Ian Welsh – The horizon is not so far as we can see, but as far as we can imagine

I think everyone who’s observed American, indeed, Western politics is aware that whenever a strong economic left winger comes along the attacks on him are almost always primarily about violations of “woke”.

Corbyn was attacked for anti-semitism, when he might be the most anti-racist person on the Earth. The idea that he was anti-semitic was laughable on the face, he’d be the first person putting his body on the line if there were actual threats to Jews.

What was remarkable about the smears against Corbyn is that the guy is practically a Saint. He’s as pure as driven snow or aquifer water run through a triple filter.

Not everyone is. Al Franken did some inappropriate things, though none of them rose to the level where he should have stepped down.

Woke is used because it works, especially sexual harassment allegations. It doesn’t just work against the left. New York Governor Cuomo was taken down for sexual harassment, which I always found hilarious, because this is a guy whose policies killed thousands of people during Covid when he stuck Covid patients in old folks homes. That’s gross negligent manslaughter, in my books, and he should have gone to prison, not just lost his job, but it was the sex stuff that took him down.

That doesn’t mean the Democratic establishment wanted him gone. Oh no. They supported him to the hilt against Mamdani in the NYC elections. Anything can be forgiven if you serve corporate interests, nothing can be forgiven if you don’t.

Platner’s the latest target, and man is he ripe. There’s the skull and crossbones tattoo: Nazi symbology which he got as a soldier twenty years ago.

They attacked him on that. It didn’t work. It didn’t work for the same reason attacks on Trump didn’t use to work: because Platner appears very anti-establishment (and unlike Trump, probably is.) He’s a left wing economic populist. This is from the top of his policy page:

End Billionaire Welfare: A Tax Policy for the Rest of Us

Defend Democracy and the Constitution

Healthcare Policy: Replacing and Rebuilding A Broken System

Take Back American Power: End Big Oil Price Gouging, Build Now

So out came the sexual allegations. First the fact that near the start of his marriage he sent texts to women. That caused marital issues (surprise!) but Platner and his wife got counseling. Platner’s wife, Amy Gertner:

“It makes me really angry, disappointed,” Platner’s wife, Amy Gertner, said in a direct-to-camera video Platner’s campaign released Saturday night. “And I find it really shameful that there’s a group of media outlets and people who are willing to spread gossip instead of talking about real issues that Graham is running on.”

One might wish to discount this: political wives are famous for publicly dismissing scabrous behaviour. But it was years ago, and she has stayed with him.

Of more interest, I think, is this:

The New York Times and The Wall Street Journal reported that Gertner told Platner’s campaign about the sexually explicit texts last year, near the start of his Senate bid. Her disclosure came during a conversation with campaign officials about potential opposition research into Platner, the two outlets reported, with the Times citing a former senior official in Platner’s campaign and the Journal citing people familiar with the matter.

I believe this falls under “the call came from inside the house!” Platner and his wife were foolish enough to trust Democratic officials, not realizing that the Democratic party is the opposition, far more than the Republicans.

Now we have the New York Times, doubling down:

Amid the turmoil, Mr. Platner worked the phones, rolling through calls to ex-girlfriends who might publicly acknowledge that while he may have been a bad boyfriend, he was, in fact, a decent guy.

In interviews with The New York Times on Wednesday, several women did just that, describing Mr. Platner as a fun and caring partner, and saying they felt safe with him. Some remain friends with him to this day, years after their relationships ended.

But in extensive conversations over the past two months, three other women who had been romantically involved with Mr. Platner offered a far more complicated assessment, describing volatile and “toxic” relationships that were unsettling and at times emotionally wrenching.

Mr. Platner could be charming and charismatic, they recalled in interviews, but also demeaning to women and, in at least one case, even physically threatening. He drank heavily and was regularly unfaithful.

OK. Sounds like some of his ex-girlfriends like him, and others don’t. But there’s no allegation of rape or assault, only “once physically threatening” and you know that if there were, they’d have run with it.

