The American Prospect, #347

Betting the Ranch on Crypto

The digital asset industry finds a new home...Wyoming?

BY WHITNEY CURRY WIMBISH

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Features

12 Down and Out on the Crypto Frontier

In Wyoming, the Delaware of cryptocurrency, industry players celebrated their fortunes and said everyone will benefit. But workers haven’t seen it.

By Whitney Curry Wimbish

20 This Greenland Is Red

The small island nation has one of the largest and most successful portfolios of state-owned companies in the world. What? By Ryan Cooper

26 Can Resistance Succeed?

The more authoritarian Trump becomes, the more he provokes effective opposition. By Robert Kuttner

36 Big Banks Behaving Badly

Decades of consolidation have made large financial institutions the primary partners for small businesses. Two case studies show how this can go awry.

By David Dayen

45 A Beacon of Progress

Boston Mayor Michelle Wu’s first-term achievements shine, but numerous challenges persist after her re-election. By Naomi Bethune

I love to travel,

and I love to talk to people about travel. There’s something about being somewhere new, and something about giving others the impression of what it was like, that’s intoxicating to me. Maybe that’s why I’m a journalist: It’s a way to put people into another reality, to have them see through the eyes of the people we report on. I’ve never been to a couple of the places profiled in our latest issue, but I’m grateful that we had some great reporters to help me understand them.

Whitney Wimbish was on-site at the Wyoming Blockchain Symposium. It’s the story of a conference featuring the leading lights of the crypto industry, and how Wyoming, the least populous state in the country, is trying to leverage digital assets to drive its fiscal future. But because it’s Whitney, the piece is something more than that. It’s also about the disconnect between the elites who flew their private jets into the luxury resort of Jackson Hole, and the workers whose job it is to wait on them and serve them, who don’t earn enough money for that toil even to live in the same state or maintain a decent quality of life. And none of them think of crypto as their financial savior.

Then we crossed the Atlantic with Ryan Cooper, our roving reporter of all things Nordic. Ryan has written from the Faroe Islands, Finland, and now Greenland, the apple of Donald Trump’s eye. Trump may not like it so much if he picks up this issue and reads that this autonomous territory of Denmark is one of the biggest practitioners of public ownership in the world, with the government owning businesses that account for more than half of Greenland’s total gross domestic product. But again, Ryan didn’t stop there. You’ll also get a history lesson and an appreciation for Greenland’s natural, if unforgiving, beauty, along with an economic lesson about Nordic cooperation, state capacity, and triumph over long odds.

And our newest writing fellow Naomi Bethune, a native Bostonian, returns to her hometown to check in on the success of a progressive mayor, Michelle Wu, as she cruises to re-election. I didn’t only read about the issues facing Boston, but also the historical challenges of an Asian American woman leading a city where politics has traditionally been confined to back-slapping Irish and Italian pols.

Not every story needs detailed geography, of course. Bob Kuttner in this issue offers a nationwide tour of the resistance to Donald Trump, from coast to coast, emerging with an ultimately hopeful story of people from all walks of life organizing with common purpose. And my story is about the landscape for small-business owners, who used to have a local banker that they knew and could turn to for help, but who now must deal with giant financial institutions that aren’t as committed to their survival.

The best writing, whether tied to place or not, puts you in someone else’s head so you understand their motivations, the forces they’re up against, and the ways they can prevail. I think these stories offer excellent examples of that. –David Dayen

EXECUTIVE EDITOR DAVID DAYEN

FOUNDING CO-EDITORS

ROBERT KUTTNER, PAUL STARR CO-FOUNDER ROBERT B. REICH

EDITOR AT LARGE HAROLD MEYERSON

EXECUTIVE EDITOR David Dayen

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FOUNDING CO-EDITORS Robert Kuttner, Paul Starr

CO-FOUNDER Robert B. Reich

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PROSPEC TS

HAROLD MEYERSON

Class Matters

Sixty years ago, the leaders of the civil rights movement faced an unavoidable question: What now? In successive summers, Congress had enacted the Civil Rights Act and the Voting Rights Act. The South’s de jure segregation and denial of Black citizenship were no more; the battle for equality before the law appeared to be settled. The battle for social and economic equality, however, was only just beginning.

Even before the legislative triumphs, the instigators, organizers, and leaders of the 1963 March on Washington understood that their fight had to become a much broader social revolution. On the day after the march, they convened a conference to discuss what they could do to make that happen. The conference was sponsored by the Socialist Party, which, despite its minuscule membership, contained within its ranks the instigators and organizers of the march.

The keynote speakers at the conference were the instigator, the venerable socialist A. Philip Randolph, and the organizer, Randolph’s deputy Bayard Rustin. Randolph’s socialist activism dated back to the 1910s, when his newspaper urged Blacks to oppose U.S. participation in World War I. In the 1930s, as president of the Brotherhood of Sleeping Car Porters, he astounded and alarmed business leaders and delighted Black Americans when his union won recognition and a contract from the reactionary Pullman Company. In the early 1940s, with war looming, his threat of a march on then-segregated Washington, D.C. (which 100,000 Blacks had pledged to join) compelled President Roosevelt to meet Randolph’s demand for a ban on racial discrimination in defense plants. In 1948, a similar Randolph threat compelled Presi-

dent Truman to order the desegregation of the armed forces.

In late 1962, Randolph and Rustin proposed a march for the following year—the 100th anniversary of the Emancipation Proclamation—centered on job creation. The Emancipation March for Jobs set a bold vision, that the civil rights struggles of Blacks “may now be the catalyst which mobilizes all workers behind the demands for a broad and fundamental program for economic justice.” But in the early spring of 1963, the nonviolent campaign to desegregate Birmingham, Alabama, led by Martin Luther King Jr., was met by a violent response from the Birmingham police, who set dogs, nightsticks, and fire hoses on children and adults, all captured on television newscasts. The ensuing uproar compelled President Kennedy to call on Congress to enact a civil rights law requiring the desegregation of private and public facilities. Randolph and Rustin added that demand—and successfully urged that the legislation also include a section requiring a ban on discrimination in employment—to their march’s agenda, which they renamed the March on Washington for Jobs and Freedom.

The march, organized by Rustin, was of course a historic success, climaxing in King’s address, and providing major momentum to enact the civil rights legislation of the next two years.

At the Socialist Party’s follow-up conference, Randolph laid out his ideas for the future. Pointing out that white sharecroppers had civil rights but lived in abject poverty, he said, “We must liberate not only ourselves but our white brothers and sisters.” Rustin followed by declaring a need for economic planning that would deal with

the technological unemployment he saw coming in the auto and steel plants that employed large numbers of Black men. By 1965, after the enactment of the Civil Rights Act and the Voting Rights Act, Randolph, Rustin, and King turned even more forcefully to the economic policies they saw as imperative if Blacks were ever to achieve social as well as legal equality. They believed Lyndon Johnson’s War on Poverty, while good as far as it went, fell lamentably short of remedying the inequality hardwired into the economy. Their advocacy steered clear of programs specifically directed to help Blacks and other racial minorities, focusing instead on huge economic reforms that would, in Kennedy’s famous phrase, lift all boats.

They had ample reason to think that a white backlash would follow policies aimed only at helping racial minorities, and not just in the South. In the 1964 Democratic presidential primaries (which were held in only a handful of states), Alabama Gov. George Wallace, the nation’s foremost champion of segregation and virulent racism, took 34 percent of the vote in Wisconsin and 30 percent in Indiana.

The new civil rights laws did nothing, and the War on Poverty programs precious little, to alleviate the pervasive poverty, ghettoization, and systemic police abuse of Blacks in Northern cities. The 1965 Watts Riots made clear that those ghettos were powder kegs that needed only one more police outrage to explode. So later that year, Randolph announced that he’d “call upon the leaders of the Freedom Movement to meet together with economists and social scientists to work out a ‘Freedom Budget’” that spelled out how the nation could achieve de facto —not just de jure—equality.

Randolph, Rustin, and King, standardbearers of this Freedom Movement, were all avowed democratic socialists. Chief among the academic and union economists who worked with them on developing the budget was Leon Keyserling. As an attorney and economist on the staff of New York Sen. Robert Wagner in the 1930s, Keyserling had actually written most of the text of both the Social Security Act and the National Labor Relations Act. In the following years, he’d held multiple posts in both the Roosevelt and Truman administrations, arguing for planned full employment and higher minimum wages. (His advocacy led Truman and the Congress to

enact what is still the greatest percentage increase in the federal minimum wage.)

When the Freedom Budget was released in late 1966, it called for planned full employment, income provision for those who couldn’t be employed, universal medical care, higher minimum wages, new housing to replace the nation’s 9.3 million “seriously deficient housing units,” the eradication of air and water pollution, and preservation of the nation’s natural resources, among other social necessities. It was Keyserling’s achievement that it did so without running a deficit or raising tax rates. By mandating a high level of production and planned full employment, the budget penciled out so that revenues coming in to the government would grow to provide an additional $185 billion over the next ten years that could fund its proposals, without diminishing the billions needed to fund other government activities. Full employment was the key, boosting the number of taxpayers, the level of their wages, and the government’s revenues.

We need to recall that in 1966, the highest marginal federal income tax rate was 70 percent (today, it’s 37 percent); the federal corporate tax rate was 53 percent (it’s 21 percent today); and the rate of private-sector unionization was 30 percent (it’s 6 percent today). Keyserling’s numbers were based on the more egalitarian income and tax rates in place when he wrote.

To say that the odds against the Freedom Budget’s adoption were steep is an understatement. It presupposed that the burst of liberal legislation that came out of the overwhelmingly Democratic Congress of 1965 would continue, yet the Democratic majorities were quickly diminished in the 1966 midterms. The budget also failed to account for the growing spending on the Vietnam War— and by ignoring the moral as well as financial costs of the war, it failed to reach out to and interest its most natural constituency—liberal and left-liberal anti-war activists. With the election of Richard Nixon in 1968, hopes for any of the budget being even partly enacted abruptly ended. When Jimmy Carter recaptured the White House for the Democrats in 1976, alongside a lopsidedly Democratic Congress, a movement for full employment emerged. It was backed by the more progressive unions, embodied legislatively in the Humphrey-Hawkins bill setting full employment targets for the government, and led intellectually by socialist Michael Harrington, who argued in print

and on podiums that planned full employment was the only way to create the kind of broad economic security necessary for the public to support a comprehensive progressive agenda. (Harrington explained how planned full employment in the Nordic social democracies gave those nations the political space to enact other progressive policies—feminist, environmental, and so on.) Harrington also assembled a coalition of unions and newer social movements in support of both Humphrey-Hawkins and the broader cause.

Carter and centrist Democrats in the Congress so watered down HumphreyHawkins, however, that the enacted version made no real impact on the nation’s economy. Still, as late as the 1992 Democratic presidential primaries, before neoliberalism had captured not just the Republicans but most of the Democratic Party as well, candidate Bill Clinton would occasionally refer to Sweden’s full employment policies as something the U.S. would do well to emulate.

What remains clear nearly 60 years after the Freedom Budget is the conviction of its authors—Randolph wrote its introduction, King wrote its foreword, and Rustin supervised its production—that the only real way to produce a social revolution for America’s Blacks was to produce a social revolution for all Americans. The Black nationalism, Black separatism, and Black capitalism that also began to surge once the government had struck down de jure segregation, they believed, wouldn’t and couldn’t change the contours of the nation’s economy in a way that could alleviate Black poverty. In a speech Rustin delivered shortly after the budget was unveiled, at a time when both Black nationalism and white backlash were on the rise, he said that any viable strategy had to be addressed “equally to Negro frustration and white fear.”

The Urban League’s Whitney Young eagerly endorsed the Freedom Budget, but he also backed a policy that stood in stark contrast to the budget’s universalism. He argued that the government should set quotas for hiring and advancing Blacks in public- and private-sector jobs, and in colleges and unions. An attenuated version of that proposal became a key part of various affirmative action programs, and over the years won considerable support from the one sector of white society with which the Urban League interacted most: corporate

elites, who could admit Blacks and other minorities to their ranks without the kind of reversals to power relationships (and, despite Keyserling’s calculations, higher taxes) to which the Freedom Budget could lead. To be sure, Young and his successors still favored many of the social programs spelled out in the budget and subsequent progressive legislation, just as the successors to Randolph and Rustin were to support affirmative action in the absence of the kind of sweeping changes their budget called for.

But today, as Idrees Kahloon recently documented in The New Yorker, the past half-century of affirmative action and DEI have failed to move the needle in reducing the still vast gap between Black and white wealth and income. Politically, such policies were in retreat well before Donald Trump attained and then regained state power. Kahloon argues that the sole remaining path forward to reduce our soaring economic and social inequality is the kind of class-based universalism embodied in the long-forgotten Freedom Budget. I’d add that the downward mobility of the American working class in recent decades makes such universalism more politically plausible than it was in 1966. The class-based universalistic politics of the socialists of the 1960s and ’70s hold important lessons for the socialists of 2025. One socialist who understands those lessons in his very bones is New York mayoral candidate Zohran Mamdani, whose affordability agenda steers clear of a multitude of more particularist agendas—some very worthy, some less so—in favor of policies directed at the broadest possible population of poor and working-class, middle-class, and even upper-middle-class New Yorkers. While New York city government has no real power over levels of employment, much less full employment, it does have power over municipal provision of such services as child care and rent controls.

At a time when nationalism, xenophobia, and racism are all around us, socialism certainly should be universalistic. As it happens, class-based universalism is also the most pragmatic course for progressive initiatives in America today. That Democrats of all tendencies have embraced varieties of affordability platforms illustrates the appeal of sharply drawn but universally targeted economic policies. In his class-based, universal, and very pragmatic socialism, Mamdani is the proper heir to Randolph, Rustin, and King. n

NOTEBOOK

FEMA’s Years of Living Dangerously

The Trump administration’s determination to force states to shoulder disaster funding burdens guarantees more deaths and destruction.

By Gabrielle Gurley

The federal government had come a long way from the heckuva-job-Brownie days of George W. Bush and Michael Brown, the unqualified head of the Federal Emergency Management Agency (FEMA) who mangled the Hurricane Katrina disaster response in New Orleans and on the Gulf Coast.

Yet 20 years and another unqualified FEMA leader later, despite reforms intended to guard against future agency heads joking (or not) about the hurricane season, America’s disaster response has devolved into something more akin to the pre-FEMA era’s improvisions. After two decades of major disasters in the 1960s and ’70s like the Hilo, Hawaii, tsunami, the Alaska earthquake (the worst in American history), and major hurricanes including Agnes, the National Governors Association called for a reorganization of the country’s decentralized emergency preparedness and disaster response systems in 1977. FEMA debuted two years later.

The Trump administration’s zeal to stamp out a flawed but essential agency has been interrupted by the mind-numbing display of bureaucratic micromanaging: the federal response to the Central Texas flash floods in July that killed 135 people, among them children vacationing in summer camps. “As sad as that is, unfortunately, that is typically what moves the needle in terms of disaster policy throughout history,” says Jeff Schlegelmilch, director of the National Center for Disaster Preparedness at Columbia University. “It’s not the data forecasting what’s going to happen. It’s the lives lost when it does happen—and this happened in a red state.”

The requirement that Homeland Security Secretary Kristi Noem sign off on agency expenses above $100,000 compromised FEMA disaster hotline availability and search and rescue missions so severely

that FEMA’s head of urban search and rescue resigned in frustration.

None of those facts made it into an August DHS press release that offered an upbeat, wholly unsubstantiated perspective on the agency, declaring that after 200 days, “FEMA is 100% faster in getting bootson-the-ground to respond to disasters.” Nim Kidd, the head of the Texas Division of Emergency Management, claimed, “I’ve been doing this for more than 30 years, and I can say with confidence that this was the fastest and most effective federal support Texas has ever received.”

Earlier this year, President Trump signed an executive order that “empowers State, local, and individual preparedness and injects common sense into infrastructure prioritization and strategic investments through risk-informed decisions that make our infrastructure, communities, and economy resilient to global and dynamic threats and hazards.” An administration “review council” will consider what comes next for the emasculated agency, with a final report due in November.

But common sense isn’t so common. Only the federal government can come up with the billions of dollars and assets to backstop the 50 states, local governments, territories, and tribal lands in the direst catastrophes. In an era when storms and wildfires are more frequent, stronger, and more expensive to respond to and recover from, shifting more of that burden onto states and localities after a jumble of executive orders, layoffs, firings, and delaying or withholding funds displays an obsession with cost-cutting by any means necessary and no concern with the ability of states to deal with catastrophes.

One long-held fallacy that cratered FEMA’s public image is the misguided belief that the federal government parachutes in with fists full of dollars to backstop local efforts as soon as the rains end or the last embers

flicker out. It’s led to “Where’s FEMA?” outbursts by angry, despondent survivors who aren’t aware of officials scrambling, or have been taken in by mis/disinformation that compounds their agonies.

After a disaster, local and state officials are the first ones on the ground in many cases, not FEMA . The amount of financial assistance that a community might receive depends on the scope of devastation. A small storm or fire that affects few properties, with no loss of life, particularly in areas that are susceptible to severe storms and wildfires, is usually handled by municipalities and states.

Even broader damage might still not reach the federal threshold for a disaster declaration. The federal government has been selective in how it responds. The National Emergency Management Association reports that in fiscal year 2023 there were nearly 25,000 disasters in the United States; of those, only 60 received a federal disaster declaration.

Under the 1988 Stafford Act, the president approves major disaster declarations for cataclysmic situations that are beyond the capabilities of local and state officials, and emergency declarations for smaller upheavals where federal assistance can help stave off more serious consequences.

“The issue that it often comes down to is who is going to pay for those resources?” says Samantha Montano, a Massachusetts Maritime Academy associate professor of emergency management. “That’s why that declaration is so important, because it comes with money.”

FEMA has historically paid most of the costs for major disasters. Urging states to improve how they gear up for seasonal upheavals like tornadoes, hurricanes, and wildfires is not new. Having states budget for disasters as they might for education or health care has had support from Demo -

crats and Republicans. One such proposal, a state disaster deductible proposed by Craig Fugate, the FEMA administrator during the Obama years, evaporated under the first Trump administration.

But swerving from dependence on Washington after a catastrophe to deep budget cuts and homegrown self-reliance in just a few months produced the horror show that played out on the ground in Texas Hill Country.

President Biden signed a major disaster declaration for North Carolina after Tropical Storm Helene on September 28, 2024. The day before, Connecticut Gov. Ned Lamont (D) approved the deployment of an eightmember volunteer urban search and rescue team to assist local officials in western North Carolina under the auspices of the Emergency Management Assistance Compact

(EMAC). The mayor of Norwalk agreed to send a volunteer from the city’s fire department, a hazmat command and communications unit, along with a fire department utility truck and an ATV for the mission.

EMAC, a national mutual aid framework overseen by the National Emergency Management Association (NEMA), provides disaster relief in all 50 states, the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands, and the Northern Mariana

Only the federal government can come up with billions of dollars in the direst catastrophes.

Islands, with people and equipment, but not funding. States providing assistance can seek reimbursement or send aid at no cost to a receiving state; but that is not linked to a state’s request for a federal declaration or funding. Connecticut and the other New England states also have reciprocal disaster assistance relationships with Canada’s eastern provinces through the International Emergency Management Assistance Compact.

With fewer natural disasters, Connecticut sends more assistance than it receives.

“When we put in a bid to help another state, we up front say this is what it’s going to cost, so we know what resources are going to get reimbursed if we send them,” says William Turner, the state’s emergency management director. “[EMAC] is really the mechanism that allows all of us to respond and recover before we have to get FEMA pulled in.

The flash floods in Texas Hill Country killed 135 people this summer.

We’ve got that piece pretty well figured out. We just need to understand where FEMA is going to end up when the dust settles.”

EMAC isn’t safe from a disintegrating FEMA . The mutual aid system runs exclusively on National Incident Management System funding provided through DHS and FEMA . However, in early September, FEMA failed to sign off on EMAC’s annual $2 million grant. Lynn Budd, NEMA’s president, told the national news outlet NOTUS that the episode “certainly flies in the face of the idea that states need to take on more responsibility.” The system finally received its monies, but this snafu raises critical questions about how EMAC can remain effective and navigate the volatile federal environment.

“ EMAC works well, as long as there is trust and security among the states that there is going to be funding to pay for those resources,” Montano says. “Once you lose assurance that there is going to be funding for those resources, that can break apart very quickly, not because other states don’t want to help each other, but because the funding isn’t there to do it.”

Before Helene, North Carolina was fairly well off, with a healthy $5 billion in its reserve fund for disasters. Today, about $1 billion has gone to disaster relief, with that account now down to about $3.5 billion. State officials have estimated the total cost of Helene at $60 billion. The proposed state budget for fiscal year 2026 is nearly $34 billion. FEMA has reimbursed about $1 billion.

Trying to work around bureaucratic inertia can backfire. Henderson County in western North Carolina decided not to wait for FEMA funds for debris removal and spent $20 million up front, thinking that the federal payout would be speedier. Across the border, Tennessee took another tack, setting up a Helene Emergency Assistance Loan Program. The $100 million loan fund provides no-interest loans to eligible counties for hauling debris, as well as water and wastewater infrastructure repairs.

Even wealthy states that see frequent natural disasters don’t have the fiscal wherewithal to absorb the multibillions of a major catastrophe. Florida relies heavily on the federal government for response assistance and dollars. In the wildfire sector, California and Washington have devised budgetary formulas based on past disaster costs to allocate funds to disaster accounts. Montana moves a portion of excess general funds once every two years into a wildfire

In New Orleans, local residents have stepped into the city’s disaster preparedness void.

suppression fund. But though those steps have to be taken, particularly now, they don’t deliver enough money.

For some states, moving from “what if” to the “when” in state disaster budgeting is a radical paradigm shift. Historically lessprepared states have had to step up recovery and resilience programs. After several years of federal disaster declarations, an extreme rainfall event in 2015, and Hurricanes Matthew in 2016 and Florence in 2018, South Carolina created an office of resilience. Focusing on coastal and riverine areas, the state encourages strategies to manage waterways and mitigate flooding across communities, recognizing that if a downstream area has strong building codes, storm plans, and public awareness of risks, those efforts may not matter much if an upstream town doesn’t make comparable investments.

Being proactive is critical, says Peter Muller of the Pew Charitable Trusts’ Managing Fiscal Risks project. “They’re trying to put money aside for costs they know they’re going to have, officially, before it happens, so that you don’t have to go and suddenly scramble and pull money from other priorities when a disaster does happen.”

Local residents also have stepped in to fill disaster preparedness gaps. Imagine Water Works, a New Orleans climate and disaster relief group, set up community power stations in neighborhoods after Hurricane Zeta in 2020, when three hurricanes and two tropical storms hit the state, the most in any calendar year. Residents were able to charge devices at homes and businesses that still had or regained power.

With the pandemic raging, residents were also able to pick up hand sanitizer, masks, and other COVID -19 supplies. The group asked fire stations to host charging stations and help people get oxygen for medical devices. They reached out to the city again the following year, and by the third year New Orleans officials began to duplicate their efforts. Fire stations also offer cooling facilities now.

With a robust network of indigenous and LGBTQ people, the group also has locations in Houma and southwest Louisiana as well as other local groups across the Deep South. “My relationship is very good with government. Folks who work in that space will contact me directly and ask for help spreading messages to folks, and we have a large social media presence, and we’re trusted,” says Klie Kliebert, the group’s executive director.

