This Boom Looks a Lot Like the Housing Bubble

Artificial intelligence is fast becoming the largest investment in U.S. history. As the money pours in, the companies involved are resurrecting bad old habits eerily reminiscent of the shenanigans deployed in the run-up to the financial crisis.

There are already signs that much of this investment may go bad. If it does, the consequences could rival what happened in 2008.

We know far too little about the financial plumbing propping up this surge. What little we do know looks remarkably like the tactics once employed by Wall Street firms like Lehman Brothers, the storied 158-year-old bank that collapsed in 2008, setting off a panic that ultimately cost taxpayers nearly $700 billion in bailouts in today’s dollars and nearly nine million Americans their jobs. Now as then, companies are hiding large amounts of debt off public balance sheets. Firms responsible for protecting our pensions and our insurance are again risking our money by snapping up complicated financial products backstopped by assets of uncertain value. A small group of companies are buying and selling large amounts of a hot product to one another, inflating demand for the product and obscuring the risks of the system in a web of complexity. The accountants and credit-rating firms that analyze the situation — and that are financially beholden to the debtors — are deploying shaky excuses to declare it all fine.

There are a few differences. With more U.S. funds in A.I.-heavy stocks than in homes, a crash could destroy more wealth than the 2008 financial crisis did. And the Trump administration, reportedly eager to prevent a bust, is making changes that inject new opacity and more risk into the situation.

There are already signs the nascent A.I. industry may not soon generate the trillions of dollars required to pay off all the huge debts it is incurring. Earlier this month, The Financial Times reported that the projected annual revenue at A.I. lab OpenAI was about $50 billion at the end of September, 28 percent lower than had previously been believed. Figures reported by The Wall Street Journal this month suggested that revenue growth at Anthropic, OpenAI’s chief rival, was softening. Markets are getting nervous, with the tech-laden Nasdaq falling over 5 percent over the last two weeks.

Anthropic and OpenAI are already so entangled in our economy (and in our national security) that if they sink, Washington will need a plan. Done right, any rescue would come with real safety guardrails, real insurance that we won’t cede control of the technology to China and real service to the public interest.

Lehman Brothers was born in 1850 as a cotton brokerage in antebellum Alabama. The A.I. chipmaker Nvidia was born in 1993 in a booth at a Denny’s in San Jose, Calif., and Meta in a Harvard dorm in 2004. And yet the financial circumstances surrounding those companies share an uncanny resemblance.

Start with hidden loans. A Wall Street Journal analysis in August concluded that the nine largest tech firms, Nvidia and Meta included, have managed to accrue $3 trillion of debt, or roughly 10 percent of the entire U.S. economy, off their balance sheets. Keeping the debt off the books (and away from the figures investors and regulators watch most closely) makes it easier for those companies to spend enormous sums constructing the data centers that drive A.I. — centers they believe will both improve the technology and satisfy an expected takeoff in demand.

Back in 2008, Lehman, too, accumulated lots of debt, primarily from buying subprime mortgages; those loans, which were targeted to home buyers with thin or imperfect credit histories, were the hot product of its day. The firm similarly avoided scrutiny by shuffling the debts off its balance sheet. When those mortgages went bad, so did Lehman, and its sudden demise nearly took much of the banking system with it.

Within days of its failure, Washington committed hundreds of billions of dollars to stabilize the financial system, and the Federal Reserve backstopped trillions more. Still, the rescue wasn’t enough to stave off the worst recession since the Great Depression. Millions of jobs and trillions in household wealth evaporated.

Now you might ask: Didn’t Congress pass legislation to prevent another crisis from occurring? Yes, but that law, known as Dodd-Frank, applied largely to lenders, which means banks and bank-holding companies. It left private creditors, back then a relatively small slice of the finance world, virtually untouched. In 2018, Congress, worried about the potential impact on small businesses, loosened rules to allow many private creditors to stretch their balance sheets. It ignored objections that money, like water, would always flow to the least regulated corners of finance.

Enter Silicon Valley. A.I.’s biggest players seized on the loosely regulated private credit industry to help finance their data center spree.

Another throwback to the bad old days of 2008: the way the A.I. firms and their main suppliers are buying and selling the technology and its infrastructure to each other, lending large sums to one another to fund the deals. Nvidia disclosed commitments and guarantees of over $530 billion to its own customers in July — more than triple the amount it was lending just three months earlier. Analysis by the asset manager Sona found at least 176 circular financing deals in the A.I. ecosystem that were worth $3.6 trillion over the past three and a half years.

Back in the housing bubble, major Wall Street firms came up with numerous complex ways to borrow from their rivals, with proceeds going to purchase even more subprime mortgages. The result made demand for those loans look greater than it actually was, and it built a financing web so tangled that it became difficult to parse any one firm’s exposure. As Lehman’s collapse later showed, such confusion meant that a problem anywhere can soon become a problem everywhere.

Then how about the fact that accounting firms, those given the job of calling out any warning signs, appear asleep at the wheel once again? Ernst & Young, which signed off on Lehman’s questionable accounting tactics before its collapse, is now being accused of offering more tautology than real comfort in its latest approval of Meta’s unusual accounting moves to fund its very expensive A.I. push. Everything is all fine, essentially, because Meta said it is.

Those are the similarities. Now for the differences.

This presidential administration, reportedly worried that any A.I. slowdown will beget a broader economic one (which, in turn, could worsen its political standing), is propping up the boom. Its measures likely goose the available money in the short term but will worsen the pain of any correction. President Trump wants to allow Americans to invest their retirement savings in private credit funds, ensuring they will lose directly if these data center deals go bad. The Securities and Exchange Commission has made it easier for data center owners and their lenders to slice and repackage this debt, which is exactly what banks did to subprime mortgage debts in the housing bubble. The S.E.C. is also proposing rules that allow newly public companies to disclose even less than they already do.

Another difference: This time, taxpayers are more clearly on the hook, because private creditors are more directly attaching A.I. debt to the financial products we need. Take annuities, which are often relied on by retirees. Because many Americans rely on such insurance products, their policies are usually guaranteed by the state should an insurer go bankrupt. Right now, private creditors like Apollo are funding the debt boom in part by tapping the money sitting in companies like Athene, the $470 billion insurer Apollo controls. Should the A.I. boom go bad and Athene go under, Apollo knows the state (i.e. taxpayers) will be on the hook for much of what it owes policyholders. (Athene’s opaque disclosures make it hard to know how much of its assets are in data centers.)

Private-capital-backed firms now own nearly 20 percent of the entire U.S. life insurance industry, with assets of nearly $1.5 trillion.

As bad as the financial crisis was, it began with a small slice of mortgages of a still-diversified economy. This time, the sector at risk is our economy’s growth engine. A.I.-related investment fueled an estimated one-third of the country’s recent economic growth, and the handful of companies most exposed to the A.I. build-out now comprise roughly one-third of the entire S&P 500.

In other words, the U.S. economy is fully hostage to an A.I. build-out laden with increasingly worrying financial engineering, all riding on a wager — that demand for A.I. will keep growing, that customers will soon be willing to pay what the technology actually costs to produce and that firms will manage to build the infrastructure required to supply it. Recent estimates indicate that A.I. would need to generate as much as $3 trillion annually in perpetuity to return the capital extended. That’s 9 percent of the U.S. gross domestic product, or twice what Americans spend on food.

Already, a closer look at the fundamentals of OpenAI and Anthropic, the most critical players in this bet, appears to be perhaps even worse than the headlines suggest. Right now OpenAI expects to lose $280 billion by 2030 even assuming revenues grow tenfold over the same period. And both OpenAI and Anthropic have already slashed prices 40 percent to 50 percent from early summer, perhaps because China’s Deep Seek, the leading “open weight” A.I. model, reportedly nearly matches their latest models’ performances at about 1.4 percent of the cost. Far less expensive open weight models have roughly doubled their share of token volume this year, according to OpenRouter, a service that tracks A.I. usage across all major providers. Prices and market share are shrinking; costs are not.

Such worries may explain why tech stocks have been taking a beating, and bond markets — normally where investors go for shelter amid financial turbulence — are volatile. Many of those private creditors — a sector that has grown sharply amid the A.I. boom, to between $2 trillion and $3 trillion — are showing classic signs of financial distress.

A final difference from 2008: The government deficit has reached historic highs.

by Jen Harris, NY Times |  Read more:

Image: Chuan Ming Ong
[ed. Sleepwalking into a disaster.]

How the Consulting Class Always Wins

How the Consulting Class Is Eating the Democratic Party

Image: Doug Chayka

[ed. I'd say both parties. Do small donors really matter much compared to their multi-billionaire counterparts? Does all that money spent on ads really move the needle much? (It sure moves it for me. Negatively.]

Obra de Ubé, proditio fraterna, (2026)

via:

What’s Riding on Anthropic’s Market Debut? Nearly Everything

When Anthropic goes public as soon as next month, its initial offering will be more than just a coming-out party for the artificial intelligence company. It will also be a litmus test for the economy, with trillions of dollars at stake.

