Does Anyone Know Why We're Still Doing Tariffs?

The ridiculous policy has taken on a life of its own.

In case you haven’t heard, the Supreme Court just ruled many of Donald Trump’s tariffs illegal:

[T]he Supreme Court ruled that the unilaterally imposed [tariffs] were illegal…No longer does Trump have a tariff “on/off” switch…Future tariffs will need to be imposed by lengthy, more technical trade authorities — or through Congress…

In a 6-3 ruling, the Supreme Court said that affirming Trump's use of the International Emergency Economic Powers Act (IEEPA) would "represent a transformative expansion of the President's authority over tariff policy."…Chief Justice John Roberts said that IEEPA does not authorize the president to impose tariffs because the Constitution grants Congress — and only Congress — the power to levy taxes and duties. [...]

What was the point of these tariffs? It has never really been clear. Trump’s official justification was that they were about reducing America’s chronic trade deficit. In fact, the initial “Liberation Day” tariffs were set according to a formula based on America’s bilateral trade deficits with various countries. But trade deficits are not so easy to banish, and although America’s trade deficit bounced around a lot and shifted somewhat from China to other countries, it stayed more or less the same overall:

Economists don’t actually have a good handle on what causes trade deficits, but whatever it is, it’s clear that tariffs have a hard time getting rid of them without causing severe damage to the economy. Trump seemed to sense this when stock markets fell and money started fleeing America, which is why he backed off on much of his tariff agenda.

Trump also seemed to believe that tariffs would lead to a renaissance in American manufacturing. Economists did know something about that — namely, they recognized that tariffs are taxes on intermediate goods, and would therefore hurt American manufacturing more than they helped. The car industry and the construction industry and other industries all use steel, so if you put taxes on imported steel, you protect the domestic market for American steel manufacturers, but you hurt all those other industries by making their inputs more expensive.

And guess what? The economists were right. Under Trump’s tariffs, the U.S. manufacturing sector has suffered. Here’s the WSJ:

The manufacturing boom President Trump promised would usher in a golden age for America is going in reverse…Manufacturers shed workers in each of the eight months after Trump unveiled “Liberation Day” tariffs, according to federal figures…An index of factory activity tracked by the Institute for Supply Management shrunk in 26 straight months through December…[M]anufacturing construction spending, which surged with Biden-era funding for chips and renewable energy, fell in each of Trump’s first nine months in office. [...]

Macroeconomically, the tariffs haven’t been as big a deal as initially feared. Growth came in slightly weak in the final quarter of 2025, but that was mostly due to the government shutdown, and will rebound next quarter. Inflation keeps bumping along at a little bit above the official target, distressing the American consumer but failing to either explode or collapse. The President’s cronies have taken to holding up this lack of catastrophe as a great victory, but this sets the bar too low. If you back off of most of your tariffs and the economy fails to crash, you don’t get to celebrate — after all, the tariffs were ostensibly supposed to fix something in our economy, and they have fixed absolutely nothing.

Instead, the tariffs have mostly just caused inconvenience for American consumers, who have been cut off from being able to buy many imported goods. The Kiel Institute studied what happened to traded products after Trump put tariffs on their country of origin, and found out that they mostly just stopped coming:

The 2025 US tariffs are an own goal: American importers and consumers bear nearly the entire cost. Foreign exporters absorb only about 4% of the tariff burden—the remaining 96% is passed through to US buyers…Using shipment-level data covering over 25 million transactions…we find near-complete pass-through of tariffs to US import prices……Event studies around discrete tariff shocks on Brazil (50%) and India (25–50%) confirm: export prices did not decline. Trade volumes collapsed instead…Indian export customs data validates our findings: when facing US tariffs, Indian exporters maintained their prices and reduced shipments. They did not “eat” the tariff. [emphasis mine]

So it’s no surprise that the most recent polls show that Americans despise the tariffs:

Source: ABC

A Fox News poll found the same, and Trump’s approval rating on both trade and the economy is underwater by over 16 points despite a solid labor market. Consumer sentiment, meanwhile, has crashed:

Trump has belatedly begun to realize the hardship he’s inflicting on voters. But instead of simply abandoning the tariff strategy, he’s issuing yet more exemptions and carve-outs in an attempt to placate consumers:

Donald Trump is planning to scale back some tariffs on steel and aluminium goods as he battles an affordability crisis that has sapped his approval ratings…The US president hit steel and aluminium imports with tariffs of up to 50 per cent last summer, and has expanded the taxes to a range of goods made from those metals including washing machines and ovens…But his administration is now reviewing the list of products affected by the levies and plans to exempt some items, halt the expansion of the lists and instead launch more targeted national security probes into specific goods, according to three people familiar with the matter.

Tariffs — or at least, broad, blanket tariffs on many products from many different countries — are simply a bad policy that accomplishes nothing while causing varying degrees of economic harm. But despite all his chicken-outs and walk-backs and exemptions, Trump is still deeply wedded to the idea. When news of the Supreme Court ruling reached him, he flew into a rage and accused the Justices of serving foreign interests:

He called the liberals a “disgrace to our nation.” But he heaped particular vitriol on the three conservatives [who ruled against him]. They “think they’re being ‘politically correct,’ which has happened before, far too often, with certain members of this Court,” Mr. Trump said. “When, in fact, they’re just being fools and lapdogs for the RINOs and the radical left Democrats—and . . . they’re very unpatriotic and disloyal to our Constitution. It’s my opinion that the Court has been swayed by foreign interests.”

Why are the President and his loyalists so incensed over the SCOTUS decision? The tariffs are a millstone weighing down Trump’s presidency, and his various walk-backs confirm that he realizes this. It would have been smarter, from a purely political standpoint, to just let SCOTUS do the administration a favor and cancel the tariffs. Instead, Trump is going to the mat for the policy. Why?

One possibility is simply that Trump hates having his authority challenged by anyone. Tariffs were his signature economic policy — something he probably decided on after hearing people like Lou Dobbs complain about trade deficits back in the 1990s. To give up and admit that tariffs aren’t a good solution to trade imbalances would mean a huge loss of face for Trump.

Another possibility is that Trump ideologically hates the idea of trade with other nations, viewing it as an unacceptable form of dependency on foreigners. Perhaps by using ever-shifting uncertainty about who would be hit by tariffs next, he hoped to prod other countries into simply giving up and not selling much to the United States.

A third possibility is that tariffs offer Trump a golden opportunity for corruption and personal enrichment. Trump issues blanket tariffs, and then offers carve-outs and exemptions to various companies and/or their products. This means companies line up to curry favor with Trump and his family, in the hopes that Trump will grant them a reprieve.

But the explanation I find most convincing is power. If all Trump wanted was to kick out against global trade, the Section 122 tariffs and all the other alternatives would surely suffice. Instead, he was very specifically attached to the IEEPA tariffs that SCOTUS struck down. Those tariffs allowed Trump to levy tariffs on specific countries, at rates of his own choosing, as well as to grant specific exemptions. That gave Trump an enormous amount of negotiating leverage with countries that value America’s big market.

This is the kind of personal power that no President had before Trump. It allowed him to conduct foreign policy entirely on his own. It allowed him to enrich himself and his family. It allowed him to gain influence domestically, by holding out the promise of tariff exemptions for businesses that toe his political line. And it allowed him to act as a sort of haphazard economic central planner, using tariffs like a scalpel to discourage the kinds of trade and production that he didn’t personally like.

In other words, I think that although the tariffs had their origin in 1990s-era worries about trade deficits, they ended up as a way to make the Presidency more like a dictatorship. That is almost certainly why the Supreme Court struck the IEEPA tariffs down, citing concerns over presidential overreach instead of more technical considerations.

For much of the modern GOP, I think, autocracy has become its own justification. To many Republicans, tariffs were good because they made the President powerful, and SCOTUS’ ruling is anathema because it pushes back on the imperial Presidency.

by Noah Smith, Noahpinion |  Read more:
Images: Joey Politano/ABC

[ed. Look at the charts. Nothing penetrates with some people. See also: February 23, 2026 (LFaA).]

Chicago Gets a Lift

Walking down the magnificent streets of downtown Chicago, towering skyscrapers on all sides of you, you probably couldn’t guess the incredible scheme the city carried out in the area some 160 years before.

They lifted the whole city up in the air.

Between four and fourteen feet. Buildings, streets and all. Straight up, using hydraulic jacks and jackscrews.