I don’t think Platner sounds like the greatest guy with women, but I think it’s also unlikely you’ll find many people, men or women, who have had multiple relationships and all their ex’s don’t have anything bad to say about him. I also don’t think that any of this is disqualifying for office.

Serious war crime allegations, since he was a soldier, would be. A pattern of corruption in business would be. “Has, on occasion, been a jerk to women and unfaithful” is laughable. Neither FDR nor JFK were faithful, their behaviour was far worse than Platner’s, and FDR, at least, was arguably the best President America ever had for ordinary citizens.

But for whatever reason, Americans take allegations like these much more seriously than gross corruption, bribe taking, insider trading, or mass murder.

Or—they did. Because so far this doesn’t seem to be working against Platner. Americans are finally getting their priorities straight again: certainly rape or assault should be disqualifying (though neither were for Trump), but sexual immorality? Please.

The woke attack takedown, perfected and used for a couple generations now, is beginning to fail. Voters are looking at the actual issues and thinking “actually, I care more about the fact that I can’t afford rent, food, gas and healthcare.”

In this I finally see some hope that Americans voters might be growing up. For may years now Americans have basically gotten the politicians they deserve, with some exceptions. To deserve better they have to stop being suckers. The takedown of Thomas Massie by the Israeli lobby was a bad sign. The failure, so far, to take down Platner is a good one.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

Character and Destiny

By Ian Welsh

On June 4, 2026

8 Comments

From 2012 to 2014 this blog’s project was a large number of pieces on ideology, and quite a few have been about character: how it is created by experience, and how specific types of character (like sociopathy) are selected for amongst our leadership classes. I want to reprint some of these, because they’re fundamental and at least half my readership has never read them.

We’ll star with “Matters of Character”.

Let’s parse this out:

1) Character (personality), determines how people act.

2) While part of character is clearly genetic, much of it forms out of our experiences. Different experiences create different types of character. As a simple thought exercise, you would be a very different person if you had been born five hundred years ago in, say, Central Africa, than you are today.

3) As children, our primary experience is of school. We are a very schooled society, with the upper classes starting school at age 5 or so, and continuing into their mid twenties. Twenty years of schooling is not uncommon. Fifteen to sixteen is completely normal.

4) This schooling takes place when we are forming much of our character, when we are most susceptible to having our character changed.

5) In addition to this, we are influenced by media of various kinds (including books), our parents, and our peer group.

6) Different time periods form different characters, as do different nations, because people born in those times and places have different experiences. The more synchronized events are, as Newberry has noted, the stronger this is. In a mass media society, with relatively fast technological and social change, it makes sense to speak of generations. The character of people born 20 or 30 years apart in modern societies will be different, and within cohorts similar experiences will tend to create somewhat similar patterns of character.

7) Society is nothing except people and their creations and interactions over time. Walk around an old neighbourhood one day, and look at the buildings, the road, the trees and think about all the people who made everything you see, and all the people behind those people. Read the laws, and know that people made those, and enforce those.

8 ) Because society is just people, past and present, the nature of society is formed by our character.

9) If we want a different society, we must deal with matters of character.

10) Because we should be leery of engaging in eugenics, for reasons which should be obvious, changing society involves changing character through changing our lived experiences.

11) Everyone’s character matters, but some people’s character matters more than others. The more power someone has, whether that power comes from political position, charisma, force, or money, the more their character matters.

12) Leaders inform the character of people. People tend to act up, or down, to their leadership.

13) Money is permission. The more money you have, the more you get to decide what other people do. This can be directly through hiring them, or indirectly by buying the products of other people’s time. As the market society has spread to more and more of our lives, what we do is what gets paid for.

14) Who we give money to, and be clear that what banks, government and financial institutions do is decide who gets money, and what they get to spend it on, determines much of the lived experience of adults, and indeed of children outside school, and with the rise of for-profit schooling, inside school.

15) Money positions are of three main types. Elected (taxes); officers (CEOs and so on who control a lot of money that isn’t theirs); actually rich (the money is their own).

16) In all three cases who gets that money is a social choice. Billionaires are a social choice, created by government policy including tax policy, and the entire structure of how profits are booked. Multi-millionaire CEOs are a social choice, created by tax and other laws as well as social norms. And politicians are a social choice, especially in a democracy, but even in autocracies, though in such societies few people’s active and passive consent is needed.

