billion creates an incentive for companies to stay private longer or engage in financial engineering to hover just below $ 1 billion. The fix is straightforward: apply the tax only to the marginal value above $1 billion, creating a smooth phase-in rather than a punitive notch.

The Venture Option

The American Commons Fund would have the option to purchase up to 10% of any privately issued stock in a company raising $50 million or more, under the same terms as the lead investor.

ACF shares would be non-voting with negotiated information rights. If the company does not go public within ten years, it would have a right to repurchase the fund’s shares from ACF at fair market value.

— Benefits

One of the most significant sources of wealth concentration in recent decades is that private investors capture the highest returns before companies go public. In the 1990s, Microsoft and Amazon went public relatively early, allowing ordinary investors to participate in the upside. Today, companies stay private far longer. Stripe and SpaceX are worth tens of billions, and no public investor can participate. The venture option gives the public a way in.

The American Commons Fund would need to be selective. There are thousands of private financings each year; blindly exercising the option on all of them would produce mediocre returns. In practice, the fund would exercise the option on rounds led by top-tier investors or in sectors aligned with national strategic priorities.

Once you have established a sovereign wealth fund, this approach has some strengths.

• It solves adverse selection. The classic problem with government investment in private companies is that the government funds Solyndra, not SpaceX. But this mechanism sidesteps this problem. The ACF does not choose companies; it drafts behind investors who do. If Sequoia has done the diligence, negotiated the terms, and committed its own capital, the ACF is free-riding on some of the most sophisticated investment judgment in the world. The logic is the same one that makes index funds work: you do not need to be smart if you can attach yourself to investors who are.

• The terms are pre-negotiated. The American Commons Fund does not need a deal team, does not haggle over valuation, and does not negotiate protective provisions. It takes what the lead investor gets. This keeps operating costs extraordinarily low—you need analysts to decide which options to exercise, lawyers to process the paperwork, and a back office, but not the full infrastructure of a venture fund.

• It democratizes access to private-market returns. The ACF captures pre-IPO appreciation on behalf of the public. In practice, it operates as a silent limited partner riding alongside whoever priced the deal. If the fund’s returns flow back to households through dividends, Social Security support, or tax relief, this is a direct mechanism for sharing wealth creation that currently accrues almost exclusively to accredited investors and institutions large enough to access top-tier venture capital.

• It is non-distortionary. The company gets the same amount of capital it would have raised anyway. Operations, governance, and strategy are unaffected because the shares do not vote. The lead investor’s incentives are unchanged. The pricing is unchanged. The ACF skims a thin layer of return off the top of private markets without altering how those markets function. And the ten-year buyback provision prevents the fund from becoming a permanent, unwanted guest on the cap tables of companies that choose to remain private indefinitely.

• It creates a natural pipeline into the public company levy. The two programs are architecturally complementary. Companies that succeed and eventually cross the $1 billion market cap threshold transition from the voluntary co-investment regime to the compulsory equity levy. The ACF’s early private-market stake converts into a public-market holding, subject to the dilution of the .5% levy outlined above.

— Costs

Venture and private equity investors are unlikely to give this idea a standing ovation, as it amounts to a tax on their capital.

• Syndicate resistance. Venture rounds involve tight syndicates where relationships, reputation, and follow-on commitment matter. A lead investor allocates shares to co-investors partly based on the value those co-investors bring—introductions, expertise, future capital. Aside from committing to future rounds and introductions to federal buyers, the American Commons Fund is a dead weight on the cap table. If the ACF’s 10% displaces a strategic co-investor who would have provided real operational value, the company is worse off. Founders and lead investors would resent this, and you would sometimes see creative structuring to minimize ACF participation—side letters, unusual share classes, restructured rounds, and a surprising number of financings for $49.9 million. VCs are very good at this.

• The information-rights tension. At best, the American Commons Fund would negotiate the same information rights as other preferred shareholders—board observer seats, quarterly financials, cap table access, and material event notifications. This means the federal government, through the ACF, could have detailed financial visibility into thousands of private companies, including those in defense, sensitive technology, or politically charged sectors. Even with strict information barriers, the perception that the government has a window into a company’s private books could chill certain kinds of entrepreneurship. Foreign-founded companies raising money from U.S. investors would be particularly wary.

