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    Doge reportedly using AI tool to create ‘delete list’ of federal regulations

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    The “department of government efficiency” (Doge) is using artificial intelligence to create a “delete list” of federal regulations, according to a report, proposing to use the tool to cut 50% of regulations by the first anniversary of Donald Trump’s second inauguration.The “Doge AI Deregulation Decision Tool” will analyze 200,000 government regulations, according to internal documents obtained by the Washington Post, and select those which it deems to be no longer required by law.Doge, which was run by Elon Musk until May, claims that 100,000 of those regulations can then be eliminated, following some staff feedback.A PowerPoint presentation made public by the Post claims that the Department of Housing and Urban Development (HUD) used the AI tool to make “decisions on 1,083 regulatory sections”, while the Consumer Financial Protection Bureau used it to write “100% of deregulations”.The Post spoke to three HUD employees who told the newspaper AI had been “recently used to review hundreds, if not more than 1,000, lines of regulations”.During his 2024 campaign, Donald Trump claimed that government regulations were “driving up the cost of goods” and promised the “most aggressive regulatory reduction” in history. He repeatedly criticized rules which aimed to tackle the climate crisis, and as president he ordered the heads of all government agencies to undertake a review of all regulations in coordination with Doge.Asked about the use of AI in deregulation by the Post, White House spokesperson Harrison Fields said “all options are being explored” to achieve the president’s deregulation promises. Fields said that “no single plan has been approved or green-lit”, and the work is “in its early stages and is being conducted in a creative way in consultation with the White House”.Fields added: “The Doge experts creating these plans are the best and brightest in the business and are embarking on a never-before-attempted transformation of government systems and operations to enhance efficiency and effectiveness.”Musk appointed a slew of inexperienced staffers to Doge, including Edward Coristine, a 19-year-old who was previously known by the online handle “Big Balls”. Earlier this year, Reuters reported that Coristine was one of two Doge associates promoting the use of AI across the federal bureaucracy. More

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      ‘I have never seen such open corruption’: Trump’s crypto deals and loosening of rules shock observers