Anthropic, which makes the Claude chatbot, is a tent pole of the AI industry. Valued in the private markets at nearly $1 trillion and backed by more than $130 billion in funding, it could raise $100 billion in its offering and promptly become one of the world’s biggest public companies. But the stakes are even higher than that.

Anthropic and OpenAI, its chief rival, sit atop a pyramid of business partners and suppliers — infrastructure providers, chipmakers, energy companies and AI startups — that have all spent heavily over the last four years because they believe demand for AI products will keep growing.

Anthropic’s listing will provide the first in-depth look at the health of a key business underlying the AI boom — and will be a test of its durability. Is there unending appetite for AI services to justify the spending on chips, data centers and other infrastructure? Or will Anthropic’s performance show that there are limits?

“For the market, it’s a bellwether,” said Umesh Padval, an investor at Seligman Ventures, who has worked in tech for nearly 40 years.

If Anthropic disappoints in its public debut, that could hurt investor confidence and cascade into a wider market sell-off, casting doubts on how much longer the AI boom can go. A successful offering could lift the market and pave the way for more AI companies to go public.

Stock markets are already on edge, with technology stocks broadly falling this month, led by a sell-off in the companies that design and produce the computer chips that power AI. The Philadelphia Semiconductor Index is in a bear market, defined as a decline of 20% or more from a recent high and a sign of significant investor angst, after falling 26% from its June peak.

Over the last couple of weeks, Microsoft canceled a deal with Nscale, a provider of data centers. A report from the research firm Gartner predicted that 80% of “neoclouds,” the companies that provide data and computing power for AI firms, could be forced out of business. And Ken Griffin, the billionaire owner of the hedge fund Citadel, said AI investors were “almost certainly” in a bubble.

Those negative signals have added to fears about the huge piles of money being spent on AI infrastructure. Amazon, Meta, Google and Microsoft have said they plan to spend at least $740 billion on AI infrastructure, including data centers, this year. Private market investors have poured $1.1 trillion into Anthropic, OpenAI and other AI companies since 2022, according to PitchBook, which tracks investments.

As spending and investment have risen in private markets, public investments have grown, too, increasing the stock market’s reliance on the performance of the AI industry. The top 10 stocks in the S&P 500 are worth more than $1 trillion together, with eight of them being tech companies. Combined, the top 10 account for over 40% of the index, up from less than 20% a decade ago.

When Anthropic is added to the index, it is likely to displace either Berkshire Hathaway or Eli Lilly, the only non-tech companies with valuations above $1 trillion, from the top 10.

“There is a lot riding on this one,” said Brad Gastwirth, the global head of research and market intelligence at Circular Technology, a supply chain services firm. “If it goes bad, it’s going to bring down the market.”

by Erin Griffith and Lauren Hirsch, Seattle Times/NY Times | Read more:
Image: Dustin Chambers/The New York Times
[ed. House of cards. Too many moving parts, with precarious circular financing, locked-in future contracts, uncertain political and regulatory climate, and a product that could kill everybody. Plus, no signs of AI payoff outside the tech sector so far. So, more than a little liability baked in. See also: Wall Street prepares for AI's "day after"  and, Anthropic to investors: Trump hates us so much (Axios).]

Comcast Loses More Customers, Claims Cheap Prices are “Irrational”

Comcast reportedly plans significant job cuts in its cable division as the firm continues to lose residential broadband and TV customers. Comcast lost 144,000 residential broadband customers in Q3 2026, up from a 91,000-customer loss in the same quarter a year ago, the company said in its earnings report today.

Comcast historically capitalized on a lack of competition for high-speed wired broadband. But now it faces stronger competition from fixed wireless providers and from fiber providers in parts of its cable territory.

“Fixed wireless remains aggressive and continues to take share, while fiber construction remains elevated, with pockets of irrational pricing and promotional activity,” Comcast co-CEO Mike Cavanagh said today in an earnings call.

Comcast CFO Jason Armstrong said “irrational pricing” from fiber operators includes $30 to $40 monthly broadband offers “in specific markets in the third quarter.” He said $30 to $40 pricing is irrational because deploying fiber costs $1,500 or more per home, and is “getting more expensive with construction costs up as you get into more suburban and rural areas.” [...]

Armstrong said more Comcast customers are leaving when they face “pricing transitions,” apparently referring to the price hikes customers get when promotional offers expire. “We’ve been refining our offers and retention strategies to better manage these transitions and strengthen customer retention,” he said. [...]

Fewer Jobs, More AI Agents

It appears likely that job cuts will affect Comcast’s famously frustrating customer service division, replacing some number of humans with AI agents that already handle some customer interactions. “As personal AI agents reshape how consumers discover, purchase, and manage services, we’re positioning Comcast to capitalize on that shift,” Armstrong said.

by Jon Brodkin, Ars Technica | Read more:

Image: Getty Images | Smith Collection/Gado

[ed. Comcast/Xfinity has been ripping off its captive audience for decades. Anybody shedding a single tear for them today? Ha! They upped my monthly internet bill by $10 in August, then another $10 in September, one month later. Guess they thought people on autopay wouldn't notice. I went in and told them I was leaving for a new fiber service in town and they promptly halved my bill.]

Fish, Family, Freedom

Alaska’s Senate Race Could Be Decided by Salmon

Perhaps the most important thing to know about Alaska’s Senate race, a close contest between the Republican incumbent, Dan Sullivan, and the former congresswoman Mary Peltola, is that salmon are pretty amazing fish. There’s the swimming upstream, the spawning, and the dying. Bears love salmon. Orcas love salmon. People love salmon. Without salmon, the first Alaskans, crossing the Bering land bridge some fifteen thousand years ago, could not have survived. On a recent trip to Alaska, I was, at various points, fed salmon for dinner, offered salmon as a gift, and given salmon for barter. Directly or indirectly, salmon feeds almost everything in the state, including its politics. Alaska’s bid for statehood, in the late nineteen-fifties, was in part a matter of keeping the hands of Seattle businessmen off local salmon stocks. Business deals are hammered out at fishing retreats. In 2010, a seaplane carrying Ted Stevens, likely the most powerful politician ever to come out of Alaska, crashed en route to a salmon lodge near Bristol Bay. He died wearing his waders.

People in the Lower Forty-eight care a lot about Alaska’s Senate race. This cycle, it has been twice as expensive, per capita, as Michigan’s, and eight times Texas’s. The attention is unusual. In federal elections, Alaska reliably votes Republican; every time Donald Trump has been on the ballot, Alaska has voted for him by ten points or more. But, amid historically low approval ratings for the President, the Democrats are hoping to flip the seat, an essential part of any attempt to wrest back control of both houses of Congress. Trump, meanwhile, is clearly nervous about holding the seat. He recently headlined a rally for Sullivan in Wasilla, a small city north of Anchorage. “This is worth the eight hours on a plane,” Trump said. “And don’t forget, I got eight hours going back, too.”

In January, Chuck Schumer recruited Peltola to run, calling her the “last piece to the puzzle” of his midterms plan. Peltola, the state’s former at-large House member, launched her campaign with the slogan “Fish, Family, Freedom.” To most outsiders, this read as folksy branding for a race that would inevitably be dominated by Donald Trump. But Peltola really wants to talk about fish. Recently, I saw her speak at the elementary school in Utqiagvik, an Arctic town at the state’s northern tip. It was a very unusual stump speech. She apologized for the “super negative, toxic ads” flooding the state, including her own. She mentioned her opponent just once: a flattering anecdote about his advocacy for an oil project she supports. She didn’t mention Trump at all. And even though, compared with the rest of the state, salmon is not so big in Utqiagvik, Peltola still mostly talked about fish.

This piscine primacy is relatively new in Alaska’s politics. In past election cycles, fish have always been one issue among many. But Alaska’s fish are in crisis. In recent years, runs of Chinook, or king salmon, the biggest and most revered species on the Yukon River, have been down as much as eighty per cent from average levels, according to the National Oceanic and Atmospheric Administration. Chum salmon, a more ordinary variety, have had an O.K. year, but they’ve been down as much as ninety per cent. Some species and some areas are worse off than others, but the general trend is bad, including for the state’s other two iconic seafood catches, halibut and crab. As I travelled around the state, I was surprised to find that virtually everyone I talked to was upset about the fish situation. One political consultant explained, “A lot of people come into the state, and they’re, like, ‘Why the hell is Mary Peltola “fish, family, freedom”?’ I’m a white guy who lives in Anchorage, and my freezer is currently full of rockfish, halibut, and salmon that I’ve caught because that’s just what we all do.”

The crisis is worst up rivers such as the Yukon and the Kuskokwim. For many thousands of years, entire Athabascan and Yup’ik villages have subsisted on salmon. ... But stocks have got so low that, in 2024, the Alaska government, in conjunction with Canada, shut down fishing for king salmon on the Yukon River and its Canadian tributaries for seven years—one complete king-salmon life cycle. The fish camps stand empty. [...]