17) If we select for positions of power, whether monetary, political, or charismatic, people whose character is such that they do not insist on good outcomes for the majority of people, then those outcomes will occur only by chance, if the happenstance of technology and environment aligns in what amounts to random fashion. Having not been planned, having not been understood, any such prosperity and freedom will not last.

18) If society is just us, and is a matter of our character combined with environment and technology, then we must consciously choose what we want our character to be. If we look at how we raise children and see that it is not creating the sort of people required for a happy, free, healthy, and prosperous society, then we need to change how we rear children. This is a social decision, not an individual one: we can choose a different type of learning (not necessarily schooling), we can choose a different type of media, we can choose to encourage different types of parenting (parenting styles have changed massively over the last 100 years, more than once).

19) We can also change how we select our leaders, both political and economic, to whom we give money, and for what purpose. We already do: Who makes money is a social choice, embedded in our tax code, laws (like “IP”), and monetary system. We can make other choices and create a system where people make money because they do good, not because they do evil (see “bankers”).

20) We can change our adult experience of the world, and when we change how goods and services are distributed (note that I did not use the word “money”), we will change our experience of the world, and in so doing we will change our character.

21) We can do so even if our current character is flawed. The politicians who ended Jim Crow were themselves mostly racists. They were racists who knew that racism was wrong. It is possible to look at one’s own character and know that it is simply a product of experience: to say “I am racist and sexist but I still know that is wrong.” It is possible to be involved in corruption (Kennedy Sr., the first SEC chairman) and decide to help clean it up, to end it. It is possible to have all the accoutrements of privilege (FDR) and turn around and change society mostly for the better.

We are all products of our time and place. We are all products of our parents and our experiences; millions of small events which shaped our character, for good, for ill, for kicks.

All of us (except maybe a few enlightened sages).

The full realization of how shaped we are is one of the watersheds of any voyage worth having. If you cannot look at yourself, and see how shaped you were, then you are trapped by those experiences, an even more limited and finite being than you need to be.

Once, however, you see the shaping, feel it, know it, and acknowledge it, then you are not free, but you have the potential to be more free, to change what you are and who you are, both individually, and as a group.

Character matters. It is destiny. Change your character, change your destiny. Change the character of nations; change their destiny.

Change the character of humanity; change our destiny.

Why Do So Many Right Wing Parties Worship America

By Ian Welsh

On June 3, 2026

19 Comments

Yeah, I know. Domestic not foreign, but so perfect.

Back during the last election in Canada the Conservatives had a huge lead in the polls. Then Trump started attacking Canada: tariffs and threats of annexation and lots of shit-talk about how Canada wasn’t a real country, was completely dependent on the US, was taking advantage, etc, etc…

Poilievre, the Conservative leader, didn’t condemn this. He even agreed somewhat.

And Carney (a neoliberal scumbag, but a smart and competent one) came out hard against Trump, defended Canada rhetorically, and won an election he should never have stood a chance in.

In Korea the right are pro-American symps. Many European right wing parties are as well, though others are figuring out, finally, that it’s bad politics.

Not all right wingers fall for this, of course. Doug Ford, the Premier of Ontario, and a corrupt right wing bastard if there’s ever been, immediately fired back, took US liquor off the shelves and generally told Trump to go to Hell.

I think the issue here is whether the right wingers are alphas or betas. The classic fascist personality is kick down, kiss up. Those are the people who love Trump, especially overseas. They want to feel strong, so they identify with the strong.

Alpha right wingers, on the other hand, when pushed, push back as hard as they can. Someone challenges them, and they don’t bow unless forced to. Doug Ford is a jerk, but he isn’t fundamentally a coward. To him being strong means being strong against everyone, and knowing that you don’t back down because that makes you look weak.

Poilievre: fundamentally a follower. Ford: a bastard who’ll kick up or down. Oh he’s corrupt and evil and takes care of his cronies, for sure. But he isn’t a wimp.