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      Cryptocurrency multibillionaire Justin Sun could barely contain his glee.Last month, Sun publicly flaunted a $100,000 Donald Trump-branded watch that he was awarded at a private dinner at Trump’s Virginia golf club. Sun had earned the recognition for buying $20m of the crypto memecoin $Trump, ranking him first among 220 purchasers of the token who received dinner invitations.Trump’s much-hyped 22 May dinner and a White House tour the next day for 25 leading memecoin buyers were devised to spur sales of $Trump and wound up raking in about $148m, much of it courtesy of anonymous and foreign buyers, for Trump and his partners.Memecoins are crypto tokens that are often based on online jokes but have no inherent value. They often prove risky investments as their prices can fluctuate wildly. The $Trump memecoin was launched days before Trump’s presidential inauguration, spurring a surge of buyers and yielding tens of millions of dollars for Trump and some partners.Trump’s private events on 22 May to reward the top purchasers of $Trump have sparked strong criticism of the president from ethics watchdogs, ex-prosecutors and scholars for exploiting his office for personal gain in unprecedented ways. But they fit in a broader pattern of how Trump has exploited the power and lure of his office to enrich himself and some top allies via cryptocurrencies.“Self-enrichment is exactly what the founders feared most in a leader – that’s why they put two separate prohibitions on self-benefit into the constitution,” said former federal prosecutor Paul Rosenzweig. “Trump’s profiting from his presidential memecoin is a textbook example of what the framers wanted to avoid.”Scholars, too, offer a harsh analysis of Trump’s crypto dealings.“I have never seen such open corruption in any modern government anywhere,” said Steven Levitsky, a professor of government at Harvard University and an expert on authoritarian regimes who co-authored the book How Democracies Die.Such ethical and legal qualms don’t seem to have fazed Trump or Sun. The pair forged their ties well before the dinner as Sun invested $75m in another Trump crypto enterprise, World Liberty Financial (WLF), that Trump and his two older sons launched last fall and in which they boast a 60% stake.The Chinese-born Sun’s political and financial fortunes, as well as those of other crypto tycoons, have improved markedly since Trump took office and moved fast to loosen regulations of cryptocurrency ventures at the Securities and Exchange Commission (SEC), the justice department and other agencies to upend Joe Biden’s policies.As the SEC has eased regulations and paused or ended 12 cases involving cryptocurrency fraud, three Sun crypto companies that were charged with fraud by an SEC lawsuit in 2023 had their cases paused in February by the agency, which cited the “public interest” and reportedly has held settlement talks.Trump’s and Sun’s mutually beneficial crypto dealings symbolize how the US president has boosted his paper wealth by an estimated billions of dollars since he returned to office, and worked diligently to slash regulations fulfilling his pledges to make the US the “crypto capital of the planet” and end the “war on crypto”.After the 22 May dinner, Sun posted: “Thank you @POTUS for your unwavering support of our industry!”Although Trump’s crypto ventures are less than a year old, the State Democracy Defenders Fund watchdog group has estimated that as of mid-March they are worth about $2.9bn.In late March, Reuters revealed that WLF had raised more than $500m in recent months and that the Trump family receives about 75% of crypto token sales.Trump’s pursuit of crypto riches and deregulation represents a big shift from his comments to Fox News in 2021, when he said that bitcoin, a very popular crypto currency, “seems like a scam”.View image in fullscreenIn July 2019, Trump posted that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade”, and noted that their value was “highly volatile and based on thin air”.Now, Trump’s new pro-crypto policies have benefited big campaign donors who lead crypto firms as well as Elon Musk, the world’s richest person, who spent almost $300m to help elect Trump, and who boasts sizable crypto investments in bitcoin through his electric car firm Tesla and his other ventures. Though Trump and Musk have since fallen out, the mogul’s crypto fortunes seem to have improved due to the president’s deregulatory agenda.Trump’s special envoy to the Middle East, Steve Witkoff, is a real estate billionaire who helped found WLF, in which he has a stake; Trump’s two oldest sons, Eric and Don Jr, and Witkoff’s son Zach have played key roles promoting WLF in the Middle East and other places.Trump’s use of his Oval Office perch to increase his wealth through his burgeoning crypto businesses while his administration rapidly eases regulations is unprecedented and smacks of corruption, say scholars, many congressional Democrats and some Republicans.“To me, Trump’s crypto dealings seem pretty explicit,” Julian Zelizer, a Princeton University professor who focuses on political history, told the Guardian. “Policy decisions are being made regarding parts of the financial industry that are being done not to benefit the nation, but his own financial interests … It’s hard to imagine what he’s doing benefits the nation.”Rosenzweig stressed that “not only do Trump’s extravagant crypto ventures benefit him personally as his administration slashes crypto regulations and takes pro-crypto steps at the SEC; they also benefit his tech bro backers who will take full advantage of the end of regulatory enforcement”.In Congress, leading Democrats, including Richard Blumenthal, a senator from Connecticut, and Jamie Raskin, a representative from Maryland, in May announced separate inquiries by key panels in which they are ranking members into Trump’s crypto dealings, and attacked Trump for using his office to enrich himself via his crypto operations.“With his pay-for-access dinner, Trump put presidential access and influence on the auction block,” Blumenthal told the Guardian. “The scope and scale of Trump’s corruption is staggering – I’ll continue to demand answers.”Last month, too, the Democratic senator Jeff Merkley, from Oregon, and the Senate minority leader, Chuck Schumer, introduced the “end crypto corruption” bill, which 22 other Democrats have endorsed.“Trump’s crypto schemes are the Mount Everest of corruption,” Merkley told the Guardian. “We must ban Trump-style crypto corruption so all elected federal officials – including the president, vice-president and members of Congress – cannot profit from shady crypto practices,” which his bill would curtail.Some former congressional Republicans are also incensed by Trump’s blatant use of his presidency to peddle $Trump. “Nobody should be allowed to use their public positions while in office to enrich themselves,” said ex-Republican congressman Charlie Dent of Pennsylvania, who once chaired the House ethics panel. “A member of Congress would not be permitted to engage in the kind of memecoin activities which the president has been doing.”Trump and his family have dismissed critics concerns about the 22 May events and his other crypto ventures.Before the 22 May dinner, Trump’s press secretary, Karoline Leavitt, told reporters that the president would attend his crypto gala in his “personal time” and it was not a White House event, but declined to release names of the many anonymous and foreign attendees.To allay criticism, the Trump Organization said in January that Trump’s business interests, including his assets and investments, would be placed in a trust his children would manage and that the president wouldn’t be involved in decision-making or daily operations. Trump’s family also hired a lawyer as an ethics adviser.But those commitments have been dwarfed by Trump’s public embrace of his crypto ventures and strong deregulatory agenda. In March, for instance, Trump hosted the first-ever “crypto summit” at the White House, which drew a couple dozen industry bigwigs who heard Trump promise to end Biden’s “war on crypto”.Trump’s crypto critics worry that the president’s strong push for less industry regulation may create big problems: the crypto industry has been battered by some major scandals including ones involving North Korean hackers and has been plagued by concerns about industry’s lack of transparency and risks.For instance, a report last December by leading research firm Chainalysis found that North Korean hackers had stolen $1.34bn of cryptocurrency in 2024, a record total and double what they stole the year before.The report concluded that US and foreign analysts believe the stolen funds were diverted in North Korea to “finance its weapons of mass destruction and ballistic missile programs”.Other crypto fraud schemes in the US have spurred loud alarms.In an annual report last September, the FBI revealed that fraud related to crypto businesses soared in 2023 with Americans suffering $5.6bn in losses, a 45% jump from the previous year.Sam Bankman-Fried, who founded the now bankrupt FTX crypto exchange, was sentenced to 25 years in prison in March 2024 by a New York judge for bilking customers out of $8bn.Nonetheless, a justice department memo in April announced it was closing a national cryptocurrency enforcement team that was established in 2022, which had brought major crypto cases against North Korean hackers and other crypto criminals.The memo stressed that the justice department was not a “digital assets regulator” and tried to tar the Biden administration for a “reckless strategy of regulation by prosecution”. The memo stated that a pro-crypto Trump executive order in January spurred the justice department’s policy shift.Ex-prosecutors and ethics watchdogs worry increasingly that crypto scandals and conflicts of interest will worsen as the Trump administration moves fast to ease crypto oversight at the justice department, the SEC and other agencies.Some of WLF’s high-profile crypto deals have involved overseas crypto firms which have had recent regulatory and legal problems in the US, fueling new concerns, watchdogs and ex-prosecutors say.View image in fullscreenOne lucrative deal raised eyebrows when WLF was tapped to play a central role in a $2bn investment by Abu Dhabi financial fund MGX that is backed by the United Arab Emirates in the world’s largest crypto exchange, Binance.As part of the deal, the Abu Dhabi fund bought $2bn of a WLF stablecoin, dubbed USD1, to invest in Binance. Stablecoins are a popular type of cryptocurrency that are often pegged to the dollar.The WLF deal comes after Binance in 2023 pleaded guilty to violating US money-laundering laws and other violations and the justice department fined it a whopping $4bn.Furthermore, Binance’s ex-CEO and founder, Changpeng Zhao, pleaded guilty in the US to violating the Bank Secrecy Act and failing to maintain an effective anti-money-laundering program.Zhao, who still owns 90% of Binance, served a four-month jail term last year.WLF’s $2bn deal was announced at an Abu Dhabi crypto conference on 1 May that drew Eric Trump two weeks before Trump’s visit to the UAE capital, sparking concerns of foreign influence and ethics issues.Increasing WLF’s ties further with Binance, the crypto exchange announced on 22 May that it had begun listing the stablecoin for trading purposes. Binance got some good news at the end of May, too, when the SEC announced the dismissal of a civil lawsuit it filed in 2023 against the exchange for misleading investors about surveillance controls and trading irregularities.Paul Pelletier, a former acting chief of the justice department’s fraud section, noted that SEC moves back in February “to emasculate its crypto enforcement efforts sent crypto fraudsters a welcome mat of impunity”.He added: “The recent dismissal of the SEC’s lawsuit against Binance for mishandling customer funds, days after it began listing the Trump family’s cryptocurrency on its exchange, seemed to be the natural consequence of such enforcement laxity. Victims be damned.”Other agency deregulatory moves that favor crypto interests can boost Trump’s own enterprises and his allies, but pose potential risks for ordinary investors, say legal scholars.Columbia law professor Richard Briffault noted that as part of the Trump administration’s wide-ranging and risky crypto deregulatory agenda which can benefit Trump’s own crypto ventures, the Department of Labor in late May nixed a Biden-era “extreme care” warning about 401K plans investing in crypto.“[The labor department] has rescinded the red light from the Biden years for 401K retirement plans, which is another sign of the Trump administration’s embrace of crypto,” Briffault said.Briffault, an expert on government ethics, has told the Guardian more broadly that Trump’s crypto ventures and his 22 May memecoin bash are “unprecedented”.“I don’t think there’s been anything like this in American history,” he said. “Trump is marketing access to himself as a way to profit his memecoin. People are paying to meet Trump and he’s the regulator-in-chief. It’s doubly corrupt.”In late May, in a new crypto business twist, the Trump Media and Technology Group, the parent of Truth Social, said it had sealed a deal to raise $2.5bn to be used to buy bitcoin, creating a reserve of the cryptocurrency.Meanwhile, Trump’s stablecoin fortunes and those of many industry allies could get boosts soon from a Senate stablecoin bill, dubbed the “genius act”, that’s poised to pass the Senate on Tuesday but which critics have said loosens regulatory controls in dangerous ways unless amended with consumer protections and other safeguards.Senators Merkley and Elizabeth Warren, of Massachusetts, led unsuccessful efforts to amend the bill to thwart potential criminal abuses, protect consumers and prevent Trump from using his office to profit his crypto businesses.“The ‘genius act’ fails to prevent sanctions evasion and other illicit activity and lets big tech giants like Elon Musk’s X issue their own private money – all without the guardrails needed to keep Americans safe from scams, junk fees or another financial crash,” Warren told the Guardian.“Donald Trump has turned the presidency into a crypto cash machine,” Warren said. The Genius act, Warren stressed, should have “prohibited the President AND his family from profiting from any stablecoin project.”More broadly, Kedric Payne, the general counsel and ethics director at the Campaign Legal Center, said: “President Trump’s financial stakes in the crypto industry at the same time that he is determining how the government will regulate the industry is unprecedented in modern history. This is precisely the type of conflict of interest that ethics laws and norms are designed to stop.” More