To mark the Katrina anniversary, a group of past and present FEMA employees demanded that Congress wake up to the threat posed by dumping the agency leadership reforms that came out of the 2005 debacle. Some employees were suspended. Restoring FEMA’s independence has support in Congress, but saving FEMA , much less any of the dozens of vital agencies that have been rocketed into oblivion by the Trump administration, hasn’t prioritized faster action. President Trump’s assault on disaster assistance has had one unifying effect, ginning up varying degrees of outrage and disbelief from every corner of the country. In the short term at least, there’s been the faintest glimmer of off-camera comity between Texas and California, two of the most disaster-prone states in the country, despite the cold civil war over redistricting: In mid-July, Gov. Gavin Newsom (D) sent a three-member human remains detection team to Texas, which boosted urban search and rescue personnel in Texas to 42 people.

Twenty states have sued FEMA and DHS to restore funding that had already been allocated under incentivized mitigation programs like Building Resilient Infrastructure and Communities (BRIC), enacted under the first Trump administration. This second time around, FEMA canceled BRIC. A federal judge ordered the White House to halt any reallocation of $4 billion in BRIC funds.

2025 has been a quiet season on the hurricane front—so far. Escaping the threat posed by Hurricane Erin, which steered off into the open Atlantic away from coasts, appears to have dampened any urgency in Washington surrounding this mess. What happens next will signal whether the states can hang together and demand an end to whims disguised as policy or whether federalism is as moribund as the rest of America’s democratic systems. It may take another massive calamity to field-test that proposition. n

Supermarket Shaping

Critics say Zohran Mamdani’s public grocery store proposal will never work. But Mamdani’s idea isn’t the problem—market consolidation is.

By Emma Janssen

One of the more intriguing kitchen-table economic proposals from New York City mayoral candidate Zohran Mamdani is a pilot program for five city-owned grocery stores. Like his other ideas in his platform (free buses, rent freezes), public groceries aren’t a new invention. But New York City would be the largest municipality to test

them, and all eyes would be watching to see if they succeed.

The logic behind city-run grocery stores is simple. Privately owned grocery stores have to turn a profit, so they mark up their goods. City services don’t need to make a profit. So a city-run grocery store could sell goods at lower prices.

Perhaps more importantly, public groceries can prevent food deserts, which the USDA

defines as any low-income community ten miles or more from the nearest grocer (in cities, it’s one mile). Both rural and urban food deserts have seen independent grocers gutted while giants like Walmart, Kroger, and Aldi rise. Public grocers can bring fresh food options to communities that corporate groceries don’t consider profitable.

Several cities are testing the public grocery model, from Madison, Wisconsin, to Kansas City, Missouri . But many of the examples are in rural areas, and often in red states. Food deserts proliferate in rural America, and small-town governments are more flexible than the 306,000-person city government of New York City. They can innovate without wading into a multiyear bureaucratic process first, like in Chicago, which floated the idea of a public market but hasn’t yet followed through on it.

Take Little River, Kansas, a town of 472 people. There had always been a grocery store in this community; whenever one owner retired, they passed the responsibility on to someone else. But in the 2010s, the Nelsons, who owned and operated the store, started to feel the financial stress of maintaining decades-old freezers and refrigerators. The city bought the building and took responsibility for maintenance costs. When the Nelsons retire, the city will just need to find new operators, keeping the town fed. At least three other Kansas towns—Erie, Caney, and St. Paul—have public groceries as well.

Not all public groceries have succeeded; the Kansas City store had chronically empty shelves before closing this August. That has much to do with the inability of groceries with small inventory needs to win the same deals from suppliers as the industry’s giants. A law that made special pricing for big chain stores illegal nearly a century ago has been barely enforced in recent decades. But adding New York City’s muscle to demand fair treatment for noncorporate grocers could change the game.

Different Models

Some municipalities have experimented with entirely publicly owned and operated models, while other stores are coops or nonprofits. Sean Park, a program manager at Western Illinois University who works with independent grocers, sees the municipally owned, privately operated model (like Little River’s) as one of the most promising. At their best, these pub -

lic-private partnerships take the administrative support of a city and combine it with the fast-moving entrepreneurship of a business owner. The model also sidesteps the need for cities to learn how to become grocery store operators.

Cities often take a role in real estate, constructing and leasing the grocery building to its operator. Cities can also provide the initial funding needed to get off the ground and lower the rent for the first few crucial years. From the operator’s perspective, Park explained, having the city available to absorb the shock of those early costs can make all the difference. Cities also win: When issuing a bid for an operator, they can choose what to prioritize, whether it be years of experience or entrepreneurial creativity.

Most important, the city gains certainty, said Park. “That community can never lose the grocery store. They can lose the operator. But so often, with Walmarts and Dollar Generals, when they close up their stores … [they] just sit there in probate as an eyesore.”

A municipal grocery with private operators creates an opening for a local smallbusiness owner to invest and grow in the community. An entrepreneurial model can broaden the appeal, particularly for those on the right who might balk at the idea of government entering the grocery business.

Rial Carver, the program director of the Rural Grocery Initiative at Kansas State University, suggested that local governments tend to be better suited as grocery store funders or landlords rather than operators. “It can really be the best of both worlds,” she said. “You’re able to leverage partners and also leverage interest in this concept of having access to healthy food, but also not forcing anyone out of their comfort zone.”

Atlanta recently announced a publicprivate partnership with Savi Provisions, a small chain of community markets that is already established in the area. The city’s development agency will award Savi Provisions $8.2 million to build two stores in neighborhoods that had been left behind by other grocers. Savi Provisions CEO Paul Nair said that they hope to keep costs comparable to Kroger, even if that means that they won’t be making a significant profit.

Disadvantaged Independents

Park is skeptical that a grocery store both owned and operated by a city would be suc -

cessful, due to the bureaucratic nature of city governments. “Because it’s such a tight margin, any addition of bureaucracy or cost is just not going to be profitable,” he said. If purchasing decisions must go through multiple levels of city approval, stores could miss out on attractive options and struggle with management.

Carver also questioned a city-owned and -operated grocery. “I think that the traditional municipal grocery model [where the city owns and operates the store] is a little less known, less established, so I think that a local government would really want to do their due diligence … before stepping in,” she said.

Criticism of Mamdani’s proposal has typically fallen along those lines. But that argument misidentifies the real issue. It’s not that all public grocery stores are inherently doomed to fail, but that the grocery industry is structured against all independent grocers, whether they’re public or not. The grocery industry experts I spoke to identi-

fied market consolidation as likely the biggest issue facing independent grocers today.

“Walmart specifically precipitated this big change in grocery competition,” explained Claire Kelloway, the food program manager at the Open Markets Institute. She accused Walmart of “bullying, bludgeoning, ruthlessly negotiating with suppliers, because they have access to this market that is so big, and suppliers really can’t afford to not be on Walmart’s shelves.”

To ensure they get on those shelves, distributors will often give massive discounts to Walmart and other large grocers. Those discounts get passed along to customers, which is why it’s practically always cheaper to shop at Walmart than your local momand-pop market. While I love the tiny grocery store on my street in Chicago that sells locally grown produce, for example, it’s much more economical for me to bike to the huge Jewel-Osco, a chain owned by Albertsons, in the next neighborhood over.

Independents struggle to work with dis-

tributors that deliver goods to stores, said Carver. “In a rural area … sometimes it’s hard to get a wholesale supplier to even service your store,” she said, because it’s so far from their base. In urban areas, a wholesaler might see a small grocery as not worth their time. Even if independents can source goods, the price could be steep.

A look at a grocery funding initiative in Illinois, the Fresh Food Fund, shows how hard it is to get small grocers off the ground, even with robust government support. A 2024 ProPublica and Capitol News Illinois investigation found that only two grocery stores out of the original six announced in 2018 had survived. Community members said cost was the biggest reason they chose stores like Walmart over a local independent store in Cairo, Illinois. Even if the community is excited about having an independent store close by, low-income residents may prefer to travel farther for groceries if it means they can buy at the lowest price.

But there is a law already on the books that experts say could transform the grocery industry by leveling the playing field for small stores. It just hasn’t been enforced.

Rise and Fall of an Anti-Monopoly Law

The Robinson-Patman Act, passed in 1936, required all distributors to offer the same pricing on their goods, regardless of the size of the retailer. It was designed to thwart the market power of A&P, the nation’s first and biggest chain grocery.

Once it was passed, Robinson-Patman did significantly level the playing field. But in the 1970s and 1980s, the ideological tides shifted, and the law fell out of favor. Government enforcement all but stopped, precipitating the rise of Walmart and today’s biggest grocers. Today, Walmart is responsible for some 50 percent of all groceries sold in hundreds of regions throughout the country.

Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance (ILSR),

argues that the rise of food deserts is almost entirely caused by the lack of RobinsonPatman enforcement. In a 2024 article for The Atlantic , she takes the case of Deanwood, a low-income, majority-Black neighborhood of Washington, D.C. In the 1960s, Deanwood had numerous grocery stores, including some independent businesses and co-ops. By the 1990s, there were only two left, and now there are none. That change tracks the timeline of the rise and fall of Robinson-Patman enforcement.

During the Biden administration, antimonopoly advocates looked to revive Robinson-Patman. Alvaro Bedoya, a former commissioner on the Federal Trade Commission (FTC), and Lina Khan, the FTC ’s former chair, championed the law and the need to fight price discrimination against small retailers. During Khan’s tenure, the FTC filed two Robinson-Patman suits: the first against Southern Glazer’s Wine and Spirits in December 2024, and the second against PepsiCo in January 2025.

“It would have a massive impact on the grocery industry,” Carver said of a return to enforcement.

But Donald Trump’s election spelled doom for reinvigorating Robinson-Patman. In May, the FTC dismissed the case against PepsiCo, arguing that the case was a “ legally dubious partisan stunt ,” in the words of current chair Andrew Ferguson. The FTC failed to release further details from the heavily redacted case materials. The suit alleged that PepsiCo gave one big-box retailer better prices, disadvantaging their competitors—but the name of that retailer was never revealed, along with several crucial details (reporting suggests the retailer is Walmart).

Typically, Mitchell explained, those redactions would be lifted within weeks or months of the case’s filing, but that never happened with the Pepsi case. So in August, ILSR asked a judge to disclose the details to see whether or not it really is just a “partisan stunt.” In response to Ferguson’s comments, Mitchell said: “If it was so baseless, then why not just let the complaint out into the public realm?”

murky. It’s not yet clear if his proposed grocery stores would be 100 percent publicly owned and operated, or if the city would partner with private operators. But we do know that the pilot program would begin with five stores, using city-owned land and exempted from rent and property taxes. That, and the lack of needing to turn a profit, could hold down costs a bit.

But big-box stores’ ability to secure wholesale products at much lower prices makes it hard for public groceries to compete. “I don’t think companies are sweating it too much yet,” says Kelloway, who adds that Robinson-Patman enforcement is the key. “It’s going to take someone just trying, and bringing [a] case, and we are seeing some of that happen.”

The FTC ’s case against Southern Glazer’s still stands. In addition, a number of Biden-era FTC officials have taken roles in private law firms that have a strong antitrust focus, Kelloway noted. Robinson-Patman includes a “private right of action,” which means that independent grocery stores or municipalities can file suit over price discrimination.

The problem, of course, is that most independent grocers cannot afford the time and expense of filing a RobinsonPatman case. Small towns like Little River, Kansas, can’t either. But New York City, the nation’s largest, has far greater resources. Mamdani could use the leverage of city government to pressure distributors to give fair deals.

This could spur more enforcement outside of Washington. Nine states already have laws on the books that are functionally mini Robinson-Patman Acts, banning price discrimination within their borders. New York is not one of those states, but it could consider passing such a law, giving New York City even more firepower.

A law already on the books could transform the grocery industry by leveling the playing field for small stores.

Mitchell sharply criticized the dismissal of the case. “The FTC has said to the entire grocery industry: ‘Just go back to what you were doing before, we are not at all serious about enforcing this law,’” she said.

New York City’s Promise

So far, the details of Mamdani’s plan remain

Mitchell, of ILSR , stressed the real-world need to reform grocery markets, including with public options. “It’s a daily hardship and indignity for people not to be able to shop for groceries where they live,” she said. “If a city wants to step in and run a grocery store immediately to deal with that, by all means.”

But Mitchell also advises governments, whether federal, state, or municipal, to consider structural change. “The optimal role of government is to structure the market in a way that enables independent grocers, local grocers, to compete and succeed.” n

DOWN AND OUT ON THE CRYPTO FRONTIER

JACKSON HOLE , WYOMING – The shuttle bus rolls beneath the Teton Range. The afternoon is warm and bright. The scene is dreamlike, with aspen trees and tall grasses and round hay bales stacked in neat rows. A black horse and foal are in the center of a field and raise their heads in unison to watch the group drive past. Elk leap over a fence to walk among grazing cattle, then leap out again, free.

The scene makes me catch my breath. I turn to the other passengers, ready to say, “Did you see that?” But my seatmates in the black Mercedes van are all glued to their phones. They work in crypto, they’re heading to the Wyoming Blockchain Symposium at the Four Seasons Resort and Residences Jackson Hole, and there’s no time to look out the window.

They stay locked on those phones even as they commiserate. One man reminisces about how convicted fraudster Sam Bank-

man-Fried’s FTX once ran a conference and gave his company $15,000 to spend. He sighs. That was awesome. Another offers an update on his company. “Everyone is trying to create these walled gardens,” he says, “and we’re trying to create a public good.” The company presented their idea to the

Securities and Exchange Commission and the Department of Treasury last month: What if you could create a basket of assets that perfectly tracks inflation? The regulators “were super stoked,” he says.

In Wyoming, the Delaware of cryptocurrency, industry players celebrated their fortunes and said everyone will benefit. But workers haven’t seen it.

By Whitney Curry Wimbish ILLUSTRATIONS BY JOSEPH GOUGH

“Ugh, the SEC,” says another man. His company just hired two former SEC employees, and they can’t give clear “yes” or “no” answers to anything. They’re great, but “I just want to work in tech where people are really cracked out,” he sighs. Unfortunately, they’re the ones with expertise in TradFi—traditional finance—and that’s where all the money is.

The shuttle stops at the resort, where the cheapest rooms cost more than $1,000 a night and tickets for the invitation-only conference went as high as $10,000. The crypto guys agree to meet at the gondola later, where decals of American BTO, Kraken, and the Solana Policy Institute are stuck to the windows, blocking the view.

Jackson Hole is a playground for the rich,

but that’s not why Anthony Scaramucci’s company, SALT, is holding a blockchain symposium there. Wyoming is the underappreciated heart of the American cryptocurrency boom; lawmakers have passed more than 50 industry-friendly laws over the last eight years, more than anywhere else in the country. One established the Wyoming Chancery Court for businessrelated litigation, similar to the chancery court system in Delaware. With wide-open spaces and twice as many cattle as people, Wyoming’s political leaders want to base the entire state’s economy on crypto.

The executives, lawmakers, regulators, and even a member of the Trump family who congregated here were in party mode. Fresh off buying Washington, D.C., with hundreds of millions of dollars in the last election, crypto’s elite celebrated the passage of one industry-written federal law, and two others in the works. They gloated about owning the SEC, Federal Reserve, and most of all the White House. They heaped scorn on Sen. Elizabeth Warren (D-MA), former SEC chair Gary Gensler, and anyone else who wants to pump the brakes on what proponents say is an inevitable takeover. It’s the Pax Cryptomanica, haters be damned.

They spoke, too, of the public-mindedness of their industry and how it will benefit Wyoming, though they were short on specifics. One man insisted that his cryptocurrency company, which he had recently relocated to the state, would help regular people, but couldn’t say how, exactly. Would it create more jobs? No. Would it fund any social programs? Not exactly. But somehow it would get cash into people’s hands who needed it the most, the details of which would be worked out later.

Then he offered to send me an amethyst from a mine he owns. I declined, per the Prospect ’s policy against accepting gifts of gems.

“Thank you for getting rid of Sherrod Brown!” exclaimed Senate Banking Committee chair Tim Scott (R-SC) from the stage, referring to Ohio’s former Democratic senator, who used to have his job. The main crypto PAC, Fairshake, spent more than $40 million last year to stop Brown’s re-election; it now has more than $141 million stored up for next year’s midterms.

Scott’s panel, the second of the day, was a conversation with Austin Reid, global head of revenue and business at crypto prime broker FalconX, who would later pump a

glop of mayo onto a burger at a cookout and agree that doing so was either trashy or European. But that was ten hours away. It was still shortly after 9 a.m.

“We are working hand in glove,” Scott told the audience. He launched into a story about growing up in poverty with a single mom. “This industry offers a woman like that more access at a lower cost point.” It will also help him “accomplish the goal I had when I was 19 years old, to impact a billion people.” That’s about three times the

population of the United States. Scott praised his fellow banking committee member, digital asset subcommittee chair Sen. Cynthia Lummis (R-WY), for cosponsoring the industry-friendly Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS, Act, which creates a federal regulatory system for the cryptocurrency supposedly pegged to the dollar. It passed with help from 16 Democratic senators this spring, and Donald Trump signed it in July. The law offers a “vision” for what

the world looks like in 2028, Scott said. Reid asked him to elaborate.

“I have a dream!” said Scott, who is Black. The mostly white audience shifted in their seats. Scott chided them: Let a man have some fun. He rose to meander through the crowd. We must innovate before we regulate, “because competition needs time to grow up.” America must “empower people to want to take the risk,” and set rules of the road to make that happen, to “give people the chance to jump in, completely be miserable while they’re failing, and get better.” He returned to his seat and concluded the koan-like monologue about the new law. “That will allow that single mother like me to get more of her money faster.” The audience felt comfortable enough to clap. Reid asked: What advice does Scott have for people in the room?

“Number one,” Scott said, “fire the legislators that are in your way.”

The lone Democratic lawmaker at the symposium, Rep. Angie Craig (D-MN), offered not so much resistance as a shrug. She’s running against populist Lt. Gov. Peggy Flanagan for a U.S. Senate seat and told the audience that inviting digital assets

With lawmakers in both parties falling all over themselves to win their favor, you can understand the crypto elite’s delusions of grandeur.

into the financial system should be apolitical. Her presence on the cusp of an expensive campaign suggested otherwise.

With lawmakers in both parties falling all over themselves to win their favor and their campaign donations, you can understand the crypto elite’s delusions of grandeur, even amid enthusiastic ignorance. Who even knows what a “CUSIP number” is, sneered Kyle Samani, co-founder and managing partner of Multicoin Capital, on a panel with Scaramucci. The two laughed together. (For the record, it’s the Committee on Uniform Securities Identification Procedures number, the unique identifier for most financial securities in North America.)

“I learned yesterday what a registration statement is,” Samani said, “and I described it to my team as, quote, carrier pigeon for TradFi.”

Eric Trump, whose mining company American Bitcoin just went public in the beginning of September, was on hand as well. He took the stage with the intensity of a black hole, drawing all the attention toward his unblinking face. He towered over the other panelists and hugged them; he said he spends most of his business life involved in crypto, and that Bitcoin would one day soon cross $1 million in price. Crypto “might actually be the best asset class of all,” the president’s son gushed.

Bill Tai, co-founder of NTF company Metagood, offered one of the only sour notes. He said the U.S. has less than two years to build dozens of power plants to accommodate a panoply of data centers set for construction. The entire grid must be “redone,” he said, or “we’re gonna be having some very big issues.” This is an urgent topic in Wyoming, where a recently announced data center near Cheyenne intends to use 10,000 megawatts, the generation capacity of the entire state, as independent news outlet WyoFile reported last month.

You saw all the rolling blackouts in Portugal, Tai said. “In about 18 months, if all of these data centers come up, we’re going to start having that issue in the U.S.”

Another way to resolve the issue would be to not build the data centers, but Tai did not mention that. In fact, he’s counting on a fortune from there being no alternative but to power more crypto. Tai is chairman of the board of Hut 8 Corp., which has remade itself as an energy infrastructure company. Shortly after the conference, the firm announced that it “expects its platform to exceed 2.5 gigawatts of capacity under management” with the addition of four new production sites in Illinois, Louisiana, and Texas. The news pushed its stock up by 10 percent.

Let’s take a tour around the conference. Here is a man in a teal suit jacket and matching cowboy hat, more Huggy Bear than cowboy. Here is Morgan Murphy, a senior adviser to Trump’s special envoy to Ukraine and a food writer, with his dog, Chester. He’s running for senator in Alabama and is “thinking about making crypto a plank” of his campaign.

Here is Brittany Kaiser, who worked at Cambridge Analytica, the company that secretly used personal data from Facebook to get Trump elected. She fled to Thailand with a film crew in tow when the news broke. But now she’s the co-founder of AlphaTon, wearing patent leather red boots and speaking so rapidly and in such a byzantine way that it’s difficult to follow what she is saying.

She is far from the only one speaking in riddles. Her fellow panelist, Jeff Park, chief investment officer of ProCap BTC, utters the following: “The reality is Bitcoin tends to sometimes get a little bit of the short end of the stick when it comes to its utility because part of why people find it so useful is potentially its uselessness.”

If you can explain what that means, the Prospect will pay you ten billion Zimbabwean dollars, cash. That is the denomination of the banknote taped under the audience’s chairs, which human rights activist and pastor Evan Mawarire uses to make a point during a speech about how digital assets can help activists. Conference handouts refer to him as a “Zimbabwean hyperinflation survivor,” but a more accurate description is “torture survivor,” since that’s what the Robert Mugabe dictatorship did to him after he demanded government accountability in 2016 via an online video that went viral.

There are three other panels on human rights and crypto, accompanied by soaring music and video montages. Then the panel discussions snap back to moneymaking.

Here are women in frilly dresses, some of whom brought their dogs, and serious ones in smart ensembles, and others who got into the spirit of the state and the request by conference schedulers to wear “Cowboy Casual.” Some of them have gone downtown to buy bespoke cowboy hats, which range from $245 to $1,795.

Here is Zunera Mazhar, vice president of policy at lobbyist The Digital Chamber, who posted a photo of herself in the conference Telegram channel in cowboy boots and a short leather skirt with a slit up the thigh, standing shoulder to shoulder with the chair of the SEC, Paul Atkins, and two other stylish women.

Here is a man in a cowboy hat and a black shirt with gold diamonds strewn across the fabric, and dark wraparound sunglasses though the room is dim. His cowboy boots are bedazzled with numerous sparkling studs. Here are the casual hoodie tech bros, sleeveless fleece zip finance bros, blazer-withsneakers bros, and at least one Brazilian jiu-jitsu bro.

Here is a man cramming his mouth with popcorn from a red-and-white striped bag in steady five-second intervals. The uninterrupted rustle of paper prompts another man to glare at him from across the aisle. But popcorn guy is rapt by his snack and the speaker, Premier of Bermuda E. David Burt.

David Hirsch, former head of the Crypto Assets and Cyber Unit in the SEC’s Division of Enforcement, has also availed himself of the popcorn. Now he works in private practice representing crypto firms.

Let us go next to the Cowboy Cookout, an evening activity that followed the first day of speakers, held at a ranch near the foot of the Tetons and sponsored by blockchain platform Avalanche. The same day, Fortune reported that Scaramucci’s SkyBridge Capital would bring $300 million in assets to tokenize on Avalance’s blockchain, about 10 percent of total assets under management.