It was a titanic feat of engineering, imagination and sheer moxie. And it might just say a lot about that early Chicago character.

... buildings were lifted up using jackscrews and the occasional hydraulic lift. And we’re not just talking houses. Entire masonry buildings were raised in the air. Eventually, they even figured out how to raise an entire block at once. They placed 6000 jackscrews under the one-acre block between Lake, Clark and LaSalle streets, estimated at 35,000 tons in weight, and raised the whole thing over four days—buildings, sidewalks and all. The process was gradual enough that business continued in the buildings throughout.

Not every building went through the process. Not because it was too difficult, but because some of the buildings no longer fit with where the city was going. But waste not, want not. They put these old wooden buildings on rollers and drew them by horse to the edges of town. Of course, the enterprising owners of businesses operating in these buildings didn’t want to miss out on business, so many continued to serve customers even as the buildings were rolling down the street.

by Illinois Office of Tourism |  Read more:

Image: uncredited

[ed. Man, they really got things done back then. See also: American water is too clean (WIP).]

IRS: First Time Penalty Abatement

Always an adventure calling the IRS 

Me: "Hi, I'm calling about penalty relief for my client. He's disabled and --" 

Agent: "What's the account number?" 

Me: "He lost his job. Couldn't afford to file. He has severe anxiety and --" 

Agent: "I see. The penalty is $847. Next?" 

Me: "His anxiety is documented. He's been struggling for years. He literally couldn't handle opening the mail from you guys." 

Agent: "Understood. The penalty stands." 

Me: "He's on disability income. This is going to hurt him badly." 

Agent: "I hear you. Still $847." 

Me: "He was literally unable to function during this period. His doctor can verify --" 

Agent: "That's unfortunate. The penalty is assessed." 

Me: "So there's nothing we can do? No hardship exception? No compassion?" 

Agent: "Not without something to base it on, sir." 

Me: *long pause* 

Me: "I mean - unless I..." 

Agent: "You could...." 

Me: "Could what?" 

Agent: "Well. You'd have to say it." 

Me: "Say..." 

Agent: "THE words, sir." 

Me: "What words?" 

Agent: "I can't say them for you." 

Me: "It's not even a sure thing though. Could it work?." 

Agent: "Only one way to find out sir." 

Me: *long pause* 

Me: "I'm going to say it." 

Agent: "I'm bracing, sir." 

Me: "First time penalty abatement." 

Agent: "Excellent. Your client is eligible. I'm releasing the penalty now. We're all set." 

Me: "Wait. That's it? Just like that?" 

Agent: "Yes sir. The penalty is gone." 

Me: "It's automatic?" 

Agent: "Exactly." 

Me: "So why all the drama? Why couldn't you just tell me?" 

Agent: "Because most people don't understand how serious a decision it is to say THE words." 

Me: "It's that serious? Why?" 

Agent: "You just used your one shot." 

Me: "What do you mean my one shot?" 

Agent: "First time penalty abatement. You can only invoke it once per client. Ever." 

Me: "...once?" 

Agent: "That's right. Once... And then it resets again in three years." 

Me: "Wait, it resets? So we can do this again in a few years?" 

Agent: "Is there anything else I can help you with?"

by Roger Ledbetter, CPA, X |  Read more:

Image: Getty

[ed. Can you believe it? This is really a thing. Have some catastrophic medical bill (or windfall?) and can't or don't want to pay taxes this year? First time penalty abatement. See also: The IRS’s First-Time Penalty Abatement: What It Is And How To Get It (Forbes); and, other types of penalty relief (IRS). Also this.]

ICE vs. Everyone

At 9 AM I fall in love with Amy. We’re in my friend’s old Corolla, following an Immigration and Customs Enforcement vehicle in our neighborhood. We only know “Amy” through the Signal voice call we’re on together, alongside more than eight hundred others, all trying to coordinate sightings throughout South Minneapolis. Amy drives a silver Subaru and is directly in front of us, expertly tailing a black Wagoneer with two masked agents in front. The Wagoneer skips a red light to try and lose us, but Amy’s fast. She bolts across the intersection, Bullitt-style, and we follow just behind, shouting inside the car, GO AMY! WE LOVE YOU! “I’m gonna fucking marry Amy,” my friend says. “You think it’s chill to propose over this call?”

You can’t walk for ten minutes in my neighborhood without seeing them: boxy SUVs, mostly domestic-made, with tinted windows and out-of-state plates. Two men riding in front, dressed in tactical gear. Following behind is a train of three or four cars, honking. Sometimes there are bikers, too, blowing on neon-colored plastic whistles that local businesses give out for free. Every street corner has patrollers on foot, yelling and filming when a convoy rolls by.

If the ICE vehicles pull over, people flood the street. Crowds materialize seemingly out of nowhere. The honking and whistling amps up, becoming an unignorable wail, and more people stream out of their houses and businesses. When agents leave their cars they’re met with jeers, mostly variations on “Fuck you.” Usually someone starts throwing snowballs. Agents pull out pepper spray guns, threatening protesters who get too close. If there’s enough of a crowd, they use tear gas. Meanwhile they go about their barbaric business: they’ve pulled someone out of their car or home and are shoving them into a vehicle, handcuffed. Over the noise, an observer tries to ask the person being detained for their name and who they want contacted. Sometimes a detainee’s phone, keys, or a bag make it into an observer’s hands. Everyone is filming. The press is taking photos.

Soon the agents are back in their vehicles. They pull risky maneuvers to move through the crowd and speed off. No more than six or seven minutes have elapsed, and another neighbor has been kidnapped. Observers are left to deal with the wreckage: tow an abandoned car, contact family, sometimes collect children. There are lawyers on call, local tow companies offering free services, mutual aid groups to support families after an abduction. Some observers stay behind to do this kind of coordination, and some get back in their cars or on their bikes and speed off again. If enough people get there fast enough, ICE might back off next time. At a minimum, their cruelty can’t go unchallenged.

I’m in my kitchen typing out “do swim goggles protect you from tear gas.” The AI search response that I’ve failed to disable tells me they can “help significantly.” I laugh at this ridiculous tableau. The local ACE Hardware store posted on Facebook that they’ve stocked up on respirators and safety goggles. What I once considered hardcore riot gear is now essential for leaving the house.

I live near the intersection of Chicago Avenue and Lake Street, two major South Minneapolis thoroughfares that mark the northwest corner of the Powderhorn Park neighborhood. My house is a mile north of where George Floyd was murdered by Minneapolis Police officer Derek Chauvin in 2020 and even closer to where Renee Good was murdered by ICE agent Jonathan Ross this month. Since the Department of Homeland Security initiated “Operation Metro Surge” in December, there have been at least half a dozen abductions that I know of on or around my block. A nearby house of recently arrived Ecuadorians used to be home to sixteen adults and six children. Six weeks into the federal invasion, only eight adults remain.

Citywide, hundreds of people are being abducted from their homes and separated from their families. Citizens are racially profiled and asked for papers. Exact numbers on detainees are unreliable, but the number of federal agents is roughly three thousand. These numbers are similar in scale to ICE operations in other cities across the US, including LA and Chicago, but what’s new in Minneapolis are the extreme tactics that federal agents are using to repress organized resistance. The stories circulating online and by word of mouth are harrowing: federal agents surrounding observer cars to trap them, then smashing car windows and dragging observers out; agents spraying mace six inches from someone’s face or spraying mace into intake vents so that the inside of cars are immediately flooded; agents suddenly braking at seventy miles per hour on the freeway and forcing tailing vehicles to swerve; agents throwing observers on the ground, punching observers in the face, agents taking observers on aimless rides around the city while taunting them with racial or sexual epithets; agents holding observers at the federal detention building for hours without access to phone calls or lawyers. (This is merely how ICE terrorizes US citizens.)

What also feels new is the frequent candor with which ICE agents are displaying hateful ideology. Two days after Good was murdered, DHS overtly referenced a Neo-Nazi anthem in a nationwide recruitment post. Agents seem to feel empowered to say new kinds of chilling things out loud. One told an observer: “Stop following us, that’s why that lesbian bitch is dead.” (He was referring to Good.) A friend of mine was sexually harassed by an ICE agent, who called them “too pretty” to stay locked up while in detention. Another was shoved to the ground and asked, “Do you like the dirt, queer?” Sometimes the behavior is simply bizarre. After an attempted abduction left a couple dozen observers standing on a neighborhood street, one ICE vehicle circled the block, broadcasting a looped audio recording of a woman screaming.