Too many politicians in American satrapies are wimps. Their idea of being powerful is being chosen by America as the leader of a weak state, doing what they’re told, and being King over their own countrymen.

This, fundamentally, means they aren’t strong: not psychologically or in fact.

A strong right winger wants to rule a strong country which doesn’t have to do what other countries tell it to. They don’t want to be subject kings.

Heck, a strong ruler of any ideology wants a strong country and to chart their own course, not be a lackey.

Europe and most of the Asian satrapies (Japan is particularly obsequious) are ruled by weak politicians. Weak men and women. It’s just especially embarassing on the right because one of the right’s fundamental promises is “I’m strong. We’re strong! You’re lead by a strong person.”

Pathetic.

Americans Today Have Little To Be Proud Of

By Ian Welsh

On June 1, 2026

32 Comments

Pride in one’s nation is one of the weakest and most pathetic types of pride because a nation’s greatness is a result of so many different people’s contribution. Unless you are FDR level, you contributed very little.

But American pride in being American is ridiculous.

Americans have nothing to be proud of, not today’s Americans anyway. The people who made America great are all dead. The people in power today are those who threw away the greatness their predecessors: their betters, created. The same is true of the English. Victorians or even Regency English would despise their descendants pathetic weakness, foolishness and stupidity.

What are you proud of, exactly? Getting you asses whipped by Iran? Impoverishing 60% of your own population? Helping Israel commit genocide? Killing millions in Iraq for no goddamn reason, since Iraq never attacked America? Gutting the Bill of Rights? Having the most corrupt President in American history?

One can criticize FDR and the post-war liberals of the 40s and 50s and 60s for various reasons: but they built an America which was great in many ways: that worked for more and more people, that delivered a good life for many, and which became more fair over time (civil liberties, for example, and increased rights for women.)

Americans were given the best hand in the world: the industrial and tech lead, and they pissed it away. They literally, voluntarily, shipped their industry to China acting as if making a an extra percentage point more profit was all that mattered.

America’s always been evil. All Empires are, and so are all settler colonial states. It’s just the way it is. But Americans of previous generations were competent, and starting with FDR, they at least took care of their own people. They were an American Athens, where immigrants were welcome, where people could make something of themselves, where the world’s great scholars and scientists wanted to be.

America had it all, and pissed it away.

No country, like no person, is of a piece. There is always good and evil, things to be proud of and things to be ashamed of.

But everything great in America was created by people who are dead or old, or are downstream of the post-war liberal period. The tech for the internet was created by post-war government agencies. The world wide web was invented by a government scientist working in an agency created by post-war liberals. Modern GUI interfaces were created in the early 70s and everything that flows from all this, including cell and smart phones is a result of technologies created by government or Bell Labs.

The great tech revolutions of the 80s, 90s and 2000s were all matters of exploiting fundamental discoveries and work done in the post-war era and the cupboard is now bare. America is cutting spending on research, burning its seed corn, even as China ramps up research. America is impoverishing its own people, even as China forces housing prices lower and works to improve wages and living standards for the majority.

To be proud of being American today is pathetic. What is there to be proud of? Destroying the bill of rights? Having a president who openly takes bribes in office? Losing the the tech and industrial lead? Making most of the population poor? Being the attack dog of Israel, with most politicians doing the bidding of a foreign country to the detriment of their own people?

Everything great about America is a legacy of the past, not a product of the present and being proud of being American is like being proud your parents left you a billion dollars, and you’re now worth a hundred million.

Week-end Wrap – Political Economy – May 31, 2026

By Tony Wikrent

On May 31, 2026

17 Comments

Week-end Wrap – Political Economy – May 31, 2026

by Tony Wikrent

Trump not violating any law

‘He who saves his Country does not violate any Law’

Trump Stuns By Saying ‘I Don’t Know’ When Asked Directly NBC’s Kristen Welker ‘Don’t You Need to Uphold the Constitution?’

