The usual stories about voting models of democracy assume that the costs of political campaigning are very modest. Effectively, you can just ignore them. Those models are way off base: the costs are immense. Not just the costs of information but also of taking action and following through in the real world. So the only way ordinary people can control the state is if they can join together and share those costs through unions and community organizations — if they’re genuinely community organizations, and not astroturfed and nourished by big money, which is what they have tended to be, especially since the 1970s.

In the absence of effective vehicles for political action by ordinary voters, power passes by default into the hands of people who can pay those costs: major investors and businesses, especially larger firms and groups organized from among them. That, in a nutshell, is the core plank of the investment theory of political parties.

Empirical tests of this basic claim are clear in principle but hard to do. Archival evidence about the past is deeply revealing when records survive, but it is rarely available in the present. There are some newer statistical approaches like event analysis that I’ve used, for example on Adolf Hitler’s ascent to power and Federal Reserve open market operations, but the most compelling and easily understood tactic is to analyze patterns of political money.

That’s not easy, to put it mildly, in the United States or anyplace else. Reporting is fragmentary, disorganized, and sometimes concealed. Political money also takes many forms besides campaign contributions. The information also requires integrating with a lot of economic data to reveal much of interest. I am often struck by how the media pour resources into analyzing polls, almost as though they were baseball statistics, but report only superficially on political money. Neither scholars nor the media nor websites reporting on political money do well at aggregating contributions over time by large contributors and firms or sorting them into meaningful units.

If you want accurate data, there is no substitute for doing it yourself. Campaigns use all kinds of dodges, and sometimes they are deliberately deceptive. I myself saw an email that the Barack Obama campaign sent donors, cautioning them not to give in one big dollop but to break the money into smaller contributions. Even the mass media eventually caught on to that dodge, but nobody really put the statistics back together well. And linking individuals to firms and industries is way more complicated than you would imagine. The same people often appear again and again using different name forms and even addresses.

Political parties and interest groups also fill the air with misleading claims. Both major parties tout all kinds of groups and organizations as representing ordinary people. But virtually all are dominated by major donors, whose influence with their leaders dominates. Small donations in effect just get swept up into the plans of major interests.

My colleagues and I return to this and related questions over and over. Paul Jorgensen, Jie Chen, and I laboriously sorted out repeat donations to show the true dimensions of big money for the 2016 presidential candidates and congressional leaders. The results were stunning: Essentially no large contributors supported Bernie Sanders, including the usual giant Democratic donors often heralded in the press as pushing the party to the left. Sanders’s money came from small donors.

By contrast, Donald Trump displayed a peculiar “barbell” pattern: substantial amounts of money at both ends of the income spectrum, including from some truly giant donors. Everybody else, all the Democrats and all the Republicans, were massively dependent on big money. Joined by Matthias Lalisse, we are working on 2024 and crypto right now. I doubt anything has changed. We have already demonstrated that one of our most striking findings — that the outcomes of individual congressional elections track the two-party split in total spending in individual races — held again in 2024.

This treatment of party competition has a crucial implication that voter-centered stories miss entirely: the principle of noncompetition across all investors, as I called it in my book Golden Rule. In order to be heard, you are going to need cash, and the people giving you the cash are going to have to at least tolerate your message. This means that if there are messages that nobody with big money wants to hear, you don’t hear them. They are completely marginalized, no matter how many people might be interested.

The inability to leap over the cost threshold has a corollary in the press: black holes are also ever-present in the major, for-profit mass media, for the same reason they exist in the party system. Nobody with money wants to hear certain messages. These days, I’m feeling extremely comfortable with that line of argument. People forget that the famous “Overton window” is actually coin-operated.

The conclusion has to be that the decline of unions and the co-optation of them and community organizations makes serious trouble for democracy. Average humans are nearly voiceless, and the for-profit press at best gestures at many issues that really matter to ordinary people.

The only ones you hear, along with government officials typically aligning with some blocs of them. This defines the media to a really terrible degree.

An example: Look at the current debate in the Democratic Party. The mainstream message, often carried in the press by former economists for Joe Biden or [Barack] Obama, is that Biden’s economy was the most worker-friendly in decades, marked by major improvements in the labor market position of workers, especially the lowest paid.