Elk graze in the distance. Servers pass what they say is crudités: two celery sticks and two mini carrots rolling around in a paper dish, with an optional puddle of ranch dressing. A drone zips above the party and a man drives his rental car into a ditch.

I talk to a “digital nomad” from the Bay

Area who says he was once a park ranger in Yellowstone. He’d like to move back to Jackson Hole, but everything is expensive, so he’s come up with a plan. “I’ll start with a studio,” he says, “and rent it out to companies who need a Wyoming address.” So they can get the Wyoming tax benefits? Yes, but what they really need is a human who has the address. “Luckily, I’m a human.”

There are a lot of swindlers in this industry, and you might not know that right away, a man who’s at the party with his wife tells me. Both are executive coaches. The man is also an ex-Marine, or, as he puts it, “a protector.” Scaramucci is also making the rounds, urging people to call him Tony. “He’s one of the good guys,” the protector says.

The sun sets behind the mountain range and the temperature drops. Ground fog rises

through the field. The rental car is still in the ditch. “That’s a problem for tomorrow,” says the man who put it there. A woman laughs as they catch the Four Seasons shuttle back to their rooms. “I like that attitude.” she says.

“Regulatory capture” used to mean corruption. And, well, it still does. But crypto executives in Wyoming discussed it as an imperative. Take Henson Orser, founder and CEO of Soter Insure, which provides theft and loss insurance for digital assets. If there is to be a global crypto economy, he said, “you nevertheless need to have local regulatory capture.” That was the overwhelming sentiment of the symposium, and it was on display immediately.

Fortunately for the industry, the regulators are so happy to be captured these days,

One expert estimated that the number of digital asset companies domiciled in Wyoming runs into the “thousands.”

they’d probably build the prison cells themselves. The ones who took the stage were bent on jamming cryptocurrency into the American financial system.

The crypto industry has for years seethed at the SEC, led in the Biden years by Gary Gensler, who once called the digital asset industry the “ Wild West ” because it lacked adequate investor protections. But “it’s a new day,” said Gensler’s successor, Paul Atkins.

The agency is no longer “head in the sand, hoping crypto would go away,” Atkins said. Instead, the recently announced Project Crypto and other initiatives will make sure everyone in the room has what they want, including the ability to choose what regulator oversees their outfit, so that “if one regulator becomes too obstinate,” they can take their idea and go to another.

Atkins praised the passage of the GENIUS Act, “which was great, hallelujah,” called Scott “a great guy,” and looked forward to the Digital Asset Market Clarity Act, which passed the House in July and would create a regulatory framework for all digital assets other than stablecoins. The centerpiece of the bill would take oversight over most crypto assets away from the SEC, and to the much friendlier Commodity Futures Trading Commission. And here was the head of the SEC, beaming about the prospect of having his agency’s power stripped away.

“The good thing is we have a president who’s thrown down the gauntlet. I mean, he’s not shrinking from this and he understands the importance of it,” Atkins said, adding that Trump wants “the world running on American technology” and for the country to be “the crypto capital of the world.” The Trump clan, of course, has gorged on crypto cash. It now represents more than half of Trump’s total net worth.

“There’s a benefit to not regulating too quickly,” said Ian De Bode, chief strategy officer of Ondo, on a later panel, and he’s “in active conversations with the SEC about

how to figure this out.” Until last year, De Bode was a partner at scandal-addicted consultancy McKinsey, which helped the first Trump administration terrorize immigrants. His aside about grinding the regulators into submission was unintentionally revealing about how capture works.

Michelle Bowman, vice chair for financial supervision at the Federal Reserve, was another bearer of good news, telling the audience that it was “inspiring” to be at the symposium, extolling the virtues of tokenized assets, and remarking that stablecoins “are now positioned to become a fixture in the financial system” thanks to the GENIUS law.

The Federal Reserve Bank of Kansas City would hold its own symposium in the same town in just a few days. But before then, Bowman sympathized with the crypto industry’s unsatisfying interactions with regulators.

“When you start from a world of possibility, where you move fast and break things to make rapid improvements, you may struggle with the complex and rigid regulatory constructs familiar to bankers and regulators,” she said, and reassured the audience that “despite this past inertia, change is coming.”

Bowman explained what questions the industry should answer for regulators and mentioned her recent fireside chat about artificial intelligence with OpenAI CEO Sam Altman, whose Chat GPT program led a teen to kill himself this year, his parents allege in a lawsuit, including by providing encouragement and detailed instructions on how to tie a noose.

But regulating based on “an imaginary ‘worst-case’ scenario” is not the way forward, Bowman said, nor is it the role of examiners or policymakers to direct which customers or industries to serve or which products to offer. That’s the job of bank management. The relationship between industry and regulators should be collaborative, she said, and Fed staff should be allowed to hold crypto. Otherwise, how will they know how it works? “I certainly wouldn’t trust someone to teach me to ski if they’d never put on skis,” Bowman said.

Caitlin Long, founder and CEO of Wyoming-chartered Custodia Bank, sat smiling in the front row, sometimes pumping a fist in agreement. Her bank is for cryptocurrencies and offers various services, including custody and a token it calls an “electronic negotiable instrument.”

She’s been locked in a regulatory fight for the last two years after the Federal Reserve

board denied her application to make Custodia part of the Federal Reserve System because she failed to convince members that it could operate in a safe and sound manner. “Instead, the record indicates Custodia could in fact pose significant risk to its community,” the Board of Governors ruled.

After Bowman’s speech, Long tweeted, “ PINCH ME!! – the @federalreserve Vice Chairman for Supervision is making a speech *supportive* of #tokenization & @ stablecoins, incl facilitation of near-real time payments, in my home state – the leading state for #crypto – of #Wyoming. ‘Change is coming’ – Bowman ”

The digital asset industry has good reason to pick Wyoming as its HQ. In addition to being the least populated state in the union, it’s also one of the world’s major tax havens, drawing wealthy elites from all over who want to hide their money from investigators and tax collectors.

The state’s “cowboy cocktail” of laws, as wealth managers call it, offers a variety of maneuvers, such as the ability to create a trust with a private company at the head rather than a specific person, and another law that allows for the creation of a company within a trust to hold bank accounts, property, and other assets. The state offers 1,000year dynasty trusts, laws that protect assets against creditors, and freedom from taxes on capital gains, estates, gifts, or income.

There are incentives for creating limitedliability companies, the formation of which Wyoming was the first to authorize in 1977, though Delaware steals all the credit as the home of legalized financial trickery. Wyoming LLCs have tripled over the last five years, outstripping Delaware as the location of choice, according to OpenCorporates. In 2023, 166,960 entities incorporated in Wyoming, and all but 8 percent were LLCs. That’s 348 LLCs per 1,000 adults in Wyoming versus 268 in Delaware. It’s easy and cheap. First hire a registered agent, which can run as low as $25 a year, according to one firm’s online advertisements. Then pay the state’s fee of $100.

The arrangement has made Wyoming attractive for crooks. In March, the International Consortium of Investigative Journalists found that a small building in Sheridan was the incorporation address for 266,000 companies between 2019 and 2024, including one called Alo Group. That company used its Wyoming address when it received more than $500,000 in emergency COVID -19 Pay-

Everyday residents in Jackson Hole struggle to keep up with rising cost of living on meager salaries.

check Protection Program money from the U.S. government. Then it switched its mailing address to China. Then it disappeared.

The same laws have made Wyoming attractive for cryptocurrency companies.

Steven Lupien, director of the University of Wyoming’s Center for Blockchain and Digital Innovation and Long’s life partner, estimated in July that the number of digital asset companies domiciled in the state runs into the “thousands.”

During the conference, Gov. Mark Gordon unveiled the nation’s first state-sponsored stablecoin, the Frontier Stable Token, or FRNT. It will be available on Avalanche, Base, Ethereum, Optimism, Polygon, and Solana. The state will hold collateral for the tokens at 102 percent and put income over the reserve requirement into a public school fund, lawmakers said.

Asked for her thoughts on Wyoming’s embrace of crypto while waiting for a hamburger at the Cowboy Cookout, Long told me that it’s all “about jobs, it’s about revenue to the state, and it’s about the University of Wyoming, attracting donors, students, and scholars in this space.” Others echoed Long’s optimism about the rise of the state’s digital asset industry.

But Lee Reiners, lecturing fellow at the Duke Financial Economics Center, said that, for all of Wyoming’s chatter about the benevolence of its stablecoin and crypto’s

benefits, lawmakers still haven’t solved the central problem that the industry is full of liars and thieves. The stablecoin, for example, could easily be used to fund drug trafficking or launder terrorist financing.

The digital asset players brush that aside. “Nobody believes that anymore,” Lupien told me in an interview before the symposium. Unless you’re a real anti-crypto zealot like Elizabeth Warren, this is the way the world is going,” he said. “I think the day of referring to us as money launderers or drug dealers or terrorists is gone.”

That style of thinking has made Wyoming a magnet for the industry. Crypto exchange Kraken relocated its headquarters to Cheyenne in June, because the state’s pro-crypto environment “made it a uniquely well-situated backdrop” to “foster institutional understanding” of cryptocurrency as an asset class. The press release announcing the move includes a quote applauding the decision from Sen. Lummis, who took the stage with Kraken co- CEO Arjun Sethi. Lummis has been crypto’s cowboss in Washington for years now. She has been pushing, along with Custodia, to give Wyoming crypto banks access to the federal payment system, as well as calling for the creation of a “strategic Bitcoin reserve.” Her nickname is the “Crypto Queen.” At the conference, Lummis forecast that the Senate’s version of a market structure bill, which she

predictably co-authored, would be voted out of the Senate Banking Committee by the end of September and finished by the end of the year, hopefully before Thanksgiving, which the audience rewarded with cheers. Kraken’s Sethi commented that he’s still stuck in California’s expensive Menlo Park after his company relocated. He wants to move to Jackson, but that’s expensive, too. “Can you subsidize my house?” he asked Lummis. “Move to Cheyenne and I won’t have to,” she responded. Cheyenne is the seat of Laramie County, where Lummis lives. The audience laughed.

Sethi asked about Lummis’s crypto holdings; she has individual stock and five Bitcoin in a blind trust, she said. “Which exchange do you use?” Sethi asked. The audience laughed again, this time punctuated with “ohhh!” Sethi offered for his firm to custody her assets “in a blindly trusted way. I’ll leave it there.” Lummis threw her head back and laughed, clapping over her head. “I’ll say this to that: Arjun, you had me at hello.”

That evening, the two held a fundraiser for Lummis at the Teton Village home of former Interior Department official Rob Wallace and his wife Celia, where the suggested contribution was at least $1,000.

There is another story in Jackson Hole that deserves oxygen, one that unfolds every morning at dawn.

Not a single worker I spoke with had heard about the state’s cryptocurrency industry or Wyoming’s new stablecoin.

It is 7 a.m. on a crowded local bus from downtown. Riders greet each other briefly, mostly in Spanish, sometimes in English, then settle in for the hour-long ride to Teton Village, where the symposium is taking place and where snow and sun bunnies stay in luxury resort suites. One-way bus fare is $3, higher than the cost of public transportation in New York City.

A woman folds her arms on the seat in front of her and leans forward to rest her head. Others pull their hoodies over their eyes and lean back. The bus passes the same idyll as the airport shuttle. Again, no one is looking out the window. But this time it’s because they are dog-tired. The sun rises over the Teton Range and paints the valley with light.

The last stop is a parking lot near major resorts, across the street from a trail riding company, where a stablehand saddles dozens of horses before their first customers arrive.

Though conference attendees framed their industry as altruistic, not a single local worker I spoke with had heard about the state’s cryptocurrency industry or Wyoming’s new stablecoin. None believed either would improve their lives. All of them said Jackson is an exhausting place to live, mainly because rent is astronomical, homes are scarce, and salaries are too low to keep up. It’s a microcosm of the U.S. affordability crisis, made more painful by all the rich tourists with piles of money to spend on fun.

Rental platform Zillow puts the average monthly cost for a Jackson Hole twobedroom apartment at $4,000, about 25 percent higher than in Los Angeles. But workers said the amount they pay is even more. A woman who manages three hotels said if you can find a relatively reasonable place to rent, you hang onto it as long as possible or hope that your employer provides company housing. She said she was

lucky to find her $3,000 place, but has to move soon because her landlord is raising the rent. It’s not just her and her husband the prices affect; she often can’t fill open jobs unless she can also provide workers with a place to stay. They can’t afford to live in the area otherwise. Usually that means renting rooms in local hotels. But Jackson only has two short off-seasons, and the rest of the time most places are booked.

She had not heard about the Wyoming stablecoin, but she had heard that Eric Trump was in town for something or other about cryptocurrency.

Another worker who drives for Lyft and Uber said that claims that Wyoming’s crypto industry would help made no sense, because he had no idea how to buy it and didn’t want to. He has worked practically every day since moving to the U.S. from Mexico a decade ago, with no time to enjoy the natural beauty of the state, such as taking a drive to Yellowstone. The Four Seasons Resort had offered him a job, and it came with housing. But at the last minute, management told him they were charging him $1,450 to live there, and he had to share with three other roommates. How could he make his wife live in a place with three other men? So he turned down the job and moved across the border to Idaho, where it’s more affordable. But that comes with a long commute that is dangerous in winter.

A worker with multiple jobs, including at the Jackson Hole Airport, said he was sick of the high cost of living and of wealthy visitors’ sense of entitlement. The day the blockchain conference started, for example, so many private jets flew into the airport that they interrupted the schedules of two commercial flights, he said. An official on the ground radioed to the jets in the air and demanded they circle so commercial planes could land. But instead of complying, they argued back for several minutes until the airport official ultimately won. The airport did not respond to a request seeking confirmation and more information.

Elsewhere in Jackson, the food rescue organization Hole Food Rescue was preparing for its own gathering: the annual Million Pound Party to celebrate their work with a cook-off among local chefs, food, games, and music. More people have relied on the organization for help in recent months, program director Iván Jiménez told me. About 10 percent of residents in Teton County are food insecure under an assessment officials

conducted four years ago. But the United Way recently found that another 30 percent of people are food insecure, too—they just earn more than the federal poverty level.

Jiménez laughed when asked about Wyoming’s digital asset industry. “Let me tell you, working-class people are not talking about that,” he said. “They’re concerned about working one to three jobs.”

I asked an official from the treasurer’s office to comment on how difficult life is for regular people and how the crypto industry would help. He wore starched jeans with a crease pressed down the middle. Billionaires are fine with people coming over the pass from Idaho to work, but they don’t want them living here, so they make sure to buy up as much land as possible and keep rents high. That way, poor people will be locked out, and there will be no slums in Jackson. He wanted that off the record, but I did not agree to that, and instead wrote down what he said and asked workers about it.

One person shook his head in disbelief when I did and said they’d like to take the official to some trailer parks in Jackson. They added that they were “not impressed, nor am I convinced” that Wyoming has any intention of sharing any crypto industry gains with regular people. “It seems like glorified gambling to me.”

Contrast this with the Telegram channel of conference attendees, who posted happy snaps of their “excursions,” as the conference organizers put it. There was paragliding, trail riding, yoga, an oxygen bar, massages, and a “regenerative health experience” in an Airstream camper. There were off-road vehicle tours and a visit to a gun range.

They were still talking about all the fun they had for days afterward in the Telegram channel. “Still absolutely buzzing off the energy from last week!” one attendee posted. Many praised the conference and looked forward to the next one. Like so many other beautiful places on this planet, workers are just another natural resource to exploit.

After a particularly sad conversation with a worker one day, during which he looked at the mountains and wished for some time off, the symposium’s atmosphere of self-congratulation was too much to bear. I ducked out for a solitary walk, past preparations for lunch, the man-made waterfall, and the many attendants welcoming guests. Half a mile away, a trail led along a creek and into the shade of aspen trees. Their leaves shivered overhead. n

NUUK , GREENLAND – One of the odder initiatives of Donald Trump’s second term has been his fixation on the idea of annexing Greenland, an autonomous territory of Denmark. “We need Greenland for national security and even international security,” he said in a speech before Congress in March. “One way or the other, we’re going to get it.” Later that month, Vice President JD Vance traveled to the island and accused Denmark of mismanagement: “Our message to Denmark is very simple: You have

not done a good job by the people of Greenland,” he said, though he also claimed that America would not send in troops—at least not for now.

Then in May, Trump threatened to seize Greenland by force. “Something could happen with Greenland, I’ll be honest,” he said on Meet the Press.

The reason for this obsession is anybody’s guess. After all, Greenland is already a NATO ally, and the U.S. military already has a large base in its far north. My personal the -

ory is that he has been looking at Mercator projection maps, which exaggerate the size of Greenland by about a factor of 14 (it looks roughly the size of Africa, when it’s actually smaller than Argentina) and thinking it would be nice to paint all that ice red, white, and blue. Wars of aggression are, after all, a typical characteristic of fascists.

But then Trump seemed to forget all about it. He stopped threatening Denmark and posting about it on Truth Social, and moved on to occupying liberal American cities.

GREEN LAND THIS

The small island nation has one of the largest and most successful portfolios of state-owned companies in the world. What?

TEXT AND PHOTOS BY

Yet at least some in MAGA-world have not forgotten about Trump’s fantasies of conquest. In August, Danish media reported that Trump-associated figures had been conducting “influence operations” as part of a possible effort to split Greenland away from Denmark and pave the way for an American takeover. Den -

mark’s foreign minister summoned the American chargé d’affaires there (as Senate Republicans had not yet confirmed his nomination for Danish ambassador) for a dressing-down.

I traveled to Greenland around that time, and alas, I did not see any steroidal bearded types furtively casing the parlia -

ment building. But I wasn’t there to report on Trump’s lunatic imperialism. I was there because of a peculiar characteristic of Greenland’s economy: the state’s extensive portfolio of companies.

The government owns the fishing company Royal Greenland, which is also the country’s largest single employer; the ship -

LANDRED IS

Fishing accounts for 95 percent of all of Greenland’s exports.

ping company Royal Arctic Line; the housing company INI; the ferry company Arctic Umiaq Line; the logistics and retail company KNI; the national airline Air Greenland; the telecom company Tusass; the clothing company Great Greenland; the construction and renewable-energy company NunaGreen; the investment company Nalik Ventures; the real estate company Illuut; the utility company Nukissiorfiit; and the tourism company Visit Greenland.

It is hard to get precise statistics on these companies, as the government counts them as part of the relevant industrial sectors rather than the government itself. But according to a recent report, in 2023 they collectively employed 5,117 people, close to 10 percent of the total population. That year, they were responsible for 2.6 billion kroner in wages and profits (or about $410 million), which gives a rough sense of their contribution to GDP—11 percent in 2023. In 2022, that figure was 13 percent; the decline is thanks to post-pandemic inflation and some big investment spending turning their com-

bined net profits negative. Add the 11,633 Greenland residents who worked for the government directly in 2023, and the 9.6 billion kroner directly spent by the government, and about 66 percent of employed Greenlanders work for the state or its companies, and the public sector writ large is responsible for something like 57 percent of GDP (or 59 percent in 2022).

Why does Greenland maintain such a bafflingly large array of public companies? Isn’t that the dread socialism—a guaranteed route to mismanagement and destitution?

The answer to the first question is twofold: On the one hand, Greenland has a Nordic-style tradition, influenced by Inuit culture, of collective ownership of resources. On the other, Greenland has been pressured into direct ownership by its geography and sparse population. It has learned through experience that with difficult geography and a small internal market, it simply cannot trust the world market to provide for its needs. If the state won’t do it, then no one will.

As to the second question, it is arguably socialism—public control of the means of production, mostly of fish—but it also inarguably works. Greenland is a rich society, and its companies are successful and competitive. As a whole, they have consistently turned a profit in recent years, with the exception of 2023. Despite many challenges and setbacks, it has built up a wealthy and broadly successful economy, and this would not have happened without government control and coordination.

A major theme of Greenlandic history is mass death. Starting at about 2500 BCE , the Saqqaq, Independence I, Dorset, and Independence II cultures variously settled on the island over three millennia, eventually either departing or dying off. The Norse famously arrived in 986 under the leadership of Erik the Red, who created one of the first baldly dishonest marketing campaigns in history. Calling the island “Greenland,” he thought, would attract European settlers—even though it is almost entirely cov-

About 66 percent of employed Greenlanders work for the state or its companies.

ered with a massive ice sheet, and nearby Iceland is quite a bit more hospitable. The Norse thrived for some time with hunting and subsistence agriculture, but by the mid-1400s, they too fled for, er, greener pastures, or died.

Clearly Greenland is a tough place to scrape out an existence. From the menacing tooth-like peak of Sermitsiaq mountain to the trackless immensity of the 700,000 cubic miles of the Greenland ice sheet, it’s not the coziest spot on Earth. Yet the capital city of Nuuk, with about 20,000 residents, has some attractive features, like the 170-yearold Nuuk Cathedral and the rather good national history museum.

One day, I trekked 20 miles up to the peak of the nearby mountain Kuanninnguit and around the Qallussuaq reservoir, listening to a grisly history of the Greenlandic Norse. It was about the nicest weather Greenland ever gets—which is to say, sunny in the high 50s—and even then, the mosquito swarms were utterly relentless. I managed to avoid many bites, but I probably swallowed at least two dozen of them.

Modern Greenland’s history starts with the Thule people, ancestors of modern Greenlandic Inuit, who arrived in the 1300s. With their development of dogsleds, harpoons, and highly insulated clothing, they managed to survive. To this day, about 90 percent of the population is Inuit.

Denmark-Norway (then part of a single kingdom) maintained a claim to Greenland through the 1700s, despite the fact that no European lived there for almost 300 years, and established the Royal Greenland Trading Department, which governed Greenland as a colony and directly ran its economy, with the usual panoply of imperialist abuses. Greenlanders were exploited with unfair terms of trade—prevented from trading with other nations, charged outrageous markups on imports, ripped off on their export prices, and so on.

When Denmark and Norway split in

1814, Denmark got the Atlantic colonies. It controlled Greenland until the Second World War, when Denmark was occupied by the Nazis and Greenland was briefly a de facto American protectorate. After the war, with imperialism in distinctly bad odor, Greenland was changed into a formal part of Denmark, complete with representatives in parliament.

In the 1950s and ’60s, the Danish government attempted to “modernize” the island, with mixed results. Infrastructure and health care were drastically improved, and Greenland’s government got a large ongoing subsidy. But Danish authorities also undertook a paternalistic campaign to make Greenlanders behave like Europeans.

The population was pressured to abandon the migratory hunter lifestyle that had sustained them for over 600 years and settle in cities. Little effort was paid to the transition, leading to the usual problems of despair, alcoholism, and domestic violence, as seen on many American Indian reservations. Danish doctors even conducted a campaign to put IUDs in Inuit women and girls, sometimes without their consent or knowledge, which became a massive scandal when it was fully uncovered by Danish media in 2022.

As a likely consequence, to this day Greenland has a chronic problem of relatively low labor force participation. Though unemployment is a rock-bottom 2.7 percent as of the end of 2023, “there is quite a large amount of people outside of the workforce,” said Anders Blaabjerg, an economist at Statistics Greenland.