Joe DePaolo, May 4th, 2025

Company headed by Trump-pardoned Republican fundraiser Elliott Broidy wins $106 million federal prison contract

[Guardian, Drop Site Daily: May 28, 2026]

LEO Technologies, a Texas-based AI company founded and led by Elliott Broidy—a Republican fundraiser pardoned by President Donald Trump on his last day in office in 2021, days before Broidy was to be sentenced for secretly lobbying the Trump administration on behalf of Chinese and Malaysian interests—won a $106 million contract from the Bureau of Prisons to translate, transcribe, and monitor prison phone calls using artificial intelligence last month, the Guardian reported. The contract marks LEO’s first with the federal government. Broidy, who has twice pleaded guilty to separate criminal offenses.

The White House Intervened to Get a $620 Million Deal for a Company Tied to Donald Trump Jr.

Robert Faturechi, May 28, 2026 [propublica.org]

Donald Trump Jr. and Eric Trump Are Running a $1.2 Billion Felony Fraud Scheme that is Fully Prosecutable in New York.

Christopher Armitage, May 24, 2026 [The Existentialist Republic]

Other crypto founders are serving eight, twelve, and twenty-five years in prison for the same conduct. The only thing that separates the Trump sons from those men is their last name.

How Trump Created a Slush Fund for His Allies – The President may have committed the rare offense that turns Republican lawmakers against him.

Ruth Marcus, May 24, 2026 [The New Yorker]

Trump’s Jan. 6 slush fund is right from Hitler’s playbook! This is not a coincidence

Dean Obeidallah, May 25, 2026

It was about a year after Jan. 6 that I first raised red flags in both articles and on my SiriusXM radio show that Donald Trump would be increasingly defending and even praising the Jan. 6 terrorists. That was way before Trump was calling them “patriots,” pardoned them or recently erased their crimes from the DOJ website and created his $1.8 billion terrorist slush fund to reward them.

The reason I raised that concern is not because I’m some type of political version of Nostradamus. Rather it’s because I have read a great deal about the history of fascist leaders and spoken to many experts.

That history was telling us that Trump would not reject the J6 terrorists but instead embrace, celebrate and honor those who helped him wage his failed coup. After all, it’s exactly what Adolph Hitler did after his 1923 failed coup known as the “Beer Hall Putsch.”….

Here’s the Real Reason Pam Bondi is Returning to the Trump Regime

Dean Obeidallah, May 28, 2026

On Wednesday, we learned that fired Attorney General Pam Bondi was returning to work for the Trump regime. However, this time no longer as the corrupt administration’s top attorney but as a member of the President’s Council of Advisors on Science and Technology (PCAST) that will focus on Artificial Intelligence….

But why would Bondi—who has no experience in the AI area—be appointed to this board by Trump and get a hero’s welcome?! Well former prosecutor Glenn Kirschner has a theory—and it’s one that resonates with me.

Glenn’s view it’s likely two reasons. First, “This is probably a wonderful opportunity to grift Should someone be interested in doing just that,” Kirschner commented.

And second—and this is the big one—”Pam Bondi knows where all the Epstein bodies are buried and Trump wants to keep her close.” Ding! Ding! Ding! That sounds like a winner. This is especially true given Bondi will testify Friday, May 29 before the House Oversight committee. (Obviously, the timing of the new gig is not a coincidence!)

And as I have written about in the past, Bondi served as Florida’s Attorney General from 2011 to 2019 at the very time Epstein was operating his massive child rape and women sex trafficking ring in that very state. Yet Bondi NEVER investigated Epstein despite there being more one thousand victims. That was clearly a decision by her in an effort to protect Trump and other powerful men….

We also discussed Trump DOJ’s latest actions to cover up the Jan. 6 crimes. This comes in the form of Acting AG Todd Blanche deleting a massive number of Jan. 6 related files from the DOJ website about the people charged and convicted of crimes—including those who brutally beat up police officers like Michael Fanone.

Some of the records Blanche deleted–as NPR reported— include:

Daniel Rodriguez, who pleaded guilty to driving an electroshock device into the neck of former Washington, D.C., Metropolitan Police Department officer Michael Fanone, and who was sentenced to more than 12 years in prison.