Servaas Storm and I scrutinized these assertions in a series of papers. The first appeared in early 2023. Claims of major wage gains for workers and sharp improvements in labor markets were way overstated. In the early stages of COVID-19, the lowest wages appeared to rise because of a composition effect from firms laying off low-wage workers while retaining higher-paid ones. Thereafter, wage growth was sparse indeed. The general pattern was for hourly wages to rise, as working hours fell sharply, sending real weekly earnings down as inflation surged. The net effect showed in declines in real median household income, but those figures came out only well after the fact.

We also looked carefully at wages, consumption spending, and wealth holdings. The Federal Reserve’s quantitative easing policy drove up the value of wealthy folks’ stock market holdings and houses. They had already gained during the earlier round of quantitative easing in the wake of the great financial crisis. But in the second, after 2020, the magnitude of their gains was crazy — truly epochal increases in wealth at the top of the income pyramid. And the affluent spent plenty, even as the rest of the population became increasingly straitened. The giant shift in wealth accentuated the existing tendencies toward a dual economy in the United States that Peter Temin, Lance Taylor, Storm, and other economists had written about earlier.

Long before the 2024 election, it was obvious that the Democrats were heading for a fall. At the start of the year, Storm and I laid the case out again in “Trump versus Biden: The Macroeconomics of the Second Coming.” The title says it all. We warned that hourly wages, especially nominal hourly wages, didn’t begin to tell the full story, and that cumulative real-wage losses over the Biden term for most workers were substantial. But the party line right up to Election Day was, “The economy is really great. We’re the greatest workers’ party since Franklin D. Roosevelt.” Most of the press played along.

But voters were not convinced. Polls Jie Chen and I looked at indicate that ordinary (nonaffluent) voters who stuck with the Democrats often professed their disappointment. Workers had been moving away from the Democrats for a long time, but the swing in November turned heads everywhere. Some postmortems on the election, such as that in Foreign Affairs by Jason Furman, straightforwardly acknowledged that real wages had fallen under Biden. But that was after the fact and is still not typical.

The old line continues in a new way as people try to understand the Trump economy. Paul Krugman and many others continue to maintain that Biden left a good economy that Trump is ruining. The very last months of Biden’s term were somewhat better, but the dominant tendency is a deepening of the dual economy Storm and I spotlighted with the continuing stock market boom. The Federal Reserve Bank of Boston just put out a study of wealth, income, and consumption spending. It concludes that it’s the rich who are benefiting hugely in both wage growth and spending, not the lower-income groups. Other studies confirm this.

Indeed, segments of the business press now routinely refer to the “K-shaped economy,” alluding to the divergence between top and bottom in income and wealth. Most stories manage not to mention quantitative easing and the Fed’s role, but they document very clearly the way retail sales and other spending divide in our dual economy. That tendency became stronger during Biden’s term, especially once the relief programs were withdrawn and access to health insurance fell. Even the Wall Street Journal has come around on this point.

The process has been going on for quite a long time, yet Democratic Party elites mostly felt comfortable discussing it in terms of second-order effects suffused in references to racism and gender. You could see that very clearly in 2016, where virtually everybody’s election analysis focused on race and gender. By contrast, in the analysis that Ben Page and my colleagues and I did, we were very clear that Trump’s ascent was first of all an economic story. You only had to listen to him talk to realize that race and gender were also playing big roles in his electoral appeals. But the importance of the economic squeeze on many Americans was clear from day one, as was the disenchantment of many Democratic voters with the party.

It’s not getting better. Little in the “abundance agenda” now touted by many Democrats addresses the real problems. The recent paper from economists at the San Francisco Fed showing that supply constraints don’t explain housing construction and prices in US cities is devastating, for example. So is the evidence Storm and I presented about electricity rates; you don’t explain those by NIMBYism. Electricity prices are classic cases of money in politics distorting regulation.

Or the party has somehow not found a message. That’s another nonsense bromide. The Democrats failed to deliver for most Americans who were not rich, full stop.

In truth, the inflation shock was fairly sizable. The slight improvement in the final months did not erase either its effects or the bitterness of the experience. Between the first quarter of 2021 and the fourth quarter of 2024, real average weekly wages grew 0.4 percent. That end-to-end comparison slides past the painful cumulative shortfall experienced by workers over the period as a whole: they had voted for Biden expecting something much better.

The hit was not nearly as big as the titanic Volcker shock under Jimmy Carter, another Democratic president. But I think that earlier experience holds important lessons for us today. If you look at political analyses of the Democrats’ time in the wilderness in the ’80s, Stanley Kelley’s work on the 1980 election stands out. It highlighted the devastating impact Carter’s turn to austerity had on the Democrats. Later treatments that touted how average Americans typically did somewhat better under the Democrats over the long run missed the durable impact Volcker had on the party’s reputation, along, of course, with the party leadership’s commitment to free trade at virtually any price that Joel Rogers and I highlighted in Right Turn.