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      Fifteen years after Deepwater Horizon, Trump is setting the stage for disaster | Terry Garcia

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      Last month, I joined nearly 500 former and current employees of National Geographic, where I was executive vice-president and chief science and exploration officer for 17 years, urging the institution to take a public stance against the Trump administration’s reckless attacks on science. Our letter pointed out that the programs being dismantled are “imperative for the success of our country’s economy and are the foundation of our progress and wellbeing. They make us safer, stronger and more prosperous.” We warned that gutting them is a recipe for disaster.In the face of this danger, none of us can remain silent.I say this from the unique perspective of having been closely involved in the two most significant environmental disasters in US history: the Exxon Valdez and Deepwater Horizon oil spills. Fifteen years ago this Sunday, an enormous explosion tore through the BP Deepwater Horizon drilling rig and unleashed an environmental catastrophe that devastated the Gulf of Mexico. The explosion triggered the release of more than 3m barrels of oil that polluted 1,300 miles of coastline from Louisiana to Florida. Eleven lives were lost, ecosystems were ravaged and the economic toll soared into the billions.I served on the National Commission on the BP Deepwater Horizon Oil Spill, which investigated the root causes of the disaster, and before that I led the federal government’s implementation of the Exxon Valdez Oil Spill Restoration Plan. I have witnessed first-hand the human and economic toll exacted by these events. Men and women who, for generations, had made a living from the sea were suddenly confronted with the possibility that an entire way of life would be lost.Despite such painful lessons of the past, we find ourselves once again hurtling toward disaster. The Trump administration’s personnel and programmatic cuts at science, environmental and safety agencies, and the wholesale rollback of environmental regulations, threaten to unravel decades of progress in safeguarding our country. These actions aren’t just misguided – they’re a dangerous rejection of the hard-won knowledge gained from former crises and a gamble we cannot afford to take.Among the many alarming moves by the Trump administration are plans to weaken offshore drilling safety measures implemented in response to the Deepwater Horizon calamity, such as the reversal of the Biden administration’s ban on drilling in sensitive coastal areas, including the Arctic, and the closure of regional offices responsible for oil spill response. Eliminating these measures demonstrates a callous disregard for lessons learned at a staggering human and economic cost.Disturbingly, these actions are but a small part of a larger effort to weaken environmental regulation and oversight under the guise of restoring government efficiency. Take the recent rollback of dozens of Environmental Protection Agency health and safety regulations and the reported plan to eliminate the agency’s scientific research office. The administration claims these moves will unleash US energy and lower the cost of living, when in fact the only thing they’re guaranteed to achieve is undermining fundamental protections that keep our air and water clean. The mass layoffs and plans to dismember the National Oceanic and Atmospheric Administration (Noaa), where I was deputy administrator from 1997 to the end of 1999 and prior to that its general counsel, have nothing to do with cost savings – they’re an outright assault on science. Targeting programs that monitor ocean health, track ecosystem changes and study climate impacts – essential to understanding and mitigating looming threats – will leave us blind to and defenseless against the dangers ahead.Cuts to science funding amplify the harms, jeopardizing our ability to innovate solutions, assess risks and respond effectively to crises. In 2010, we lacked even basic data about ocean conditions in areas around the ruptured Deepwater Horizon well. This absence of critical knowledge hindered response and recovery efforts, including understanding the impacts of using oil dispersants in the deep ocean. After the spill, robust government support for science enabled researchers to develop new response and cleanup technologies, better understand long-term ecological impacts, and provide critical insights that helped shape environmental and safety policy. Without government support, these advances would have been impossible – and they will be impossible in the future as funding is slashed.The Trump administration’s insistence that its actions will reduce bureaucratic burdens or spur economic growth is false and deliberately misleading. It’s gaslighting on a national scale. The only sure result is that the burden of risk will be shifted on to communities, small businesses and ordinary Americans. The destruction of habitats and livelihoods is not an abstract consequence of environmental disasters. They devastate families, cripple economies, poison food supplies and leave communities struggling for decades. Businesses are boarded up, and community members suffer life-altering health consequences. After the Deepwater Horizon spill, losses in commercial and recreational fishing, tourism and property values amounted to tens of billions of dollars; cleanup and restoration costs exceeded $60bn – far surpassing what preventive measures would have required.skip past newsletter promotionafter newsletter promotionTrump and his industry allies will paint such an event as an unforeseeable tragedy, a terrible mishap, a sad accident. Don’t buy it.As we mark this somber anniversary, we cannot allow the cautionary tales of Exxon Valdez and Deepwater Horizon to fade into history, only to be repeated when the next horror strikes. Science and environmental protections are our first line of defense against catastrophe. Now is the time to demand that our government stop the madness and commit to strong environmental and safety regulations, rigorous scientific research, and adequate funding for the agencies tasked with protecting our health and shared resources. The price of ignoring science and dismantling regulations is far too high.