Research scientists with the N.P.F.M.C. and N.O.A.A. attribute the die-off, primarily, to climate change. But activists in Alaska have mostly focussed their ire on a type of fishing known as trawling. In the Bering Sea and the Gulf of Alaska, the main target of commercial fishing boats is pollock, a medium-sized, mild fish that swims in fantastically vast schools. Trawlers catch pollock by dragging enormous nets; some open wide enough to swallow a thousand M.T.A. buses. Any net you put in the water will incidentally catch other, non-targeted fish. This is known as bycatch. Every year, the Alaskan pollock industry brings up around twenty thousand king salmon and around a quarter million pounds of halibut as bycatch. Recently, anger at this collateral damage, heightened by the fish shortage, has evolved into a political movement. [...]

I’d assumed that pollock people—businesspeople—would lean Republican, and the salmon people—the conservation-oriented—would lean Democratic, but that’s not really the case. “There’s nothing partisan about it,” Peltola told me recently. “When you ask folks who are MAGA why they’re splitting the ticket and voting for me, it’s largely because of trawling.” (The campaign later pointed out that a lot of those voters are also animated by high fuel prices.) Politics in Alaska are idiosyncratic. They rarely map onto a national partisan model. Republicans outnumber Democrats two to one, but independent voters outnumber both. “Partisan politics doesn’t work that well for a candidate,” Tony Knowles, the last Democrat to serve as governor, told me. A government staffer in a remote region put it to me, “Locally, no one gives a shit about the parties.”

One oddity of Alaska politics is that, though only twelve per cent of voters identify as Democrats, both the State Senate and the State House of Representatives are currently controlled by coalitions made up mostly of Democrats and independents, with some Republicans. Coalition governments are not uncommon in the state, where politicians are fond of saying that pragmatism trumps partisanship. Sometimes it’s more about vibes. “Somebody is a magnificent pain in the ass, and we don’t want them in our caucus so we build a caucus to exclude them,” Joelle Hall, a longtime union leader, told me. Imagine a congressional coalition formed by kicking out the lawmakers, on either side, who are annoying—the Ted Cruzes and the John Fettermans. Peltola tried to explain this unique approach by telling me that the current coalition “took the hardest people to work with and just put them to the side, and then everybody else joined as a majority to move forward and solve problems. And that is a model I am hoping we can export to every state in the nation.” [...]

“Alaskans consider themselves more Alaskan than Republican, and more Alaskan, quite honestly, than they are American,” Scott Kendall, an attorney and longtime G.O.P. political consultant in the state, told me. “We like each other. To me, it’s kind of a beautiful thing. And I’ve been back to D.C. and elsewhere enough to know how good we’ve got it.”...

As I spoke with Peltola voters across Alaska, I noticed a split between those who think she is talking too much about fishing, when a stronger message would be the war in Iran or gas prices, and those who worry that the outside strategists urging the Peltola campaign to focus on national topics will drown out her winning message. Alaska’s core constituency is composed of Natives, fishermen, rural legislators, and unions, with some chamber-of-commerce types mixed in. Peltola is a gun-owning, fish-catching Alaska-bush native, who has worked for mines and supports oil drilling, and is allied with the state’s largest labor unions. “You’ve got a once-in-a-generation candidate who is all the pieces of that coalition as one person,” the strategist told me. “You worry that the federal PACs will come in and fuck all that up. What’s actually somewhat surprising to me is that we’re here in October, and the dominant issue of the race is still trawl bycatch and local fisheries, which says they didn’t fuck it up that bad.” [...]

Trawling is a wedge issue in Kodiak. Many people rely on trawling, directly or indirectly, for work, but small seiners, long-liners, and crab fishermen have major issues with it. (“There’s five different fisheries groups, and they all basically think the others are stealing fish from them,” Hackney, the G.O.P. political consultant, told me.) ... We were at the brewery in town with the mayor, Terry Haines, who is also a retired fisherman, and the host of the Alaska Fisheries Report on KMXT, the local radio station. (He also d.j.s a half-hour spot of soul music every week.) “Bycatch is not the driver of our stock crashes,” he said. “It is simply the only lever that we have to pull. So that makes it a valid reason to look at pulling that lever. But you have to realize that you can pull that lever all the way down to the floor, and you’re still not going to change the environment that’s causing the fishery collapses.”

Peltola insists on what is called “rural preference”: in times of shortage, subsistence fishing must come first. Carrie Stevens, the representative for the Council of Athabascan Tribes, told me, “If people on the rivers have a moratorium to stand down, why is it so obscene to ask others to bear any brunt of conservation?” The tribes contend that the government’s scientists are underestimating the effect of trawling. One argument is that it’s not just the bycatch but the catch itself. Salmon eat juvenile pollock—or would, if they didn’t become fish sticks. Jim Balsiger, who retired as NOAA’s top fisheries official in Alaska in 2021, said recently, “Removing three to four billion pounds of fish from the Bering Sea every year for four decades is not a benign activity.” [...]

Fishing jobs like these are essential to Alaskan identity and have been declining across the state. Gunnar Knapp, a professor emeritus at the University of Alaska Anchorage and a prominent fishery economist, told me that the trawling issue has become about more than just fishing regulations. “A lot of this is symbolic. There is a vision that the world economy has been moving inexorably toward this dystopia controlled by large corporations, capitalism, and global enterprises, where the individual is marginalized and means nothing,” Knapp said. “If you’ve ever seen a trawl net when it comes in, it seems so appalling. You think, ‘You won’t have any fish left in the ocean!’ Well, it actually is sustainable, for pollock. But it’s not noble like a guy holding up one subsistence salmon.” The choice for Alaskans is difficult: crack down significantly on trawl, and you’ll limit global food supply and inflict significant damage to the state economy. In return, you’ll possibly get small gains upriver. “It’s less economic than moral or ethical,” Knapp said. “What costs are worth it for even a marginal improvement to the salmon runs? I think some people would say anything is worth it.” As a friend in Anchorage put it, “Trawling is our version of data centers.”

by Zach Helfand, New Yorker | Read more:
Image: Clara Mokri / NYT / Redux

The Hackening

Last week at a small conference, there was talk about a future event referred to as The Hackening. As in, within 6-12 months, many predicted that due to advanced AIs and AI agents the internet would become a severely hostile place. Some worried that this could rise to the level of ‘assume any phone connected to the internet is rooted’ and several people urged doing general crisis preparations on a personal level, in case of disruptions in supply lines, power, water or internet.

It did not take long for things to escalate.

The biggest hack is a flaw in PHP, which can be exploited to take control of the computer running any website using an unpatched version of PHP. There are many others.

On a personal level, you want to do at least some basic prep and get your security in order. It is cheap to do as a form of insurance, and being caught not having it when you need it is a large mistake. That doesn’t mean you should panic, or cancel travel plans or anything like that. But there is low hanging security fruit out there. Pick it.

And So It Begins: PHP

Joshua Achiam (Formerly OpenAI): Feels like March 1, 2020 for Cyber. Not normal, something is happening. Internet lockdowns in a couple of months?

Multiple sources using GPT-5.6 Sol identified a critical flaw in PHP. Okay, identified two critical flaws in PHP. The plan was to deploy the patch first before announcing the flaw, but the embargo on the fix got broken more than six hours in advance, so here we are.

Dan Lorenc: I wanted to share what happened with the PHP embargo, our role in it, and my decision process last night to ship the fixed builds early. First of all, the PHP Foundation and maintainers did an amazing job here in a high stress situation. I'm sorry that my decision led to even more stress for them.

We first got read in that there was something coming up in PHP last Friday by one of the original researchers that discovered this issue. That night we were able to independently discover the same issue using our harness and a frontier model with a basic prompt of "find bad vulnerabilities in PHP".

We got fully read in Saturday and confirmed that some our findings matched those from the initial report, and worked to help test the fixes.​

They may have been in a rush due to attackers finding the exploit. Amazon reports that this was happening as early as October 17, four days before disclosure. We are fortunate that this did not scale far larger than it did. [...]

Jonny G: Can somebody explain this to me like I’m 5 years old please? Ta.

BRYNMAWR ∴ SHERLOCK: Websites are files on a computer. When you view a website, you are asking the computer to send you the files, then your browser shows them to you.

70% of the websites you see use PHP to make them interactive. So you can send things to the website too and it can respond. E.g. filling in a comment box and hitting ‘post’ adds the comment as a row to a spreadsheet.

PHP has a flaw in its code that allows anyone to gain control of the computer that has the website on it.

The organisation that provides PHP announced the vulnerability before a patch was available, meaning we’re in a window where everyone knows about it (including baddies) but the good guys don’t have an official solution.

Some are just turning off their websites and waiting for the solution. Others are trying to fix it themselves. General chaos and lots of stressed techies across literally the entire planet because this affects the entire internet.

The bug has been there for 14 years and was discovered in 2024, but it was not considered significant at the time. A lot more bugs are significant now.

The PHP Bug Was Kind of a Big Deal

Things could have gone very, very badly, the same way Y2K could have gone quite badly if we had not done the work to prevent it. These days we are on rather tighter deadlines.