Analysts are whistling past the graveyard as they assess the current state of the Democrats. If you look at the polling on Biden and the Democrats, you’ll find they both were doing well through January 2021. As inflation accelerated and the early Biden programs to help people through COVID-19 phased out, both Biden and the party’s standing plummeted. The damage to the party’s brand is worse than most people recognize. This is not a message problem and won’t be cured by a wave of cute videos.

Another implication of the investment approach to party competition is that with labor and community groups so weak, understanding political dynamics involves grasping the logic of coalitions among business groups. And right now, that’s crucial. I don’t disagree that, if you like, oligarchic influences in the Democratic Party are very strong. It is perfectly obvious that groups of superaffluent investors and business groups are trying to shape both parties’ policy positions. But what is happening now is extraordinary. It’s not captured by the familiar recitals about the position of big money in the party. It’s something altogether different.

The emergence of “red tech” is obvious in the Republican Party. But the phenomenon has sweeping implications for the Democrats too.

Red tech reflects an ever denser overlap between firms and investors in high tech, defense, and finance, particularly crypto. High tech’s role in defense is now enormous, with wide support in both parties. The resurgence goes back to at least 2017, with the growing interest in the Pentagon and related environs in countering China. Both the Pentagon and key parts of the tech industry became increasingly fixated on AI and especially the possibilities of applying machine learning and large language models (LLMs) to defense. It’s customary to invoke Anduril and Peter Thiel and colleagues here, whose influence in the second Trump administration is immense, but the trend runs much deeper.

Yes. That’s very clear. Committees from both the House and, especially, the Senate under Marco Rubio and Mark Warner, produced a series of reports and hearings, starting well before COVID hit. Many, though not all, of their recommendations were bipartisan. Along with this was the growing interest in tech entrepreneurs, claiming that they could do defense better and cheaper than the legacy defense producers.

At that time, Silicon Valley was still heavily green. But that changed rapidly after the Russian invasion of Ukraine. The energy price shock was terrific, spilling over into food and other commodities. Coal, oil, and liquid natural gas (LNG) interests in and out of the United States quickly started touting fossil fuels as America’s ace in the hole as the world economy began breaking into blocs. A lot of previously sympathetic folks within finance and other parts of big business agreed and started changing their positions too.

Within Silicon Valley, spiraling demands for more and more “compute” for running large language models picked up where foreign policy considerations left off. Suddenly the chlorophyll counts of the techies started dropping fast. They weren’t green anymore; they wanted cheap power any way they could get it. Many started saying stuff that I consider pure wishful thinking, like, “First we’ve got to have AI, and then we’ll use it to help figure out how to undo global warming.”

The steady movement in favor of vigorous action on climate change has withered, not just in the United States but worldwide, as the Gulf states and other producers join the US Republican pushback and higher interest rates make climate investment much more hazardous. In the US, insurers are now quietly picking up some of the pieces, with the rest of the costs dumped on ordinary Americans.

This was the context in which high tech encountered Biden. As became obvious by 2024, many of them moved over to Trump. To explain this, the major media has repeated a litany of complaints offered by various prominent tech advocates: regulation, curbs on free speech (meaning challenges to the big platform companies’ right to block or repeat virtually anything they want, to any audience, including children), even diversity, equity, and inclusion.

This is superficial. Reid Hoffman, a prominent Silicon Valley Democrat, told Joe Lonsdale on a podcast something much more interesting. No, high tech doesn’t like regulation. Neither do they like unions. But as Hoffman explained it, the reason for this goes far beyond the obvious point that business firms in America do not welcome unionization.

Instead, as Hoffman recounted, the valley thinks advances in LLMs and other techniques now gives it the power to revolutionize education. But when they try that, high-tech entrepreneurs find teachers unions’ standing in the way. The valley is also convinced that it can transform construction and building, but there it finds building trades’ unions in opposition.

Hoffman didn’t mention it, but vast numbers of AI firms are right now trying to revolutionize how Hollywood makes movies and — surprise — they find the Screen Actors Guild in their path. Health care and medicine are also fields that high tech also believes it can transform, especially with the help of private equity. This list could be extended, because firms everywhere are on fire with the desire to see if they can capture productivity gains from AI, and a massive amount of capital from private equity and others is being mobilized to try to make this happen.