Greenlanders naturally wanted more autonomy, and petitioned for home rule, which was granted in 1979. And contrary to JD Vance’s slurs against Denmark, since then it has, by and large, attempted to do right by Greenland. In contrast to most former Belgian, British, French, German, Spanish, Portuguese, or Russian colonies— particularly nonwhite ones—Denmark has granted Greenlanders the vote, provided immense funding for infrastructure and services, and made it clear that if they wish, they can declare independence. The idea that the Trump administration would do better is preposterous—witness the appalling mistreatment of the extant American colony of Puerto Rico, which has no votes in Congress and has still not recovered from Hurricane Maria in 2017.

No doubt things could be better. But the fact of a European nation maintaining a reasonably decent, cordial, and mutually beneficial relationship with a former colony that is 90 percent nonwhite is practically unique in world history. And Greenland’s vote is not meaningless—in the 2022 Danish elections, the winning center-left coalition got over the line thanks to lefty parties winning three seats in Greenland and the Faroe Islands.

The main motivation for home rule was to protect Greenland’s fish. Residents worried that if they were part of the European Union trading bloc, highly efficient foreign fishing companies would sweep in and clean out the local stocks, leaving Greenlanders with nothing and taking all the profits for themselves. So it left the European Economic Community in 1985.

This fits well with Nordic traditions— Norway also claimed collective ownership of North Sea oil reserves when they were discovered in the 1960s—but also with Inuit views. Like many migratory peoples, the Inuit have traditionally found the idea of private ownership of natural resources odd and unfair. Surely the Earth’s bounty should be broadly shared with the entire community, as they have for thousands of years. Hence Greenland’s prohibition on private ownership of land, which can only be leased from the government, and hence the reliance on public companies.

Remarkably, the Royal Greenland Trading Department persisted until the homerule period; when it was reformed and split up in the mid-1980s, it formed the nucleus of the state-owned sector. Royal Greenland, Royal Arctic Line, and KNI are all direct descendants of that ancient colonial institution.

Fishing is by far the most important industry for Greenland, accounting for over 95 percent of its exports, which mostly go to Denmark , and thence to China and Europe. This foothold in Asia took years of research and market development to build up.

Maliina Abelsen, Royal Greenland’s chairwoman of the board—Greenland’s public companies are organized like ordinary private ones, to provide something of an arm’s-length relationship to the state— explained that as a public company, it has certain obligations in addition to turning a profit. To protect the livelihoods of dispersed settlements, it runs some money-

losing factories and processing facilities in these areas that are cross-subsidized by the profitable operations. “We are sometimes the only workplace in a small community and people rely on us in the small villages. It’s a place where they can fish and then they can sell the fish to us, or whatever they are catching,” she said. “So for them, it’s like a live nerve that goes through the whole country.”

Something similar holds for Royal Arctic Line, which charges the same price for shipping even to dispersed settlements, and KNI , which subsidizes retail prices for them as well. It is a costly trade-off, to be sure, but Greenland’s government has decided it is worth it.

If Royal Greenland were ever to be fully privatized, the new owner would immediately close all its unprofitable facilities, likely destroying many settlements. They also might try to overfish for short-term profit, or it might be bought by a private equity company and driven into the ground—or I should say sea.

In short, these companies are basically too big or important to fail, and Greenland’s internal market is too small to rely on entrepreneurs or foreigners to step in if they do. But unlike the American approach to such critical companies—like when the big banks blew themselves up in 2008 betting on subprime mortgages, and in response got a $700 billion bailout, with prosecutors looking the other way at the thousands of crimes committed before, during, and after the crisis—Greenland’s government takes direct responsibility. If a company cannot be allowed to fail, better to face that fact and run it directly, with the inevitable business problems that crop up under open public scrutiny.

Indeed, Greenland learned this the hard way. As Birger Poppel, an emeritus professor of economics at the University of Greenland told me, in the early 2000s the government attempted to privatize the state-owned ferry service Arctic Umiaq Line, and sure enough the new foreign owner, in an attempt to lower costs, immediately ceased several routes to small settlements, virtually cutting them off from contact in the process. “It was privatized, and within a year, it totally failed and flopped out, so the government bought it back for one krone,” he said. It took a lot of money to get it going again, though the state did not restore all the canceled services, alas. Greenland’s public companies have more or less the same relationship with the local

unions as private companies do, with the usual Nordic tradition of nearly universal contract coverage. Even when hiring outside contractors for big infrastructure projects (as there are not nearly enough workers to construct a hydroelectric dam), companies are required to follow Greenlandic law about unions, pay, and working conditions.

“Overall, the relationships between the organizations and the unions is very good,” said Christian Keldsen, the director of the Greenland Business Association, which actually has some of the government companies as members. “It’s very important for us that we have proper working conditions, proper salaries, obviously remain competitive, but not necessarily at the cost of the welfare of our employees.”

Jess Berthelsen, who has been chairman of SIK (Greenland’s largest labor union) for 33 years, was less enthusiastic. Both private and government companies are “equally bad,” he said sardonically—and sometimes, he said, the private companies are actually easier to deal with. Still, this is by Nordic standards, where labor rights are taken for granted. Any American union would kill to have Berthelsen’s issues.

Greenland’s reliance on fish might sound rather risky, and it is. The local stocks of cod, halibut, shrimp, and so on have collapsed before, and are likely to do so again with climate change hitting the far north especially hard. But Greenlanders are quite aware of this. “Fish in the whole world are not increasing,” Berthelsen said, and Greenland is no exception.

Greenland’s large stock of mineral resources has been the subject of wide discussion—some think that it may be why Trump wants to steal the country—but sources told me that its location makes this idea dubious. Almost all the mapped deposits are far from any settlements, so companies would have to construct ports, roads, power facilities, and much else before they could even start production, in locations that can routinely reach minus 40 degrees and whose surrounding waters are regularly choked with ice. After decades of effort, just two mines are currently in operation.

“The short story is that many things have been attempted and explored and so on,” economist Torben Andersen, who is also co-chair of the Greenland Economic Council, told me. “There has not been a business case for these mines.” Surely some could be

Greenland’s electricity is already mostly hydropower, but its theoretical generation capacity is practically infinite.

built, but it will be a tall order to compete with other sources.

That’s why the government, and the leaders of its public companies, are thinking about electricity. Nearby Iceland has become arguably the world’s first electro-state through a massive build-out of geothermal and hydroelectric power. It generated almost 50,000 kilowatt-hours per person in 2024—more than four times as much as America—and has leveraged that to gain a major foothold in aluminum production. This tiny nation of just 364,000 people produces more aluminum than the entire United States.

Greenland’s electricity is already mostly hydropower, with one smallish dam connected to Nuuk, complete with the largest unsupported span of high-voltage transmission lines in the world. But its theoretical generation capacity is practically infinite. With more than 27,000 miles of coastline containing dozens of glacial-fed rivers draining into deep canyons, plus extensive fjord networks ideal for tidal generation, plus consistent high winds ideal for wind power, Greenland could be a zero-carbon electricity powerhouse.

Building aluminum or steel smelters, or data centers, or other power-hungry businesses would also require a lot of additional investment in port facilities and such, but quite a bit less than mining operations (as they could be sited near existing settlements), and with much less environmental damage. The potential payoff is huge.

Plans for an electric build-out are already in development. “We regularly meet with the energy department … and we have discussions on what is the strategy that they would like to see played out,”

Royal

Greenland, the state-owned fishing company, is Greenland’s largest employer.

CEO Aviaaja Knudsen told me. To that end, a large expansion of hydro near Nuuk is in the planning stages, with another planned to the north.

“Now we’re tendering out the expansion of the hydro power plant here for the capital—actually an additional new hydropower plant we’re going to build in the future, some 30 miles from the capital near the existing one,” she said. The project “is going to be the biggest construction project ever in Greenland, bigger than the airports.” A somewhat smaller hydro project is in the works to the north near Disko Bay.

This was a consistent theme in my interviews: the professional, yet justiceinformed, approach taken by the government toward its companies. It wants them to succeed in the market, but in a way that benefits workers, consumers, and Greenland as a whole. And it wants them to invest in a way to create broadly shared prosperity.

That is not to say that mistakes are never made. Greenland recently constructed three different new airports simultaneously, and some critics argued the locations were ill-chosen. One under construction near Qaqortoq in the south will like -

ly have “every fourth [flight] on average arrival redirected or canceled,” said Poppel, because of wind and fog. Businessmen have also complained that Royal Arctic Line is not living up to its expectations.

And it’s important to note that a big chunk of Greenland’s wealth comes from Danish subsidies. Denmark provides a block grant that funds about half of the government budget, plus additional funding for services like police and courts. It all adds up to about $600 million, or about 18 percent of Greenland’s total economy.

Still, one can’t argue with the overall results. Back in 1975, Greenland’s per capita GDP in current U.S. dollars was about $4,300, while Denmark’s was 87 percent higher at about $8,000. As of 2023, those figures were $58,500 and $68,500, respectively, meaning Greenland has become almost 14 times richer over the last 50 years and closed most of the gap with Denmark.

It would be silly to conclude that Greenland’s semi-socialized economy provides a perfect blueprint for a large, rich country like the United States. Most obviously, America lacks the punishing climate,

remote location, and small population that has forced Greenland to protect and nourish its stateowned companies. There isn’t any need to create, say, a public fishing company here.

Yet I still think Greenland teaches some important lessons. The first is what government can achieve with a lot of effort and integrity. This is a place with immense disadvantages—a grueling geography, a tiny population spread out over a tremendous area, and a colonial legacy that in almost every other circumstance has led to poverty and corruption. Yes, it does get a massive Danish subsidy, but that doesn’t guarantee a rich standard of living. A lot of nations around the world have lucked into a ton of money from oil, diamonds, or other resources, only to see it disappear into a vacuum of waste and corruption. Another way of saying that about a fifth of Greenland’s economy is provided by Denmark is that four-fifths of it is not provided by Denmark. That Greenland has thrived was not at all guaranteed and took decades of grinding effort to achieve.

It isn’t always talked about, but America does have some public institutions that operate similarly to Greenland’s. Both the U.S. Postal Service and Amtrak are public companies operating on a cross-subsidy model, where profitable parts of the business fund unprofitable ones so the whole country can (theoretically) enjoy good service. The model works, but these particular institutions are just chronically neglected. State capacity and technical expertise are absolutely vital for any kind of leftist project, whether it’s publicly owned companies, a full-dress welfare state, businesses regulated in the name of the public good, or anything else. It’s all well and good for intellectuals to write up treatises about how a just economy should be run—societies do need those for inspiration and guidance—but when it comes to actually building that economy, one needs scientists, engineers, and above all honest politicians and bureaucrats. If Greenlanders can do it, clinging precariously to the edge of the world’s second-largest ice sheet, then Americans can too. n

Can Resistance Succeed?

The more authoritarian Trump becomes, the more he provokes effective opposition.

By Robert Kuttner

AAs summer came to a close, Donald Trump’s attempts at outright dictatorship became more explicit and aggressive, and his delusions of omnipotence more grandiose. A complete list would consume all of the space for this article, and more. The slide to one-man rule makes effective resistance all the more urgent, if democracy is to survive. But what sort of resistance?

“In 2025, no form of creative nonviolent resistance is wasted,” Rep. Jamie Raskin (D-MD) told

me. “Everything that builds solidarity and spirit is helpful.” It may be hard to see the impact amid a maelstrom, but individual acts of resistance can collectively make a difference. You never know what might cause the dam to suddenly break and more effective opposition to crystalize in unlikely places.

For instance, several Republicans who had not been willing to publicly oppose Trump on tariffs, Ukraine, bogus declarations of emergency, destruction of valued public institutions,

Resistance Succeed?

or budget cuts that hurt their constituents frontally opposed Trump in demanding the release of the Jeffrey Epstein documents. The Epstein pressure, seeded in the MAGA grass roots but quickly picked up by Democrats, was catalytic; it led Trump to make outlandish moves and claims in a frantic effort to change the subject, which in turn invited more opposition.

My survey of resistance, broadly defined, suggests that effective opposition often involves bank shots. Citizens can press elected officials to pressure or block Trump and promote noncooperation by state and local government. Broad protests like No Kings Day can demonstrate wide opposition to autocracy and recruit people for more targeted actions. Trump may be impervious to evidence, but publicity of his economic damage can give voters second thoughts. By spotlighting and disrupting Trump’s brutal immigrant kidnappings, activists can recruit more activists and deprive Trump of what was once a winning political issue. Relentless litigation can shame even pro-Trump judges into sometimes doing the right thing.

Battling in the Courts

One of the most formidable forms of resistance is the coalition of public-interest

groups, Democratic state attorneys general, cities, states, and trade unions that has filed lawsuits. The group Just Security has tabulated 384 cases filed through August 28. Some 130 have led to court orders blocking at least part of Trump’s moves, and another 148 cases are pending.

During Labor Day week alone, the U.S. Court of Appeals for the Federal Circuit held, 7-4, that Trump’s claim of emergency powers to take over tariff policy is illegal; lower courts intensified their blockage of the administration’s attempted deportation of immigrants in violation of due process rights; and a federal district judge in San Francisco found that Trump’s deployment of National Guard troops to Los Angeles was illegal under the Posse Comitatus Act. The administration will appeal all of these to the Supreme Court.

Thus far, the Supreme Court has relied on the “shadow docket” to quickly approve administration requests for emergency stays while ducking the underlying constitutional questions, to buy time for itself and for Trump. But that string is being played out.

Key pending decisions are binary. Either birthright citizenship is clearly mandated by the 14th Amendment, or it isn’t. Either presidential usurpation of congressional

authority on tariff policy is permissible, or it isn’t. Either Trump has the right to fire Fed governor Lisa Cook based on his own definition of cause, or he doesn’t. The fact that the charge against Cook of mortgage falsification turns out to be fake doesn’t help Trump’s case. Which way will the Court go?

The old saw, articulated by humorist Finley Peter Dunne’s fictional character Mr. Dooley, that “the Supreme Court follows the election results,” is still true. More to the point, the Supreme Court follows polls. As they keep empowering Trump’s lunacy, the justices have reason to be concerned about the Court’s own credibility. In particular, the two swing votes, Chief Justice John Roberts and Justice Amy Coney Barrett, could conclude that enough is enough. It’s one thing when the Court issues theoretical defenses of the unitary executive; it’s another when the unitary executive turns out to be a megalomaniac.

The Road to 2026

The most effective form of resistance is taking back power. As veteran organizer Michael Ansara puts it, “We are in a race between organizing to take at least one House [of Congress] and Trump’s efforts to nullify the election.”

As Trump’s own popularity plummets and budget cuts begin to bite, the 2026 election is unnerving the House leadership and Republican incumbents in swing districts. Trump has been repeatedly warned that he could lose the House. But Trump’s strategy has been to cut loose blue- and purplestate Republicans, and make up for that loss with extreme gerrymandering and other election-rigging schemes. This approach does not endear him to vulnerable Republican incumbents whose votes he will need in the future.

Rep. Raskin says, “People imagine that Trump will flip a switch and turn off the election. That’s not how it works.” Rather, Trump and his allies will use a variety of tactics, including extreme gerrymanders, attempts to limit mail-in ballots, intensified voter suppression and intimidation, and the final destruction of the Voting Rights Act. All of this will be contested in courts and on the ground, to prevent electoral death by a thousand cuts.

Trump has repeatedly asserted the right of the president to take over state and local elections, but even this Supreme Court may object. The Constitution is clear, in Article I, Section 4, that Congress shall specify “ the times, places and manner of holding elections for Senators and Representatives ,” with actual election administration carried out by states and localities. The president has no constitutional role whatsoever.

Nonetheless, Trump’s executive order of March 25 directed the Election Assistance Commission to require voters in federal elections to produce a passport or other document proving citizenship. It also tried to rescind prior certifications of voting equipment, and have the Department of Homeland Security seize state voter files. In April, district court Judge Colleen Kollar-Kotelly issued an injunction enjoining federal agencies from carrying out most of Trump’s order. That injunction is still in force. Trump repeated the threat in late August.

To power electoral organizing, Democrats will rely on grassroots energy that dates back to the first Trump term.

The great gerrymander caper may turn out to be an affront to democracy but not decisive electorally. If California voters approve an offset to Texas’s theft of up to five House seats, most tallies suggest that the net Republican gain from gerrymandering would be no more than four to eight seats nationally. Republicans in some states such as Indiana have resisted. The gain could be even less if gerrymanders play too cute and don’t leave enough Republican voters in presumed safe seats.

In Texas, where Hispanic voters shifted heavily to Trump in 2024, four of the five newly gerrymandered seats have Hispanic majorities. As the Texas economy weakens, relatively recent Hispanic support for Republicans could erode.

In 2018, Democrats made a net gain of 41 House seats. Because of intensified voter suppression in red states in 2026, they will need nearly all of their pickups in blue or purple states, but there are more than enough target districts to flip the House if organizing is strong and people are motivated to vote.

To power this electoral organizing, Democrats will rely on grassroots energy that dates back to the first Trump term. The Women’s Marches of January 2017 led to the formation of groups such as Indivisible and Run for Something, which engaged millions of citizens. They not only took back the House in 2018 and the Senate in 2020, but revived a permanent organizing culture.

Indivisible famously began with the posting of a 23-page handbook of strategies for resisting Trump, modeled in part on the right-wing Tea Parties. The authors were a Capitol Hill couple, Ezra Levin and Leah Greenberg, who worked, respectively, for two progressive congressmen, Lloyd Doggett of Texas and Tom Perriello of Virginia. The handbook went viral. Indivisible groups helped flip the House in 2018. Today, there are upwards of 2,000 local Indivisible groups, and new ones are formed every month. Levin and Greenberg host twiceweekly Zoom discussions on resistance opportunities that typically draw upwards of 10,000 people. Indivisible, Swing Left, Sister District, and other grassroots mobilizations will be active in the midterms.

The Damage of Dysfunctional Democrats

There has been a good deal of commentary on the anomaly of dwindling public approval for Trump not translating into support for Democrats. The deeper story is worth unpacking. It’s certainly true, as

commentators keep repeating, that “the Democratic brand is damaged.”

The evidence includes a widely quoted Wall Street Journal poll from late July, which found that 63 percent of voters hold an unfavorable view of the Democratic Party—the highest share in Journal polls going back to 1990, and 30 percentage points higher than those who hold a favorable view. Even though Trump is disapproved by double digits, his approval rating and that of the Republican Party are well above that of the Democrats. A New York Times deep dive into voter registration statistics in 30 states found that Democrats lost about 2.1 million registered voters between the 2020 and 2024 elections, while Republicans gained 2.4 million.

What’s really happening here? First, the wave election of 2018 was built on massive organizing and a large increase in Democratic turnout, especially among the young, all energized by opposition to the first Trump presidency. But in 2024, due to the fiasco of President Biden’s dwindling cognition and late withdrawal, followed by Kamala Harris’s weak performance, the mobilization pattern reversed. Democratic turnout declined by more than six million votes. A July 2025 poll by Celinda Lake found that nonvoters would have voted for Harris by a margin of 2-to-1, if they had been motivated to vote at all.

Second, party elites alienate the potential base. The influence of Israel-right-orwrong donors turns off innumerable young people disgusted by the ethnic cleansing in Gaza. The parallel influence of Democrats beholden to crypto and other corporate special interests blurs the Democrats’ identity as the party of working people. Both splits signal a party divided against itself.

Yet a damaged national Democratic brand doesn’t hurt local candidates who run effective campaigns. In late August, Democrat Catelin Drey won a special election for the Iowa state Senate by 10.4 points, flipping a seat in a Sioux City district that Trump won by 11.5 points in 2024 and ending a Republican supermajority. This follows Democrat Mike Zimmer’s Iowa state Senate pickup in January, flipping a district that Trump carried by 21 points. And in another special election in March for Pennsylvania’s state Senate District 36, Democrat James Malone won in a district that Trump carried by 15 points. And in Virginia’s 11th Congressional District, Democrat James Walkinshaw won a recent special

election by just under 50 points, 16 better than Harris did in 2024, exactly the average by which Democrats have performed better in special elections in 2025 than Harris did against Trump in 2024, according to analysis by The Downballot.

In 2026, there will be no candidate at the top of the ticket to drain funds and perhaps drain support. As in 2018, the motivating forces will be resistance to Trump and the declining economic prospects of regular Americans. All politics will be local, though the consequences will be national.

In Maine, oysterman Graham Platner, running to defeat Susan Collins, is emphasizing working-class values on cultural issues but is very much a populist on economics. That strategy helped mechanic and union leader Dan Osborn run 13 points ahead of Harris in his 2024 Senate race in Nebraska against Sen. Deb Fischer, which he lost by six points. Osborn is running again, against Nebraska’s other incumbent, Pete Ricketts, in 2026. In fusion states and others where the Working Families Party is active, candidates can have it both ways, and run both as Democrats and as third-party candidates.

The old assumption was the WFP strategy could work only in the two fusion states, New York and Connecticut, where more than one party can endorse the same candidate on its own ballot line. And it’s true that the WFP performed well in New York City primaries in June, where all its endorsed candidates were elected. But lately, the WFP has devised ways to be effective in nonfusion states like Pennsylvania, where it mobilized citizens in 2023 to elect two WFP-only candidates to the Philadelphia City Council who have been effective in displacing Republicans and pushing Democrats to the left. The WFP is now operating in more than a dozen other nonfusion states, bringing activists who are skeptical of establishment Democrats into politics.

The Mamdani Paradox

The most vivid case of a candidate connecting with voters based on a powerful local appeal is Zohran Mamdani. The damaged Democratic brand did not dissuade some 50,000 New Yorkers from knocking on about a million doors and organizing their friends and neighbors via social media. Though Mamdani is a democratic socialist, his core theme— that ordinary people can’t afford to live—is available to the entire range of Democrats. Mamdani’s youth is one cure for the other

widely repeated knock on Democrats, that their party is a gerontocracy. Yet the trouble with Democratic Senate leader Chuck Schumer is not his age (74); it’s that he is in bed with the party’s corporate and AIPAC donors. Likewise the Democrats’ House leader, Hakeem Jeffries, who is a youthful 55. The party’s most beloved progressive leaders, Bernie Sanders, at 84, and Elizabeth Warren, at 76, are older than Schumer. But the party does need an infusion of candidates who are both youthful and progressive.

If Mamdani is elected mayor, New York City becomes ground zero for testing how far Trump will go to destroy a political opponent and what means a city has to resist. Trump has literally said that he will take over New York City’s government. He can’t do that, but there are perfectly legal ways to make it more difficult for Mamdani to govern.

Of New York’s total operating budget of $116 billion, about 6.4 percent comes from Washington this fiscal year. According to the office of City Comptroller Brad Lander, if you add capital grants and other categories of spending that don’t flow through the city’s operating budget, such as Medicaid, federally subsidized public housing, and funds from the Inflation Reduction Act (IRA) for cleanup and repair after Superstorm Sandy, New York’s total reliance on federal funding is several times that. With Mayor Eric Adams as a Trump ally, that’s down only slightly from last year, but Trump could add further cuts without breaking the law.

The courts have constrained Trump’s retaliatory cutoffs of federal funds, but ordinary spending cuts hit New York disproportionately. Over half a million New Yorkers live in either traditional public housing or Section 8 voucher housing. HUD grants to New York total about $4.35 billion a year. And 35 percent of New Yorkers get their health care through Medicaid. In the 12 months ending June 2024, before the Trump Medicaid cuts, about $32 billion in federal Medicaid and other funding for lowincome health programs flowed into New York. The city is also disproportionately reliant on public transit, another federally subsidized area not in the operating budget.