      Terry Garcia was National Geographic’s executive vice-president and chief science and exploration officer for 17 years. He also served as the assistant secretary of commerce for oceans and atmosphere and deputy administrator of Noaa, as well as its general counsel More

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      What is ‘abundance’ liberalism, and why are people arguing about it?

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      Is progressive public policy in America broken? Do many left-leaning laws actually make life more expensive for struggling people? Is regulatory red tape hindering growth and innovation? Have Democratic-run cities, such as New York and San Francisco, become giant billboards against liberal governance?These arguments wouldn’t sound out of place in a policy paper from a conservative thinktank. Yet their newest champions are two of America’s best-known left-leaning journalists, the New York Times’ Ezra Klein and the Atlantic’s Derek Thompson – and they believe the left is overdue for a reckoning of sorts.Klein and Thompson make their case in a new book simply called, with no subtitle, Abundance. The authors put forward a positive pitch for “abundance liberalism”: a vision of the US where policymakers spend less time fighting over how to apportion scarce resources and more time making sure there’s no scarcity to start with.View image in fullscreenAbundance has received a mostly positive reception so far, but also sparked debate, with critics arguing that the book ignores the effect of corporate power, downplays Republicans’ role in the crises that the US faces or overstates the effectiveness of its policy prescriptions. A writer in the left-leaning magazine American Prospect accused the “abundance agenda” of being “neoliberalism repackaged for a post-neoliberal world”.The book opens with a striking image of a US, in the year 2050, that is close to utopia. Americans’ electrical needs are powered by sustainable energy “so clean it barely leaves a carbon trace and so cheap you can scarcely find it on your monthly bill”. AI breakthroughs, labor rights and economic reforms mean that most people can do their jobs in a shorter workweek. Vertical farms provide cheap and fresh vegetables, desalinated water from the ocean is used as drinking water, and lab-grown meat has replaced animal slaughter.This near-future America – less the gritty neon smog of Blade Runner than a hi-tech Copenhagen – is entirely achievable, the authors argue. It just requires political vision and a willingness to reconsider certain assumptions.Despite being the richest country in the world, the US has a problem of scarcity, particularly in Democratic-run metropolitan areas, where the costs of housing and other basic needs have spiraled out of control. This is exacerbated by the traditional progressive solution of giving people money or vouchers to help them pay for finite resources such as housing, healthcare and food, the book argues, which increases demand and merely makes those things even more expensive.“The problem is that if you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing,” Klein has said. He and Thompson have described themselves as “supply-side” progressives, borrowing a term usually associated with conservative economic theories.What the US badly needs to do is build, they argue – build more houses, public transportation, power plants and other infrastructure – but that isn’t happening.One obstacle is nimbyism, the tendency of people to support public works and development in the abstract but fight them when they affect their own neighborhoods. Another is “everything bagel” logrolling that complicates what should be narrowly focused legislation by layering it with other social and political objectives, such as diverse hiring requirements or climate crisis goals, in order to appease interest groups or political constituencies.In an example Thompson recently discussed on a podcast, then president Joe Biden signed legislation in 2021 providing $42bn of funding to expand access to broadband internet in rural America. As of this December, according to Politico, the program had “yet to connect a single household”. Critics told Politico that this was partly because of a “suite of federal conditions” that required states “accepting the money to make sure providers plan for climate change, reach out to unionized workforces and hire locally”, as well as guarantee affordable broadband plans for people with low incomes.“I don’t want the state of Virginia taking, say, federal money to build broadband internet and then charging poor rural folks, like, $200 a month to go online,” Thompson said. “But by holding those values so closely … we accidentally built just about nothing.” A “confusion of process versus outcomes” meant that “very little was actually done on behalf of the Americans for whom we wanted to raise their living standards”.Another example is California, which in 1982 began studying the idea of implementing a high-speed rail system across the state. The idea was, and is, extremely popular with voters, and billions of dollars were budgeted for the project. Four decades later, almost none of it has been built. A “vetocracy” of regulatory, legal, environmental and political considerations have caused endless delays and continually narrowed the project’s ambition.“In the time California has spent failing to complete its 500-mile high-speed rail system,” Thompson and Klein write, “China has built more than 23,000 miles of high-speed rail.”The solution to these problems, Abundance argues, is a combination of techno-optimism, ambitious and clearly defined policy goals, and political leadership that is willing at times to say no to progressive pressure groups.Klein and Thompson favorably cite what happened when a bridge collapsed in Pennsylvania in 2023, crippling an essential highway. To fix it would typically take months of planning, consultation and reviews; Governor Josh Shapiro instead declared a state of emergency that allowed the reconstruction of the bridge with union labor but free from many normal processes. The highway reopened in 12 days, instead of the 12 to 24 months that it might have taken.Abundance makes clear that it is a book written for the left, and isn’t really interested in elaborating the ways that Republicans and conservatives have contributed to these problems, though Klein and Thompson acknowledge that they have. Yet within the left the book has proved controversial.“[I]t would be a huge mistake,” Matt Bruenig, a policy analyst, wrote in Jacobin, “to sideline whatever focus there is on welfare state expansion and economic egalitarianism in favor of a focus on administrative burdens in construction.”He continued: “Indeed, we have now seen what it looks like when the government supports and subsidizes technological innovation and implementation without concerning itself with the inegalitarianism of the system. His name is Elon Musk. In its desire to promote electrical vehicles and rocketry innovations, the US government made him the richest man in the world and then he used his riches to take over a major political communications platform and then the government.”While agreeing with some of Abundance’s aims, the journalists Paul Glastris and Nate Weisberg, writing in the Washington Monthly, argued that the book’s prescriptions wouldn’t necessarily bring the kind of sweeping changes that Klein and Thompson believe. For example, according to examples they cite, areas of the US that have reformed zoning laws to make it easier to build apartment buildings and multifamily homes have seen only modest reductions in the cost of housing.Thompson and Klein have argued that the abundance agenda is bigger than any individual policy proposal, and more about the Democratic party and other left-leaning institutions rethinking their own ambitions and how they conceive of success and failure.“Liberals should be able to say: Vote for us, and we will govern the country the way we govern California!” they write. “Instead, conservatives are able to say: Vote for them, and they will govern the country the way they govern California! … What has gone wrong?” More