The big generalization is this: Red tech and its (growing) allies in finance and related sectors believe that AI confers the power to effect sweeping changes in vast sectors of American life and make enormous amounts of money in the process. But virtually everywhere, often even inside their own firms, they face opposition from people they accuse of standing in the way of progress — and, we might say, abundance — for all.

An investment perspective on past political changes like the New Deal emphasizes the pivotal role of new sectors in the economy and their ability to strike compromises with mass movements or not. The real problem in the Democratic Party is that its legacy organizational structure — unions and community groups, along with sympathetic ordinary citizens — are on a collision course with the economy’s leading sector. Hoffman himself said he was not an opponent of unions in principle; it’s just that they are wrong in so many critical areas now. And a few large platform companies are talking with teachers unions about how their members can learn to use their products. But the deepening tension is still obvious.

Something has to give.

This assertion comes with some important caveats. I think AI is overhyped. The stuff is less ready for prime time than most proponents proclaim, as I and my colleagues found out ourselves when we tried a machine-learning approach to analyzing Trump and the Republican base. But particularly where you’ve got lots of big data that allows you to train LLMs or smaller “spike neural networks” to focus on one particular task, you can get very good performance in specific areas. I have no doubt that AI applications to medical care, for example, will be immensely valuable. Indeed, I think they are already, though there are whole areas where applications of AI remain very dangerous. We are only going to find out experimentally over time about what works and what doesn’t.

In the meantime, the industry is hyping itself, and a lot of folks beyond the industry find that useful. All the sirens and water cannons crimp employees’ willingness to seek higher pay or benefits, or even to look for alternative jobs. They get scared. It’s very much like what happened in the United States in the late 1990s, when, as Alan Greenspan told the entire Fed Open Market Committee, capital mobility and technological advances deeply cowed American workers.

Yes. I would add that I think Brad DeLong is right in saying that unemployment now is not basically driven by AI, though I wouldn’t lay quite so much emphasis on policy uncertainty. The adjustment to higher interest rates takes time, but its effects are profound. That has impelled larger firms hoarding skilled labor as an anticompetitive tactic to let a lot of people go, for example.

That said, you’re seeing AI’s effects on employment in a few segments already. The case that everybody cites is software development programming. A graph on the Federal Reserve Economic Data site shows demand plunging virtually to zero in the last few years. Some recent studies also suggest broader effects on entry–level workers in parts of the economy most exposed to AI.

AI is plainly curbing employment in journalism. Here there is a backstory though. The last eight or ten years had already hollowed out the whole field. Firms moved to a business model in which you hire young people, churn them out, and tell them to write three, four, or even more stories a day. In some sense, the mass media was being prepared for ChatGPT long before ChatGPT came into existence; they had already dumbed everything down.

You can see the next step is we’re going to have the high-tech guys hoover up everything and then train ChatGPT and its cognates on this already deracinated brew. Soon we’ll have an endogenous idiocy in both input and output. You can hope to improve, but I actually think this is a problem now.

It does not help that there is clearly a railroad boom aspect to AI’s ascent. As with railroads, massive social changes are being set in motion that should in the long run make society much better off, but many, probably most current ventures, are not going to make it. A lot of money will swirl down the drain.

The effects of this if, as I expect (and clearly some utilities do also), demands for electricity turn out to be exaggerated, will be quite jolting. Would you like to guess who will pay the stranded costs of the power developed to power all the data centers that fail to be profitable? Even if the data centers eventually come to life, rather like all the telecom cables laid in the ’90s.

All this makes the current situation in the Democratic Party very grave. I wrote the basic paper on the New Deal that said: You had capital-intensive industries willing to live with labor unions even though they didn’t like them because they wanted free trade. That defined a highly successful political formula for a generation. This situation isn’t like that.

The tech folks see the unions as their enemies and vice versa, and for very good reasons on both sides. The notion that Big Tech is going to devise myriad ways to make tech useful and inexpensive for ordinary people . . . I’m not seeing it. The reaction to regulation that pushed so many tech titans toward Trump has already killed the click-to-cancel rule that the Federal Trade Commission had put in and, I think, affected the course of the Google antitrust suits.