Internet Archive: https://Archive.org is currently offline. We are working to restore service now.

Brewster Kahle (21 hours later): Internet Archive ops staff were heroes last night.

PHP vulnerability announced, soon saw attacks, isolated the vulnerability, used Claude to make fixes for our older php versions, used local models to run simulated attacks, deployed.

In summary:

j🫪e: ICYMI: Today was basically the worst day of the year for cyber security incidents

On Your Marks

Now the race is on to patch all the systems before attackers can go on the offensive. OpenAI is helping race to get that done to the greatest extent possible, and are looking for better methods for fixing vulnerabilities in time.

John David Pressman: I know everyone is rightfully freaking out but it must be noted that the worst case scenario isn’t you receiving lots of patches you have to apply, the worst case scenario is receiving zero patches and waking up to everything having been stolen.

John David Pressman: My takeaway so far is that we do not have a good way to coordinate the distribution of patches to vulnerable software.

This one was important enough the NSA got in on the act.

NSA Cyber: Effective Immediately, all organizations using PHP for their systems are advised to be prepared for an update addressing two critical vulnerabilities. PHP is widely used for web applications. These vulnerabilities often provide a direct path to the server’s file system or database. If an immediate update is not feasible, it is recommend that organizations take the system offline until it can be fully mitigated. NSA will follow up shortly with more specific guidance.

We are going to need better procedures for updates.

The best case scenario is that a defender finds the bug first, has enough time to figure out a solution and creates a patch. Then, the moment the patch is rolled out, every attacker gets what are effectively very clear instructions on how to exploit any unpatched systems.

by Zvi Mowshowitz, DWAV |  Read more:

Image: The Simpsons; uncredited

[ed. So far, zero coverage in the mainstream media. [Update: Ars Technica has a story here.] See also: If the vulnpocalypse is the apocalypse, where are the agentic attacker hordes? (Joshua Saxe):]

*****

We’ve ignored how cybercriminals are unskilled and get arrested a lot

Here’s the first part of my theory: cybercriminals are not the organized geniuses we implicitly imagine. Anyone building a criminal gang has to find candidates willing to forgo more stable opportunities in the formal economy. My modeling estimated that something like 720,000 people are involved in the online criminal economy, 90% of them in scam and fraud call-center type operations, some of them human-trafficked. Of the 76k or so actual hackers, the vast majority work for governments. Of the remaining few thousand criminal hackers, most work in ransomware. 

Alaskan Gasbags

A $54 Billion Exercise in Revisionist History

So here we have Republican former legislator Charisse Millett claiming that President Donald Trump never claimed that a deal had been approved with Korea to pay $54 billion for the Alaska LNG project.

Millett claims that Trump, Sen. Dan Sullivan, Rep. Nick Begich the Third, Gov. Mike Dunleavy and Glenfarne did not portray the Korean “investment” as a done deal.

Perhaps Millett was fed bad information by Sullivan.

Perhaps she failed to do any homework.

Perhaps she didn’t pay attention to what Trump said.

Perhaps she thinks she can get away with rewriting the history of the past three weeks to improve the campaign picture for Republicans.

What’s certain is that her analysis is completely wrong.

Larry Persily wrote a good column in the Anchorage Daily News in which he told the truth about the gas line campaign fraud perpetrated on Alaskans right before the election.

The column obviously touched a nerve with Sullivan, who had been hoping to ride to reelection on the basis of winning the gas pipeline deal to end all gas pipeline deals.

Millett’s response in the ADN touched on exactly the same points that Suzanne Downing, whom Sullivan portrays as an exemplar of integrity, used to attack Persily — that his column was motivated by politics alone. That no one promised a gas pipeline, etc.

What the Sullivan apologists can’t confess is that Persily’s column was exactly right — the White House claimed it has a $54 billion deal in hand with Korea, but that nation says the claim is not true.

As they stood behind Trump in the Oval Office at the Sept. 30 campaign stunt, however, Sullivan, Begich and Dunleavy led a gas line victory dance.

I still don’t know if they knew the $54 billion was a charade or if they were desperate to believe a Trump lie because it would help con Alaskans into thinking a miracle had happened.

There was nothing conditional about the Trump announcement at all or how the Alaska politicians received it, contrary to Millett’s meandering missive.

“Thank you Mr. President!” Sullivan said afterward. “Glad we could get this across the finish line for Alaska!”

Fresh from the White House gas line party, Sullivan went on a right-wing talk show in Anchorage to say the money was in hand to build the gas pipeline, attack his challenger Mary Peltola and praise Trump, who had said that the pipeline would be built because of Dan Sullivan.

“I think the president has no interest in switching horses when he just said the guy who’s getting it done for Alaska and us is me right now,” Sullivan told Mike Porcaro, adding that the president of Korea had agreed to pay for the massive project.

Commerce Secretary Howard Lutnick “really really drove a hard bargain with the Koreans,” Sullivan claimed. “But this is a really important day. It’s exciting.”

“It’s a big announcement. $54 billion. It’s a president to a president of an important ally,” said Sullivan. As Sullivan went after Peltola for being soft on the gas line, he said she was “saying anything to get elected.”

Dunleavy, who also appeared on Porcaro’s talk show Sept. 30, said, “Whenever you can get $50 billion plus coming your way for the largest gas project in the Arctic’s history and probably the largest project in the Pacific and certainly the largest project on the map in the world right now, that’s a good day Mike.”

Dunleavy said on social media it “was a fantastic day both for Alaska and for America as President Trump announced that the Republic of Korea is investing $54B into the Alaska LNG project, ensuring affordable, reliable gas for Alaskans.”

“Our South Korean allies are partners now, they are providing a lot of funding for this, upwards of $50 billion plus,” Dunleavy said.

Begich the Third also claimed the $54 billion deal was a historic accomplishment that Alaskans could take to the bank. He said the delegation was excited about what the pipeline would mean for the state.

And Sullivan and Begich should be reelected, Begich the Third said.

“When you’re putting up championships, you don’t trade Michael Jordan and Scottie Pippen. You come back and you win again,” Begich the Third told Porcaro.

The Third did not say whether he sees himself as Jordan or Pippen in that analogy.

by Dermot Cole, Anchorage Daily News |  Read more:

Image:AP Photo/Alex Brandon
[ed. Man, they're trying everything. See here and here. See also: In U.S. Gas Talks With Kremlin, Hidden Financing for Alaska Project Emerges (NYT):]

*****

An American energy company intends to buy Russian technology and use it to access a massive supply of natural gas in Alaska, liquefy it and export it to allies abroad.

The Kremlin and the White House were interested in the idea. President Vladimir V. Putin discussed the plan last month with President Trump’s peace envoys, Steve Witkoff and Jared Kushner, people familiar with the negotiations said, speaking on condition of anonymity to discuss sensitive diplomacy. It is one of a series of energy deals White House officials believe could help smooth relations with Moscow and eventually pave the way to end the war in Ukraine.

But it turns out that the company was not an All-American affair. The multibillion-dollar project has received secret funding from the same powerful Russian company that was to provide the technology, according to the energy executive who until last month led the U.S. firm and two others involved in company negotiations. [...]

“It’s not only unlawful, but it’s not in the U.S. interest to have Russian technology controlling the commercialization of Arctic gas in the North Slope,” Mr. Riddle said in a brief interview.

These previously unreported tensions were also detailed in legal memos that Mr. Riddle attached to his resignation letter, which was reviewed by The New York Times. The memos, prepared by Baker Botts, an international law firm, said the Treasury Department’s sanctions enforcement unit had raised concerns that Polar LNG had ties to Novatek that might present “potential Russia-related sanctions concerns.”

Polar LNG on Friday issued a statement announcing a new acting chief executive, Tim Talkington, and described Mr. Riddle as a “disgruntled former employee.”

But in a statement to The Times, Novatek said on Friday that it, in fact, was moving to acquire “minority shareholder” status in the Polar LNG project — a striking effort by the Russian energy giant to seek ownership of American gas production.

The project, if it happens, is a long way off. In addition to the sanctions issues that would have to be negotiated, the technology envisioned is highly complex and must overcome some of the most brutal weather conditions in the United States. It also is competing with another Alaska gas plan that already has the support of the Trump administration. But that the Polar LNG deal is being discussed at all shows how business deals of almost any stripe are on the table during the talks with the Kremlin.

Edwin Austin Abbey

via:

Why Trump’s 2024 Voters Are Turning on Him

[ed. Illuminating throughout: Iran, corruption, affordability, healthcare, Epstein, Israel, data centers, and more. I'll probably trim quite a bit of this later, but for now enjoy the expanded version.]

Since he took office in 2025, Donald Trump’s net approval rating has collapsed, falling by more than 30 points. As we head into the midterms, Democrats now have the opportunity to do something that seemed unthinkable just a year ago: to take back not just the House but the Senate, possibly even winning in places like Texas and Kansas.

So how did Donald Trump go from winning his first popular vote victory ever to, in less than two years, what now looks like it could be an electoral wipeout for Republicans?