Quite apart from his extreme hostility to Mamdani, Trump wants to cut both public housing and public transit, while Mamdani has pledged to increase public support for both. Increased funding from the state can help, as can higher taxes on the rich, but

The damaged Democratic brand did not dissuade some 50,000 New Yorkers from knocking on about a million doors for Zohran Mamdani.

Trump must have staffers staying up nights thinking of new ways to screw New York.

In late August, Trump signed an executive order denying federal funds to states and cities, such as New York, that have enacted “cashless bail” options for judges. Trump contends that letting minor offenders free without bail has increased crime. Whether Trump is right or wrong on the facts, this is one of innumerable gray areas where Trump may be able to legally deny New York and other progressive cities federal funds.

Neither Schumer nor Jeffries, both New Yorkers, has endorsed Mamdani. This is likely largely the result of pressure from donors. But assuming that Mamdani gets elected, they will need to defend fellow New Yorkers from crippling budget cuts, regardless of who is the mayor.

As for Trump taking over the governing of New York, the foray of the National Guard into Washington, D.C., is seen as a dry run. But D.C. is a special case, because presidents have explicit authority to commandeer the District’s police department, at least for a short period. It is neither practical nor legal for the National Guard or the Army to literally occupy and govern New York.

While New York’s likely next mayor may be controversial in some precincts of the city, New Yorkers will rally around a Mamdani besieged by Trump. One senior Mamdani adviser told me, “The more it feels like Trump vs. NYC, the more it will feel like New Yorkers are coming together to resist an authoritarian takeover.”

Chasing Off the Guard

On June 9, after four days of protests, Trump and Defense Secretary Pete Hegseth ordered the deployment of 700 Marines and some 4,000 National Guard troops into Los Angeles. They mainly stood outside two federal buildings, one downtown and one on

the Westside. Troops also briefly occupied MacArthur Park, in a heavily Latino neighborhood, in a performative, symbolic show of force. There were no arrests.

After a month of organizing and protest from an ordinarily indifferent citizenry, on July 21, all the Marines and about half the National Guard troops were ordered withdrawn. Today, only about 300 remain, further constrained by the courts. Afterward, Pentagon spokesman Sean Parnell said the military presence had “sent a clear message: lawlessness will not be tolerated.” But that was hot air. The occupation accomplished nothing other than to fuel lawful resistance. Trump looked more impotent than all-powerful.

Trump’s attempted takeover of D.C. increasingly looks silly. The main effect has been to depress tourism. In late August, prime visiting season, the National Mall was mostly empty. National Guard troops were seen clearing trash, spreading mulch at the Tidal Basin, and standing around near Union Station. Though the White

House has more direct authority over D.C. than other cities, litigation by city Attorney General Brian Schwalb led the Justice Department to back off illegal demands to assume direct control over the D.C. police. National Guard troops and federal agents from the Justice Department are primarily performing low-level policing actions such as traffic stops and arrests for smoking pot in public, as well as gun permit violations. About 2,000 such arrests were made during the first month of Trump’s intervention, with no significant impact on D.C.’s already low rate of serious crimes. The public has increasingly rejected the use of military troops on American soil, and D.C. residents have engaged in similar tactics as in L.A., including local challenges to ICE raids and mass protest.

Two Democratic governors have stepped to the fore of the resistance: California’s Gavin Newsom and Illinois’s JB Pritzker. Newsom has found a way to do it with ridicule, imitating Trump’s childish ALL CAPS social media posts and lampooning Trump’s

claims of infallibility. This clearly gets under Trump’s skin and upstages his own act.

Pritzker has used real constitutional eloquence. Even before a federal judge ruled that Trump’s dispatching the National Guard to L.A. was illegal, Trump held a narcissistic, staged-for-TV cabinet meeting. He requested that Pritzker request federal troops for Chicago—an unintended admission that Trump lacks the authority to do it over the governor’s objection. At a hastily called news conference, Pritzker punched back: “Mr. President, do not come to Chicago. You are neither wanted here nor needed here. Your remarks about this effort over the last several weeks have betrayed a continuing slip in your mental faculties and are not fit for the auspicious office that you occupy.”

By early September, Trump was reduced to seething. “We could straighten out Chicago,” he told reporters. “All they have to do is ask us.” Trump then said he might send troops to Louisiana instead, where they’d be welcome, and he later pivoted to Memphis. Resistance can work.

Reviving a Permanent Culture of Organizing

I once wrote a piece for the Prospect titled “Tocqueville for Toffs.” In Democracy in America , I noted, Tocqueville “famously identified ‘the art of association’ as an essential complement to American constitutional democracy.” Associations “breathed civic life into formally democratic institutions of government … ‘Americans of all ages, all stations of life … are forever forming associations,’ he wrote admiringly.”

But today, that no longer describes Americans of “all stations of life.” Of the top-spending trade associations or issue organizations, the U.S. Chamber of Commerce leads the list with a lobbying budget of $76 million. Only one pseudo-liberal group, AARP, is even in the top 20.

The labor movement, the center of a permanent organizing culture, represents a smaller percentage of workers than it did in the mid-1930s before the Wagner Act. While there has been a great deal of talk about long-term relational organizing and “deep canvassing,” a lot of it is just talk. In the absence of a strong labor movement, there are few lifetime career paths for organizers. A great deal of what passes for organizing is the ad hoc efforts of conventional electoral campaigns, in which door-knocking often gets crowded out by social media, phone-

banking, and paid ads that leave little trace once the campaign is over. Far too much of the money gets consumed by campaign professionals who in turn rely too heavily on TV spots that generate commissions for them and engage too few voters.

Yet resistance to Trump in all its forms can energize citizen organizing. Fighting Trump can reverse the trend of citizenship giving way to consumption, and democracy itself becoming just another market, as political money crowds out speech.

“There will never be enough professional organizers,” says Maurice Mitchell, who heads the Working Families Party. Everything in effective small-d democratic life, from school board elections to collective bargaining, is built mainly on amateur organizing. Without that kind of organizing, economic elites win.

The biggest and most formidable citizen organizing of Trump’s second term is the 50501 movement. 50501 stands for 50 states, 50 protests, one movement. Beginning mostly on social media, the movement helped organize the massive No Kings rallies in June, when millions of people came out to protest Trump across the country. Another mobilization is set for October 18. The No Kings coalition includes Indivisible, bringing an electoral component and a popular front to weaken the Trump regime.

A vexing question is the connection between organizing in the usual sense of mobilizing citizens to hold protests, advance issues, form unions, or elect leaders, and the kind of organizing needed to resist dictatorship. The latter sort of organizing looks more like civil disobedience, but using that to restrain a president eager for pretexts for mass arrests requires careful thought.

Gandhi’s passive resistance could work against the British because the British Raj, despite its brutality in India, was an embryonic liberal democracy at home. Gandhi’s tactics would have been crushed had they been tried against Hitler, Stalin, or Mao.

Civil disobedience was central to the successful civil rights movement of the late 1950s and 1960s. The freedom rides, sitins, and marches in the segregated South all deliberately broke local laws that were denying Black Americans their rights. But Dr. King and the other activists of the era had the federal government and the courts as allies, first gingerly, then wholeheartedly. Today, the entire federal machinery is

Alligator Alcatraz and other ICE detention crackdowns have been a magnet for citizen resistance and organizing.

being wielded to deny rights, sometimes in concert with far-right state governments.

So if protesters organize civil disobedience, they are likely to suffer the consequences. At the same time, there are useful gray areas where organized citizens can disrupt Trump’s incipient dictatorship without explicitly breaking the law.

The Slippery Case of ICE

The emblematic arena of citizen resistance is disruption of Trump’s brutal crackdown on immigrants. In Massachusetts, a broad and decentralized coalition, loosely coordinated through a statewide group called LUCE , does everything from organizing neighborhood watch systems, providing lawyers to immigrants, training community groups, finding stand-by guardians in cases where parents are at risk of abrupt removal, publicizing abuses, harassing local ICE offices, lobbying for state and city noncooperation laws, and in some cases working with clergy to give sanctuary to immigrants at risk of arrest.

Similar networks operate in other localities, like Los Angeles, where defiance came in many forms. ICE watch groups swarmed attempted detentions, including one at Dodger Stadium, filming and agitating and forcing agents into retreat. Citizens-turned-

The citizen movement against ICE also includes going after corporations that contract with ICE.

activists handed out red cards so immigrants knew their rights. Others learned which hotels ICE agents were staying at, and held noisy all-night rallies outside their windows.

The Los Angeles Unified School District adopted an explicit policy of treating schools as ICE-free zones of safety. In one case, apparently unrelated to Trump’s national strategy, four local investigators from the Department of Homeland Security showed up at two South Los Angeles elementary schools, Russell Elementary and Lillian Street Elementary. They asked to conduct “wellness checks” on five allegedly undocumented students. The two principals demanded to see a warrant, which they could not produce, and both refused to let them in. There were no further attempts.

In Rochester, New York, in early September, a crowd of about 200 surrounded

an ICE vehicle. They prevented ICE officials from arresting two allegedly illegal-migrant roofers. While they were attempting to get to the roof, someone slashed the tires. The vehicle limped away, and was towed. There were no arrests. Rochester expanded its role as a sanctuary city in August.

The citizen movement against ICE also includes going after corporations that contract with ICE . Ground Avelo is aimed at the small airline, Avelo, that has a contract with ICE to transport detainees to ICE concentration camps. Activities include signing a pledge to boycott the airlines, holding protests at airports, and pressuring state and local governments and universities to join the boycott. Avelo’s East Coast hub is New Haven’s small airport. Recently, New Haven prohibited city employees from using the airline, and Avelo also closed its West Coast hub at Hollywood Burbank Airport. Intensified removal of immigrants is one of the few areas of Trump’s drive to autocracy where the law is basically on his side, even though he often breaks the law by picking up legal residents and depriving immigrants of due process. There are as many as 14 million migrants in the U.S. illegally. The left has long taken care to use the euphemism “undocumented,” as a reminder that they are also human beings.

But the hard fact is that they have far fewer rights than citizens or legal residents.

White House officials have given ICE a daily quota of 3,000 arrests. While ICE has not met that quota, the numbers are increasing ominously. As of August 10, there were 59,380 people in ICE detention, and 31,282 people were booked into ICE detention in July alone. Armed with a mountain of money from Trump’s Big Beautiful Bill, the administration is offering signing bonuses for new ICE recruits, and has detailed people from other federal agencies to ICE

Even so, the effort to disrupt ICE and defend immigrants has engaged large numbers of Americans, strengthened alliances between citizen groups and local governments, and slowed the process of deportations that deny due process. This strategy has also dramatically shifted public opinion. According to a Quinnipiac poll in June, a majority of Americans disapproved of the activities of ICE by 17 points, and more than two-thirds support giving most undocumented immigrants a path to citizenship—a dramatic shift from 2024.

Some 17 states, including New York, California, Illinois, and Massachusetts, and dozens of municipalities have passed sanctuary laws denying Trump the cooperation of local law enforcement. These efforts on the whole are popular. In mid-August, Attorney General Pam Bondi sent out a letter threatening “sanctuary cities” with a cutoff of federal funds. None caved.

In Boston, Mayor Michelle Wu, up for re-election this fall, gave a news conference rejecting federal demands, which turned into an anti-Trump rally. White House Deputy Chief of Staff Stephen Miller then told Fox News that Boston will now “face not only revocation of funds, not only the loss of taxpayer support, but also potential criminal charges for harboring and smuggling.”

Good luck to that. The courts have repeatedly overturned denial of federal funds intended as retribution. Long-standing judicial precedent relies on the Tenth Amendment, which holds that powers not expressly delegated to the federal government are reserved to the states. The related “anti-commandeering doctrine” allows states to refuse cooperation with federal law enforcement.

The press is filled with accounts of ICE swooping in and breaking up families, often with extreme cruelty. But the cruelty is the whole point. The administration hopes that

the publicity will encourage undocumented migrants to “self-deport.” But brutal kidnappings, evocative of the Gestapo, are monumentally unpopular, and part of the general downdraft on Trump’s approval ratings.

College Resistance

In the first several months of his administration, Trump’s strategy of shaking down institutions that thwarted many of his actions in his first term worked all too well. Media corporations owned by conglomerates or billionaires facing regulatory decisions caved in to Trump’s demands. Corporate law firms, subjected to gross extortion demands, judged it cheaper to pay tribute to Trump than to risk lucrative client business.

These preemptive surrenders backfired in several instances. Media outlets like Jeff Bezos’s Washington Post lost several key writers, a large amount of readership, and hundreds of thousands of subscribers, while law firms that played ball lost outraged partners and outraged clients. Those law firms that refused Trump’s demands and took him to court suffered no losses.

Big universities have followed this pattern. Even before Trump brought down the hammer with withdrawal of federal research grants, denial of visas to foreign students, threats to accreditation and tax status, and demands to review applications and admissions, several universities engaged in anticipatory appeasement. Columbia changed its own policies to redefine antisemitism to Trump’s liking, fire faculty for their views, and constrain free speech on campus. In the eventual settlement, in July, Columbia paid the federal government a $200 million fine, a number invented from whole cloth. In return, Trump agreed to restore frozen federal funding totaling as much as $1.3 billion. But as numerous critics pointed out, there was nothing in the deal to prevent Trump from upping the ante with new extortion demands.

By contrast, Harvard resisted—in spite of itself. Throughout July and August, The New York Times regularly published articles based on administration leaks that Harvard was on the verge of settling with Trump for $500 million and concessions on university governance. In exchange, Trump would release research funding worth several times that, and relent on other forms of harassment, such as targeting foreign student visas and challenging Harvard’s tax exemption and accreditation. On August 25, Trump himself, speaking at a cabinet

meeting, confirmed that his price was $500 million. But no such deal was forthcoming.

Credit goes to Crimson Courage, which has kept the pressure on Harvard President Alan Garber and the Harvard Corporation to not cave in to Trump. In mid-August, Crimson Courage and other groups sent a petition signed by more than 14,000 Harvard alums, faculty, and students to Garber and the university’s governing board, warning that “[a] settlement with the Trump administration will have a chilling effect on the Harvard community and on all of higher education.”

Garber has been an accidental and unintentional hero of the resistance. In the Columbia fashion, he preemptively altered many of Harvard’s policies that offended Trump, and spent much of the spring pursuing a deal. As part of a January settlement of Title VI allegations, Harvard agreed to adopt the extreme definition of antisemitism created by the International Holocaust Remembrance Alliance, which defines some kinds of criticisms of Israel as per se antisemitic.

But then, Trump saved Garber from himself. The administration sent a letter in April with new demands, including “audits” of academic programs and departments, screening for the viewpoints of students, faculty, and staff, and changes to the university’s governance structure and hiring practices, threatening $9 billion in federal funding.

Garber indignantly wrote, “The University will not surrender its independence or relinquish its constitutional rights.” Instead of settling, he sued. And on September 3, Judge Allison Burroughs of U.S. district court in Boston ruled that Trump’s freezing of billions of dollars in Harvard research funds was illegal, which will make it even harder for Garber to cave.

Wesleyan’s president, Michael Roth, one of the first to publicly denounce Trump’s shakedown of universities, told me, “There are the opportunists and collaborators preaching neutrality and just staying quiet, but resistance is growing.” Roth cited the bravery of George Mason University President Gregory Washington for refusing to apologize for trying to diversify his faculty, and Mike Gavin of Delta College in Michigan for organizing more than 200 other community college leaders into Education for All to resist Trump’s anti-DEI crusade.

Resisting the Collaborators

Initially, only a handful of corporations resisted Trump’s demands. At Costco,

Apple, and Levi Strauss, shareholders overwhelmingly voted with the company board against proposals to re-evaluate DEI policies. Delta Air Lines reaffirmed its commitment to DEI.

But these are the exceptions. Corporations and universities have either been killing DEI programs outright, or changing their names to anodyne offices such as “Belonging, Respect and Fairness” (Nationwide Insurance). This gives aid and comfort to Trump’s claim that there is something wrong with diversity initiatives, or that Black employees should be presumed diversity hires until proven otherwise. However, it also creates opportunities for resistance.

One of the most visible and vulnerable corporate turncoats is the well-named Target, which employs large numbers of Black workers and attracts numerous Black shoppers. Target is also key because in 2020, after the George Floyd murder, Target’s CEO made a commitment to invest $2 billion in Black-owned businesses, double the number of Black-owned brands on its shelves, increase Black employee representation by 20 percent, and donate $100 million to social justice organizations. But in 2025, in response to pressure from Trump, Target walked away from these commitments.

Black leaders, led by Pastor Jamal Bryant of New Birth Missionary Baptist Church in Stonecrest, Georgia, made Target the focus of a nationwide boycott. The result has been severe damage to the Target brand. Foot traffic is down, and the stock has plummeted. A PBS report quoted Dr. Bryant on the logic of singling out one high-visibility company. “We thought it prudent to just go after one at a time,” Bryant said. “The Montgomery bus boycott went for a year and a day. And this is just our fifth month.”

Tesla Takedown is an epic case of grassroots disruption of a close Trump ally, Elon Musk. Since its launch in February, the campaign has organized protests in front of hundreds of Tesla showrooms, helping to depress sales and drive down Tesla stock. According to Evan Sutton, one of the campaign’s organizers, more than 500 people have hosted a demonstration. “About half of them had never hosted a protest before, and people thanked us for giving them a way to get involved.” The campaign’s next anti-Musk project is an effort, in partnership with the Communications Workers of

One of the most visible and vulnerable corporate turncoats is the well-named Target, which attracts numerous Black shoppers.

America, to pressure T-Mobile to cut its ties with Musk’s Starlink.

Perhaps recognizing these successful anti-collaboration efforts, a number of corporations have begun pushing back on Trump, notably in areas that are damaging their business, such as the crackdown on immigrants, the cancellation of renewable-energy projects in which billions have already been invested, and the on-again, off-again tariffs that wreak havoc on supply chains. Tariffs on inputs are costing John Deere, an iconic American export champion, $600 million this year, and leading to layoffs.

These areas also create opportunities for joint efforts by business and labor. In California, where crops are starting to rot for lack of farmworkers, the California Farm Bureau, representing agribusiness, is working with the California Farmworker Foundation to support farmers and farmworkers, and both are working with state officials to pressure ICE to lay off.

Prospects for a New Democracy

Trump’s multifaceted assaults offer more opportunities. Trump is making the already flawed student debt system even more expensive and cumbersome, but outside of the Debt Collective, mass challenges to these policies have been muted. Trump is destroying science and the country’s leading research institutions, but we have yet to see a well-organized protest spearheaded by leading scientific organizations. Trump is gutting the VA health system. As Suzanne Gordon has written in the Prospect, there have been intermittent protests, but the largest veterans service organizations have yet to make resistance a priority.

Another area that has only begun to realize its organizing potential is the connection between Trump’s economic policies and rampant economic inequality, which affects millions of Trump voters. This has

been a constant theme of Bernie Sanders and AOC’s “Fighting Oligarchy” tour, which has made a point of touring red areas. On Labor Day, hundreds of Workers Over Billionaires protests were held in cities throughout the country.

“Bringing pocketbook issues to the fore can help drive a wedge in the MAGA coalition,” says organizer and author (and former Prospect board member) Chuck Collins, “as economic conditions worsen and more Trump supporters begin to conclude, ‘This isn’t what I voted for.’” In a Wall Street Journal-NORC poll published September 1, nearly 70 percent of Americans said that it wasn’t possible to work hard and get ahead. The Journal separately reported that “American companies are once again beating profit expectations,” but through job cuts and price hikes , not higher consumer spending. How popular is that?

At least some Republicans, seeing this growing unpopularity, are beginning to offer resistance. In mid-July, ten GOP senators led by Sen. Shelley Moore Capito (R-WV) urged Trump to release $6.8 billion in frozen public-school funds, which cut funds for recruitment and training of teachers, English proficiency learning, academic enrichment, and after-school and summer programs. Ten days later, the funds were released.

Later, a bipartisan group of senators strenuously challenged a gimmick called

“pocket rescissions” to impound $4.9 billion in previously authorized foreign aid without congressional approval. The Office of Management and Budget contended that since the rescission came within 45 days of the end of the fiscal year, congressional consent was not required. Sen. Susan Collins (R-ME), chair of the Appropriations Committee, facing her own difficult re-election campaign, flatly said, “Any effort to rescind appropriated funds without congressional approval is a clear violation of the law.”

Each time Republicans frontally challenge a Trump violation of a congressional prerogative, it emboldens Republicans to act on the next incursion. As this article was being finalized for publication, the evisceration of the Centers for Disease Control and Prevention stimulated serious opposition from key Senate Republicans who never should have voted to confirm HHS Secretary Robert F. Kennedy Jr. in the first place. There are now coalitions of states setting up their own shadow public-health coalitions to provide vaccine guidance.

I come away from this survey of resistance with new respect for the genius of America’s Founders. After all, each of the major firebreaks against Trump’s tyranny reflects some aspect of the constitutional design. The Founders decided that Congress, not the executive, would be the paramount branch; and that the whole House would face the voters every two years.

Though it is taking too long, Congress is beginning to reassert its prerogatives. As the midterms approach, Congress will become even more alert to public opinion, which could well flip one house and further constrain Trump.

The Founders also gave us an independent judiciary. While the Supreme Court has been too beholden to Trump, lower courts have slowed him down and the high court may come around on key decisions.

If Americans have been free to organize and protest without fear of arbitrary arrest and indefinite detention, they can thank the Bill of Rights, the first ten amendments that were added to the Constitution at the insistence of the Jeffersonians. And to the extent that state and local governments have become a key part of the resistance, we can credit American federalism, the accidental legacy of separate colonies, which was also explicitly enshrined in the Constitution. To be sure, some of the final document reflected expedient compromises, yet it has an elegant coherence centered on the protection of popular, legitimate rule.

In the era of FDR and LBJ, mostly benign strong presidents, the checks and balances bequeathed by the Founders were a source of progressive frustration; in the Trump era, they have been our salvation. The Founders, after all, designed their constitution as a reaction against King George and his trampling of their historic liberties as Englishmen—and to prevent future would-be kings. They knew exactly what tyranny looked like.

All of the foregoing suggests that the great American democratic experiment is far from over. If the slide to autocracy can be slowed and reasonably fair elections preserved, the millions of citizens engaged in resistance could stay mobilized to elect a drastically different governing coalition and set of policies. If the antibodies to tyranny continue to revive, Trump’s paradoxical legacy may be a reawakened citizenry. Over the long term, that is the only antidote to Trumpism.

I could be wrong, of course. As Trump becomes more cornered and more crazed, he and his enablers might attempt more flagrant forms of fascism: arbitrary arrests, assassinations, more extreme uses of the military and private police, shutting down Congress, defying even the Supreme Court. Whether that happens could depend on how effectively the resistance contains Trump now. n

BIG BANKS BEHAVING BADLY

Decades of consolidation have made large financial institutions the primary partners for small businesses. Two case studies show how this can go awry.

BY DAVID DAYEN

One Tuesday night in July 2023, Ron Luessen got contacted by a late-shift worker on the support team for Elcon, a construction firm in the Pacific Northwest. Luessen, an equipment manager, was off the clock, but he was the main point of contact, and the worker was puzzled. “We’re supposed to be working tonight, and this place is closed,” Luessen recalled the message. “What do you want us to do?”

There wasn’t any reason for the building to be closed. Elcon was steadily busy, recently picking up business in Billings, Montana, beyond its base of operations in Seattle. The company had even just updated the kitchens.