Neither Democrats nor Republicans have made any serious effort to safeguard privacy. Software for landlords to coordinate on pricing apartments is a reality; despite some gestures, renters have nothing similar. As AI allows firms to change prices at virtually zero costs and to integrate information about specific consumers into the prices shown, “dynamic pricing” is going to make a lot of money for businesses. Storm and I pointed to this during the Biden inflation, but most everyone else ignored it. How to protect workers from what is basically chrome-plated Taylorism or, if you work at home, a high-tech version of the old putting-out system, is also a very clear problem. Its urgency will grow exponentially in the next few years.

We already know that medical insurance firms are using AI to grind down desperate consumers seeking to appeal denial of coverage. And they are just warming up: the head of a firm doing AI not long ago recounted to me how requests for more such software come to him frequently. This problem urgently needs a policy response, but I am not hearing anything from the abundance Democrats.

The Democrats have to stop crowing about Obamacare. It was never that great, and in any case, that was then but this is now. My colleague Phillip Alvelda is right in recommending that the vast overhead costs piling up in health care imply that blue states could start experimenting with much bolder ideas to restructure it. At least some of these efforts, by the way, could make good use of the profit motive: Mark Cuban’s innovative approach to distributing pharmaceuticals is very much worth examining here.

It is high time to make much more pointed use of the data on life expectancy. Steven Woolf and other scholars have published quite detailed studies of life expectancy over time. We know not only that the United States has lagged way behind other countries in life expectancy increases for a long time, but that when you segment by state and counties, the Republican jurisdictions fare much worse.

The key takeaway is that for blue states, breaking with the Centers for Disease Control and Prevention on vaccines is a necessary start but far from sufficient. Running with health care and insurance issues is also a certain winner electorally. Together with Social Security, these concerns have enormous mass appeal.

Yes. Randi Weingarten, head of the American Federation of Teachers (AFT), just resigned from the Democratic National Committee (DNC), and so did Lee Saunders, head of the American Federation of State, County and Municipal Employees (AFSCME). The DNC is almost entirely corporate lobbyists or former office holders and apparatchiks now. There is a poll out recently suggesting that voters actually think the Democrats are more corrupt than the Republicans.

But a particularly important thing to watch in this is the crypto story. For high tech, crypto is in their DNA. Many of the most successful early innovators worked on payment systems and related problems, and they bear grudges against conventional finance and the Federal Reserve. Though it sounds outlandish, it is plain to me that more than a few actually believe they could eventually displace not simply banks, but even the dollar, perhaps with Bitcoin or some other contrivance.

This subject is huge and complex, and we can only scratch the surface here. First of all, a big chunk of the industry is at best either a form of gambling in which the house is destined to be the big winner (think meme coins) or something much worse — for example, facilitating ransomware, human trafficking, and any number of other abuses.

Stablecoins present a different set of challenges. I’m not totally opposed to them, but you have to ask: Under what conditions might we have a nonpredatory stablecoin business? It is interesting that the Hong Kong Monetary Authority just recently put in some rules for stablecoins with strong “know your customer” imperatives. Immediately stablecoin and other crypto advocates started claiming these would inhibit the adoption of stablecoins. Many crypto proponents are not interested in knowing too much about their customers. A big part of its appeal comes from servicing fraudsters and ransomware.

When you start to build out new pieces of the money supply, the potential for big trouble is enormous. And these developments come in the context of major moves to liberalize bank and fintech regulation, in the context of an international “race to the bottom” in regulatory standards. In the United States, the moves to weaken regulation are also accompanied by new measures to increase state monetary support in emergencies — effectively single-payer insurance for finance.

The Trump administration has not been good on cybersecurity. It drastically reshuffled and reduced the role of the Cybersecurity and Infrastructure Security Agency (CISA). In a world in which most ransomware is paid in Bitcoin, this should be a red flag, just by itself.

Some of crypto’s appeal in the US stems from the importance of foreign remittances to communities with many immigrant workers supporting family members in other countries. US bank charges for transfers are fairly stiff. Other channels are also not always so attractive. This has made the idea of crypto more attractive than it would be if efforts to make banks pay more attention to the unbanked had succeeded.

A contributing factor here has been the lack of interest by most banks in serving poorer customers. Competition has failed here, as it has in credit cards. Credit card fees are too high. Most cards are used by wealthier folks, but everybody pays the same charge. It tends to push up charges on the poor too. We haven’t done enough for low-income banking; only a few Democrats have been really interested.