Sarah Longwell is a political consultant and the founder and publisher of The Bulwark. Since the 2016 election, she has conducted hundreds of focus groups with thousands of voters across the political spectrum that have become this really extraordinary source of qualitative evidence of how voters have evolved in the Trump era — particularly voters who had leaned toward Trump but maybe now don’t.

Ezra Klein: Sarah Longwell, welcome to the show.

Sarah Longwell: Thanks for having me. I’m superexcited to be here.

Donald Trump takes office again in January 2025. His approval rating is above 50 percent. He has his biggest electoral victory ever.

He’s now at 36 percent.

I think you’ve probably personally done more focus groups with Trump voters of different flavors and variants than anybody else in America.

So what happened?

It’s easy, actually. This is the easiest question in politics right now. Donald Trump made some very specific choices, and they were his choices, and everyone knows they were his choices.

The first one was when he did all of the unilateral tariffs, didn’t consult Congress and just got into trade wars with a whole bunch of people. And the second was starting the war with Iran.

Voters completely identify those two things with Trump. You can’t say Joe Biden did that. You can’t say it was someone else or Congress. There was nothing else.

The deep state went to war on Iran.

Donald Trump made these choices, and voters know it.

The consequences of both have been to raise prices for the American people at a time when they elected Donald Trump to do one thing: lower prices.

And as a secondary matter, they said: No more stupid wars.

So the voters right now recognize that their life is not getting better and that Donald Trump has broken his promises. That is the easiest way to explain what’s happening right now.

Tariffs were a promise from Donald Trump. He ran for office saying again and again and again: Tariffs on everyone, tariffs in all directions.

I can imagine, if you’re him, you look at your tariff policy as promises kept. So when his supporters tell you what they don’t like about them, what do they say?

Well, the thing about voters is that they are often not interested in the policy minutiae of how one gets to a place. They’re just saying: What are we going to do to lower prices?

The thing that has shocked me the most listening to voters — not even shocked, it’s more the thing that I find has changed my relationship with voters — is that the first thing we do is ask people: How do you think things are going in the country?

And every focus group, every single time, doesn’t matter — whether left, right or center — right now, people say: bad. And then they immediately start talking about the prices of something.

They talk about the prices of gas. They talk about the prices of beef. But they talk about something they did: I walked into the store today, and the beef cost X dollars, and that’s $2 more than it did, and it wasn’t even the good stuff.”

Americans don’t necessarily connect policy rhetoric to the outcome. They live through something, see the outcome, and then they decide how they feel about it. 

On that point, about the ground beef, I want to play a clip that your team shared with me from one of the focus groups. This is someone who voted for Trump in 2024.

Archival clip: I grocery shop every week, so I know when prices are going down and up, and I’m like: He’s lying. Nothing has changed — OK, maybe the eggs have gone down, but that’s it.

I’ve never paid $9 for ground beef before — ever — even the good kind. So that is really, really crazy and getting very scary. I really thought that it was going to be about us here at home.

When that woman says to you: “I really thought it was going to be about us here at home” — what did she think?

What did the people who had swung toward Trump in 2024 see in him that they maybe hadn’t seen in 2020?

Well, this is the promise of “America first.”

“America first” has a lot of racist origins. But for the voters, “America first” is an idea that the president is going to prioritize them — Mr. and Mrs. American — and they like that promise. They like the idea of not sending all this money to other places.

I hear versions of this in basically every group that I do, which is: We want to be taken care of. We want money spent on our schools.

It’s interesting watching Abdul El-Sayed, because he’s doing a version of this right now, his own version of “America first.”

Often when he gets asked the question about Israel, he says: I don’t want our money going overseas. I want it spent here in Michigan. I want it spent on our schools, on taking care of our people.

Archival clip of Abdul El-Sayed: I’m opposed to unconditional military aid for any country. That is Israel, yes, but that’s also Egypt, where my family immigrated from. That’s Pakistan, that’s Saudi Arabia, that’s U.A.E. And that’s not because of a focus on what’s happening anywhere except for a focus on what’s happening here. We’ve got communities in my state where the median income is $14,000. And I believe they have a right to their tax dollars.

And that is something that appeals to Americans deeply. They say: Yes, we want to be taken care of.

They feel like, in the big maelstrom of conversations — whether it’s sort of the weird social issues that people get wrapped around the axle about or whether it’s the big geopolitical questions that politicians are always talking about — what they really want to know is: What are you going to do for me? [...]

I think this is a problem that ends up afflicting both sides. It happened to the Biden administration during their term, and now it’s happening to Trump, which is: You get elected, and the voters who crucially put you over the top — not your big base of voters who are always going to vote for you but the people who made the difference in the election — they hire you to do often a job that is maybe not the job that you’re most excited about doing.

Voters want lower prices. They’re maybe not as bought-in on climate change questions as Democrats are.

And there are all these people around you who have your ear — who, in fact, do not have problems buying groceries in the grocery store. They have things they are much more excited about doing. So you have this constant pressure to get off the course of what the swing voters wanted from you.

That seems, to me, to be a lot of the Trump story here. He won because inflation was high, but he didn’t really care about inflation. That’s not what gets him out of bed in the morning.

No, what gets Donald Trump out of bed in the morning is Donald Trump’s interests in enriching himself. This goes back to the earlier question: Why do Americans think that Donald Trump is in it for them?

The way that I heard so many voters characterize it is that the process was so slow and sclerotic, and they felt like nothing was changing, and the way that politicians talked all sounded the same.

But mostly, they thought: This guy is a businessman — and that means that he is going to figure it out. Because this is what Donald Trump pitched all the time: I’m going to cut deals for you. I know how this system works. It’s rigged against you. I’m going to unrig it.

And voters really did think, whether it was because of “The Apprentice” — and I cannot tell you how important “The Apprentice” is and was to the lore that sits inside voters ——

Still, by 2024, it was so important?

He lived, in their living rooms, at the top of a boardroom where he made decisions about business, and that is what voters really internalized about Donald Trump.

So when inflation was high, they thought he was going to come in, and in some way that is magic from him — sort of like the Kool-Aid Man busting through the window — and say: Here, I’m going to lower grocery prices on Day 1.

They think he has some secret sauce that allows him to do that. When, of course, it is just a lie. He couldn’t do it.

There are a lot of ways that the people who interpret politics publicly — my job, for instance — end up having a lot of trouble understanding voters.

One of the ways is that we think of the primary divide in the electorate as left or right. But the primary divide in politics, I always think, is between interested and uninterested. The hard-core left and the hard-core right, MAGA, the liberals, resistance, whatever it is, they’re all interested. They’re all following some media source constantly.

But a lot of voters don’t like politics. And they’re not that interested.

So I’d like to hear you talk about the different ways that people who decide elections but do not follow politics that closely in between elections — that difference in the electorate and how they then understand what is happening.

We talk in political science terms. We’re always slicing and dicing the electorate, and we often talk about “low-information voters.” I always think that is an unfair term to people who are just not sick in the head like us, who are not following everything, who don’t let their nervous systems be hijacked on a daily basis by the vicissitudes of political wrangling.

Low neuroticism voters. [Laughs.]

Yeah, that’s right. I think it’s a perfectly acceptable thing to be like: Actually, I’m going to focus on my family and getting my kids out the door, and then I’ve got to go to a job that’s quite demanding. And both parents in the household are working.

One of the things we ask about in the focus groups all the time is: Where do people get their information?

And it is unsatisfying now, because it used to be that people would be pretty clear. They’d be like: I watch Fox News. Or: I watch CNN. I read this newspaper. I read The New York Times. Or: I read my local newspaper.

The majority of people would often say that they watch their local news. But now what people mostly say is: I don’t know where I saw that.

They’re scrolling. They’ve got their favorite cooking influencer, or they’re scrolling on Instagram or TikTok — an algorithm-driven information environment where they mostly want basketball or sports. But then there’s Stephen A. Smith talking about politics.

So this is why, when people said: The left needs its own Joe Rogan — and they tend to reach for people who are actually political pundits. But that’s not what Joe Rogan is.

Joe Rogan is a comedian. I mean, I don’t watch a ton of his content, but I do think there’s a fair amount of getting stoned and figuring out who would win between a shark or a gorilla if they fought each other. And then they have a guest, and the guest says whatever, and Joe Rogan really doesn’t challenge him because he’s not a subject matter expert in much.

That’s about culture. There are cultural people all over the place where politics is injected.

There used to be this phrase: Politics is downstream from culture. I think, increasingly, the overlap between politics and culture combines into something that is a deeply nonpolitical-science term, which we would call a vibe.

And that vibe is what a lot of the low-information voters are getting. Something that washes over them, that is algorithmically injected into the cultural things that they imbibe.

Say more about that. What changes in politics — or what have you watched change in politics — as it has become more, in your language here, vibe oriented?

I think it’s the big difference between news seekers and news receivers.

We used to live in a world where you spent time with the news, and it was a specific time. You sat down at the breakfast table, and you read a newspaper. You watched the evening news. You made time for the news.