In these moments the whole situation can seem ridiculous. The professional kidnappers step out of their flashy American cars with their special outfits on. They wave their little mace guns at us, but we’re not scared—we have oversized ski goggles! A particularly comic element at play is that we’re in the middle of another winter with wild variations in temperature, meaning that Minneapolis streets are covered in thick sheets of ice. There are some heartwarming videos of agents falling down (“ICE on ice!”) but we slip too, running towards or away from them. It can feel kind of slapstick, until you remember that they will destroy someone’s life today, and that they can kill you.

A black gloved hand reaches out of the Wagoneer window and begins to give a princess wave to us, then the peace sign, then a thumbs up. They’re mocking us. The agents stop their vehicle suddenly but Amy brakes in time. Luckily, so do we. ICE has been using “brake-checks” as pretense for detaining observers. Another observer car pulls up and my city council member steps out. He strides up to the Wagoneer, blowing his whistle. (Absolutely everyone is confronting ICE—I’ve encountered my old boss from the local cafe scuffling with agents, too.) Someone on the street starts filming and the bicyclist we know in the chat as “small fry” shouts at the agents to get out of Minneapolis. We’re honking. The Wagoneer idles for a few minutes and then takes off towards the freeway. We follow until they’re on the exit ramp. It feels good to watch them leave the neighborhood, but I worry about where they’re headed next. We drive towards home and come across another two vehicles with observers tailing behind. Lake Street, a major corridor of immigrant businesses in the neighborhood, has been crawling with ICE vehicles every morning this week.

Powderhorn Park is a middle-class neighborhood known for its May Day parade, replete with larger-than-life puppets and steampunk Mad Max vehicles. Artists and families live here, and young queer people, and many immigrants, most arriving from Ecuador in recent years. The past few summers, the block south of me has become impassable every evening as hundreds of my Spanish-speaking neighbors use the park for massive volleyball tournaments. Food vendors set up tables and families bring lawn chairs to watch the games. Last year, two women sold grilled chicken on the corner closest to me. My neighbor’s lawn became a kind of informal restaurant, where customers would sit at the warping picnic table and eat. I bought their chicken a few times, and it was awesome.

A week into the invasion my neighbor with the picnic table called to ask if I was available to come with one of the two vendors to an immigration appointment. The woman had been contacted by USCIS that morning and was told to come in at 3 o’clock that same afternoon. She was worried she could be detained on the spot and had a newborn with her. Several neighbors gathered to arrange a ride, but in the end she only wanted a lawyer and translator to attend with her. I heard later that at the appointment she announced she wanted to self-deport, trading a planned exit for the fear of being taken at random. Her sister, the other vendor, is still here. The Saturday after Good’s murder, she and I sit with a small group of volunteers gathered to talk about how to improve rideshare coordination over WhatsApp. She tells us in Spanish that migrants can’t use corporate rideshare services because there have been reports of Uber drivers taking people directly to ICE. Of the more than two hundred people in the rideshare text thread, half are citizens offering rides and half are requesting. “I like being in this group because I’m meeting so many neighbors I would not have met otherwise,” someone says at the meeting. “I hope we stay connected after this is all over.”

by Erin West, N+1 |  Read more:

Image: uncredited

Supreme Court Strikes Down Trump Tariffs

Why the “Lesser Included Action” Argument for IEEPA Tariffs Fails

The Supreme Court yesterday struck down Trump’s IEEPA tariffs, holding that the statute’s authorization to “regulate… importation” doesn’t include the power to impose tariffs. The majority’s strongest argument is simple: every time Congress actually delegates tariff authority, it uses the word “duty,” caps the rate, sets a time limit, and requires procedural prerequisites. IEEPA has none of these.

The dissent pushes back with an intuitively appealing argument: IEEPA authorizes the President to prohibit imports entirely, so surely it authorizes the lesser action of merely taxing them. If Congress handed over the nuclear option, why would it withhold the conventional weapon? Indeed in his press conference Trump, in his rambling manner, made exactly this argument:

“I am allowed to cut off any and all trade…I can destroy the trade, I can destroy the country, I’m even allowed to impose a foreign country destroying embargo…I can do anything I want to do to them…I’m allowed to destroy the country, but I can’t charge a little fee.”

The argument is superficially appealing but it fails due to a standard result in principal-agent theory.

Congress wants the President to move fast in a real emergency, but it doesn’t want to hand over routine control of trade policy. The right delegation design is therefore a screening device: give the President authority he will exercise only when the situation is truly an emergency.

An import ban works as a screening device precisely because it is very disruptive. A ban creates immediate and substantial harm. It is a “costly signal.” A President who invokes it is credibly saying: this is serious enough that I am willing to absorb a large cost. Tariffs, in contrast, are cheaper–especially to the President. Tariffs raise revenue, which offsets political pain. Tariff incidence is diffuse and easy to misattribute—prices creep, intermediaries take blame, consumers don’t observe the policy lever directly. Most importantly tariffs are adjustable, which makes them a weapon useful for bargaining, exemptions, and targeted favors. Tariffs under executive authority implicitly carry the message–I am the king; give me a gold bar and I will reduce your tariffs. Tariff flexibility is more politically appealing than a ban and thus a less credible signal of an emergency. The “lesser-included” argument gets the logic backwards. The asymmetry is the point.

Not surprisingly, the same structure appears in real emergency services. A fire chief may have the authority to close roads during an emergency but that doesn’t imply that the fire chief has the authority to impose road tolls. Road closure is costly and self-limiting — it disrupts traffic, generates immediate complaints, and the chief has every incentive to lift it as soon as possible. Tolls are cheap, adjustable, and once in place tend to persist; they generate revenue that can fund the agency and create constituencies for their continuation. Nobody thinks granting a fire chief emergency closure authority implicitly grants them taxing authority, even if the latter is a lesser authority. The closure and toll instruments have completely different political economy properties despite operating on the same roads.

The majority reaches the right conclusion by noting that tariffs are a tax over which Congress, not the President, has authority. That is constitutionally correct but the deeper question is why the Framers lodged the taxing power in Congress — and the answer is political economy. Revenue instruments are especially easy for an executive to exploit because they can be targeted. The constitutional rule exists to solve that incentive problem.

by Alex Tabarrok, Marginal Revolution | Read more:

Image: uncredited/via

[ed. Making Congress do their job, even when they don't want to... See also: Justice Gorsuch Tries to Revive Congress (WSJ):]

***

As they wait out the latest winter storm, Members of Congress ought to spend time reading Justice Neil Gorsuch’s concurring opinion in the Supreme Court’s rejection of President Trump’s claim of emergency power to impose tariffs (Learning Resources v. Trump). The Justice has more confidence in Congress than the Members themselves do these days.

Justice Gorsuch rides shotgun to Chief Justice John Roberts’s excellent majority opinion, and he mows down both the dissents and the concurring opinion by liberal Justice Elena Kagan. It’s an intellectual tour de force. But his main theme isn’t an assertion of judicial power. It’s an effort to encourage Congress to reclaim its proper authority under the Constitution’s separation of powers. [...]

In our view, the recent weakness of Congress vis-à-vis the President has many causes. Political polarization and narrow majorities make it harder for bipartisan coalitions to form. Media focus on the Presidency draws more readers than do stories on legislative process. The failure of civic education about the American system produces a public that is more susceptible to demagoguery and political idolatry.

But as Justice Gorsuch makes clear, the difficulty of passing legislation is a constitutional feature, not a fault. “Deliberation tempers impulse, and compromise hammers disagreements into workable solutions,” he writes. “And because laws must earn such broad support to survive the legislative process, they tend to endure.” He rightly calls the legislative process “the bulwark of liberty.”

The Beast of Bentonville

Who needs the state, when Walmart provides?

In retrospect, the week of Donald Trump’s inauguration was an inopportune time for Walmart to hold the grand opening of its new corporate campus. Conceptualized in 2017 and under construction since 2019, the January 2025 opening of the 350-acre mini-city filled with mixed-use office buildings, food halls, hiking trails, and retail storefronts was meant to make Walmart modern––to keep it in the mix of companies that could attract top corporate and tech talent to Bentonville, Arkansas in an era when it all seemed headed to Silicon Valley.