Because stablecoins are now being pushed as a way to address that problem, you’ve got crypto Democrats talking that approach up, while taking vast sums from the industry. Crypto contributions to Chuck Schumer, Hakeem Jeffries, the Democratic Congressional Campaign Committee, and the state parties are now very large. My colleagues and I will have more to say about that when we finish some current work.

We will see how all this works out, particularly as quantum computing and its threats to security develop. Right now the last thing you need is any watering down of financial regulation.

Yes. This is a fact that anybody can see. Note that the just-passed GENIUS Act, the bill that set up stablecoins, got 102 Democratic votes in the House of Representatives. Last year, a somewhat comparable bill got forty-two. A related bill to define the tasks of regulators, the Clarity Act, won seventy-eight votes from Democrats. That still needs Senate action, and it is clear that many Democrats are planning to support it.

I would begin an answer to that question with a look abroad. Across the postwar Atlantic world — and now in Japan too — as center parties fail to deliver for their citizens, politics moves to the extremes. That is true in France, where the Fifth Republic has just transformed itself into something that looks very much like the Fourth Republic. It is also obvious that Sir Keir Starmer’s Labour Party in the UK has gone the full Democratic route. It’s now a big-money party. In Austria, you have a narrow moderate coalition in power, while the largest party in the country is far-right.

After the 2014 elections, Walter Dean Burnham and I wrote about the gigantic turnout decline from the previous presidential race. It was one of the largest ever in American history. We said, this is the end of the party system as we know it, and 2016 is going to see real challenges to party elites in both parties. That is what happened.

My sense is that in the next few years, more neoliberalism — which is what the abundance economy is, a variation on the old script of just deregulate and that will solve the problem — will fail.

It was never high in the population at large. In 2016, 2020, and 2024, the negatives for both Trump and the Democratic candidates were very high. MAGA enthusiasts are not that many. Many voters who cast ballots for Trump picked him in the belief that he was the lesser of two evils.

Going forward, much will depend on the course of real wages and inflation. The dual, K-shaped nature of the American economy that Storm and I emphasized is obvious. So is the slowdown in growth. That’s why the current Trump administration is pushing hard for Fed rate cuts and trying to oust Lisa Cook and Jerome Powell. Soon it will be bringing in more measures to hand it wider control of the Fed.

They have the problem, though, that they can push down short-term rates but not long-term ones. Remember Elon Musk’s fabled trip to Fort Knox to check on the gold? That hasn’t happened, but I think you’ll be hearing other strange proposals to get takers on longer-term bonds. Meanwhile, the administration is trying to open up crime and other issues à la [Richard] Nixon.

I do think that electoral laws make third-party runs so difficult, whereas it’s pretty easy to run real campaigns in the Democratic Party. But it would help if people would look in more detail at the national Democratic Party structure, especially the heavy weight of corporate lobbying and big money. There’s not very many people representing ordinary people — not just labor unions, because at this point you have a very low union percentage anyway and the labor leadership is very mixed. But it’s crazy how corporate-dominated and cash-oriented the DNC and the party’s top rungs are now.

You need candidates who are appealing because they speak on the real issues that matter to most people. Zohran Mamdani is one. Bernie Sanders ran for president twice and picked up enormous support. [Alexandria Ocasio-Cortez] has potential.

My critique of the congressional progressives is they should pay more attention to health issues, life expectancy, and related issues, above all the cost of medical care, where Sanders has led the way. Blue states could experiment with health care initiatives, as a few are timidly doing. They could also enact their own “click-to-cancel” rules as a few states have done.

National candidates will need to address the crucial link between foreign policy and finances. We’re paying way too much in interest rates. You’re not going to move to direct financing of the government, and I rather doubt you should, given the existing power configuration.

So Congress has to put a limit on expenditures. You’ve got two choices on this. You can chop social programs, or you can reorient foreign policy and defense — those areas were barely touched by DOGE [the Department of Government Efficiency]. While the high-tech pitch in most industries is, “We can help you cut your costs and become more productive.” Look carefully at what tech is doing in defense. They are not saying, “We can help you be more productive; we can do more with existing money.” Instead they are supporting big increases in the defense budget. Trump is delivering those.

The basic point is well highlighted in the recent Gallup poll. The system is simply not working for enormous percentages of the population, and they know it. Neoliberalism is turning off more and more people. Politics has to focus on people’s real problems: wages, Social Security, medical care, education, housing, and employment. It has to find ways to make AI work for the whole society and not simply fuel incomes of a tiny elite. And it has to end the “Golden Rule”: the rule of money in politics, the media, and society generally.