Thomas Webster, who was convicted by a jury of assaulting law enforcement with a metal flagpole, tackling a police officer to the ground and trying to remove the officer’s gas mask. Webster was sentenced to 10 years in prison.

Peter Schwartz, who was convicted by a jury of assaulting police officers with pepper spray and throwing a metal chair at law enforcement. Schwartz was sentenced to 14 years in prison.

And DOJ is bragging about this erasure of records saying in a statement they are “proud” to strip the “DOJ’s website of partisan propaganda.” The goal in deleting these records is not just part of the effort to rewrite Jan. 6. It’s also to make it more difficult for the media and public to uncover the crimes committed by Trump’s followers—especially since he is on the verge of giving them a huge pay day with his $1.8 billion terrorist slush fund….

How the War on Terror Created the Age of Trump (W/ Matt Kennard)

Chris Hedges, May 27, 2026

Matt Kennard shows in his new book that the bipartisan War on Terror laid the groundwork for the Trump presidency and the rise of fascism — now, with extremists empowered, we face the consequences.

Trump’s $250 Greenback Is a Gift to the Criminal Class

Timothy Noah, May 28, 2026 [The New Republic]

National Park Entrance Fees Are Funding Trump’s D.C. Projects

[New York Times, via Naked Capitalism 05-29-2026]

Strategic Political Economy

GRAPH: Not All Oil Is the Same (types of oil)

[X-Twitter, via Naked Capitalism 05-26-2026]

The Mystery Gasoline Surcharge: How Oil Incumbents Are Trying to Maintain Fossil Fuel Dominance

Matt Stoller, May 29, 2026 [BIG]

Among American elites, there appears to be an aggressive embrace of new technologies, whether crypto, generative artificial intelligence, or automated systems in war. But there is an important exception. If you deploy energy systems at scale that compete with fossil fuels, you will be ignored. The reason is both the narrative power of oil companies, and the Trump administration’s view that fossil fuel infrastructure is a deep source of American strength.

What’s interesting about this dynamic is that clean tech systems – batteries, solar panels, electric vehicles – are having real impacts, far more measurable than crypto or AI. Here is a chart of annualized gasoline sales in California, which has dropped by 2.5 billion gallons a year since 2019, despite more cars on the road. And California is leading the way in America; a quarter of new cars there are electric….

[TW: I have not yet come across a book that, imho, adequately explains the proper principles of political economy for a republic. I have been pondering these principles since it became clear around 2009-2010 that President Obama and the Democratic Party leadership had no intention of imposing accountability and justice on the financial predators who had created the 2008 Global Financial Crisis. Among the principles of political economy of civic republicanism I have identified are

[1. Scientific and technology progress are fundamental and essential to a republic’s economic health (note I do not use the term “economic growth” here).

[2. Because private enterprise, in reality, is mostly risk averse and therefore unwilling to invest in breakthrough science and unproven technology, one major responsibility of the national government is to encourage and support scientific endeavors and the development of new technologies — including outright funding. First Secretary of the Treasury was explicit about this in hid December 1791 Report to Congress on the Subject of Manufactures, which carefully and thoroughly refuted the “free enterprise” and “free trade” nostrums of British empire factotum Adam Smith. Point number 2 is reflected repeatedly in the history of how nations actually industrialized, including

USA’s deliberate seeding of new armory machine tool technology into the rest of the economy in the early 1800s (which created the bases for modern industrial mass production);
the massive land giveaways that supported the development of nationwide rail networks in the mid-1800s;
outright national funding of the telegraph and infant electricidal industry;
agricultural research and development, including fighting pests and diseases, and identification and support of new crop breeds;
outright government funding of the road and highway network that made possible the widespread use of automotive technology;
early funding and continued support for aviation and aerospace technology;
the development of transistors, integrated circuits, computers and the internet.

[To use Marxist phraseology, it is the political superstructure — the government — that most often creates and determines new means of production — the exact opposite of the disastrously erroneous Marxist view of reality.