I just think that the news receiver means: I didn’t sit down to find something out. Information just washed over me, and there was no mechanism to verify it. I didn’t really sit and spend time with it and ask: Is this true? Does it even matter to me? It just hit me for a second.

It just flashes over them. So they wake up with an opinion without any idea of how it was formed.

I want to talk about something that seems to have begun breaking through. And I don’t really know why it’s finally breaking through now, but it is: corruption.

I want to play a clip from a Trump voter talking about corruption and how it has changed in his view.

Archival clip: I’m a Republican. I’m just saying he’s front and center now. And he’s just blatant with corruption. But we tolerated corruption in a way, or looked the other way. Even their own politicians look the other way at each other. But because it was more minimal or more obscure … every now and then you heard of a big corruption thing here or there, whatever, a pay-for-play.

But now it’s just like: bang! He just does it blatantly. He just says what he wants to do. He’s investing in crypto. His sons are invested in drones, just before the war started with Iran. It’s ridiculous. It’s so obvious and blatant now.

This Fox News poll from October asked voters how concerned they were about key issues. More expressed concern over corruption in government than any other issue. It came out higher in this Fox News poll than prices and health care, the war in Iran and immigration.

Corruption has just been constant in the Trump administration. I was watching corruption in polls through the whole administration, waiting for it to attain salience.

It was just like nothing, nothing, nothing, nothing, nothing — and then suddenly, it’s the top issue.

What broke through?

It’s prices again. Everything comes back to people’s relationship to the economy. And this is a bummer, actually, of an observation, but the American people — especially Trump voters and more low-information voters — would probably let Trump get away with corruption. In fact, we know they would — he was doing a lot of corrupt things in his first term.

People didn’t really care. You couldn’t get them to care about how much he was spending on golf or having big meetings at all of his hotels with the rich.

All the insane crypto stuff during the 2024 election, that was the one I always thought was crazy — the Trump family getting involved in crypto scams and meme coins during the election and the post-electoral period.

They don’t care. But again, it comes down to people’s relationship with their own money. If they thought Trump could do something for them — and you can see this especially with people who are superengaged on the crypto stuff — if they think they can make some money off Trump, they don’t care about his corruption.

There are two reasons that corruption is breaking through right now. The first is, people are suffering economically.

And so all of Trump’s focus on his ballroom and the Reflecting Pool frustrates voters that he is not focused on them — he’s focused on himself.

But also, the enriching himself is becoming difficult to ignore because it’s so out in the open. And when people are not doing well, they’re angrier about it.

The second reason, though, that corruption is now a very high-salience issue, is the same reason that democracy became a high-salience issue.

To some of your work on polarization, there’s a backlash effect that happens when Democrats start accusing Republicans of being corrupt because Donald Trump is doing this brazen corruption.

The thing that happens for Republicans is that they do the “What about…?”

So they say: No, Democrats are corrupt. Or: They’re all corrupt.

Part of what happens is this national conversation where one side is accusing the other of something, and so the other side does: What about…? — and then quickly it becomes a dominant issue.

Democrats were also accusing Republicans of being a threat to democracy after Jan. 6. But Republicans were accusing Democrats of having stolen the election. And pretty soon, democracy is the No. 1 issue.

And Democrats think: Oh, look, everyone cares about democracy. And I’m going: No, no, no, no, no — they don’t care about it the way you want them to care about it.

The Democrat who seemed to really figure out how to make the corruption case against Trump and get people to pay attention to it this cycle is Jon Ossoff.

And Ossoff, in Georgia, is fascinating because that should be, in theory, a swing state. It’s a close state. We don’t even talk about it as a swing state this cycle. It’s like: Is he going to beat his opponent by eight points, by 10 points, by 12 points?

There’s more interest in whether or not he’s going to run for president than in whether he’s going to win in Georgia.

So what worked there?

Well, first of all, Jon Ossoff has the thing. He is a very talented person. He writes those speeches himself. He appears to believe it deeply.

But he understands something about storytelling. I think oftentimes Donald Trump’s scale of corruption, scale of venality, leaves Democrats sputtering to make the longest list that they can make of all of the horrible things. And it leaves people just with their arms up.

Jon Ossoff is taking it slow. He’s taking it one bite at a time, and he is writing to say: Hey, you’ve heard about this.

Archival clip of Jon Ossoff: Now maybe you saw Trump’s so desperate, he’s begging Putin for diesel. But listen to this.

Maybe they have, maybe they haven’t. But he’s inviting them into a story that he’s going to tell where he’s going to give them information about what Donald Trump is doing.

Archival clip of Ossoff: Y’all remember Jared Kushner, the president’s son-in-law, the so-called special envoy responsible for diplomacy with Russia and in the Middle East? Do you remember the other special envoy, Steve Witkoff, who co-founded the president’s crooked crypto business, World Liberty?

OK, so follow me through on this. What Jared and Steve are doing right now is negotiating with Putin to sell billions in Russian oil fields and refineries and gas stations to the president’s friends.

You’ve got Sheikh Tahnoon, the Emirati spy chief, who paid half a billion to the Trump-Witkoff crypto business. Then you’ve got the Al-Khayyat brothers, two Syrians who are financing Jared and Ivanka’s multibillion-dollar Albanian resort project.

And then the third partner, a billionaire megadonor to Trump’s campaign. Oh, and the U.S. government would take a 15 percent stake, by the way. Are you getting the picture?

He’s just very adept at saying: I’m going to walk you through what’s happening.

Archival clip of Ossoff: Amid a global energy crisis, the president’s son-in-law and the president’s business partner are brokering the sale of Russian oil fields to the first family’s friends.

The same friends who have poured hundreds of millions of dollars into Trump family businesses. […]

They are literally the elites they pretend to hate.

More Democrats need to figure out how to talk about this. Because I do think Americans — whether it is all the court cases, all the lawsuits against Donald Trump — when there is scale, they get lost, and it becomes white noise. It’s why Hunter Biden, the specifics of it, Republicans can make a meal out of it.

But the level of Donald Trump’s corruption is so big and so multifaceted and so difficult to follow, that it can become white noise if you don’t lay it out step by step. And that’s what he’s doing.

How much did Jeffrey Epstein matter here?

I think it mattered in terms of setting up Donald Trump to fail his base immediately. [...]

There is an analogy here to something you were saying right at the beginning of our conversation, which is that Trump has made a series of decisions — war in Iran, tariffs — and everybody knows it’s him.

One thing that has always seemed meaningful about Epstein — and has been harder for Trump in his second term is that: In his first term, Trump did this slight magic trick, but there was also some truth to it — he was the president, but he was up against the deep state.

There was a reality that he didn’t really quite have control of the government he led. And it wasn’t a deep state in the way he put it, but the sense that Trump could somehow be the president and still be anti-establishment was real.

In that world, Epstein has become this synonym for a corrupt, pedophilic, untouchable elite.

And the fact that it seemed to people that Trump was more on the side of whatever that was than on their side seems to get to this larger reality of him — that he’s the establishment now. MAGA is in charge. So he can’t say: These guys over here are stopping me from doing it.

It’s all just him.

I think that’s right. I talk a lot about the schism that I see between the MAGA establishment and the America firsters.

There is this new break in the party, and the America firsters are sort of like: Real America first has never been tried.

This is your Marjorie Taylor Greenes, it’s your Tucker Carlsons. These are the people who are anti-Israel. They think that Trump really broke faith over the Iran war. That’s the thing that caused them to go out on him and to really start taking him on.

The MAGA establishment, though, is Trump. It’s Rubio. It’s Mike Johnson. These are people for whom Trump is the sun and the moon, and whatever their public policy, it’s going to be dictated by Trump.

So you get somebody like Kash Patel and Dan Bongino. Why is Dan Bongino back out after being the deputy at the F.B.I.? He’s back out because he can’t release the Epstein files, and it was ruining his street cred on his podcast.

Kash Patel is not really doing the job. He just runs around and hangs out with his girlfriend. And that’s how Donald Trump wants it because he wants a heat shield. It’s why Pam Bondi had to go, right?

He needs these heat shields for why he’s not releasing the Epstein files, and I think his voters are hip to it. They know there’s no reason this shouldn’t be coming out.

Why is Pete Hegseth still there?

Well, I do think that Donald Trump needs somebody to take the fall for the war.

My guess is that Pete Hegseth goes after the midterms.

But nobody buys that it was Hegseth’s war.

I mean, Pete Hegseth would like it to be Pete Hegseth’s war. So he’s out there stumping for it pretty hard. But it’s difficult to change course in the middle of this. Actually, I don’t even know why I’m trying to explain this, because it’s preposterous that Pete Hegseth was in that role in the first place. It’s preposterous he’s still there.

What do you do when you’re losing a war to Iran, and then you give these weird Pattonesque speeches where you talk about “no trannies, no fatties, no beardos, no weirdos?” [...]

So that is one part of it.