Glittering office buildings now line Walmart-owned streets with names like Excellence and Integrity. The “Maverick” building sits at the corner of 10th and Customer; the Moon Pie and Ol’ Roy buildings are between Martin Luther King, Jr. Parkway and Respect Drive. To the south of campus is Bud’s Preserve, a large park which houses the headquarters’ utility buildings and a “lake” that supplies water to the campus. Walmart’s new home feels much more urban than the town it’s in, and it’s meant to. It’s a massive corporate footprint in a city that’s become synonymous with the company, populated by Walmart corporate executives, employees, and the executive teams of Walmart’s suppliers and vendors.

Walmart—still the country’s largest private employer, the world’s largest retailer, and the world’s largest company by revenue—was founded in the 1960s in this small corner of Arkansas by Sam Walton and his brother Bud when they opened their first discount store in my hometown, Rogers, immediately south of Bentonville. Starting in one rural locale and rapidly expanding to others across the Midwest and South, Walmart (then Wal-Mart, its hyphen since lost to the 21st century) grew quickly by tapping into consumer markets other chains had written off. By 1984, the New York Times wrote that Walton was “gyrating awkwardly to a hula” on Wall Street in celebration of record profit margins. Walmart’s workers were “happy and productive” and Walton a “wiry bundle of energy, company boosterism, and general enthusiasm,” a “folksy, down-home businessman who just happened to be one of the richest people in the country.” By the 2000s, Walmart had expanded successfully into grocery, wholesaling, and international markets, cornering not just rural but suburban and even some urban retail markets, dominating supply chains, able to bend manufacturers and even governments to its will. “Is Wal-Mart Too Powerful?” Businessweek asked in a 2003 cover story. “In business, there is big and there is Wal-Mart.”

The Beast of Bentonville, as the press took to calling it, was foundational in ushering in a new era of the globalized economy. It kept prices murderously and profitably low by strong-arming its suppliers into ever-cheaper modes of production. It capitalized on and pushed forward the liberalization of global trade, sourcing goods ever more cheaply from suppliers reliant on exploited labor in China, Mexico, India, and elsewhere around the globe. As retail and service-sector corporations captured the domestic economy, Walmart’s claim to market dominance helped mark the end of the American industrial economy. And its old corporate headquarters were a relic of the cost-cutting era it helped usher into being. The previous iteration of Walmart’s home office was stark, windowless, and fluorescently lit. A former Procter & Gamble executive recalled his Walmart counterpart by comparing the headquarters to a bus station. At the time, Jeffrey Goldberg wrote, the company’s executives were proud of their “ostentatiously shabby surroundings,” which gave credibility to its slogan of “Always Low Prices—Always”: everything in service of the customer’s wallet, even if it meant employees working in the dark, dank cave of the unassuming brick building.

Walmart has always been more of a tech and data company than it gets credit for, but with the onslaught of online retail, it’s had to pivot more aggressively, in search both of higher-income customers and of alternatives to Amazon Prime. Also, it was looking for labor. Walmart today employs twenty thousand tech workers—about a third of its corporate workforce. Its ideal white-collar worker is no longer the homegrown son of the rural South who had to choose between the farm, the factory, and the office. Now, it seeks out employees whose other options may be tech companies in the San Franciscos and New Yorks of the world—urban metropoles that outstrip Bentonville in vibes, opportunity, and work environment. As the political and cultural zeitgeist has bent toward firms like Amazon and the tech giants of Silicon Valley, Walmart’s spot on top of the Fortune 500 began to feel unstable. (It’s soon expected to lose its status as the world’s largest retailer to Amazon.) Something new seemed in order as the retailer moved increasingly into ecommerce and the “omnichannel” space. Tech company or retail giant? Walmart is trying to be both.

It’s only a testament to Walmart’s business savvy that the new corporate campus pays homage to the brand of decadent, neoliberal, tech sector-infused capitalism that seemed to have supplanted the era of cheap. Its physical transformation was self-consciously in the model of Silicon Valley and the Pacific Northwest’s corporate campuses: Walmart hired the SWA Group (which counts among its other projects the campuses of Apple, PayPal, Google, and Stanford) to do landscape design, and the architecture firm Gensler (Meta, Airbnb, Salesforce, etc.) as the design architect. The Palo Alto wish-casting is evident.

Like its tech-world models, the new campus is a small city replete with childcare (“Little Squiggles Children Enrichment Center” is now the largest childcare provider in the northwest Arkansas region), a health and fitness center (“Walton Family Whole Health and Fitness,” a 360,000 square foot facility featuring gyms, pickleball courts, meditation spaces, and cryotherapy), and a food hall (“8th and Plate”). It contains seven miles of walking and biking trails, three hundred EV charging stations, and its own rentable bike fleet. Storefronts throughout the campus hold local outdoor retailers, breweries, and barbecue joints. But for all the expense, ambition, and decadence, the Walmart play-city feels like a copy of a Silicon Valley gone by, the company playing catch-up to a tech economy that no longer exists. In his recent book The Technological Republic, Palantir founder Alex Karp writes (notably, in the past tense):

The Sunnyvales, Palo Altos, and Mountain Views of the world were company towns and city-states, walled off from society and offering something that the national project could no longer provide. Technology companies formed internally coherent communities whose corporate campuses attempted to provide for all the wants and needs of daily life.

It’s a company city within a company town. Walmart needed something like this bizarro-world place, straight out of HBO’s Silicon Valley title sequence, to solidify its own future in a shifting economic terrain. But its weirdness reveals the anachronisms of the retail giant’s political and economic legacy, and of its future—not quite conservative enough, not quite liberal enough, not quite a tech company, not just a brick-and-mortar retailer, either. [...]

These are the kinds of things you build when you need to lure people away from cities, which has been the motivation for northwest Arkansas’s (or “Oz,” as recent efforts have tried to rebrand it) economic development machine that also includes other local corporate powerhouses like meat giant Tyson Foods and logistics behemoth J. B. Hunt Transportation. It’s part of Walmart’s transparent effort to make the region a desirable place to live not just for its own workforce, but for those of its suppliers too, which it unofficially requires to maintain an office and executive team within the region. As parts of the tech world—SpaceX, Hewlett Packard, Oracle—make lots of noise about moving their headquarters off the coasts, the region’s boosters are making an explicit play for tech workers, and maybe companies too, to move here. In recent years the Northwest Arkansas Council has placed billboards in places like Austin and Seattle that read, “Go South, young tech workers” and “It’s like Austin, but affordable.”

The Walton dynasty presides in the background of Arkansas politics, but the family has largely stayed out of the culture wars, at least in public. The Walton Family Foundation has put millions of dollars into funding climate projects and environmental journalism, with recent grants to NPR and PBS. After much pressure, in 2021, the Foundation issued a statement opposing the Arkansas legislature’s attacks on trans rights; later that year, it established a special “Arkansas LGBTQ+ Advancement Fund” to “improve the quality of life for LGBTQ+ Arkansans.” But the fund made just one round of grants, in 2022, and its promotional webpage was pulled down last year. More recently, the foundation seems to be tacking to the center: It commissioned a cross-partisan study of nonprofits (“The problems our nation faces are too big for any one sector or political party to solve on its own. They require people with a range of beliefs and experiences to come together to find answers”) and is framing its climate work in similar terms (“Support for Clean, Safe, and Secure Water Supplies Transcends Partisan Politics”).

In order to keep up with the Walton’s benevolent stewardship of Bentonville, and its presumed-to-be-liberal workforce, the Walmart of the 2010s had combined its historic commitment to anti-unionism and conservative economics with a more liberal outlook on identity and inclusion, like its corporate peers. Recently, however, spurred on by Trump’s second term, Walmart’s DEI initiatives have hit the chopping block: Pride merchandise has been pulled, and inclusion and diversity have been renamed “belonging,” even as the company tries desperately to convince its employees to make the move to Arkansas.

Meanwhile, the Trump administration’s approach to international trade has taken straight aim at these economic interests through its protectionism—or, at least, heavy-handed and chaotic attempts at it. [...]