But the next day, around 120 Elcon employees got the official word: Don’t come in. After 42 years building bridges, highways, rail lines, airports, and basic

infrastructure Americans use every day, Elcon was history.

“Everybody was just dumbfounded,” said Luessen, who had put 16 years in at the company. He started tearing up on the phone. “Sorry, I’m a big marshmallow,” he apologized. “Elcon took me in, I knew nothing about nothing in construction. They were just very good to me … We worked together, had fun together, outside of work we got together. On a regular basis, celebrating birthdays, if they’re doing a charity walk we’d have 10 to 15 people show up. I don’t know how else to put it but family.”

Several months later, Abilene Eplin, a single mother of three, was building a company that set up electronic payment terminals for businesses. She was able to sign a major contract with an automotive dealership group, projecting revenue of $1.1 million per year with the potential to scale past $2 million. It was the fulfillment of a year of toil. “She put 120 percent into this night and day,” said Jenell Cabrinha, her best friend. “It was something to help her create a life for her kids.”

Yet one day, she went to withdraw funds from the company bank account, and the transaction was blocked. Someone else had claimed that they were the sole owner of the business, preventing Eplin from accessing her money. Eplin provided copious evidence that she in fact owned the business, but 19 months later, she has been unable to pry one cent out of the hijacked account.

“My bank should have protected me,” she

told me. “Had they done any bit of due diligence none of this would have happened.”

The common thread in these two stories—one company’s demise after decades of success, and another snuffed out right at its incipiency—is the role of the large, impersonal institutions that served as their bankers. KeyBank, a Cleveland-based regional lender with $185 billion in assets under management, decided to call in Elcon’s loans, instantly vaporizing the company and destroying its value. Wells Fargo, America’s fourth-largest bank by asset size, froze Eplin’s business account and has declined to release the funds, extinguishing her dream of owning her own company.

KeyBank and Wells Fargo were asked about every allegation in this story. Spokespeople for both banks said that because the matters involved litigation or were “being addressed through legal channels,” they could not comment or share any details.

Small businesses, and especially startups, are precarious institutions. One in five fail every year. In these two case studies, both businesses made mistakes. Elcon got behind on its invoices and ran up a debt on its line of credit with KeyBank, and Eplin trusted a friend who she says ended up doublecrossing her. But these slipups did not have to be fatal. It was the cold-eyed choices of their banks that led to the failures, a byproduct of trends in the financial industry over the past several decades.

In the old days of relationship banking, a local official worked with small-business owners to prevent catastrophe, aiding businesses and the bank’s bottom line. But after decades of bank consolidation, about half of all companies now use large institutions as their primary financial services provider, according to the 2023 Small Business Credit Survey from the Federal Reserve Banks.

This often puts key financial decisionmakers far from the millions of businesses they serve, without the stake in community success that characterized previous eras. In these instances, off-ramps with mutual benefit were ignored, promises made were not kept, and emotion seemed to take precedence over sound decision-making.

Among the many reasons given for today’s sour economic mood, we don’t talk much about small businesses with enduring financial needs that have been forced into shotgun weddings with soulless institutions that are disinterested in their futures. “One of the reasons money is channeled

through banks, they’re supposed to be on the ground, they’re supposed to know clients,” said Graham Steele, former assistant secretary for financial institutions in Joe Biden’s Treasury Department. “The larger an institution gets, the less they care about small businesses.”

Jason Decker met Peter Williams when he worked as an apprentice electrician 50 years ago. “Peter wanted to start his own business and wanted me to help him,” Decker told me. In 1981, with $5,000 from Decker’s father, Elcon was born.

The company did electrical subcontracting. “They were very technical, had a lot of good structure,” said Luis Martinez, a senior project manager with the electrical team. Led by Williams, who is Black, Elcon became one of Washington state’s first minorityowned contractors for public infrastructure projects, operating across Seattle, the Portland metro region, and even Alaska. Some of Elcon’s full-time employees had more than 30 years at the company, and it hired hundreds of others for construction tasks.

“It was a very successful business, but I did not want to be married to it the rest of my life,” Decker said. He retired in 2015, retaining his ownership stake. Williams stayed to run Elcon, but as the years went on, friends inside the company whispered to Decker that something was wrong. It turned out Williams was suffering from early-onset Parkinson’s disease and experiencing cognitive decline. His inattention to detail caused problems with accounts receivable. While Elcon was still booking jobs and taking on work, even during the COVID years, invoices weren’t being sent or receivables collected in a timely fashion, leading to a cash flow crisis.

By the fall of 2022, Williams no longer had the capacity to lead Elcon, and Decker felt the pull to come back. The co-owners and their families had signed indemnity agreements on Elcon’s bonded projects. If something went wrong with the company, bond insurance companies assume the defaulted projects. They in turn could seek restitution directly from Williams and Decker. So they had a personal stake in the company’s survival.

For most of its life, Elcon had a local lender, Columbia Bank. “I knew the folks at the prior bank … I knew them by name,” Decker said. But in 2019, KeyBank, which had branches in Washington and Oregon along with 13 other states, pitched Elcon to switch.

Decker estimated that he needed 60 to 90 days to return KeyBank their money. He wouldn’t get that chance.

Elcon signed up for a checking account and a $7 million line of credit. Because of irregular flows of payments in the construction industry, lines of credit provided critical bridge funding to meet expenses.

By the spring of 2023, Elcon had overadvanced on the line of credit by more than $3 million, violating covenants KeyBank laid out in its loan agreement. There were also several overdrafts on the checking account. KeyBank sent a notice of default on April 24, 2023, denying Elcon all future advances or overdrafts and “accelerating” the loan, meaning all $7 million was due immediately, along with interest and other costs. The Elcon account was shifted to Dale Conder, a senior vice president in KeyBank’s Western Asset Recovery Group who specialized in distressed loans. He was based in Boise, Idaho, not Seattle.

In the context of Elcon’s portfolio of work, $7 million wasn’t a lot of money. A May 31, 2023, balance sheet showed that Elcon had total assets of over $23 million, and Decker claimed that the company had about $250 million in future contracts in the pipeline. In addition, there were $12.3 million in receivable invoices out for work already completed. “It was normal to have these kinds of cash flow issues,” Martinez told me. “You have to get your ass working and knocking on doors.” Part of Decker’s career involved “perfecting” claims to get proper payments, he explained. On a long-term project, subcontractors would often perform more work than what was stipulated in the contract. Companies would have to document labor costs to obtain an equitable contract adjustment. This was tedious but critical work for construction firms, which Elcon had lapsed in undertaking; Decker was sure he could get it moving again.

According to Decker and other experts, construction firms with cash flow problems typically secured forbearance agree -

ments from their lenders, to buy time until invoices got paid.

Forbearance made sense for both sides. If KeyBank demanded immediate payment, it would trigger a series of adverse actions making the company’s debt all but unrecoverable, Elcon attorney Ryan Sternoff explained to the bank in email correspondence. Plus, Elcon’s partners needed assurances that it would continue as a going concern. Insurance company Nationwide Insurance told Elcon that June that it was “favorably inclined” to issue a surety bond on $53 million in projects, but “our ability to move forward will be negated” by KeyBank’s refusal to issue forbearance.

“Elcon is in a box to which KeyBank holds [the] key,” Sternoff said to his legal counterpart at KeyBank in a June email. “Elcon cannot pay off KeyBank without new projects; it cannot get new projects without bonding; and it cannot get new bonding without forbearance from KeyBank.”

Decker estimated that, if KeyBank participated in a workout, he could repay the loan within 60 to 90 days. He wouldn’t get that chance.

Abilene Eplin had never started a business. She had no college degree. She had just gotten out of a bad marriage, alleging mental and emotional abuse. She won full custody of her three daughters after the divorce, but needed a spark to set her life back on track.

After working in merchant processing in Los Angeles for a couple of years, she decided that she knew enough to create her own company. A merchant processor assembles the systems that allow businesses to accept electronic payments, like credit or debit cards. Eplin thought she could carve out a niche by offering a revenue share, enticing merchants to work with her and earning profits by keeping operational costs low. She named the business Merchant Consul-

tancy, LLC, and never stopped hustling: coldcalling contacts, putting up videos, whatever she could to get people’s attention. Her friend Cabrinha, a sales and marketing professional who lived in the apartment across the hall, was helping her out. “This is something she put together from the ground up,” Cabrinha said. “She was good at it, she worked really hard to make those connections.”

A breakthrough came early in 2024. Through an industry colleague, Eplin connected with Mills Automotive Group, the largest individually Black-owned car dealership in the country with 34 locations. Mills agreed to a three-year contract with Merchant Consultancy for processing services. Even with the revenue share, Eplin projected $91,000 per month in earnings. “I was so proud of her,” said Eplin’s mother, Kathy Cumber. “She was in Hawaii when she got the phone call. I remember her telling me, ‘I’m going home first class.’”

Cumber knew her daughter would need operating capital to buy equipment and visit dealerships for training. So she floated a $20,000 loan to get Merchant Consultancy off the ground. “She didn’t really ask for it, I just knew she had to pay rent,” Cumber said. A grateful Eplin planned a mid-February launch for the first ten dealerships.

Eplin needed a business account to finalize the contract. Her personal bank was Chase, but they were taking too long to set up an appointment, and a credit union she contacted wanted more documentation. She ended up at a Wells Fargo in Sherman Oaks, California, where she only needed formation documents. While small in relative terms, the contract was a big responsibility for one person with limited experience. Eplin had an old friend in Fort Lauderdale named Ari Daniels, who offered to help her. “He said, ‘I’ll get your business filed, and file it in Florida, I’ll be your registered agent,’” Eplin told me. IRS documents, the operating agreement, and the articles of organization for Merchant Consultancy reflect this arrangement; Eplin was the business owner, and Daniels the registered agent. Daniels then asked to become a 50 percent owner. “He said, ‘This industry, they don’t respect women, you need a man to have your back,’” Eplin said. In a weak moment, Eplin admitted to me with embarrassment, she signed an addendum to the incorporation documents establishing split ownership. But that agreement was never finalized, and within hours, she called Daniels to say she made a mistake. “I said, ‘This

is mine, I definitely want to compensate you, but I can’t turn over my business like that.’”

Daniels grew argumentative in a series of texts reviewed by the Prospect. He wrote to Eplin, “If you wonder why I’m going to react so drastically it’s because of your actions.”

On January 27, 2024, Daniels filed a notarized “statement of fact” with the Florida Department of State’s Division of Corporations. Instead of an equal ownership share, the statement of fact instead asserted that Eplin had been removed from Merchant Consultancy, LLC , effective immediately. Then Daniels filed an annual report, placing himself as the sole “authorized person” for Merchant Consultancy.

Eplin filed documents with the state changing everything back, but Daniels refiled his documents. This happened several times. Eplin hired an attorney to contact the Florida Division of Corporations to stop the tug-of-war, but to no avail. “Our office is just a filing agency and we have to take documents at face value so I am sorry but there is no way to stop all future filings from being filed,” an operations manager from the Division of Corporations wrote to Eplin.

Daniels used the statement of fact to take over Merchant Consultancy’s website and get into Eplin’s business email, according to her testimony in a report with the Los Angeles Police Department. Inside her email, Daniels found the Wells Fargo bank account information. Eplin’s application with Wells Fargo clearly indicated that Eplin was the business owner and “authorized signer” on all checks; Daniels is not mentioned at all. But by February 6, Daniels had used the Florida records to gain control of the account.

“Wells Fargo didn’t tell me this happened,” Eplin explained. “I went to withdraw money and it was blocked.” Eplin immediately notified Paul Sin Woo, the Wells Fargo bank representative with whom she opened the account, that she remained the lawful business owner, supplying incorporation documents, IRS communications, police reports filed with LAPD and the FBI, and an identity fraud claim with the Federal Trade Commission. Sin Woo submitted them to the Loss Prevention Department.

Meanwhile, Daniels sued Eplin in Florida, claiming that he was a full partner in the business and did most of the work, including personally negotiating the contract with Mills. The lawsuit reads like an inverted version of Eplin’s story, with Daniels alleging that she stole his identity. Eplin denied every allega-

tion in the lawsuit and produced documents showing Daniels’s involvement in what she told the LAPD were “shady business dealings” under a variety of assumed names. (Within a month, Daniels’s attorney withdrew from the case, and the judge later dismissed it.)

In an email exchange, Daniels told me that “the version of the story you’ve been provided is completely inaccurate.” He said that he and Eplin had a 50-50 split in place from the beginning, and that he “created the company’s name, brand, and structure.”

When I asked why he changed the incorporation documents to reflect his sole ownership and not a 50-50 split, why the bank account was initially in Eplin’s name, and why the contract with Mills—also signed by Eplin—was no longer operative if he negotiated it himself, he did not respond. By phone, Wells Fargo representatives insisted to Eplin that they could only go by

the ownership records in Florida, which were changing by the day. Eplin eventually filed a new incorporation in California, out of Daniels’s reach. If she could get the remaining funds in the account back from Wells Fargo—$10,791—she could weather the incident and move forward with the Mills rollout.

Finally, Wells Fargo contacted her with a message: “We’re going to close the account but will issue you a cashier’s check within 10 days.”

She’s still waiting.

KeyBank and Wells Fargo have large numbers of small-business customers today due to our concentrated banking sector. In 1984, there were 14,496 insured depository institutions in the U.S.; 40 years later, there were fewer than 4,000. As late as the 1980s, some states, like Illinois and Texas, did not allow

The ten largest U.S. banks control over 60 percent of the country’s total financial assets.

any bank to have more than one branch, even inside their borders; now, JPMorgan Chase has 4,994 branches in every state in the contiguous U.S. The ten largest U.S. banks control over 60 percent of the country’s total financial assets.

Several laws and policies contributed to this shift. The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 allowed banks to cross state lines. Lenient antitrust enforcement smoothed the ground for thousands of bank mergers; the last time the Federal Reserve rejected one was 2003. The assumption that larger institutions are too big to fail drove consolidation as well. Many see the prospects for bank mergers under President Trump as incredibly favorable.

Consolidation weakened the tradition of the locally focused banker with a stake in the community. In past decades, “the directors of the bank usually lived right in town,” said Ron Grzywinski, whose ShoreBank on Chicago’s South Side was the biggest community development bank in America for decades. “They knew the borrowers. They often knew the father of the borrower or the grandfather in some cases … They’d work with the borrower on making the original loan or they’d work on trying to help the borrower repay.”

It wasn’t just that community bankers were necessarily more responsible; local banks needed to make successful loans to thrive. They didn’t have other business lines in trading or selling derivatives. Borrowing short and lending long was the business, and failure would hit them directly. “The shareholders who would lose money were the shareholders of the bank,” Grzywinski said. “It wasn’t somebody else’s money they were lending, it was their own.”

The notion that your success and your bank’s success were linked may sound like a foreign concept today. Modern big banks are definitely hyperefficient. But I asked

Grzywinski what gets lost in that transition. “In my opinion,” he replied, “you only lose what essentially built this country.”

When the Elcon loan defaulted, KeyBank had advised the company to present all its financial documents to a third party, Huron Consulting Group, to determine “a viable path for short-term financial restructuring.” Elcon cooperated with the request, but KeyBank repeatedly complained that it hadn’t received basic information. Elcon countered that Huron merely wanted updates to documentation it already had in hand.

At the time, Elcon was completing construction of a Sound Transit light-rail station in Bellevue, Washington, for which it was owed $6 million by the general contractor, Absher Construction. KeyBank threatened to issue a Uniform Commercial Code (UCC) notice on the project, directing Absher to forward all future payments to the bank. Sternoff, Elcon’s lawyer, warned that would create a “contractual default,” voiding Elcon’s ability to collect, and that the bonding company, Travelers Insurance, would claim seniority over KeyBank for the proceeds, creating uncertainty and delay.

This is precisely what happened when KeyBank issued a UCC notice to Absher on June 30; Travelers asserted seniority and a legal battle ensued. But Decker had already settled much of that payment claim earlier in June; Elcon got an advance check from Absher for $2.5 million. Sternoff asked KeyBank for assurances that no money would be swept out of Elcon’s checking account to pay off the line of credit without 14 days’ notice, allowing Elcon to pay its employees. KeyBank replied that it could only give a seven-day grace period, “provided there is no material adverse change in Elcon’s financial circumstances.”

Facing a gut-check decision, Decker was advised to open a second checking account with a local lender named Umpqua Bank. “I’m thinking I have payroll to make,” he said. Throughout June and July, Elcon pleaded with KeyBank for dialogue toward a resolution. Elcon outlined $8 million in expected near-term profit, not including the Sound Transit project. It proposed a 13-week cash flow plan and even drafted a forbearance agreement. Decker repeatedly sought inperson meetings with Conder; while Conder did meet once that spring with Elcon’s thenpresident, Scott Wood, he would not agree to meet with Decker. (Wood, now president

at a different electrical firm in Seattle, did not respond to a request for comment.)

Finally, KeyBank scheduled a July 17 conference call with Elcon representatives over Zoom. Decker called in from his car, with other Elcon personnel and four lawyers on the line. They figured this would finally put the company on the right path. But the meeting lasted five minutes.

KeyBank had found out about the Umpqua Bank account. What followed was described by Decker and others as retaliation. “I just want to let you know that KeyBank will not be considering forbearance,” Decker reported Conder as saying. “We will be shutting Elcon down.”

A half-hour after the call, KeyBank had issued 13 UCC notices to Elcon’s receivables, demanding priority payment. In his legal declaration, Sternoff notes that KeyBank wouldn’t have had critical information about outstanding invoices without forcing Elcon to give it to Huron Consulting, purportedly so it could assess the company’s financial condition. “In other words, KeyBank utilized premeditated ‘bait and switch’ tactics to destroy Elcon’s business operations,” Sternoff wrote.

KeyBank also contacted Umpqua Bank, demanding a seizure of funds in the Elcon bank account. Umpqua froze the account and initiated an investigation.

Just as Decker and Sternoff had warned, general contractors began to terminate Elcon projects, including a major contract for a bridge replacement on State Route 520 in Washington valued at $50 million; Elcon was relying on that revenue. With cash flow stopped, there was no path forward. Workers got the news the next day. “It was ridiculous what [KeyBank] did,” Martinez said. “They caused lot of harm to themselves, to Elcon, and the people. They created a mess.”

Decker paid Ron Luessen and others out of his own pocket to help with liquidation, working with a receiver that KeyBank appointed. “The amount of stuff I do know that was left out on-site, left uncollected, the dollars there alone is ridiculous,” Luessen said. “Other people who came on jobs as contractors cleaned us out … taking keys out of the trucks on the lot and cleaning the trucks out.” Luessen added that everything that didn’t sell at auction was just left at Elcon’s yard; Decker borrowed a forklift and a dumpster to clear the property.

“KeyBank has exhibited some of the worst business judgment I have seen in my

18 years in practice,” Sternoff wrote in an email to KeyBank that week.

Abilene Eplin had her own decision to make. The merchant processing contract with Mills Automotive stipulated that she personally install payment terminals and train dealerships. Ten stores were ready to roll out, and she would have begun to generate revenue to fund installations at the other 24. But she had no near-term capital for travel and operations until Wells Fargo released her funds.

Eplin ultimately decided to unwind the contract. In a statement made later to financial regulators, Eplin wrote: “This withdrawal was not a reflection of insolvency, business failure, or lack of preparedness. It was the direct result of interference by Wells Fargo, which caused devastating disruption to a high-value, scalable, and imminently active business contract.”

The sudden end hit Eplin hard. Her mother, Kathy Cumber, flew down from Oregon to Los Angeles to check on her. “She was devastated,” Cumber said. “She could barely get dressed, could barely function. I was so worried about her, worried about everything.”

Eplin described the situation as paralyzing. She would call Wells Fargo; they’d say the matter was under investigation. She would call again and hear the same thing. Over time, the pauses between calls to the bank got longer and longer. Blocking it out of her mind made it easier to handle the pain. “It feels like when I was in an abusive relationship. This is triggering to me,” she told me.

After months of anguish, Eplin recommitted to finding closure. This time, her mother and stepfather got on the phone as witnesses. According to a statement from Cumber and interviews with both Cumber and Eplin, a representative from the Claims Department named Ileana claimed on the February 19, 2025, call that Wells Fargo never received any records about the account—no proof of ownership, no business formation documents, no police or FTC reports.

Eplin explained that she had delivered all those documents to her local branch, and that the banker, Paul Sin Woo, submitted them to Loss Prevention right in front of her. Ileana told her to go back and resubmit. “I did everything right. I followed the law. I complied with every request,” Eplin said. “And yet, I was silenced and erased.”

Two days later, Eplin and Jenell Cabrinha visited the bank branch in Sherman Oaks.

According to both witnesses, Sin Woo remembered Eplin coming in the year before, and when he was told that the Claims Department had no record of the documents, he confirmed that he personally submitted everything and was even thanked by Loss Prevention for the submission.

“He said he would escalate it to the executive office,” Eplin explained. “I said I would like the notes of the escalation report, the call logs. He said, ‘I can’t give that to you.’” When Eplin pressed him that she had rights as a consumer to transaction records and notes, Sin Woo consulted with his manager and informed her that the escalation report was an “internal document” and therefore classified.

I tracked down Sin Woo, who now works at a different Wells Fargo branch in Tarzana, and asked him about the situation. He said he was unable to give out customer information and referred me to Loss Prevention.

Steele, the former Treasury Department official, said that both cases were an inevitable consequence of big banks relying on remote functionaries and automated systems, rather than personal relationships, to deal with small-business clients. When business owners cannot get bankers’ attention to resolve desperate situations, they sit unprotected in

KeyBank hasn’t recovered more than a small percentage of Elcon’s loan, and may have spent more in legal costs.

an unforgiving economy. But cheap solutions make sense for big banks, since small businesses are at best a minor part of their balance sheets. “It’s not meaningful business in the scope of a bank with hundreds of billions or trillions in assets,” Steele said.

Sometimes this is reflected in by-thenumbers decision-making, like the rote acceptance of incorporation documents in Abilene Eplin’s case and the automatic freezing of her account. Algorithms rather than humans often dictate these kinds of choices, and they can be nearly impossible to countermand.

If KeyBank was angered by Elcon opening a second bank account to make payroll and took it out on the company, that could constitute a tying arrangement, where Elcon’s choice of deposit account was in some way tied to KeyBank’s decisions on the loan. Anti-tying laws go back to the Clayton Antitrust Act of 1914 and remain illegal today. (Banking-specific prohibitions on tying exempt traditional loans and deposits, but financial institutions are still barred from tying arrangements under the Clayton Act.) Yet banking regulators have failed to enforce this improper use of power for decades.

“[Banks can] say, ‘You have to keep money here, we’re going to call the loan or

“We trust financial institutions with our money … there’s something broken in the system when this can happen so easily.”

sweep the amount unless you work with us,’” said Steele, who co-authored a recent paper about banking and antitrust. “In that way, banks have leveraged these products by reading these competition concerns out of the banking laws.” Government need not tolerate this potential abuse of market power, but that’s how the system has been constructed, with bank regulators not seeing the tyranny of the money monopoly as part of their jobs.

Even America’s relatively meager safeguards are being radically dismantled. Both Decker and Eplin filed Consumer Financial Protection Bureau complaints, alleging misconduct at the hands of their banks. But under President Trump, CFPB is a Potemkin organization, with its 1,500-plus employees doing essentially nothing, exposing millions of customers to fraud and abuse.