• Blind spots. Venture returns follow a brutal power law. The top 10–20% of deals generate virtually all of the returns; the rest return little or nothing. The ACF will need to exercise judgment about which rounds to join — and this partially recreates the deal selection problem it was designed to avoid. Moreover, venture deals contain subtle traps: bridge rounds disguised as growth rounds, leads investing defensively to protect existing positions, and side provisions that make headline valuations misleading. Sophisticated venture investors navigate these with deep relationship networks. A government fund would operate with less context.

Political capture is the greatest risk to any sovereign wealth fund, regardless of its funding source. Once the ACF holds meaningful stakes in thousands of companies, political pressure to use that position for non-financial objectives will become intense.

It is easy to imagine a senator proposing legislation to give the American Commons Fund voting rights on climate resolutions. Or that pressures the ACF to divest from firearms manufacturers, fossil fuel companies, or firms operating in disfavored countries. Or that require companies to sign labor agreements. Norway’s massive sovereign wealth fund, the world’s largest private investor, faces exactly these pressures. In early 2026, the U.S. State Department publicly criticized the fund for divesting from Caterpillar on ethical grounds related to the war in Gaza.3 The non-voting provision helps. But political gravity is relentless.

Insulating the American Commons Fund from political pressure will be an important part of its design, just as it was for the Federal Reserve Board. Among other provisions, the legislation should give companies and investors a statutory right to sue ACF for damages if it violates the terms under which it provides public capital.

The American Commons Fund: A National 401(k)?

The total market capitalization of U.S. public companies is roughly $69 trillion. A 0.5% levy would seed the ACF with approximately $345 billion in equity value in its first year alone.

At this scale, the non-voting structure is essential. Norway’s Government Pension Fund Global holds roughly 1.5% of all listed companies worldwide—and it votes its shares. That gives a single fund from a tiny country real influence over the governance of global corporations. To avoid the specter of “creeping socialism,” the American fund must be strictly non-voting. Neither Joe Biden nor Donald Trump should decide who sits on Apple’s board.

So what do you do with a fund that could eventually own 10% of corporate America? It might do any of several things (importantly, it cannot do them all).

• Improve fiscal sustainability. The ACF can use dividends and share sales to reduce the $34 trillion national debt without raising household taxes. The fund’s revenue stream would be less cyclical than corporate income tax revenue because market caps fall less in recessions than profits do. This provides a stabilizing buffer during economic contractions.

• Invest in critical sectors. Following the CHIPS Act model, the American Commons Fund can take stakes in critical infrastructure, rare earth processing, or domestic semiconductor manufacturing—channeling investment where strategic interests demand it.

• Provide citizens with a social royalty. The Alaska Permanent Fund has distributed between $1,000 and $2,000 annually to every Alaskan resident since 1982, funded by oil revenues that Alaskans decided belonged to the public.4 A seven-trillion-dollar ACF paying out 5% of its capital per year would send roughly $1,100 to every man, woman, and child in the United States. For a family of four, that is $4,400—not life-changing, but real money, and a tangible stake in the nation’s productive capacity.

Critics will call the state’s demand for a permanent equity stake in private success “nationalization by a thousand cuts.”

The response writes itself: “your success was built on a public ecosystem of laws, courts, and decades of investment in science, education, and defense. Paying forward your share so that others can succeed is not expropriation. It’s rent.”

I have serious practical concerns about the workability of wealth taxes. This has not prevented me from outlining three such taxes in two days.

• An estate tax that includes all gifts and trusts and removes any revaluing of assets at death. I would advocate a high exemption, perhaps the current $15 million, and a progressive tax on the balance ranging from 50-75%.

• A levy on the equity of large companies, payable annually in nonvoting shares held by the American Commons Fund.

• A portfolio of private nonvoting shares held by venture and private equity-backed companies. These shares are purchased at prices established by lead investors, not levied, but the right to the purchase will be viewed as a tax by the investors who need to make room for passive public financing.

Compare this to our current system: a messy, loophole-ridden income tax that largely leaves the more than $100 trillion in U.S. household wealth sitting beyond its reach.

We need to debate whether 0.5% is the right rate for a more stable union and how to structure an American sovereign wealth fund that can resist political capture. This would be vastly more productive than a spiteful ballot proposition that targets 200 wealthy Californians and hopes they don’t move to Texas.

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