As Trump’s trade war dawdles along, the cracks between business conservatism and Trump conservatism have been showing in earnest. CEO Doug McMillon, who will retire at the end of this month, sat down with Trump at Mar-a-Lago before his inauguration and reportedly told him, “We’re here long term. We’re a large employer. We serve a lot of people. We want the country to thrive. How can we be helpful?” Just a few months later, he was at an Oval Office meeting in April where, alongside the heads of Home Depot and Target, he tried to impress upon the chief executive that broad-based tariffs would mean an uptick in prices. A Walmart spokesperson called the meeting “productive.” But nothing changed; a few weeks after this meeting, at the company’s first-quarter earnings call, Walmart told investors that its prices would soon start to rise. “The magnitude and speed at which these prices are coming to us is somewhat unprecedented in history,” its chief financial officer told the Wall Street Journal. Trump reacted quickly (and characteristically) on Truth Social:

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”

In the months since then, Walmart’s prices have been rising, some slightly and some by more than 50 percent; still, the company claims that the trade war has not affected prices. “Costs increase each week,” McMillon said, but also that the company has been “keeping our prices as low as we can for as long as we can,” crediting a recent increase in high-income shoppers for keeping sales high. It’s no stretch to imagine overseas suppliers are taking the brunt of this trade showmanship.

American companies eating tariffs imposed by a Republican president, a conservative chain up against a conservative president; this can’t have been the future Sam Walton envisioned, nor can it have been what his offspring or his corporate successors thought was coming when they dumped millions of dollars into their new corporate playground.

The world the Walmart campus was built to accommodate is slipping away. As the new HQ fills with workers pedaling to any number of its fully windowed buildings, soaking up the sun in its outdoor spaces, playing pickleball in its associate-use courts, these same workers are no longer a fought-over commodity. To an industry enhanced with layoffs and firings, they’re a dime a dozen. Even if the AI bubble collapses in spectacular fashion, it will have transformed the tech and e-commerce sector. Palantir, Meta, Google, Amazon are falling in line with the Trump circus, having determined that their owners’ interests (and government contracts) are better served by playing nice with the administration than by pissing it off. In a way, Walmart seems adrift, a Spark flag waving in the wind, once at the forefront of changes in global capitalism and now something of a dinosaur figuring out how to respond, economically and politically, to them.

by Olivia Paschal, N+1 |  Read more:

Image: uncredited

Proposed AI Policy Framework for Congress

Sam Altman (Open AI): "The world may need something like an IAEA [International Atomic Energy Agency] for international coordination on AI". (source)

Alex Bores proposes his AI policy framework for Congress.

1. Protect kids and students: Parental visibility. Age verification for risky AI services. Require scanning for self-harm. Teach kids about AI. Clear guidelines for AI use in schools, explore best uses. Ban AI CSAM.

2. Take back control of your data. Privacy laws, data ownership, no sale of personal data, disclosure of AI interactions and data collections and training data.

3. Stop deepfakes. Metadata standards, origin tracing, penalties for distribution.

4. Make datacenters work for people. No rate hikes, enforce agreements, expedite data centers using green energy, repair the grid with private funds, monitor water use, close property tax loopholes.

5. Protect and support workers. Require large companies to report AI-related workforce changes. Tax incentives for upskilling, invest in retraining, ban AI as sole decider for hiring and firing, transitional period where AI needs same licensing as a human, tax large companies for an ‘AI dividend.’

6. Nationalize the Raise Act for Frontier AI. Require independent safety testing, mandate cybersecurity incident reporting, restrict government use of foreign AI tools, create accountability mechanisms for AI systems that harm, engage in diplomacy on AI issues.

7. Build Government Capacity to Oversee AI. Fund CAISI, expand technical expertise, require developers to disclose key facts to regulators, develop contingency plans for catastrophic risks.

8. Keep America Competitive. Federal funding for academic research, support for private development of safe, beneficial applications, ‘reasonable regulation that protects people without strangling innovation,’ work with allies to establish safety standards, strategic export controls, keep the door open for international agreements.

[ed. Given the pace of AI development, the federal government needs to get its act together soon or anything they do will be irrelevant and way too late. Bores is a NY State Assemblyman running for Congress. A former data scientist and project lead for Palantir Technologies - one of the leading defense and security companies in the world - he joined in 2014 and left in 2019 when Palantir renewed its contract with ICE. Wikipedia entry here. His official Framework policy can be found here (pdf). The proposed goals, which seem well thought out and easily understandable, should, with minor tweaks, gain bi-partisian support (in a saner world anyway...who knows now). Better than 50 states proposing 50 different versions. Dean Ball (former White House technology advisor) has proposed something similar called the AI Action Plan (pdf). Both are thoughtful efforts that provide ample talking points for querying your congressperson about what they're doing at this critical inflection point (if anything).] [See also: The AI-Panic Cycle—And What’s Actually Different Now (Atlantic).]

Bored of Peace

In Washington, D.C., today, President Donald J. Trump held the first meeting of his so-called Board of Peace at the U.S. Institute of Peace (USIP), newly renamed the “Donald J. Trump U.S. Institute of Peace,” a change being legally challenged. Last year, officials from the Trump administration seized the USIP building, which housed an independent entity created by Congress in 1984, and fired nearly all the employees.

Trump has made it clear he wants his new board to replace the United Nations. Twenty-seven countries have said they will participate, but so far none appear to have tossed in the $1 billion that would give them permanent status. The countries participating include Albania, Argentina, Armenia, Azerbaijan, Bahrain, Belarus, Bulgaria, Cambodia, Egypt, El Salvador, Hungary, Indonesia, Israel, Jordan, Kazakhstan, Kuwait, Kosovo, Mongolia, Morocco, Pakistan, Paraguay, Qatar, Saudi Arabia, Turkey, United Arab Emirates, Uzbekistan, and Vietnam. Trump extended invitations to Israel’s prime minister Benjamin Netanyahu and Russia’s president Vladimir Putin, both of whom have been indicted by the International Criminal Court for war crimes.

Trump withdrew an invitation to the board from Canada after Prime Minister Mark Carney denounced Trump’s foreign policy at the World Economic Forum in Davos, Switzerland, so Canada is out. Rejecting Trump’s invitation are Austria, France, Germany, Greece, Ireland, Italy, New Zealand, Norway, Poland, Slovenia, Sweden, the United Kingdom, Ukraine, and the Vatican. They cite their continuing support for the United Nations, concerns about Russian influence in Trump’s board, and concerns about the board’s organization, which gives Trump final say in all decisions, including how to spend the board’s money.

Today, Trump announced that the U.S. will put $10 billion into the Board of Peace, although since Congress is the only body that can legally appropriate money in our system, it’s unclear how he intends to do this.

The event at the board appeared to be the Trump Show. Representatives from the countries who had accepted Trump’s invitation stood awkwardly on stage waiting for him while his favorite songs blared. Once he arrived, he rambled for an hour and then appeared to fall asleep at points in the meeting as dignitaries spoke. [...]

Today Trump’s Commission of Fine Arts swore in two new members, including Chamberlain Harris, Trump’s 26-year-old executive assistant, who has no experience in the arts. Then the commission, now entirely made up of Trump appointees, approved Trump’s plans for a ballroom where the East Wing of the White House used to stand, although the chair did note that public comments about the project were over 99% negative.

According to CNN’s Sunlen Serfaty, Harris said the White House is the “greatest house in [the] world. We want this to be the greatest ballroom in the world.” Trump says the ballroom is being funded by private donations through the Trust for the National Mall, which is not required to disclose its donors.

Today workers hung a banner with a giant portrait of Trump on the Department of Justice building.

On Air Force One as Trump traveled to Georgia this afternoon for a speech on the economy, Peter Doocy of the Fox News Channel asked Trump about the arrest of Mountbatten-Windsor. “Do you think people in this country at some point, associates of Jeffrey Epstein, will wind up in handcuffs, too?”

Trump answered: “Well, you know I’m the expert in a way, because I’ve been totally exonerated. It’s very nice, I can actually speak about it very nicely. I think it’s a shame. I think it’s very sad. I think it’s so bad for the royal family. It’s very, very sad to me. It’s a very sad thing. When I see that, it’s a very sad thing. To see it, and to see what’s going on with his brother, who’s obviously coming to our country very soon and he’s a fantastic man. King. So I think it’s a very sad thing. It’s really interesting ‘cause nobody used to speak about Epstein when he was alive, but now they speak. But I’m the one that can talk about it because I’ve been totally exonerated. I did nothing. In fact, the opposite—he was against me. He was fighting me in the election, which I just found out from the last three million pages of documents.”