Then the other part of it is when voters are experiencing direct negative personal consequences, and that is obviously at the gas pump, and they can connect, right? I listen to voters all the time. They can’t quite pronounce or even conjure the Strait of Hormuz, but they know about it. They know there’s this reason that gas isn’t getting here, and that’s why everything is more expensive.

They also understand that gas prices aren’t just about gas, especially in a place like Iowa.

None of these things are in a vacuum. You get these higher gas prices that are also raising food costs, that are also raising farmers’ costs, that are having an effect on the supply chain and the trucks that drive it. Americans actually understand more of that type of thing than they do a lot of the complexities around health care or other issues.

They understand that prices are rising across the board in a lot of different ways that are squeezing them. They experience it like a cavalcade of prices going up across the board that they feel. And then they look, and they see the war, and it gives them a place to say: That’s the thing doing it.

I think we are in an era of price politics that we were not in for a very long time, because inflation was so low for so many years in America. [...]

But I do think one of the things that is just going to be very difficult for politicians of all parties for an extended period is that prices went up so much over the past couple of years that now every incremental increase is just agonizing. Because what they are not doing ever is going down.

This feels to me like something that he has not internalized. It’s going to be very interesting to me to see whether Democrats have actually internalized it. Because right now, you need to treat prices as an emergency, and anything you do that seems like it is raising prices is going to infuriate people.

Trump is endlessly saying: The affordability thing is a hoax. Prices are a hoax.

And they’re being generous to what he’s saying. From what we’re discussing, you would think inflation was 7 percent right now. It’s not.

But he came into office promising to bring down prices. Instead they are going up, and he’s doing things that drive them up, and gas has been particularly bad.

I don’t think people have internalized that the price level we are now at, the base line of prices, has just completely changed pricing as a political issue.

I think that’s something that Democrats are going to have to start thinking about. Because I think that Democrats have internalized it from a messaging standpoint.

They know that they need to talk to people about affordability. And they know how to go on offense — against the Trump administration, against the tariffs, against the things he is doing to exacerbate people’s affordability woes.

What they have not done yet is said: Here’s what we’re going to do about it.

You hear about health care costs in the focus groups. I hear about health care costs in the focus groups all the time.

So Democrats, I think, are going to come in and say: The first thing we’re going to do is we’re going to get rid of Trump’s cuts to your Medicaid, and we’re going to try to make health care more affordable. We are going to get rid of the tariffs. All the things that Trump did to exacerbate it, we’re going to stop. We’re going to get rid of the war.

But I think we will be in a vortex of backlashes if one party doesn’t figure out — and I think it’s going to have to be Democrats, and this is one of the reasons I like Jon Ossoff so much — a way of explaining to the American people that you can’t just press a button and lower costs, that there is a series of choices that we need to make and that the debt is $40 trillion now.

And interest rates are very high.

And interest rates are very high.

And that matters when you go to buy a home or get a car loan.

This is why, if a Democrat wins in 2028, it is not a small task that they are up against. This is one of the things I was really frustrated with Joe Biden about. Because he wasn’t in a position to communicate well or strongly with voters, he wasn’t able to frame the economy as a recovery and to talk all the time about how we were recovering well, but it still wasn’t good. It wasn’t good enough.

Instead, they were trying to tell people: No, things are fine. Things are good.

Trump is doing the exact same thing right now, and I think whoever comes next is going to have to level with the American public about where our economy is.

I also think that something Republicans are not preparing for — I don’t see them preparing for it — that’s going to be central in politics in 2028 is that the Medicaid cuts haven’t hit yet. The Medicaid cuts are enormous. They’re going to throw millions of people off health care, millions of Trump voters off health care.

The way the One Big Beautiful Bill Act was constructed, they delayed it till after the midterms. But every state agency in the country right now is preparing to implement these cuts because it is statute, it is law.

So the Trump administration has sent Obamacare into a spiral. They’ve destroyed the expanded subsidies and a bunch of things that were keeping those markets stable, so the individual markets are moving into chaos. You have Medicaid being thrown into chaos.

Medicare for all is polling higher than it has ever polled before. Meanwhile, the left of the Democratic Party has moved off the idea that Medicare for all means abolishing all private health insurance, so they’ve moved off the more dangerous political position.

I think we’re moving back into a period of health care politics. And I don’t think the next thing is just going to be repatching Obamacare. I think that we’re past that now.

I 100 percent agree with this. And again, this has nothing to do with any of my own personal political beliefs but only what I hear from voters. Which is that I think some kind of universal health care is just an idea whose time is going to have come because of a variety of factors.

All I hear about in focus groups from voters across the political spectrum — and this is where I do think some of the reasons that the D.S.A. types are a little more ascendant, and they believe that there is a sort of new coalition out there — is that they hear Trump voters talking about wanting something to be done about health care.

We’re not talking about country club Republicans who want to talk about different insurance markets. You are just hearing rural voters or working-class voters, noncollege voters — for whom health care is an enormous expense and an enormous burden from a complexity standpoint in how they interact with their insurance companies or the health care systems.
Voters want something that is more simple, less expensive, and higher quality.

I get that sometimes people say things to me like: Well, we could never have comprehensive immigration reform. Or: We’ll never have universal health care. We had these debates, and they lost.

And I’m like: Guys, the world has changed in ways that are making people more open than ever to the idea that we need some kind of universal system.

One of my pet theories is that in the 2028 debates, you’re going to see some Republicans starting to talk about universal health care, because it is going to be such a popular thing with voters.

Well, they may talk about it, but what they never actually want to do is to do it.

They will not do it.

Health care is traditionally the strongest Democratic issue. Immigration is traditionally Trump’s strongest issue.

It is an issue where his administration — under the leadership of Stephen Miller — has been more aggressive, more thought out and more planned on immigration than on any other single issue. It’s been the place where they’ve been the most proactive.

What do you hear from Trump voters about immigration?

Trump voters are a wide range on this.

It is still Trump’s highest-polling issue, but he’s still, I think, around 43 percent on immigration, while he’s in the 20s on affordability, inflation and the war in Iran.

So it is still one of his better-performing issues because — and I think he will get some credit for this from voters on the right in the focus groups — he has closed the border. People feel like that was the right thing to do. That is the popular position broadly for people. They want the border to be closed.

There are people who I would put as Trump’s hard-core base who still think he’s not deporting hard enough, and so you do hear that from Trump voters.

But I would say the majority — especially the more independent voters who might not seem like traditional Republicans but have always been Trump voters because they find him to be a more populist, heterodox person — these are the voters you hear say: I thought he was just going to deport criminals. The masked agents in the streets are crazy.

I talk about the last-in, first-out voters — young people, Hispanics. A lot of Hispanic voters will be very tough. They have tough immigration policies. They do not want people to come here illegally. On the other hand, they live in the communities where ICE is showing up at schools and dragging parents off.

These are voters who know people who are showing up for court — they’re doing it the right way — and that’s where ICE is apprehending them. So there is an enormous frustration over the inhumane way that the deportations are being carried out.

And there’s a lot of criticism in the focus groups over those excesses.

I want to play a clip from some of his voters talking about this in some of these groups.

Voter 1: Border control for me was a very big thing. It was one of my biggest concerns with this election, cleaning up the country and getting these dangerous illegals out. But I don’t like how innocent people, professionals, have been incarcerated or taken.

Voter 2: I don’t like the way immigration’s going. It seems like there’s no rhyme or reason or system going. Are they just grabbing people and putting them in camps?

Voter 3: I do agree that we should stay on top of actual illegal immigration and criminals, but there’s plenty of criminals already here that we could do a better job with instead of focusing on people that are — even if illegal — working and kind of minding their own business.

What I hear when I hear that — and I’ve heard a lot of this also on podcasts like Rogan’s and from some of the people who swung toward Trump on this issue in 2024 — is that Democrats always have this problem where they don’t like to deal with the fact that the public has ideas of the deserving and the undeserving poor.

Democrats want to say: There’s no distinction, and everybody deserves help. But that’s not where the public usually is. They want people to work and to show up, and that often gets Democrats in trouble.

Republicans on immigration, the MAGA right at this point, don’t have “good immigrants” and “bad immigrants.” It definitely doesn’t have “good illegal immigrants” and “bad illegal immigrants.” It just really has an antipathy toward immigrants.

And now you see this spilling out into crazy things, like saying there are too many Indian American students at a college-football game. It’s going into crazier and crazier places, more and more racist places, to be blunt about it. [...]

There is a spectrum of Trump voters on this. There are racist people, and there are people who are just like: Deport harder — get every single person out of here. That is not the majority of Trump voters.

The majority of Trump voters make a couple of distinctions. One is the one we’ve talked about, where they say dangerous criminals should go. But the person who’s paying taxes and has been here for 25 years, who lives down the street — leave that guy alone. That’s part of it.

The other distinction they make, though — and I hear this all the time from voters — is a sense of fairness. They say: I want immigrants to come here, but I want them to come — and this is the key phrase you hear — “the right way.”

And what they mean, and this is very important for people to understand, is that Americans have no idea what it is to go through the immigration system.

So when they say: Come the right way — they assume that there is some easy process by which one can become a naturalized citizen. They just have no idea what it looks like, though.