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      Thanks to Donald Trump, Apple’s new AirPods will make America hear again | John Naughton

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      Like many professional scribblers, I sometimes have to write not in a hushed study or library, but in noisy environments. So years ago I bought a set of Apple AirPods Pro, neat little gadgets that have a limited degree of noise-cancelling ability. They’re not as effective as the clunky (and pricey) headphones that seasoned transcontinental airline passengers need, but they’re much lighter and less obtrusive. And they have a button that enables you to switch off the noise cancellation and hear what’s going on around you.I remember wondering once if a version of them could also function as hearing aids, given the right software. But then dismissed the thought: after all, hearing aids are expensive, specialised devices that are often prescribed by audiologists – and also signal to the world at large that you are hard of hearing.But guess what? On 12 September, I open my laptop, click on the Verge website and find the headline: “Apple gets FDA authorisation to turn the AirPods Pro into hearing aids.” The new generation of the headphones will be able to serve as clinical-grade hearing aids later this autumn. More importantly, they can be bought over the counter (OTC in the lingo of the healthcare industry) and they will sell for $249 in the US (and £229 in the UK). Compare that with the prices of hearing aids sold by, say, Specsavers, which start at £495 and go all the way to £2,995 for the Phonak Infinio Sphere 90.Now of course price comparisons can be misleading. Vendors of conventional hearing aids will stress that customers get the undivided attention of an audiologist etc. And for customers with severe hearing difficulties, that’s fine. But for people with “mild to moderate hearing impairment”, even the US FDA (Food and Drug Administration) has concluded that the customisation software provided by Apple will be adequate.It works like this. You take an on-demand hearing test on your iPhone’s health app, which causes the earbuds to ping each ear with different frequencies at varying volumes. You tap the phone screen if you hear the sound. After a few minutes, the app will generate an audiogram that graphs your hearing deficits and this audiogram can then be used to program the AirPods Pro as hearing aids. Alternatively, you can upload an existing audiogram if you’ve had one generated by an audiologist.Neat, eh? And also a nice example of engineering ingenuity. But, as with most things, the technology is only part of the story. The healthcare industry in the US is tightly controlled by the FDA, which insisted for years that any device that goes into a human ear needs a prescription. As Matt Stoller, an antitrust expert and campaigner, points out, since 1993, campaigners have been calling for the FDA to loosen its stance on these devices and the calls got louder over the years. In 2015, the president’s council of advisers on science and technology issued a report seeking to make these devices more widely available. The next year, the National Academies of Sciences, Engineering and Medicine issued a similar report.But eventually, in 2017, Congress passed the Over-the-Counter Hearing Aid Act, proposed by senators Elizabeth Warren and Chuck Grassley and requiring the FDA to allow hearing aids without a prescription – and Donald Trump signed it! The act imposed a deadline of 2020 on the FDA, but the agency continually prevaricated until 2022, after the Biden administration compelled it to act with an executive order. Only then did the dam that had been building up since 1993 break.The moral of this story, in Stoller’s words, is simple: “How we deploy technology is not a function of engineering and science as much as it is how those interplay with law, in this case a law that fostered a hearing aid cartel and then a different law that broke it apart. So it’s not outlandish to say that Joe Biden designed Apple’s new hearing aid AirPods, with an assist from Elizabeth Warren, Chuck Grassley and Donald Trump. It’s just what happened.”This is perhaps a bit hyperbolic, but it captures an essential truth that Silicon Valley would prefer to ignore: technology does not exist in a vacuum, and the ways it is deployed and developed are shaped by social and political forces. Social media companies escape liability because of a 26-word clause in a 1996 law, for example. And millions of people in the US suffering from hearing impairment could have had hearing aids at affordable prices at least a decade ago. The problem was not that the technology didn’t exist, but that it wasn’t in the interest of the healthcare-regulatory establishment to make it available.skip past newsletter promotionafter newsletter promotionWhat I’ve been readingBad pressJeff Jarvis, the veteran journalist and City University of New York emeritus professor, has an insightful analysis on his blog titled What’s become of The Times & Co? about why US mainstream media has gone wrong.Top MarxThe Enduring Influence of Marx’s Masterpiece is a marvellous introduction by Wendy Brown to a new translation of Das Kapital.Head case A lovely essay by Erik J Larson is The Left Brain Delusion, which argues that we’re too governed by one side of our grey matter. More