In fact, Trump has not been exonerated.

When he got to Georgia, Trump’s economic message was that “I’ve won affordability.” More to the point was his focus on his Big Lie that he won the 2020 election and that Congress must pass the Safeguard American Voter Eligibility (SAVE) America Act to secure elections. In fact, in solving a nonexistent problem, the law dramatically restricts voting. Republicans in the House have already passed it. If the Senate passes it, Trump told an audience in Rome, Georgia, “We’ll never lose a race. For 50 years, we won’t lose a race.”

by Heather Cox Richardson, Letters From An American |  Read more:

Image: Getty/via

[We should just get it over with and skip all the preliminaries - the Donald J. Trump States of America. I'm sure many Republicans would be thrilled. Isn't it ominous that during two civilizational threats, Covid and AI, this is the guy in charge? We get what (at least half of us) deserve, I guess.]

February 18, 2026: J.B. Pritzker State of the State Address

Today Illinois governor J.B. Pritzker delivered the State of the State address. The underlying purpose of the address is to explain the state budget, but Pritzker, a Democrat, used the occasion to talk far more broadly about the state of Illinois and the nation.

Pritzker anchored his speech by reaching back to the days of John Peter Altgeld, a German-born American who helped to lead the Progressive movement and served as governor of Illinois from 1893 to 1897. Altgeld oversaw passage of some of the strongest laws in the country for workplace safety and protection of child workers, invested heavily in education, and appointed women to important positions in state government despite the fact that women could not yet vote.

Pritzker noted that in his State of the State speech in January 1895, Altgeld talked about “the need to ensure that science would govern the practice of medicine in Illinois; the high cost of insurance; the condition of Illinois prisons; the funding of state universities; a needed revision of election laws; the concentration of wealth in large businesses.” Altgeld expressed pride for appointing women to office and his statement that “[j]ustice requires that the same rewards and honors that encourage and incite men should be equally in reach of women in every field and activity.”

Pritzker said he brought up Altgeld’s defense of equal rights “to highlight one enduring human truth—injustice can become a genetic condition we bequeath on future generations if we fail to face it forthrightly.”

Pritzker then turned to the year that has passed since President Donald J. Trump took office. “To be perfectly candid,” Pritzker said, “as Illinois is one of the states whose taxpayers send more dollars to the federal government than we receive back in services, I was hoping that his threats to gut programs that support working families [were] the kind of unrealistic hyperbole that fuels a presidential campaign but then is abandoned when cooler heads prevail.” But, he said, “Unfortunately, there are no cooler heads at 1600 Pennsylvania Avenue these days.”

The Trump administration has cost Illinois $8.4 billion, Pritzker said, “illegally confiscating money that has already been promised and appropriated by the Congress to the people of Illinois.” Pritzker was clear that this money is not handouts but “dollars that real Illinoisans paid in federal taxes and that have been constitutionally approved by our elected Democratic and Republican representatives in Washington.”

Unlike the federal government, states must balance their budgets every year. Trump’s billions in illegally withheld funds inflict a cost on the state’s residents, while Illinois has been “forced to spend enormous time and taxpayer money going to court and fighting to get what is rightfully ours.” Pritzker said: “It is impossible to tally the hours, days, and weeks our state government has spent chasing news of Presidential executive orders, letters, and edicts that read like proclamations from the Lollipop Guild.” [...]

He noted the growth of Illinois’s economy and economic stability over the past eight years even as the state had balanced its budget every year and made historic investments in education, child welfare, disability services, and job creation in the private sector. In the past year, Illinois’s gross domestic product was more than $1.2 trillion, up from $881 billion when Pritzker took office.

Looking forward, Pritzker outlined plans to address the top three economic issues on the mind of most Americans: the cost of housing, electricity, and healthcare. He promised to reduce the cost of housing by cutting local regulations and providing more options for financing. He promised to address the skyrocketing cost of electricity first by pausing the authorization of new data center tax credits and then by investing in renewable energy and nuclear power. Finally, he announced that, as of this week, the state had eliminated $1 billion in medical debt for more than 500,000 people in the state by purchasing and erasing it for pennies on the dollar...

“I’m committed to doing everything government can to rein in the worst of the price gouging and profiteering we are seeing,” Pritzker said. “But I implore the titans of industry who regularly ask government to make their lives easier—what are you doing to make your employers’ and your customers’ lives easier?”

Then Pritzker turned to the crisis federal agents created on the streets of Chicago. “A year ago, I stood before you and asked a provocative question: After we have discriminated against, disparaged, and deported all our immigrant neighbors—and the problems we started with still remained—what comes next?” Pritzker said. He recalled that when he asked that question, some people walked out.

“But a year later, we have an answer—don’t we?” he said. “Masked, unaccountable federal agents—with little training—occupied our streets, brutalized our people, tear-gassed kids and cops, kidnapped parents in front of their children, detained and arrested and at times attempted to deport U.S. citizens, and killed innocent Americans in the streets.”

Pritzker identified Trump and White House deputy chief of staff Stephen Miller as the architects of that plan to “drip authoritarianism…into our veins.”

But, he noted, people in Illinois did not accept that authoritarianism.

Pritzker reminded the audience that President Grover Cleveland had similarly tried to “subdue the Illinois population with hired thugs” during the 1894 Pullman strike after the Pullman Company, which made railroad cars, cut workers’ wages by about 25%. When workers struck, Cleveland deputized U.S. Marshals to end the strike. They fired into crowds of bystanders and, according to a Chicago paper, “seemed to be hunting trouble.” Twenty-five people died and more were wounded before the strike ended.

Altgeld had opposed the arrival of federal troops, and his fury at their intrusion still smoldered when he gave his State of the State speech almost six months later. “If the President can, at his pleasure, send troops into any city, town, or hamlet…whenever and wherever he pleases, under pretense of enforcing some law,” Altgeld wrote, “his judgment, which means his pleasure being the sole criterion—then there can be no difference whatever in this respect between the powers of the President and those of...the Czar of Russia.”

Pritzker joked that he wished he “could spend just one year of my governorship presiding over precedented times. I yearn for normal problems,” he said. But these are not normal times.

“I’ve been thinking a lot lately about love—about loving people and loving your country and the power involved in both,” the governor said. “I know, right now, there are a lot of people out there who love their country and feel like their country is not loving them back. I know that.” But he told those people that “your country is loving you back—just not in the way you are used to hearing.”

“It’s not speaking in anthems or flags or ostentatious displays of patriotism. It will never come from the people who say the only way to love America is to hate Americans. Love is found in every act of courage—large and small—taken to preserve the country we once knew. You will find it in homes and schools and churches and art. It is there; it has not been squashed.”

by Heather Cox Richardson, Letters From An American |  Read more:

Image: via

[ed. Sounds good to me. The entire text of Governor Pritzker's speech can be found here. Really worth a full read.]

Defense Dept. and Anthropic Square Off in Dispute Over A.I. Safety

For months, the Department of Defense and the artificial intelligence company Anthropic have been negotiating a contract over the use of A.I. on classified systems by the Pentagon.

This week, those discussions erupted in a war of words.

On Monday, a person close to Defense Secretary Pete Hegseth told Axios that the Pentagon was “close” to declaring the start-up a “supply chain risk,” a move that would sever ties between the company and the U.S. military. Anthropic was caught off guard and internally scrambled to pinpoint what had set off the department, two people with knowledge of the company said.

At the heart of the fight is how A.I. will be used in future battlefields. Anthropic told defense officials that it did not want its A.I. used for mass surveillance of Americans or deployed in autonomous weapons that had no humans in the loop, two people involved in the discussions said.

But Mr. Hegseth and others in the Pentagon were furious that Anthropic would resist the military’s using A.I. as it saw fit, current and former officials briefed on the discussions said. As tensions escalated, the Department of Defense accused the San Francisco-based company of catering to an elite, liberal work force by demanding additional protections.

The disagreement underlines how political the issue of A.I. has become in the Trump administration. President Trump and his advisers want to expand technology’s use, reducing export restrictions on A.I. chips and criticizing state regulations that could be perceived as inhibitors to A.I. development. But Anthropic’s chief executive, Dario Amodei, has long said A.I. needs strict limits around it to prevent it from potentially wrecking the world.

Emelia Probasco, a senior fellow at Georgetown’s Center for Security and Emerging Technology, said it was important that the relationship between the Pentagon and Anthropic not be doomed.