When they see people coming across the border illegally, they say: Hey, somebody is standing in line over here, trying to come the right way, and this person is breaking the law coming in.

They do not want a country in which immigrants don’t come. Americans actually are quite good about talking about this. As soon as you start talking about immigration, one of the first things they will tell you is their own immigrant story: when their grandparents came here or the immigrant who they know or the person they’re married to who is an immigrant or their family.

Americans are not that hostile to the idea of immigration, they are hostile to the idea of coming here illegally across the border.

Is this another example of where people perceive Trump’s priorities diverging from their own? Because there were two instrumental arguments I would hear Republicans, including Trump, make. One was the dangerous criminal illegal immigrants. The other was that immigrants were taking your jobs, buying your homes and pushing up prices in different places.

Both of those things fit into a sense of disorder under Joe Biden. New York City was a place where there was a big swing toward Trump in the election, and something I heard from a lot of people in New York City was that they just didn’t like seeing the disorder around them.

They don’t like the sense that their government is not holding order. People prize order very highly. That is a job they entrust government with.

Trump comes in with “law and order” Republicanism. There’s a reason “order” is in that phrase.

But he, Stephen Miller and Greg Bovino created disorder. When people looked at what was happening in Minnesota and Americans getting shot by government agents, when they looked at these deployments — the Trump administration seemed to be creating disorder.

They were creating violence. They were creating frightening visuals. What instead seemed to be happening was things were getting all the more out of control, just in the other direction. Is that ——

No, I think that’s completely right. This is happening where they live. This is not abstract to them. When you talk to voters in the focus groups, they’re the people living in the places that we’re talking about on the news.

So they will say: I took my kid to school, and there were ICE agents who showed up at the school, and they had masks on, and there are kids there. What are we doing here?

And yet they’re seeing images on their TV of masked agents shooting an I.C.U. nurse in the back.

I can’t tell you how much the agents covering their faces is a problem for voters. They don’t understand why their faces are covered. That’s not something they’re used to seeing from law enforcement.

I don’t agree. I think people understand exactly why their faces are covered.

Well, I think that’s true. I think what I mean is they don’t like it. They don’t like their faces being covered. That’s not something they normally see from law enforcement.

When people say: Well, they’re worried about being targeted — people are like: That’s not a thing. We have accountability in this country.

The police go without face covers. I’ve heard this, too, and it drives me insane. Everybody knows what it means when the government begins sending people in masks after you.

It means two things. It means the thing they are doing is bad enough that maybe they are worried about being targeted. It also means the government knows the thing they are doing is bad enough that it is a problem if their faces can be seen.

When the government starts doing that, they are creating a zone of action that is wider because they are creating anonymity. They are shifting the relationship between the agents and the public because there is no face-to-face relationship between them. [...]

We’ve been mostly talking here about things where Trump is the central driver. He drives the war in Iran. He has a lot of space for action on prices, tariffs and immigration.

We’ve been talking about corruption, but the other thing that seems to be driving races all across the country, though doesn’t seem to be directly emanating from Trump, is data centers.

When I look at a bunch of the key Senate races — Abdul El-Sayed in Michigan, Josh Turek in Iowa — you see a lot happening around data centers.

I’m curious how those have begun playing into what you’re hearing in your focus groups.

The data center issue started to come up in 2025 in the off-season races, where you had Mikie Sherrill and Abigail Spanberger. This is again why I love focus groups. It caught me off guard.

It was the dominant thing that voters in those races were talking about. In their minds — and again, like immigration, A.I. is one of these issues that activates people across multiple vectors — their energy prices are going up. They think that the data centers themselves are a blight or disruptive in their communities in some way. And the third thing they say is: Are we building these things in our communities that are ultimately setting up to take our jobs from us?

And the companies are like: Maybe. Maybe.

Maybe — that’s right. [...]

When I go home to central Pennsylvania, in the more rural areas, that’s where you see the “No Data Center” signs. It’s another thing that is taking the rural voters, who usually show up in enormous numbers for Republicans, and diminishing their enthusiasm for Republicans. Because they don’t want the data centers. It’s in the rural communities where there’s lots of land that these are actually happening.

The other reason I think data centers are frustrating people is that they’re turning out in their local communities to vote against them. But then they’re often happening anyway, which is creating a real sense of frustration among voters that this is a thing being done to them.

I want to hold on that. We were looking at some clips of voters talking in your groups about this, and you really get at this sense of powerlessness, so I want to play them.

Voter 1: People are voting here in Pittsburgh, in these old mill sites, and they’re putting these data centers. People are saying: We don’t want them. We don’t want them. We don’t want the pollution. We don’t want this anymore. But yet they just keep coming, and there’s no stopping.

It doesn’t matter who the governor is or who the mayor is. They’re all on board because it’s job creation. And it’s just not job creation. It’s short-term gain for long-term pain.

Voter 2: We’re actually having one right now in our town. Everybody voted no on it, and then it came out that it was already in the process and a done deal. The farmers had already sold their property and everything for this to start being built. So basically, everybody that showed up to city hall was for nothing. Our word doesn’t matter.

One of the things I’ve always thought Trump really understood is how powerless people felt in politics, and he sort of presented himself as an answer to that. Like: You might be powerless, but I am powerful. I know how the system works. I have worked it. I have bribed these politicians before.

Totally.

And then this happens, and where’s Trump? Trump is completely pro-data center. He calls Jensen Huang during the All-In Summit, and they’re all just talking about how Trump isn’t going to fall for this anti-data center hoax.

Archival clip of Donald Trump: Google wants to build a big one in Finland — which I’m not happy about because they were unable to get permitting. And I’m telling you, it’s all a hoax. The data centers are great, and they make people wealthy, and they make states wealthy. And it’s the oil of the next 20, 25 years. It’s bigger than the internet and the A.I., you know, much more so.

Look, Trump is not an ideological person, and he certainly doesn’t care about regular Americans. He does care what the All-In podcast guys say about him. He cares what the donor class that he is talking to says and how they talk to him. Those are the people who stand to benefit the most from the data centers, and he is on their side.

I’m sure a lot of those people are coming in and explaining to Trump all of the long-term benefits and how we have to compete with China. That competitive instinct is something that I do think Trump gets into.

But what’s interesting about Trump is that for all the credit he gets for being a good communicator, he’s not trying to have a conversation about this with the public at all. He’s not trying to explain what the benefits might be. I mean, he throws a couple of things out there, but mostly he just tells voters: Stop caring about this. Affordability is a hoax. We’re going to do data centers. They’re great. [...]

What voters really want is someone to take them through it: How should we feel about this?
The problem is — I will say this, having talked to many Democrats and Republicans in office about this — none of them actually know how they feel about it. That is the hard thing about A.I. — and the interesting thing about it as a political issue. [...]

This is why I’m so suspicious of California politicians who run for national office — I think you have to be surrounded by the people who live in the swing states to have an instinct for what matters to a median voter. If you’ve cultivated your political career in California, you simply don’t have the gut-level instinct to be around a Georgia, Pennsylvania or Michigan swing voter.

So I am looking at politicians who both have that gut instinct — because they come from these places and their political careers were forged there — and who are good at talking to people and have a record of good governance.

People want a candidate who feels like they care about them. And Donald Trump conned people into believing that he cared about them when he didn’t, but people were so desperate for it that they were willing to be conned.

We’ve talked a lot here about people who voted for Trump and are maybe souring on him. But obviously, he maintains support from a huge number of his voters and a lot of Republicans.

So when you hear from the people who are still very pro-Trump — they voted for him in 2024, think he’s doing a great job and don’t regret that vote at all — how do they understand him? What is different in the picture they’re seeing from what we’ve been talking about?

The number one thing that people say to indicate that they’re still appreciative of what Donald Trump is doing is that he has made it clear that there are two genders, and that he is keeping biological men out of women’s sports.

They are still deeply into a lot of the cultural fights — the places where they think that Democrats are weird or overly woke. They tend to be people who are so polarized and so deeply anti-Democrat that, out of tribal allegiance, they continue to support Trump and will brook no dissent on that because they’re very dug in.

It is part of their personality and identity. The Trump thing is who they are. Which is again why I’m a bit skeptical about the future of the Republican Party without Trump.

It is mostly on the cultural things. Which leads me to the thing I am most curious about coming up in this election — something that I’ve been pretty obsessed with: Is it vibes or turnout then?

If it’s enthusiasm, vibes or turnout, Donald Trump turns out rural voters at Assad-like margins. So what happens when he’s no longer there to turn out these voters who were never part of the political process before but are Trump-only voters?

For Democrats, who have college-educated voters, those people are much more in tune. They read everything, they closely follow the election, and they show up to vote.

Whereas a lot of these low-information voters who turn out just for Donald Trump might not turn out in the midterms. But even more, when you add on top of that people who are depressed about what Trump is doing and don’t like their Republican candidates, I think that is why you end up in wave territory.

by Ezra Klein and Sarah Longwell, NY Times |  Read more:

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