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      Silicon Valley Bank said it was too small to need regulation. Now it’s ‘too big to fail’ | Rebecca Burns and Julia Rock

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      Silicon Valley Bank was supposedly the type of institution that would never need a government bailout – right until its backers spent three days on social media demanding one, and then promptly receiving it, after the bank’s spectacular collapse last week.Eight years ago, when the bank’s CEO, Greg Becker, personally pressed Congress to exempt SVB from post-2008 financial reform rules, he cited its “low risk profile” and role supporting “job-creating companies in the innovation economy”. Those companies include crypto outfits and venture capital firms typically opposed to the kind of government intervention they benefited from on Sunday, when regulators moved to guarantee SVB customers immediate access to their largely uninsured deposits.Fifteen years after the global financial crisis, the logic of “too big to fail” still prevails. The financial hardship of student debtors and underwater homeowners is a private problem – but losses sustained by titans of tech and finance are a matter of urgent public interest. Moral hazard for thee, but not for me.What’s more, SVB’s meteoric rise and fall serves as a reminder that many of the guardrails erected after the last crisis have since been dismantled – at the behest of banks like SVB, and with the help of lawmakers from both parties beholden to entrenched finance and tech lobbies.Before becoming the second-largest bank to fail in US history, SVB had transformed itself into a formidable influence machine – both in northern California, where it became the go-to lender for startups, and on Capitol Hill, where it spent close to a million dollars in a five-year period lobbying for the deregulatory policies that ultimately created the conditions for its downfall.“There are many ways to describe us,” SVB boasts on its website. “‘Bank’ is just one.”Indeed, SVB’s management appears to have neglected the basics of actual banking – the bank had no chief risk officer for most of last year, and failed to hedge its bets on interest rates, which ultimately played a key role in the bank’s downfall. In the meantime, the bank’s deposits ballooned from less than $50bn in 2019 to nearly $200bn in 2021.From the moment that Congress passed banking reforms through the 2010 Dodd-Frank law, SVB lobbied to defang the same rules that would probably have allowed regulators to spot trouble sooner. On many occasions, lawmakers and regulators from both parties bowed to the bank’s demands.One of SVB’s first targets was a key Dodd-Frank reform aimed at preventing federally insured banks from using deposits for risky investments. In 2012, SVB petitioned the Obama administration to exempt venture capital from the so-called Volcker Rule, which prevented banks from investing in or sponsoring private equity or hedge funds.​​“Venture investments are not the type of high-risk, ‘casino-like’ activities Congress designed the Volcker Rule to eliminate,” the bank argued to regulators. “Venture capital investments fund the high-growth startup companies that will drive innovation, create jobs, promote our economic growth, and help the United States compete in the global marketplace.”After the Obama administration finalized the Volcker Rule in 2014 without a venture capital carveout, SVB sought its own exemption that would allow it to maintain direct investments in venture capital funds, in addition to providing traditional banking services for roughly half of all venture-backed companies.One such firm was Ribbit Capital, a key investor in the collapsed cryptocurrency exchange FTX, which lauded SVB’s tech-friendly ethos in a 2015 New York Times profile. “You can go to a big bank, but you have to teach them how you are doing your investment,” Ribbit’s founder told the Times. At SBV, “these guys breathe, eat and drink this Kool-Aid every day.”In the transition between the Obama and Trump administrations, SVB got what it wanted: a string of deregulation, based on the idea that the bank posed no threat to the financial system.In 2015, Becker, the CEO, submitted testimony to Congress arguing that SVB, “like our mid-size peers, does not present systemic risks” – and therefore should not be subject to the more stringent regulations, stress tests and capital requirements required at the time for banks with $50bn or more in assets.Two years later, SVB was one of just a handful of banks to receive a five-year exemption from the Volcker Rule, allowing it to maintain its investments in high-risk venture capital funds.The deregulatory drumbeat grew louder in Congress, and in 2018 lawmakers passed legislation increasing to $250bn the threshold at which banks receive enhanced supervision – again, based on the argument that smaller banks would never prove “too big to fail”.The Federal Reserve chairman, Jerome Powell, supported the deregulatory push. Under Powell, a former private equity executive, the Fed in 2019 implemented a so-called “tailoring rule”, further exempting mid-size banks from liquidity requirements and stress tests.Even then, the banks’ lobbying groups continued to push a blanket exemption to the Volcker Rule for venture capital funds, which Powell advocated for and banking regulators granted in 2020.Then, in 2021, SVB won the Federal Reserve’s signoff on its $900m acquisition of Boston Private Bank and Trust, on the grounds that the post-merger bank would not “pose significant risk to the financial system in the event of financial distress”.“SVB Group’s management has the experience and resources to ensure that the combined organization would operate in a safe and sound manner,” Federal Reserve officials wrote.Since the financial crisis, SVB has reported spending more than $2m on federal lobbying efforts, while the bank’s political action committee and executives have made nearly $650,000 in campaign contributions, the bulk to Democrats.Among the highlights of this influence campaign was a 2016 fundraiser for the Democratic senator Mark Warner of Virginia, hosted by Greg Becker in his Menlo Park home. A few months later, Warner and three other Democratic senators wrote to regulators arguing for weaker capital rules on regional banks.Warner went on to become one of 50 congressional Democrats who joined with Republicans to pass the 2018 Dodd-Frank rollback. When asked this week about his vote, Warner said: “I think it put in place an appropriate level of regulation on mid-sized banks … these mid-sized banks needed some regulatory relief.”In the wake of SVB’s collapse, Republicans have not renounced their votes for deregulation – nor have most of the Democrats who joined them, even as Biden is promising a crackdown.Warner took to ABC’s This Week on Sunday to defend his vote; Senator Jeanne Shaheen, the Democrat from New Hampshire, told NBC on Tuesday that “all the regulation in the world isn’t going to fix bad management practices”. Senator Jon Tester, the Democrat from Montana and a co-sponsor of the 2018 deregulatory law, even held a fundraiser in Silicon Valley the day after the SVB bailout was announced.Unless they reverse course, the Silicon Valley Bank bailout could prove politically disastrous for Democrats, who just oversaw the rescue of coastal elites in a moment of ongoing economic pain for everyone else.The good news is that there are straightforward steps that Democrats can take to start fixing things.For example: Senator Elizabeth Warren’s legislation to repeal Trump-era financial deregulation.Democrats can also revisit the areas where Dodd-Frank fell short, including stronger minimum capital requirements, and consider longstanding proposals to disincentivize risky behavior by banks by reforming bankers’ pay. And they should demand that Powell recuse himself from the Federal Reserve investigation of recent bank failures and take a hard look at whether his disastrous record merits outright dismissal under the Federal Reserve Act, which allows the president to fire a central bank chair “for cause”.And yet even now – amid the wreckage of deregulation – these and other measures to better regulate the banks may still be nonstarters among both the Republicans and corporate Democrats who voted for the regulatory rollbacks and have so far shown little sign of repentance.The words of the Illinois Democratic senator Dick Durbin still ring true, 14 years after the financial crisis.“The banks – hard to believe in a time when we’re facing a banking crisis that many of the banks created – are still the most powerful lobby on Capitol Hill,” he said back in 2009. “And they frankly own the place.”If that remains true today, the possibility of change looks grim.
      Rebecca Burns and Julia Rock are reporters for the Lever, an independent investigative news outlet, where a version of this article also appeared More