“There are war fighters using Anthropic for good and legitimate purposes, and ripping this out of their hands seems like a total disservice,” she said. “What the nation needs is both sides at the table discussing what can we do with this technology to make us safer.” [...]

The Defense Department has used Anthropic’s technology for more than a year as part of a $200 million A.I. pilot program to analyze imagery and other intelligence data and conduct research. Google, OpenAI and Elon Musk’s xAI are also part of the program. But Anthropic’s A.I. chatbot, Claude, was the most widely used by the agency — and the only one on classified systems — thanks to its integration with technology from Palantir, a data analytics company that works with the federal government, according to defense officials with knowledge of the technology...

On Jan. 9, Mr. Hegseth released a memo calling on A.I. companies to remove restrictions on their technology. The memo led A.I. companies including Anthropic to renegotiate their contracts. Anthropic asked for limits to how its A.I. tools could be deployed.

Anthropic has long been more vocal than other A.I. companies on safety issues. In a podcast interview in 2023, Dr. Amodei said there was a 10 to 25 percent chance that A.I. could destroy humanity. Internally, the company has strict guidelines that bar its technology from being used to facilitate violence.

In January, Dr. Amodei wrote in an essay on his personal website that “using A.I. for domestic mass surveillance and mass propaganda” seemed “entirely illegitimate” to him. He added that A.I.-automated weapons could greatly increase the risks “of democratic governments turning them against their own people to seize power.”

In contract negotiations, the Defense Department pushed back against Anthropic, saying it would use A.I. in accordance with the law, according to people with knowledge of the conversations.

by Sheera Frenkel and Julian E. Barnes, NY Times | Read more:
Image: Kenny Holston/The New York Times
[ed. The baby's having a tantrum. So, Anthropic is now a company "catering to an elite, liberal work force"? I can't even connect the dots. Somebody (Big Daddy? Congress? ha) needs to take him out of the loop on these critical issues (AI safety) or we're all, in technical terms, 'toast'. The military should not be dictating AI safety. It's also important that other AI companies show support and solidarity on this issue or face the same dilemma.]

‘Millionaires Tax’ Finds Seattle is Far Richer Than Anyone Knew

Seattle’s new mayor was speaking to a roomful of supporters the other day when she dropped a rather blunt assessment of our city.

“You know what?” Katie Wilson said. “This city is filthy rich.”

The crowd laughed a bit. Can you say that when you’re mayor? Should you say that?

It bears some examination, because of what was announced next.

The city’s new social housing tax, levied on lofty pay packages to pay for public housing, was due Jan. 31. The startling news was that it blew the projections out of the water.

When the 5% tax on salaries and compensation above $1 million passed a year ago, its backers estimated it would bring in $50 million annually. Later the city’s finance department used state employment data for a more rigorous finding, and came up with $65.8 million.

But it looked precarious.

“The increase to the payroll expense tax … could cause businesses to change their hiring behavior to avoid taxation — such as moving existing employees to locations outside Seattle,” a report to the City Council said.

Conclusion: There’s “a large amount of uncertainty,” said the office of economic and revenue forecasts. The tax could collect anywhere from $39.2 million to $80 million, “but even larger variance cannot be ruled out.”

“Larger variance” is once again the story of just how rich we are. Because tax collections came in at $115 million — 75% higher than the estimate. And 44% over the top of the range.

It means several things about our city — all of which inform the debates currently raging about tax-the-rich efforts in our state.

One is that Seattle’s plutocrats are wealthier than anyone imagines. This keeps getting revealed, where a scheme is developed to tax wealth, and then the amounts the tax brings in wildly overshoot even the most optimistic forecasts...

Another thing is that Seattle businesses obviously did not flee.

This is interesting because the social housing tax should be one of the easier taxes to avoid. You only have to work at least half the time outside the city — in an office across the lake in Bellevue, for example.

If you make, say, $1.1 million, the social housing tax paid by your company would be $5,000 (5% of the $100,000 above $1 million). It’s probably not worth moving an executive due to five grand.

But one making $10 million? The tax on that is $450,000. $30 million? The tax hits $1.45 million.

As I wrote last year, it’d be cheaper for Amazon to fly its top execs to Bellevue in a helicopter three days a week.

They did not take me up on this strategic advice, apparently. In fact, the 5% tax is being paid by 170 Seattle companies, according to the social housing agency. (The tax is paid by companies, not individual workers.)

So are the rich set to bolt the city or the state to get away from tax-the-rich schemes? Last week at a hearing on a proposed state “millionaires income tax,” Redmond hedge fund manager Brian Heywood, who himself fled California’s taxes, testified he knows of “about 50 couples who are already in the process of, or soon to be changing, their domicile, out of this state.”

That is a lot. I’m not sure I know 50 couples period, let alone 50 couples capable of taking such decisive action. Another way the rich are different than you or me.

The press has been filled with anecdotes of wealthy people decamping. Yet someone’s got to be hanging on here paying all these taxes — the totals of which keep racking up dramatically higher than expected.

One tech exec finally emerged to argue the fleeing-from-Seattle talk is bogus.

“The math doesn’t math,” wrote Jacob Colker, a Seattle AI venture capitalist. “Should we be thoughtful about tax policy? Heck yeah. Should it be tied to better stewardship of spending? Darn right. But the breathless narrative that Seattle is one bill from collapse is not serious analysis.”

My sense is taxes work when rates are reasonable. Single digits, like the 5% social housing tax, are not killer rates. Maybe the rich say “ugh, I don’t like it but oh well, it’s not worth uprooting my life.” So far, it hasn’t been worth even driving across the bridge.

On the other hand, Democrats last year jacked the top estate tax rate for the super-wealthy, to a gouging 35% for wealth north of $12 million. Some of those are said to be fleeing Washington, and who can blame them? There’s no good to come from fleecing people. This extreme rate situation has set off enough alarms that state Democrats now have a “tail between their legs” bill to unwind that rate back to where it was set for years, 20%.

Point is, keep it cool, lawmakers, and the rich can abide. 

by Danny Westneat, Seattle Times |  Read more:

Image: Dean Rutz

[ed. I'm all for taxing the super rich, but c'mon, get serious liberals. The solution to every problem is not taxing everyone and everything in sight (or immediately jumping to extremes on public issues, like 'Defund the Police' - one of the dumbest initiatives imaginable). Washington is one of the taxingest states in country, mitigated only by the fact that there's no state income tax (although there's continual chattering about 'fixing' that), with some of the most regressive sales taxes in the country as well. Fortunately, some people seem to be coming to their senses - see also: WA Democrats consider retreat on estate tax, fearing wealth exodus (ST):]

Democrats in the state Legislature have generally dismissed warnings that new taxes on the very wealthy might lead multimillionaires to flee to lower-tax states.

But some are now acknowledging that one tax-the-rich policy they approved last year — a big increase in Washington’s top estate tax rates — may have backfired...

The problem for Washington isn’t just a single shift like the estate tax, Carlyle said, but an “aggregation of taxes” adopted swiftly in recent years, including new business and payroll taxes.

“What people I think are failing to recognize is that tipping-point scenario,” he said, which would lead the state to lose the entrepreneurial advantages that have led to the growth of companies like Amazon, T-Mobile and Starbucks.

The Crisis, No. 5: On the Hollowing of Apple

[ed. No.5 of 17 Crisis Papers.]

I never met Steve Jobs. But I know him—or I know him as well as anyone can know a man through the historical record. I have read every book written about him. I have read everything the man said publicly. I have spoken to people who knew him, who worked with him, who loved him and were hurt by him.

And I think Steve would be disgusted by what has become of his company.

This is not hagiography. Jobs was not a saint. He was cruel to people who loved him. He denied paternity of his daughter for years. He drove employees to breakdowns. He was vain, tyrannical, and capable of extraordinary pettiness. I am not unaware of his failings, of the terrible way he treated people needlessly along the way.

But he had a conscience. He moved, later in life, to repair the damage he had done. The reconciliation with his daughter Lisa was part of a broader moral development—a man who had hurt people learning, slowly, how to stop. He examined himself. He made changes. He was not a perfect man. But he had heart. He had morals. And he was willing to admit when he was wrong.

That is a lot more than can be said for this lot of corporate leaders.

It is this Steve Jobs—the morally serious man underneath the mythology—who would be so angry at what Tim Cook has made of Apple.