This is not only bad for consumers, but bad for businesses. “We trust financial institutions with our money, our livelihoods,” said Cabrinha, Eplin’s best friend. “There’s something broken in the system when this could happen so easily.”

To this day, Decker still cannot believe what happened to Elcon. “I put so many years of my life into this,” he told me. “To just see it ripped away, that’s just destruction.” Not only has he borne an estimated $800,000 in Elcon wind-down and legal costs, but Travelers Insurance and Markel, two of Elcon’s bonding companies, have come after him for nearly $20 million in defaulted projects, because of the indemnity agreement he signed back in 2017. He and his wife are now looking at declaring bankruptcy.

For Peter Williams, Decker’s co-founder, the situation is even worse. He had signed a personal guarantee with KeyBank, mak-

ing him liable for Elcon’s debts. While still battling Parkinson’s, Williams and his wife opted for Chapter 7 bankruptcy, where all nonexempt assets are liquidated. The family is in the process of abandoning their longtime residence. The Williamses’ bankruptcy attorney declined to comment.

Meanwhile, after two years of pursuit, KeyBank’s receiver has only collected $236,858 in Elcon invoices, according to a July declaration from ongoing litigation. Adding the proceeds from the auction of equipment and machinery and subtracting expenses, the receiver has brought in $464,862, around 6.7 percent of the $7 million line of credit. This doesn’t include legal fees, which could easily exceed the pittance KeyBank has recovered on Elcon. About $2.5 million from the Sound Transit job is still tangled in a battle between KeyBank and Elcon’s bond insurance company.

In the Travelers indemnity case, Decker enlisted an expert witness, a commercial banker who spent his career working with distressed loans, to assess KeyBank’s conduct toward Elcon. The witness concluded that KeyBank failed to “conduct itself in a commercially reasonable manner,” “meet generally accepted industry standards of good faith,” or “consider the unique aspects of lending to a construction contractor working on bonded projects.” The Travelers case is still pending in federal district court in Washington state.

Decker also sued KeyBank and its senior vice president Dale Conder, and for the last two years, he has been sending letters to KeyBank executives, board members, and investors, requesting a meeting, a review of the Elcon decision, an admission of the harms, and a meaningful show of support to those affected. He’s called KeyBank’s executive offices as well. “This wasn’t inevitable. It was preventable,” he wrote in one letter to board members. “All we needed was a chance to be heard. Why were we denied even that when others were not?”

A mediation session to resolve the lawsuit back in February was “a waste of time,” according to Decker; he characterized it as “let’s throw a few bucks at Decker to make it go away.” Conder emailed Decker a couple of days after mediation, referring to the many letters sent to board members. “Upon careful review of the letters received, we do not find any new or additional information that would cause us to reconsider our current path,” Conder said.

The last response was in May from a lawyer working for KeyBank, asking that Decker stop sending letters to KeyBank officials’ personal addresses. “Mr. Decker can rest assured that he has been heard,” the attorney said, adding that he and Conder would be willing to sit down with Decker at any time. Decker didn’t take that seriously.

“I know when to quit, but I’m a fighter,” Decker told me. “I can’t give up when there’s such an injustice as this.”

Abilene Eplin hasn’t given up either. She had a lawyer friend named Michele Gibson, who usually practices family law, compose a demand letter to Wells Fargo, alleging that the bank caused “extreme emotional distress, financial turmoil, and reputational harm by treating [Eplin] as a perpetrator rather than the victim of fraud.” Gibson’s letter noted that Wells Fargo conducted no due diligence before allowing Ari Daniels to take control of the business account. It asked for $750,000 in restored funds, punitive damages, and legal costs, along with a written acknowledgment of wrongful activity.

An outside counsel for Wells Fargo, Mark Wraight, got back to Gibson. After a preliminary discussion, Wraight made a promise to return the $10,791 in frozen funds within two weeks. “I was like at least that’s a start … at least I’m talking to the right person,” Gibson said in an interview. But when Wraight contacted her in June, the deal had changed. Wells Fargo would agree to give the money back only if Eplin would drop all claims for a $1,000 settlement.

“It was a nuisance offer,” Gibson said. “They probably thought, there’s no resources to go forward, so we’ll give you a nice shiny $1,000 and thanks for playing.”

Eplin has had trouble finding any civil litigator to take her case. One attorney told her that because the business didn’t have any cash flow, just a promise of future earnings in a contract, it would be hard to establish the injury needed to bring a case.

Amid the chaos, Eplin leaned on the support of a boyfriend who recently proposed marriage. They moved to a beach community in the Florida Panhandle, and her Facebook feed is peppered with the kind of questions for neighbors associated with starting a new life.

“It was supposed to go this way, part of me says. The kids need a stable father in their life,” Eplin said. “It still stings though … My business was destroyed because my institution wouldn’t protect me.” n

Beacon Progress A of

In the 19th-century George Francis Parkman House, just a block away from the Massachusetts State House, Boston Mayor Michelle Wu settled down on a cream-colored antique sofa in a bright, red-wallpapered sitting room. Surrounded by a rich display of elegant historic portraits of Boston notables in gilded frames, Wu seemed comfortable and confident, wearing a purple dress that matched her re-election campaign colors. Upstairs, she had just addressed a group of young interns who had worked for various city departments. Wu had been on the go since mid-morning. Her longtime mentor, Sen. Elizabeth

Warren (D-MA), had joined her for a campaign event near the playground on Boston City Hall Plaza to discuss her administration’s early-childhood education achievements.

Just the day before, she had been out and about ricocheting around the city, visiting the Center for Teen Empowerment, which runs several neighborhood-based youth organizing initiatives in the Bay State and New York. With her nearly eight-month-old daughter Mira, the youngest of her three children, on her hip and a smile on her face, she drew connections between her highly successful youth job guarantee, which provided summer employment for thousands of Boston teens, and the nonprofit’s mission to work toward social change through organizing and art. Heading back to City Hall, she welcomed the mayor of the Italian town of Coreno Ausonio, near Rome, along with her family and community members from the North End, Boston’s Little Italy.

Boston Mayor Michelle Wu’s firstterm achievements shine, but numerous challenges persist after her re-election. By Naomi Bethune

Wu jumped right into a time-honored political pitch to explain why she’s running for re-election: “I’m running because we have a lot more work to do,” she told the Prospect before the city’s September preliminary election. “In Boston over the last four years, we’ve [proved] that people can still come together and take big steps to solve problems that are really important.”

She’ll get to carry on her work for another four years. Wu trounced Josh Kraft, the millionaire son of NFL billionaire Robert Kraft, the New England Patriots owner, by nearly 50 percentage points in the nonpartisan race, winning all of the city’s 22 wards. Before the end of the week, he’d set aside his bid for mayor.

For a woman who’s already become one of Boston’s most capable leaders, that development is a defining indicator of the remarkable power and influence that she now wields. Born in Chicago to Taiwanese immigrants and educated at Harvard University and Harvard Law School, Wu is something of a wonder child. Her election in 2014 as the first Asian American woman to serve on the city council was monumental. Just two years later, her colleagues elected her to lead the body.

Running for mayor was a natural next step, and in 2021, Wu, a progressive, won that contest with 64 percent of the vote, stunning Boston and the country with a campaign centered on major policy changes in areas like housing that would have never been possible before.

Wu had to confront the challenges of leading a major city as well as steering residents through a global pandemic. Yet Wu headed into City Hall after building a progressive political clan during the seven years she spent as a city councilor. Her impressive work on the city council—securing paid paternal leave for city employees, advocating for unarmed community safety crisis responders, and taking aim at trying to moderate the city’s historically high rents—raised her profile and demonstrated her policy chops. These experiences contributed to her first-term successes, particularly on the housing front.

To move ahead with her more ambitious aims, Wu faces considerable obstacles, including home-rule restrictions on taxes and rent control, which must be threaded through a resistant state legislature. She has had her share of blunders, among them having to shelve a controversial proposal to

Boston’s historically marginalized communities have been given a seat at the table when it comes to real estate development.

move the city’s most diverse exam school from Roxbury, Black Boston’s cultural hub, to West Roxbury, a mostly white neighborhood with poor public transit links. She also has been accused of ignoring residents’ concerns over a local stadium, a sore point for some in the multiracial coalition that backed her four years ago. Issues like these opened

Wu up to intense criticism from Kraft, who’d been her highest-profile opponent. In many ways, Wu personifies the profound social and economic changes that have unfolded in Boston over the past decade: She is the polar opposite of the leaders who steered the city before she came on the scene—which means she must

grapple with the staggering task of redefining what it means to be the mayor of Boston in these perilous times.

For decades, Boston has been in the thrall of its long-dominant “old guard” political tribe—which was Irish or Italian, and male. Although many other major Democratic cities have made strides in electing candidates who represented diverse groups and ideologies, Boston has also seemed like it was committed to sticking with a version of political power that prioritized frayed traditions over progressive innovations.

Deferring to the city’s real estate developers who have shaped the city’s residential and commercial policymaking to suit them-

selves has long been a feature, not a bug, of the old ways. Being the mayor of Boston meant that you needed deep connections with the city’s most influential groups, the desire to abide by the rules of its unique brand of conservative-to-moderate Democrats, and the drive to play a political game that had been chugging along unimpeded even by the boldest residents and civic leaders since the early 20th century.

Wu’s two most recent predecessors had readily adapted to this construct. Thomas Menino, another one of her mentors, spent over 20 years as mayor and pushed through the construction of new housing units, many of them the “luxury” high-priced apartments that revved up gentrification and drove out longtime Boston residents. He died in 2014 shortly after leaving office.

His successor, Marty Walsh, oversaw a historic housing boom in areas like the Seaport District that Menino and his developer cronies had established on the edge of Boston Harbor, which immediately became one of the priciest neighborhoods in the city. But these housing developments weren’t accessible to all Boston residents. Boston’s Inclusionary Development Policy (IDP), the guiding framework during his term, mandated that developers set aside only 13 percent of the units in larger multifamily projects as income-restricted housing, which led to a severe scarcity of affordable new housing.

When factoring in effects of the COVID-19 pandemic on the economy and the housing market, along with minimal wage growth for many workers, owning or renting a home in Boston became much more difficult. Deviating from the former mayors’ reflexes to build new market-rate developments as a remedy for the housing crisis, Wu has taken a much firmer, strategic approach to real estate development in Boston. But rather than shutting the door completely to developers, Wu instead has implemented policies that attract developers who align with her “everything starts with housing” philosophy, which prioritizes ensuring that all Bostonians can afford to live comfortably in their city.

These changes included an adjustment to the IDP, raising the percentage of incomerestricted housing in new projects from 13 percent to rates between 17 and 20 percent, and a program that offers property tax abatements to landlords who convert empty office space into residential units. According to a 2022 executive order, the city is working on an expedited approval process

for developers interested in building affordable housing, which will take about half the time it did in the past (a whopping 337 days).

To help remedy the impact that racial segregation has historically had on housing in Boston, large residential or mixeduse projects are now required to undergo a review process that ensures an alignment with fair-housing principles. Wu is proud of that priority. “Housing has been an allhands-on-deck issue for us,” she told the Prospect. “We’ve done everything from audit every square foot of city-owned land and put 150 parcels out to build affordable housing in our neighborhoods, shaped by the needs and desires of the community, and also built by development firms that reflect and represent the diversity and talent of our community.”

In neighborhoods like Roxbury, which are historically Black, and have experienced the impact of racist housing policies, these changes have been transformational. As of January, more than 17,000 housing units have been built or started construction; about a third of those homes will be incomerestricted. In 2022, Wu steered a homerule petition through the city council, out of committee. Powerful Massachusetts real estate interests have snuffed out any whiff of reform ever since 1994 when a statewide referendum to preserve rent control failed, even though the controls were only in force in three municipalities: Boston, Brookline, and Cambridge.

Though Boston has made strides despite high interest rates and construction costs, which have been felt in other major cities across the country, critics have blamed City Hall for these external factors.

Major money had gone into attacking Wu’s track record—and most of it has been spent by Kraft and his allies. Kraft had parachuted into the race in February, and had raised nearly $7 million on the campaign trail, with $5.5 million coming out of his own funds. Your City, Your Future, the super PAC supporting him, had received donations from major players in conservative politics, including $1 million from Jim Davis, the founder of New Balance, the athletic shoe company. These dollars paved the way for relentless television and social media attack ads.

Kraft tried to convince Boston voters that his nonprofit experience, including a decade as the CEO of the Boys & Girls Club of Boston and his current posts as the head of Kraft Family Charities and board chair of

the National Urban League’s Eastern Massachusetts chapter, would serve him well as mayor. But the younger Kraft’s millions, the purchase of a condo in the city at the end of 2023—the first of many eyebrowraising moves—and his father’s support for President Trump opened him up to repeated criticism and shaved points off his popularity as the campaign season progressed.

Wu has raised around $1.8 million, with a significant amount coming from Bold Boston, a super PAC that has collected donations from environmental groups, unions, and individuals.

Kraft’s housing proposals had been influenced by the city’s developers, who have provided him with substantial financial backing. Citing slow growth in housing development, Kraft believed that Boston’s IDP should revert to 13 percent, and that the city should implement “opt-in rent control,” which would offer participating landlords a 20 percent return on their real estate taxes

It was an old-guard tactic: To escape a housing crisis, Boston had to build its way out—so private developers needed a voice in City Hall.

One Kraft claim, that Wu ignores valid criticism, has been echoed by her critics. Who exactly is Wu ignoring? When it comes to powerful local interests, Wu isn’t afraid to defend how she interacts with commercial property and real estate developers.

“We have many very fruitful and productive relationships and collaborations with developers who have been all in on our agenda to build more housing and build more affordability throughout the city,” Wu told the Prospect. “The role of city government is to direct our resources, to make it as easy and predictable as possible for private development to happen and add more housing and to put our own public resources into affordability. She added, “It is not the job of city government to bail out for-profits; to replace the profits of developers who took their own business risks and now are in a different economic environment than they were expecting.”

Even though the city has improved outreach to residents who historically have been marginalized and not consulted about the city’s real estate planning, there’s simmering resentment in two Boston neighborhoods about a new public facility destined for their communities. Wu has faced strong opposition to a project to rebuild White Stadium,

Wu has been at the forefront of resistance against the federal government’s attempts to carry out mass deportations.

located in Franklin Park, the city’s largest public green space. In the late 1940s, the football facility was purpose-built to serve as the practice and game location for Boston Public Schools (BPS) athletics. Once considered one of the best school facilities in the country, White Stadium has been falling apart for decades.

In 2023, Wu announced that the city had entered into a partnership with Boston Unity Soccer Partners, signing a tenyear, public-private lease agreement with the organization to renovate the stadium. Under the lease, in exchange for Boston

Legacy FC’s (a professional women’s soccer club) “shared usage” of the space with BPS teams, the city would split the construction costs with Boston Unity. The projected amount that the city will be expected to chip in keeps increasing: Wu stated in July that the city’s cost will “ likely ” exceed the current estimate of $91 million of the project’s estimated total $200 million cost. Wu has consistently argued that this public-private partnership is the best way to rebuild the stadium.

“This is the first time the city is moving forward with real action to deliver the reno -

vations that our student athletes and our park users and our community members deserve,” says Wu. “We were very intentional about the deal that was involved here— where BPS and our community are getting a professional stadium at more than half off the sticker price. Our tenants, the professional soccer team, committed in the legal lease language to pay for maintenance and operations entirely, forever, for throughout the term of the lease.”

Boston Unity will pay an annual rent of $400,000, share a small percentage of a few revenue streams with the city, and contribute $500,000 in the first year (then increasing by 3 percent annually) to a community benefits fund for local organizations.

Although the city’s plan provides considerable benefits, namely, a state-of-the-art facility for BPS high school students and teams, it also has been widely criticized. Money, of course, is one of the most cited concerns, as the amount of the taxpayerfunded contribution has yet to be con -

firmed. In July, Wu declined to give an update on the cost, saying that Bostonians would be informed by the end of the year— but bids for utilities and construction have already gone out.

Some organizations and individuals in the surrounding neighborhoods of Roxbury and Jamaica Plain have voiced doubts about the project. Leading the charge has been the Franklin Park Defenders, a local advocacy group backed by the Boston NAACP and the Emerald Necklace Conservancy, which oversees the city parks designed by landscape architect Frederick Law Olmsted.

This past spring, the conservancy and several community members filed suit against the city and soccer club in an attempt to halt the plan, citing traffic congestion, community disruption, reduced usage time for BPS sports teams, and damaging environmental impacts, including felling dozens of mature trees. The Suffolk County Superior Court ruled in favor of the city and the soccer club. That decision is under appeal.

Some of the project’s critics argue that residents have had limited opportunities to voice their reservations. Although the city hosted quite a few community discussions in 2023 and 2024 , there have been no sessions this year so far and the stadium demolition is under way. Kraft had seized on the discontent, pledging to halt the project if he’s elected mayor.

Wu has worked to make the city safer and more equitable. Violent crime rates have dropped, with city officials pointing to the power of community policing. “We [Boston] are the safest major city in the country because we are safe for everyone,” says Wu. Boston adopted a Green New Deal plan, which included the goals of running the city on 100 percent renewable energy by 2030, divestment from fossil fuel industries, and an expansion of housing co-ops. Wu invested $20 million into Boston’s universal pre-K program, which increased the number of seats available in early-education centers and integrated family child care providers into the system.

Overall, the mayor has been consistent in her messaging, which has helped rally voters to her purple banner. She has stressed what needs to be done locally, while also standing up for the city at the State House and on Capitol Hill. Wu doesn’t mince words when it comes to discussing the people who have attempted to browbeat her.

And she never hesitated to call out what

she described as Josh Kraft’s “negative campaigning” and “privilege.” “This city has high standards of candidates; it’s a testament to Boston’s rich political culture, and the priorities of its people.”

In the past few months, sanctuary cities across the country have come under fire for refusing to comply with the Trump administration’s aggressive immigration enforcement policies. Wu has been at the forefront of resistance against the Department of Homeland Security’s attempts to carry out mass deportations. Wu hit back at the Trump administration during a March appearance before a congressional committee on Capitol Hill that was cheered back home as well as in multiple press conferences since then. More recently, when Attorney General Pam Bondi threatened her with legal action, she sent a strongly worded letter back. Since then, the Department of Justice has moved to sue Boston, charging that the city’s policies violate federal law by preventing local police from cooperating with civil immigration enforcement.

It’s been a particularly harsh landscape to run any political campaign in, and Wu is up against a host of other disparagers, from some of her own constituents to the president of the United States. Yet it is very clear that Wu will not back down from anyone who has opposed her, because she believes strongly in both the work she is doing and the results she has achieved.

When I asked her what Boston would do if Trump escalated his attacks on the city, Wu did not flinch. “They are already throwing everything they can at us, and this is not a city that puts our heads down and hides,” she says. “It’s a complicated and scary moment for all of our community members, and we intend here in Boston at the city level to be a source of support, strength, and hope to remind all of us that we can still do big things if everyone is part of shaping our future.”

While some American cities have seen a decline in support for Democratic candidates and groups aligned with progressive policies, Boston delivered a decisive victory for Wu in the preliminary—which means the November election is shaping up to be more of a vote of confidence. As Bostonians stride forward even as the nation moves backward to reopen some of its darkest chapters, Michelle Wu has emerged as the leader best equipped to grapple with these uncertain times. n

CULTURE

By Maureen Tkacik

Brown Stage Capitalism

Cory Doctorow’s Enshittification describes how tech platforms (and everything else) went down the sewer. Hint: It rhymes with ‘deshmegulation.’

Enshittification: Why Everything Suddenly Got Worse and What to Do About It

By Cory Doctorow MCD

Five years ago this October, the richest man in China “disappeared.” Rumors swirled that he had been sent to a “re-education camp.” The Atlantic dubbed it “The Undoing of China’s Economic Miracle.” Alibaba founder Jack Ma was, the American Enterprise Institute wrote, a casualty of “China’s Takeover of Western Capitalism.”

Cory Doctorow had a different view. In a 56-part thread on Twitter, the BritishCanadian novelist-polymath explained how Jack Ma’s retreat was part of a broader campaign by the Chinese government to preserve its money supply from the

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whims of the yield-chasing ultra-wealthy.

The day I started reading Enshittification , Doctorow’s bleak nonfiction treatise on how and why Big Tech platforms are “all turning into piles of shit, all at once,” the exiled Ma made a shocking comeback. Alibaba, the platform he had founded to connect small and medium-sized manufacturers with international wholesalers and retailers, announced it had developed a proprietary semiconductor that would enable the company to wean itself off Nvidia’s H20 chips, which are critical processors for AI development and whose trade is closely monitored and restricted by wary authorities on both sides of the Pacific. Just a few days later, the federal judge who had called Google Search an illegal monopoly issued a ruling stating that he had no intention of doing anything about it.

Google is a main character in Enshittification. In 1999, the year after its founders published their idea for a search algorithm as an academic research paper, they hired a guy named Ben Gomes to figure out how to crawl

enough web pages to catch up with then-dominant Yahoo and AltaVista. Twenty years later, an exec named Prabhakar Raghavan, who’d come to Google from a post as Yahoo’s chief of strategy, issued a “code yellow” to address what he saw as an emergency: Growth in Google search queries had plateaued.

Gomes was incredulous, noting in an email:

We could increase queries quite easily in the short term in user negative ways (turn off spell correction, turn off ranking improvements, place refinements all over the page) … But I will say that I am deeply deeply uncomfortable with this, and I’d be surprised if the ads team wants this. The nature of how you would easily increase queries is a key reason I don’t like queries as an end metric. The easy ways are almost all bad. Having queries as a metric will, in my opinion, have a subtly bad effect as a launch metric even if we “decide not to do the bad things.”

By this point, of course, Google had decided to do the bad things many, many times, often in collaboration with Facebook and

Apple. It paid Apple as much as $20 billion in 2021 to make its search engine the default on the iPhone and its Safari browser, thus ensuring that the only company that feasibly could launch a competing search engine would be fiduciarily obliged not to. It conspired with Facebook to manipulate the market for internet advertising in sometimes shameless ways that extracted extreme and often fatal amounts of cash from both advertisers and online publishers (Google has also been ruled a monopolist in the online advertising market; a trial determining the penalty is in progress). It secretly worked with the military to develop AI-based targeting for drone strikes, and with sources close to the CCP on a since-abandoned project to build a Great Firewall–compatible version of Google. And in spite of its wholesome academic corporate culture, Google executives gaslit and marginalized employees who reported top executives for sexual predation, paying a $310 million fine in 2020.

And so, when faced with the choice of degrading its flagship search engine to goose ad revenue or listening to one of its

most venerated executives, it won’t shock you to learn what Google did next: It demoted Gomes, named Raghavan as his replacement, and condemned Google’s flagship search product, the very soul of its business, to the scourge of “enshittification.”

Doctorow coined the term “enshittification” in 2022, though it was hardly a new phenomenon even then. Facebook had started burying all posts with external hyperlinks in 2017 in a bid to force users to spend more time with its lousy ads; Apple had been purposely sabotaging the quality of iMessage texts since at least 2013; Amazon had retooled its search results to aggressively preference sellers who had spent heavily on ads, and de-emphasized price comparisons, which were replaced with a price-hiking algorithm called Project Nessie starting in 2015. (After four years, Amazon dropped Nessie, perhaps presuming they could hit their benchmarks by milking third-party sellers for an ever larger cut of their revenues.)