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      Is Biden’s appointment of a pioneering young lawyer bad news for big tech? | John Naughton

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      A flashback: it’s Wednesday 29 July 2020. I’m sitting glued to the US TV network C-Span, which is relaying – live – a hearing of the House of Representatives subcommittee on antitrust, commercial and administrative law. The hearing is being held following the publication of a sprawling report of a year-long investigation into the market dominance of Amazon, Apple, Facebook and Google.Arrayed on big screens before the members of the subcommittee are the four bosses of the aforementioned tech giants: Amazon’s Jeff Bezos, then midway through his Star Trek makeover; Tim Cook of Apple, looking like the clean-living lad who never understood the locker-room jokes; Facebook’s Mark Zuckerberg, wearing his trademark glued-on hairdo; and the Google boss, Sundar Pichai, every inch the scholarship boy who can’t understand why he’s been arrested by the Feds. And on the vast mahogany bench towering above these screened moguls sits David Cicilline, subcommittee chairman and the politician who has overseen the investigation.To be honest, I was watching out of duty and with low expectations. All the previous congressional interrogations of Zuckerberg and co had alternated between political grandstanding and farce. I expected much the same from this encounter. And then I noticed a young woman wearing a black mask standing behind Cicilline. She looked vaguely familiar, but it took me a few moments before I twigged that she was Lina Khan. At which point I sat up and started taking notes.I had been following her for years, ever since a paper she had published as a graduate student in the Yale Law Journal in January 2017. The title of the paper – Amazon’s Antitrust Paradox – signalled that there was something radical coming up, because since the mid-1970s US antitrust philosophy had been shaped by a landmark book by another lawyer, Robert Bork. Its title was The Antitrust Paradox and it argued that the prime focus of action against monopolies should not be corporate power, per se, but consumer harm as measured by unreasonably high prices. And since many of the products and services offered by the tech giants were “free” to their users they could hardly be accused of this; their wielding of monopoly power should not therefore be penalised by the state, for doing so would be tantamount to “penalising excellence”. Thus was shaped the legal doctrine that allowed a small number of tech companies to acquire immense power without being unduly troubled by legislators.This was the doctrine that Khan set out to demolish in her paper. She argued that Amazon was a dangerous monopoly that charged unsustainably low prices because the company knew that its shareholders would allow it to lose money for longer than its competitors. And it was also able to operate a “marketplace” that competed with the businesses that relied on it to reach customers, while amassing data on them that further entrenched its advantages. In other words, it wielded significant power for which there was no real redress.Khan’s paper lit a fuse that’s been fizzing ever since. It informed the Cicilline investigation and the subsequent report. And it’s what underpinned four of the five new bills that were unveiled last week, each one co-sponsored by Republican as well as Democratic politicians and each one targeted at monopolistic abuses identified in the report. The “Cicilline Salvo” is how the incomparable tech analyst Ben Thompson summarises them. The American innovation and choice online bill forbids platforms from giving advantages to their own products and services on marketplaces that they operate. The platform competition and opportunity bill outlaws pre-emptive acquisitions by tech giants of startups that might threaten their dominance (such as Facebook acquiring Instagram and WhatsApp, for instance). The ending platform monopolies bill bans platforms from owning any product or service that rests on top of its platform and competes with third parties in any way. And the augmenting compatibility and competition by enabling service switching bill requires tech platforms to make it easy for users to switch platforms (and take their data and social graph with them); in other words, it imposes on platforms what many jurisdictions now enforce on mobile phone operators, energy companies and other businesses.Of course, there’s many a slip ’twixt drafting and the statute book, but these are very significant pieces of legislation that go some way towards bringing tech companies under democratic control. And, to cap it all, last week also saw the announcement that Khan was to become chair of the Federal Trade Commission, the agency that, along with the US Department of Justice, has the legal muscle to enforce compliance with whatever these new laws stipulate.Which leaves us with two reflections. One is, as David Runciman pointed out in The Confidence Trap, his landmark study of the recent history of democracy, that while democracies can take a long time to awaken from their slumbers, once aroused they can be very effective. The other is a confirmation of the power of ideas, even those of a young graduate student, to change history.What I’ve been readingSituation vacant On Algorithmic Communism is a long, thoughtful review by Ian Lorrie in the LA Review of Books of Nick Srnicek’s and Alex Williams’s book, Inventing the Future, about a world without work.What’s in a phrase?There Is Nothing so Deep as the Gleaming Surface of the Aphorism is a nice – aphoristic – essay by Noreen Masud.Net costsThe Cost of Cloud: A Trillion-Dollar Paradox is a perceptive piece by Sarah Wang and Martin Casado on the expensive technology on which our networked world now depends. More