[3. Unfortunately, though it is government support which creates new industries, new companies and huge private fortunes, the human faults of avarice, lust for power, pride end up transforming these new industries, new companies and new private fortunes into opponents of further change to the means of production. When this inevitably occurs, Marxist analysis of how the means of production determines the political superstructure tends to reflect reality with more fidelity than other forms of economic analysis.

[4. Therefore, a republic must always take steps and impose measures to limit the accumulation of wealth, the translation of wealth into political power, and misuse of the political system by concentrations of wealth and the morbidly rich. The argument that every billionaire is a policy failure must be fleshed out by developing this framework of civic republican political economy. Much of the history of neoclassical and Austrian economic thinking is a series of case studies in how concentrations of wealth and the morbidly rich used academia to develop schools of political economy which justified selfish behavior and concentrations of wealth, and in effect suppress and bury a decent exploration and consideration of civic republican political economy.

[5. Civic republican political economy therefore demands making moral judgements about what is good and bad for the preservation and development of human existence. Preserving the use of fossil fuels endangers human life istelf and is therefore bad. Remember that two of the basic principles of civic republicanism are justice, and the General Welfare. Gambling, prediction markets, crypto, and artificial intelligence should all be rigorously subjected to moral judging. Markets cannot and will not do this. The essence of the evil of neoliberal and neoclassical economics is that they use mathematical certainty as a facade to evade moral judgement.

[Though it omits any consideration of government’s role in supporting the early development of the petroleum industry, Stoller’s article is an excellent case study of how an industry, once mature, becomes a force for oligarchy and against republican governance. – TW]

Open Thread

By Ian Welsh

On May 30, 2026

32 Comments

Use to discuss topics unrelated to recent posts.

Closer to the End of Credit Cycle Phase Two

By Sean Paul Kelley

On May 29, 2026

8 Comments

~by Sean Paul Kelley

For the first time in this Credit Cycle more money is leaving private credit than is going in.

In Q1 2026, $7 billion left non-publicly traded BDCs (business development companies, ie. private credit shops) while they only raised about $5 billion. Total redemption requests from investors to private credit shops topped $15 billion.

Okay class, a little math. If $7 billion was cashed out, only $5 billion was raised then $8 billion of redemption demands were denied investors. That means investors were denied 53% of their redemption requests. (One might call that a run on the bank.)

Systemic Deterioration

We’re talking about the entire private credit industry, here. Not just a bad loan or failing borrower. It’s becoming systemic.

“If there were no war,” as Herr Tarman at Deutschbank said, “in the Persian Gulf this would be dominating the news cycle.”

What makes this very, very bad is when more money leaves the private credit system, sales are forced.

These are not voluntary sales or trades. They are forced, essentially they are margin calls, except, as Bloomberg pointed out, some sales sell for .98¢ on the $1, others sell for .90¢, but one forced sale went real bad for the private credit firm. They got .65¢ on the $1.

That’s a 35% loss. I can recover from a 15% loss but losing 35%? Nope. That’s a busted investment I’m never getting my principal back on. This activity has a name, one rarely uttered on Wall Street, as it is the market equivalent of screaming, “Voldemort,” on the floor of the NYSE.

This is what we in the business call “Accelerating Downside Price Discovery.” (Honestly, last time this happened was in 2008 and I got giddy. I love seeing fools lose boatloads of money. The schadenfreude works like an aphrodisiac on me!)

Accelerating downside price discovery creates a vicious downward cycle in credit markets and later in equity markets. Assets devalue. Private credit shops announce bankruptcy. Lots of people lose jobs.

Then equities decline, soon the investment (Morgan Stanley and Goldman Sachs) and commercial (JPM Morgan Chase, BoA and Wells Fargo) banks crater. In February 2009 I bought an enormous amount of Bank of America at $6 a share. A month later it was trading at $3.50-ish. I was biting my fingernails for sure. But, ten years later I sold it for almost $30 a share. But for ten years the stock traded sideways. So did the equity markets. The Fed’s QE–quantitative easing–made money virtually free and no one paid a price for the sub-prime fiasco.

This time will be different. No one understands what private credit does, except buy up empty houses and make the housing crisis worse.