⁂

Steve Jobs understood money as instrumental.

I know this sounds like a distinction without a difference. The man built the most valuable company in the world. He died a billionaire many times over. He negotiated hard, fought for his compensation, wanted Apple to be profitable. He was not indifferent to money.

But he never treated money as the goal. Money was what let him make the things he wanted to make. It was freedom—the freedom to say no to investors, to kill products that weren’t good enough, to spend years on details that no spreadsheet could justify. Money was the instrument. The thing it purchased was the ability to do what he believed was right.

This is how he acted.

Jobs got fired from his own company because he refused to compromise his vision for what the board considered financial prudence. He spent years in the wilderness, building NeXT—a company that made beautiful machines almost no one bought—because he believed in what he was making. He acquired Pixar when it was bleeding cash and kept it alive through sheer stubbornness until it revolutionized animation.

When he returned to Apple, he killed products that were profitable because they were mediocre. He could have milked the existing lines, played it safe, optimized for margin. Instead, he burned it down and rebuilt from scratch. The iMac. The iPod. The iPhone. Each one a bet that could have destroyed the company. Each one made because he believed it was right, not because a spreadsheet said it was safe...

This essay is not really about Steve Jobs or Tim Cook. It is about what happens when efficiency becomes a substitute for freedom. Jobs and Cook are case studies in a larger question: can a company—can an economy—optimize its way out of moral responsibility? The answer, I will argue, is yes. And we are living with the consequences.

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Jobs understood something that most technology executives do not: culture matters more than politics.

He did not tweet. He did not issue press releases about social issues. He did not perform his values for an audience. He was not interested in shibboleths of the left or the right. [...]

This is how Jobs approached politics: through art, film, music, and design. Through the quiet curation of what got made. Through the understanding that the products we live with shape who we become.

If Jobs were alive today, I do not believe he would be posting on Twitter about fascism. That was never his mode. [...]

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Tim Cook is a supply chain manager.

I do not say this as an insult. It is simply what he is. It is what he was hired to be. When Jobs brought Cook to Apple in 1998, he brought him to fix operations—to make the trains run on time, to optimize inventory, to build the manufacturing relationships that would let Apple scale.

Cook was extraordinary at this job. He is, by all accounts, one of the greatest operations executives in the history of American business. The margins, the logistics, the global supply chain that can produce millions of iPhones in weeks—that is Cook’s cathedral. He built it.

But operations is not vision. Optimization is not creation. And a supply chain manager who inherits a visionary’s company is not thereby transformed into a visionary.

Under Cook, Apple has become very good at making more of what Jobs created. The iPhone gets better cameras, faster chips, new colors. The ecosystem tightens. The services revenue grows. The stock price rises. By every metric that Wall Street cares about, Cook has been a success.

But what has Apple created under Cook that Jobs did not originate? What new thing has emerged from Cupertino that reflects a vision of the future, rather than an optimization of the past?

The Vision Pro is an expensive curiosity. The car project was canceled after a decade of drift. The television set never materialized. Apple under Cook has become a company that perfects what exists rather than inventing what doesn’t.

This is what happens when an optimizer inherits a creator’s legacy. The cathedral still stands. But no one is building new rooms.

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There is a deeper problem than the absence of vision. Tim Cook has built an Apple that cannot act with moral freedom.

The supply chain that Cook constructed—his great achievement, his life’s work—runs through China. Not partially. Not incidentally. Fundamentally. The factories that build Apple‘s products are in China. The engineers who refine the manufacturing processes are in China. The workers who assemble the devices, who test the components, who pack the boxes—they are in Shenzhen and Zhengzhou and a dozen other cities that most Americans cannot find on a map.

This was a choice. It was Cook’s choice. And once made, it ceased to be a choice at all. Supply chains, like empires, do not forgive hesitation. For twenty years, it looked like genius. Chinese manufacturing was cheap, fast, and scalable. Apple could design in California and build in China, and the margins were extraordinary.

But dependency is not partnership. And Cook built a dependency so complete that Apple cannot escape it.

When Hong Kong’s democracy movement rose, Apple was silent. When the Uyghur genocide became undeniable, Apple was silent. When Beijing pressured Apple to remove apps, to store Chinese user data on Chinese servers, to make the iPhone a tool of state surveillance for Chinese citizens—Apple complied. Silently. Efficiently. As Cook’s supply chain required.

This is not a company that can stand up to authoritarianism. This is a company that has made itself a instrument of authoritarianism, because the alternative is losing access to the factories that build its products.

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There is something worse than the dependency. There is what Cook gave away.

Apple did not merely use Chinese manufacturing. Apple trained it. Cook’s operations team—the best in the world—went to China and taught Chinese companies how to do what Apple does. The manufacturing techniques. The materials science. The logistics systems. The quality control processes.

This was the price of access. This was what China demanded in exchange for letting Apple build its empire in Shenzhen. And Cook paid it.

Now look at the result.

BYD, the Chinese electric vehicle company, learned battery manufacturing and supply chain management from its work with Apple. It is now the largest EV manufacturer in the world, threatening Tesla and every Western automaker.

DJI dominates the global drone market with technology and manufacturing processes refined through the Apple relationship.

Dozens of other Chinese companies—in components, in assembly, in materials—were trained by Apple‘s experts and now compete against Western firms with the skills Apple taught them.

Cook built a supply chain. And in building it, he handed the Chinese Communist Party the industrial capabilities it needed to challenge American technological supremacy. [...]

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So when I see Tim Cook at Donald Trump’s inauguration, I understand what I am seeing.

When I see him at the White House on January 25th, 2026—attending a private screening of Melania, a vanity documentary about the First Lady, directed by Brett Ratner, a man credibly accused of sexual misconduct by multiple women—I understand what I am seeing.

I understand what I am seeing when I learn that this screening took place on the same night that federal agents shot Alex Pretti ten times in the back in Minneapolis. That while a nurse lay dying in the street for the crime of trying to help a woman being pepper-sprayed, Tim Cook was eating canapés and watching a film about the president’s wife.

Tim Cook’s Twitter bio contains a quote from Martin Luther King Jr.: “Life’s most persistent and urgent question is, ‘What are you doing for others?’”

What was Tim Cook doing for others on the night of January 25th?

He was doing what efficiency requires. He was maintaining relationships with power. He was protecting the supply chain, the margins, the tariff exemptions. He was being a good middleman.

I am seeing a man who cannot say no.

This is what efficiency looks like when it runs out of room to hide.

He cannot say no to Beijing, because his supply chain depends on Beijing’s favor. He cannot say no to Trump, because his company needs regulatory forbearance and tariff exemptions. He is trapped between two authoritarian powers, serving both, challenging neither.

This is not leadership. This is middleman management. This is a man whose great achievement—the supply chain, the operations excellence, the margins—has become the very thing that prevents him from acting with moral courage.

Cook has more money than Jobs ever had. Apple has more cash, more leverage, more market power than at any point in its history. If anyone in American business could afford to say no—to Trump, to Xi, to anyone—it is Tim Cook.

And he says yes. To everyone. To anything. Because he built a company that cannot afford to say no. [...]

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I believe that Steve Jobs built Apple to be something more than a company. He built it to be a statement about what technology could be—beautiful, humane, built for people rather than against them. He believed that the things we make reflect who we are. He believed that how we make them matters.

Tim Cook has betrayed that vision—not through malice, but by excelling in a system that rewards efficiency over freedom and calls it leadership. Through the replacement of values with optimization. Through the construction of a machine so efficient that it cannot afford to be moral.

Apple is not unique in this. It is exemplary.

This is what happens to institutions that mistake scale for strength, efficiency for freedom, optimization for wisdom. They become powerful enough to dominate markets—and too constrained to resist power. Look at Google, training AI for Beijing while preaching openness. Look at Amazon, building surveillance infrastructure for any government that pays. Look at every Fortune 500 company that issued statements about democracy while writing checks to the politicians dismantling it.

Apple is simply the cleanest case, because it once knew the difference. Because Jobs built it to know the difference. And because we can see, with unusual clarity, the precise moment when knowing the difference stopped mattering.

by Mike Brock, Notes From the Circus |  Read more:

Image: Steve Jobs/uncredited

[ed. Part seventeen of a series titled The Crisis Papers. Check them all out and jump in anywhere. A+ effort.]