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      All I want for 2021 is to see Mark Zuckerberg up in court | John Naughton

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      It’s always risky making predictions about the tech industry, but this year looks like being different, at least in the sense that there are two safe bets. One is that the attempts to regulate the tech giants that began last year will intensify; the second that we will be increasingly deluged by sanctimonious cant from Facebook & co as they seek to avoid democratic curbing of their unaccountable power.On the regulation front, last year in the US, Alphabet, Google’s corporate owner, found itself facing major antitrust suits from 38 states as well as from the Department of Justice. On this side of the pond, there are preparations for a Digital Markets Unit with statutory powers that will be able to neatly sidestep the tricky definitional questions of what constitutes a monopoly in a digital age. Instead, the unit will decide on a case-by-case basis whether a particular tech company has “strategic market status” if it possesses “substantial, entrenched market power in at least one digital activity” or if it acts as an online “gateway” for other businesses. And if a company is judged to have this status, then penalties and regulations will be imposed on it.Over in Brussels, the European Union has come up with a new two-pronged legal framework for curbing digital power – the Digital Markets Act and the Digital Services Act. The Digital Markets Act is aimed at curbing anti-competitive practices in the tech industry (like buying up potential competitors before they can scale up) and will include fines of 10% of global revenues for infringers. The Digital Services Act, for its part, will oblige social media platforms to take more responsibility for illegal content on their platforms – scams, terrorist content, images of abuse, etc – for which they could face fines of up to 6% of global revenue if they fail to police content adequately. So the US and UK approach focuses on corporate behaviour; the EU approach focuses on defining what is allowed legally.All of this action has been a long time coming and while it’s difficult to say exactly how it will play out, the bottom line is that the tech industry is – finally – going to become a regulated one. Its law-free bonanza is going to come to an end.Joe Biden’s choices for top staff in his administration include a depressing proportion of former tech company stalwartsThe big question, though, is: when? Antitrust actions proceed at a glacial pace because of the complexity of the issues and the bottomless legal budgets of the companies involved. The judge in one of the big American antitrust cases against Google has said that he expects the case to get to court only in late 2023 and then it could run for several years (as the Microsoft case did in the 1990s).The problem with that, as the veteran anti-monopoly campaigner Matt Stoller has pointed out, is that the longer monopolistic behaviour goes on, the more damage (eg, to advertisers whose revenue is being stolen and other businesses whose property is being appropriated) is being done. Google had $170bn in revenue last year and is growing on average at 10-20% a year. On a conservative estimate of 10% growth, the company will add another $100bn to its revenue by 2025, when the case will still be in the court. Facebook, says Stoller, “is at $80bn of revenue this year, but it is growing faster, so the net increase of revenue is a roughly similar amount. In other words, if the claims of the government are credible, then the lengthy case, while perhaps necessary, is also enabling these monopolists to steal an additional $100bn apiece.”What could speed up bringing these monopolists to account? A key factor is the vigour with which the US Department of Justice prosecutes its case(s). In the run-up to the 2020 election, the Democrats in Congress displayed an encouraging enthusiasm for tackling tech monopolies, but Joe Biden’s choices for top staff in his administration include a depressing proportion of former tech company stalwarts. And his vice-president-elect, Kamala Harris, consistently turned a blind eye to the anti-competitive acquisitions of the Silicon Valley giants throughout her time as California’s attorney general. So if people are hoping for antitrust zeal from the new US government, they may be in for disappointment.Interestingly, Stoller suggests that another approach (inspired by the way trust-busters in the US acted in the 1930s) could have useful leverage on corporate behaviour from now on. Monopolisation isn’t just illegal, he points out, “it is in fact a crime, an appropriation of the rights and property of others by a dominant actor. The lengthy trial is essentially akin to saying that bank robbers getting to keep robbing banks until they are convicted and can probably keep the additional loot.”Since a basic principle of the rule of law is that crime shouldn’t pay, an addition of the possibility of criminal charges to the antitrust actions might, like the prospect of being hanged in the morning (pace Dr Johnson), concentrate minds in Facebook, Google, Amazon and Apple. As an eternal optimist, I cannot think of a nicer prospect for 2021 than the sight of Mark Zuckerberg and Sundar Pichai in the dock – with Nick Clegg in attendance, taking notes. Happy new year!What I’ve been readingWho knew?What We Want Doesn’t Always Make Us Happy is a great Bloomberg column by Noah Smith.Far outIntriguing piece on how investors are using real-time satellite images to predict retailers’ sales (Stock Picks From Space), by Frank Partnoy on the Atlantic website.An American dream Lovely meditation on Nora Ephron’s New York, by Carrie Courogen on the Bright Wall/Dark Room website. More