Petroleum And Economywide Demand Destruction

Another consequence: This credit cycle is ending and oil futures are flashing a clear deflationary spiral. This is why I keep pointing out the long end of the WTI Oil futures price contracts going out a year. Here is why oil matters:

In Mid-August US petroleum reserves (non SPR) will fall to 390 million barrels. Today that number is 440mln barrels.

For refineries, pipelines, storage tanks, and terminals to function the system needs a minimum of 380mln barrels in reserve. If reserves fall below that level getting petrol from point A to B is like pushing a string, instead of pumping a viscous liquid.

Let’s do some simple math. We export 5mln barrels a week, plus or minus a million. The US uses 120million barrels a week. Subtract our exports over the next ten weeks. That’s 5×10=50 mln barrels pulled out of the reserve. Subtract 50 mln barrels from present reservers (non SPR) gets us within the margin of error at 390mln barrels. At this rate US petroleum and gasoline reserves will be at crisis levels in mid-August.

And herein lies the big rub, the dilemma of dilemmas, caught between Scylla and Charybdis: how can the Fed backstop a credit crisis with easy credit (because only easy credit solves a credit crisis) when its fighting phantom inflation with high rates, ie. tight credit? It cannot do both. Picture clearing up now?

I’ve been explaining the imminent unraveling of this credit crisis here at Ian’s for at least two months now. Today we’re closer to the end of Phase Two of the Credit Cycle now than we are to its start. When Phase Two unravels fully, that’s when the AI bubble goes pop.

When will that be?

Sooner than we want, but not as quickly as we fear.

“Cowboy up,” folks, as we say down here in Texas, “you’re going to need a raincoat.”

In Defence of Le Mot Juste

By Sean Paul Kelley

On May 28, 2026

15 Comments

~by Sean Paul Kelley

My mother and I got into it yesterday about writing.

Now, I adore my mother: she’s fantastic; most of the time.

Yesterday, however, she took issue with my word usage.

Preface: Mom is Catholic. Went to Catholic high school and university. She knows her St. Thomas Aquinas, Grotius, Pascal, and a good smattering of just war theory. She’s good coming heavy with the ethics when I screw up, Buddhist or not. When she aims, she doesn’t miss.

12 lbs of joy and discovery

So in an email yesterday we were discussing Catholic and Buddhist ethics. Mom wanted to know specifically how Buddhists view the Three Soures of Catholic Morality. I resisted a flashback to Sister Agnes and the 12 inch wood ruler with which she routinely slapped my hand. Transgression, unknown. She was a sadist but I learned my Latin declensions perfectly, especially for pain: dolor, masculine, Third declension”

Dolor, doloris, dolori, dolorem, dolore, dolor

But I digress. . .

“In Catholicism,” my Mom wrote, “for an action to be morally good the object, the intent and the circumstance must all be morally sound or the action is corrupted.”

“Interesting that there are three sources in Catholicism, because in Buddhism ethics are rooted in the Noble Eightfold Path through three main components: right speech, right action, right livelihood,” I replied. “However, to achieve merit and harmony in Buddhism one is not required to act in a supererogatory manner, whereas some Catholic actions imply it.”

She laid into me in the next email. “See, you’re grandstanding–she meant grandiloquent, a vice I am very guilty of–with your words again,” she said. “What does that even mean? It sounds like something out of the Kama Sutra!”

“First, the Kama Sutra is Hindu. Second, what did I say?” I replied.

“You’re a word snob. Supererogatory is what you wrote. What does that even mean?”

“Mom, it’s actually a Catholic concept,” I replied. “It’s something that is morally good, but not required to be done; it is to go above and beyond what is morally or ethically required.”

“Why didn’t you just say that?” She said.

“Why use eleven words when one gets the job done?”

And then I mouthed off to her, like a dumb-ass.

“How hard is it to use a dictionary app on your iPhone?”

“If you weren’t an adult I’d beat you, right now.”

“I know, Mom, but still. I’m a logophile, a verbivore. I can’t help myself.”

“You’re insufferable.”

“I love you too.”

Gustave Flaubert believed in the perfect word in the perfect place.

So do I.