Massive internet platforms aside, compa-

Massive internet platforms aside, companies like Boeing and GE had been enshittifying for years.

nies like Boeing and GE had been enshittifying for years, in arguably a direct descendant of “planned obsolescence,” a term whose first usage I could find came from a 1929 Christian Science Monitor essay contemplating the fashion industry’s exhausting habit of raising and lowering hemlines.

But the era of enshitment clearly started to accelerate in the early post-pandemic period, as evidenced by the parallel output of intellectual kindred spirit Yanis Varoufakis, who Doctorow reminds us worked for a video game developer after resigning his post as the finance minister of Greece, to identify and analyze an epidemic of algorithm-abetted parasitism he called “technofeudalism,” another description of the business model behind enshittification.

Both Technofeudalism and Enshittification owe much inspiration to Elon Musk’s leveraged buyout of Twitter, where Doctorow has nearly a half million followers and Varoufakis has 1.2 million. For the Greek economist, Musk’s self-destructive pursuit of Twitter, which destroyed his personal brand and tanked Tesla sales, was definitive proof that something fundamental had changed about the sociology of capitalism.

“If I had to name one person to illustrate the need for technofeudalism, both word and concept, in order to understand our collective predicament, it would be Elon Musk,” Varoufakis wrote in Technofeudalism: What Killed Capitalism . “For all

his success as manufacturer, and despite attaining richest-man-in-the-world status, neither his achievements nor his wealth granted him entry into the new ruling class … he has lacked a gateway to the gigantic rents that cloud capital can furnish. Twitter could be that missing gateway.”

From Doctorow, a former software programmer and son of a programmer, one gets the sense that the lightning speed with which Musk’s takeover plunged users into a disorienting cesspool of self-righteous ethno-supremacists, crypto influencers, race science sock puppets, and obnoxious relentless scam ads—then asked them to pay $8 a month for the privilege of not getting shadow banned—offended something deep and personal in a man who is not easily offended. One day, he arose to find that some Musk minion had added a blue check mark to his profile free of charge, something “that had come to mean ‘I am someone who tolerates—or even likes—Musk’s unhinged management of Twitter and/or his personal views on race, immigration, gender, and workers’ rights. I am voluntarily giving money to the Hitler-salute guy, every month.’” That pissed him off even more.

Twitter was just the crest of a tidal wave of software companies suddenly charging subscription fees to access services that had once either been one-time purchases or supported by ads. Doctorow helpfully explains how enshittifiers are enabled by the ludicrous architecture of Bubble 1.0era legislation like the Digital Millennium Copyright Act, which makes it illegal to “break a digital lock” and enables copyright holders to press felony charges against users who somehow enable others to break said locks. The DMCA is the legal backbone of every company, like Apple, that renders it effectively impossible to repair their products without hauling them in to an explicitly certified Apple feudal fiefdom. Each tiny component of an Apple phone or watch is engraved with microscopic logos that Apple then uses to lodge copyright infringement complaints against unauthorized repair shops that buy old phones for their parts; the argument is that unauthorized repairs jeopardize the brand’s image.

The DMCA is also the reason McDonald’s franchisees were barred from repairing their own failure-prone McFlurry machines. Doctorow smells DMCA’s influence in Adobe’s abrupt 2022 announcement that it would begin charging $21 a month

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for the privilege of accessing certain colors, and DoorDash’s legal harassment of Para, Inc., an app founded by a former Uber employee that before its abrupt shutdown last spring enabled gig workers to view tips that had been prepaid by DoorDash users but concealed from them to prevent them knowing whether a job is worth doing. At its peak, DoorDash detailed a team of 40 full-time engineers to blocking Para from accessing tip data. (DoorDash lawyers additionally accused Para of “tortious interference” and violating the Computer Fraud and Abuse Act, but only the DMCA is a sufficiently terrifying statute to have likely convinced the moderators of the DoorDash driver subreddit to ban all discussion of the app and excommunicate any poster who mentioned it.)

“Manufacturers of every description are scrambling to find ways to infuse ‘IP’ into their products in order to allow them to mobilize the courts and federal law enforcement to turn their shareholders’ financial interest into legal obligations,” Doctorow writes, and “an app is a website wrapped in enough IP to make it a felony to install an ad blocker or any other modification that makes the product work better for you at the expense of a company’s shareholders.”

In granting apps the right to wield the absurdities of intellectual property law to legally bully their users, Doctorow argues, the government emboldened tech founders to view their companies as exempt from laws and regulations they choose to ignore. Like the ones requiring worker minimum wages, or banning companies from misclassifying employees as independent contractors to circumvent labor law, or outlawing interest on a $2,000 loan in excess of 36 percent, which is the law in most states. Or, for that matter, the ones that bar Anthropic from feeding terabyte upon terabyte of copyrighted content to train addictive chatbots, safe in the knowledge that the captured IP bar will convince class action lawyers to settle a half-million author claims for one-time payments totaling all of $3,000, whilst happily supplying media quotes about how “sobering” the act of watching liability insurance premiums tick gently upward will be for the $183 billion startup backed by Google and Amazon, leaving the beaten-down federal judge pre -

Platform barons like Jeff Bezos have actually transcended conventional capitalism to install themselves as post-risk tollbooth operators.

siding over the case to rant about the latest obscene humiliation ritual to which BigLaw is demanding his submission.

Both Doctorow and Varoufakis insist that Enshittified Technofeudalism is something qualitatively different from plain old “capitalism,” which after all gave the world such wonders as chattel slavery and the synthetic collateralized debt obligation squared. The insidious, extractive, heads-I-win-tails-youlose tyranny of Varoufakis’s technofeudal lords and Doctorow’s algorithmic tip thieves and royalty check bandits has always been with us, but a couple of generations ago we read about their deeds in plain language in the newspapers, painstakingly pieced together by organized-crime task forces and fraud watchdogs. The internet added layers of plausible deniability and egghead inscrutability to those narratives, while professional eggheads (née economists) promised legislators that the miracles of modern markets had rendered regulation effectively obsolete, while assuring hedge fund investors they had rendered risk itself obsolete.

Enshittification and Technofeudalism

detail how platform barons like Jeff Bezos have actually transcended conventional capitalism to install themselves as postrisk tollbooth operators, siphoning an increasing cut of the revenues of economic activity of others on their platforms. Amazon takes an average of 45 percent of the gross sales of its hundreds of thousands of third-party sellers, a state of affairs Varoufakis accurately describes as unprecedented.

By comparison, Jack Ma’s Alibaba facilitated nearly three times the dollar volume of gross sales on its platform in 2022, but historically generates less than a third of Amazon’s operating profits; sellers pay the platform an annual subscription fee but are charged less than 1 percent of sales in transaction fees. Perhaps that is why Ma decided in the heady days of zero interest rates to diversify into data-driven predatory microloans, which is how he wound up running afoul of the CCP. (That, and his sneering criticism of Chinese bank regulators’ “pawn shop mentality,” which is admittedly nicer than anything David Sacks ever said about Rohit Chopra.)

Alibaba stock plunged, Ma’s net worth along with it. He later surfaced teaching classes in Japan about sustainable agriculture. SoftBank divested its stake in the company, albeit more due to limiting WeWork-driven losses than choice. It ultimately turned out that a billionaire had been using Alibaba’s fintech platforms to transfer vast sums of rich clients’ wealth into offshore slush funds, all from his jail cell; perhaps Ma’s courageous words of “dissent” were not primarily the driver of the Chinese government’s decision to cancel the fintech platform’s IPO.

By 2021, Alibaba was back in the government’s good graces, premiering a new “digital yuan,” likely the first-ever example of an actually useful stablecoin; by 2025, he was meeting with Xi Jinping and giving conference keynotes encouraging attendees to remember their “ethics” and think of AI as a tool to “empower, not replace” workers. Such sentiments were relatively standard in World Economic Forum circles a decade ago, but seem downright radical alongside Enshittification’s nauseating email exchanges between Musk and his buddies about all the Twitter engineers he can’t wait to axe. Imagine if we could sentence them all to re-education camp. n

How Today’s America Came About

Two different accounts from two of the Prospect ’s co-founders

By Paul Starr

When Bob Kuttner, Bob Reich, and I founded

The American Prospect in 1990, we were aiming to promote ideas for America’s future, as the magazine’s name indicates. That future hasn’t worked out the way we wanted, to put it mildly. Thirty-five years later, two of us have written new books with different stories about the path the country has followed. Reich’s is an autobiography, Coming Up Short: A Memoir of My America, while mine is a social and political history, American Contradiction: Revolution and Revenge From the 1950s to Now. In Coming Up Short, Bob uses his experience of being bullied because of his height (four feet eleven) to frame contemporary politics. He sees America as having devolved

into a struggle between the bullies and the bullied, the rich and powerful vs. the working majority—and the bullies have been winning. As the book ends, he admits that, at least personally, he hasn’t succeeded at the “short game” (the puns never stop), but he is no less committed to a “long game” that he believes we can win.

Born in 1946—the same year, he points out, as Donald Trump, George W. Bush, and Bill Clinton—Bob grew up in a hardworking middle-class family amid the broadly shared prosperity of the post–World War II era. Then came the “giant U-turn” toward inequality in the 1980s under Ronald Reagan, and the battle that Bob waged as secretary of labor in Bill Clinton’s first term, a section of the book that he calls “Failure.”

From that failure, Bob draws a straight

line to Trump. He recalls a speech that he gave after Newt Gingrich and the Republicans won control of Congress in 1994, when he said that “we are on the way to becoming a two-tiered society composed of a few winners and a larger group of Americans left behind, whose anger and disillusionment are easily manipulated. Once unbottled, mass resentment can poison the very fabric of society.” To which he now adds: “I wish I had been less prescient.”

Why did things turn out so badly? While pointing primarily to the bullies, Bob also blames Clinton and Barack Obama and their dependence on “big money” and desire to please Wall Street. “Both Clinton and Obama,” he writes, “stood by as corporations busted trade unions, the backbone of the working class.” Since then, “anti-

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establishment fury at a ‘rigged system’” has become the driving force in politics. Bob’s hero now is Bernie Sanders. “Because Democrats have not embraced economic populism, the only populist version available to voters without college degrees has been the Republican cultural one.” And that cultural populism is “entirely bogus,” a ruse used by Trump and others to distract from the true, economic stakes.

Bob doesn’t say much in his memoir about the considerable change in his politics since he burst into national prominence. A half dozen books of his, from The Next American Frontier in 1983 to The Work of Nations in 1991, created excitement among Democrats about new directions in economic policy and led to his role as an adviser to presidential hopefuls Gary Hart and Walter Mondale in 1984, Michael Dukakis in 1988, and finally Clinton in 1992.

In those years, Bob’s main themes concerned industrial policy and the need for a more skilled workforce. He argued that a globalized, postindustrial economy demanded public policies supporting a shift in investment from “standardized, highvolume” production to “flexible, high-value” production. In the “era of human capital,” America needed to make major new public commitments to lifelong education and training for workers. He didn’t emphasize the value of unions, and no one would have described his proposals as populist. His new book doesn’t discuss why he may have later concluded that although industrial policy and human capital investments were sensible policy, they were unlikely on their own to stop rising inequality.

An incident in the Prospect ’s early history illustrates how different Bob’s thinking was then. After the second issue came out in June 1990, he called me (the magazine came out of an office in Princeton at the time) because he felt an article by Bob Kuttner, “The Poverty of Neoliberalism,” was an implicit attack on him. “Neoliberalism” in 1990 referred to a chastened, moderate liberalism; the article criticized neoliberals for arguing that Democrats needed to distance themselves from the progressive liberalism of the New Deal and Great Society that called for economic regulation, support for unions, redistributive taxation, and expanded social insurance. I assured Bob Reich that the article was not aimed at him; it restated ideas all three of us signed on to in the Prospect ’s prospectus. But since he

was sometimes described as a neoliberal (as in Randall Rothenberg’s 1984 book The Neoliberals), it was understandable that he could think he was the target.

As secretary of labor, Bob was a public advocate for the North American Free Trade Agreement that Clinton supported. In his 1997 memoir, Locked in the Cabinet, Bob recalls making the case for NAFTA in February 1993 at his first meeting with AFL- CIO President Lane Kirkland: “Look: Mexican tariffs on the stuff we sell them are four times higher than our tariffs on what they sell us. Cut both sets of tariffs and we’ll export like mad. That means more jobs here.”

“Bullshit,” the union chief responded, “Harvard economist bullshit.” Bob continues in his 1997 account: “I restrain myself from saying the next thing on my mind: The real problem is that the unskilled U.S. workers who once had good factory jobs are inevitably being replaced, either by lowerwage foreign workers or by computers and robots. They need newer and better skills. Stop trying to protect yesterday’s jobs. Join us in preparing people for tomorrow’s jobs … Trade isn’t the problem, and you know it.”

That internal soliloquy, which is consistent with Bob’s writings before becoming labor secretary, suggests that at least in his first weeks on the job, he didn’t object to NAFTA . In Coming Up Short, however, he remembers his view differently: “I wasn’t allowed to speak out publicly against NAFTA , of course, but I dreaded media interviews

where I had to defend it.” Perhaps he is recalling what he thought of NAFTA after it became clear that Congress was not going to pass the Reemployment Act, the program he hoped would boost the skills and employability of workers and enable them to adjust to NAFTA

Bob now views both NAFTA and the later opening to China as having taken a terrible toll politically as well as economically: “You can trace a direct line from these trade deals and the subsequent job or wage losses to the rise of Donald Trump in 2016.”

Many other Democrats regret going along with free trade; even Clinton does. What they see now they didn’t anticipate then. The economy was strong during the 1990s; it enabled Clinton to become the first Democratic president since Franklin Roosevelt to be re-elected. The damage from trade agreements was regionally concentrated. NAFTA primarily devastated working-class communities in the South and helped discredit Democrats in those areas; the China shock later did the same on a larger scale, with critical effects in the Midwest.

As I put it in my own book, moderates in both parties went “sleepwalking into revenge,” and not just on trade. They supported deregulatory policies that hurt unionized workers too. American society was changing radically because of new technologies, vanishing unions, and declining real incomes for people without a college education, especially men. Much of this would have happened in the long run regardless of the policy choices of the 1990s. Bringing back highly automated factories today won’t bring back that many jobs. But because Democrats have been seemingly indifferent to the felt interests of people whose livelihood and self-respect were being destroyed, they have taken the blame.

I don’t claim that during the 1990s I had any greater foresight than Bob Reich. If either of us is entitled to use “failure” as a description for his time in the Clinton administration, that would be me. I had a hand in Clinton’s proposed Health Security Act and, not to brag, its failure was a bigger deal than the failure of Bob’s Reemployment Act. But my new book is a history, not a memoir, and I have a different view of liberal politics and Democratic presidencies over recent decades. “Failure” is not how I sum them up. The great project of liberal and progressive politics in the 20th century’s second

half became the achievement of equal rights and respect for people who had been left out of the New Deal and earlier Progressive Era reforms. The Black freedom struggle provided the spark and the model for the legal claims, economic goals, and cultural transformation sought not only by other racial minorities but by the women’s and LGBTQ+ movements. With critical support from liberals in the courts, the media, and the Democratic Party (and, at first, many Republicans), those movements brought about revolutionary changes in American life. Despite setbacks, these remain historic achievements, but they have come at a cost.

The pursuit of a broader vision of equality didn’t just predictably provoke opposition from the right. Beginning in the mid-1960s, it produced a breach in progressive politics between unions on the one hand, and the Black, feminist, gay and lesbian, anti-war, and environmental movements on the other. Those movements confronted labor leaders with demands for change in their racist and sexist practices and denounced their complicity in the Vietnam War. That attack later cost the labor movement moral legitimacy and progressive allies as the unions came under siege by employers and the Reagan administration. Lawsuits against unions for racial and gender discrimination also hit them hard financially.

Long before Clinton and Obama, the labor movement lost priority in Democratic administrations. In 1964, the Democratic platform called for repealing the provision of the 1947 Taft-Hartley Act that allowed states to pass anti-union, right-to-work laws, but Lyndon Johnson let that promise slide behind other priorities, and it met defeat in a Senate filibuster. Jimmy Carter also failed to champion labor law reform. To many of the post-Watergate generation of Democratic leaders, unions were “dinosaurs,” relics of another era. In all the years after World War II when Democrats held congressional majorities, they failed to pass a single bill that aided private-sector union organizing.

Republicans were so hostile to unions that Democrats could take labor’s support for granted. But what for Bob Reich is Reagan’s “giant U-turn” is, in my account, only a “half-turn right.” While Reagan’s policies increased economic inequality, neither he nor his Supreme Court appointments brought about the full counterrevolution

American politics since the 1990s has been a tie game in which Democrats have been losing.

against modern liberalism and equal rights that Trump and the Roberts Court are now undertaking. In the decades after Reagan, the rights-oriented movements persisted and, in the case of LGBTQ+ people, gained ground. This continuing skew, the broadening of social equality together with the exacerbation of economic inequality, helped produce the crisis we now face.

The 1990s were a historical turning point, though they didn’t lead in a straight line to Trump. In national politics, the past 35 years have been a 50-50 era, with two sharply divided but closely matched parties. Democrats won the popular vote in seven out of eight presidential elections from 1992 to 2020. As Steven Levitsky and Daniel Ziblatt point out in their book Tyranny of the Minority, Democrats also won a majority of the votes cast nationally in Senate elections over every six-year cycle from 1996 to 2020 (it takes six years for every seat to come up for election). But the structure of American institutions worked against them. In both 2000 and 2016, the Electoral College gave Republicans the presidency, and during 12 of the 24 years from 1996 to 2020, Republicans had Senate majorities because of their dominance of smaller states. Defeats that matched the actual voting patterns of the public might have led Republicans to move back toward the center; instead, Republicans learned they could move further right at no cost.

In short, American politics since the 1990s has been a tie game in which Democrats have been losing. When they’ve won the presidency, they haven’t won Congress by large enough margins, or for a long enough time, to sustain anything like a New Deal or Great Society agenda. But losing has posed more serious risks than in the past because Republicans are no longer the center-right party they used to be. As Trump gained control of two institutions—the Republican Party and the Supreme Court—the critical change has been Republican radicalization, not a symmetrical polarization or big Republican electoral gains.

America has become a 50-50 country in another sense. Until the late 20th century, the United States was a 90-10 society: Americans thought of the country’s racial makeup as 90 percent white, 10 percent Black. It is closer to a 50-50 society in the white-minority balance today, though not nearly at that point. In the 1990s, the media began proclaiming a majority-minority future based on census projections that, as the late Richard Alba explained in The Great Demographic Illusion , were fundamentally misleading.

Obama’s election in 2008 confirmed for many Democrats that demography was political destiny, and for many Republicans that America was near a dangerous tipping point that required drastic action. Contrary to the hopes that Obama would bring a “post-racial” future, his election increased anxieties among racial conservatives. That too was part of the sleepwalking pattern. Alarm bells were ringing on the right, and Democrats failed to understand that immigration and border security, like trade, could have explosive political repercussions.

The main difference between Reich’s account and mine is that I don’t reduce the story to economics. The concerns about race, gender, and sexuality—what some dismiss as “identity politics”—are not just distractions from the economic stakes. The American revolutions of the 20th century had a tragic historical timing. They developed in an era when, for independent reasons, working-class livelihoods were being undermined. The two developments became the basis on which a far-right movement could find new support, just enough to win the tie game.

The danger now is that Trump and the Roberts Court can entrench a right-wing regime for the long term. This was always a risk in a constitutional system that, as Trump has shown, is vulnerable to an executive coup. America was born in the contradiction between freedom and racial slavery, from which our later conflicts between freedom and social subordination have been descended. It was a lovely illusion that the arc of the universe bends toward justice. Freedom and equality were never truly guarantees. They have to be fought for over and over, and it will be a fight now even to preserve elementary fairness in elections and the law. That is all we can say with certainty about the American prospect. n

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Why the Israel-Palestine Conflict Remains Unresolved

Two former negotiators on opposite sides write that neither side has ever acknowledged the other side’s existential needs.

By David B. Green

Tomorrow Is Yesterday: Life, Death, and the Pursuit of Peace in Israel/Palestine

By Hussein Agha and Robert Malley Farrar, Straus and Giroux

Michael Sfard has long proclaimed that someday, Israel’s occupation of the Palestinian territories will come to an end. The courageous Israeli human rights lawyer never predicted how many decades this would require, nor how many lives would need to be sacrificed before Palestinians and Israelis would each have control of their lives, but simply argued, as he told me in 2018, how in his understanding of history, “regimes that are fundamentally subjugating people, stripping them of rights … are regimes that by definition are not sustainable.”

Today, Sfard himself would likely agree that his vision is further from realization than ever. The extent of death, destruction, and overall human suffering that both Israelis and Palestinians have visited upon themselves and each other since October 2023 challenges human comprehension. Two years ago, to most of us, at least, such barbarities would have been unthinkable.

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Not to Hussein Agha or Robert Malley, however. In Tomorrow Is Yesterday, they as much as assert that the latest round of violence, extreme as it may be, is not essentially different from the brutality that has accompanied the conflict for the past century. Which is why they have chosen to publish what is essentially an analysis of how all previous efforts to negotiate peace were doomed to fail, and why the two warring parties were nonetheless willing at various times to acquiesce to plans they found unsatisfactory. Giving in, they say, was easier than grappling with the fundamental questions that truly define the conflict.

Yet leaders of democratic states earnest in their desire to end the bloodshed, and to do so decisively, are again talking about two states, and about diplomatic recognition of the Palestinian one. The United States is offering a different alternative, but one that is even worse than no solution at all. Thus the urgency, from Agha and Malley’s perspective, to resist returning to the failed assumptions of the past, and to urge for consideration of a different approach to peacemaking. The two are former negotiators who were both involved, over many decades, in attempts—all of them ultimately failures—to resolve the conflict. Both also have deep personal connections to the region.

Hussein Agha, in his mid-seventies, is an Oxford-educated writer who grew up in a Beirut home that was filled with books, art, and music created by Jews, and often visited by his Lebanese-Iraqi-Iranian father’s Jewish colleagues in the rag trade. As an adult, Agha became an adviser to Yasser Arafat and later to Mahmoud Abbas—Arafat’s successor as president of the Palestinian Authority—and participated in many negotiations with Israel over the years, both formal and unofficial.

Malley, born in 1963, is the son of a Syrian-Jewish globetrotting journalist who supported nearly every national liberation movement on Earth—other than Zionism. The authors write that the main impact of Simon Malley’s being Jewish “seems to have been to provide him reason to be an Arab nationalist of the fiercely secular, antiZionist sort.”

Rob, as he is generally called, was raised in Paris, where in high school he debated classmate Antony Blinken on the question of Israel-Palestine, with Malley defending the Palestinian position. Generally, though, he says he rejected his father’s black-and-white view of the conflict, and became convinced that Zionism and Palestinian nationalism were “two competing national movements

in need of some kind of coexistence.” That is the approach that characterizes his and Agha’s book, which is not intended to be a brief for one nation or the other.

Malley worked in the Clinton, Obama, and Biden administrations, both on the Iran nuclear issue and as the organizer of the 2000 Camp David peace conference. He also worked for close to two decades, off and on, at the nonprofit International Crisis Group, including three years as chairman and CEO of the political analysis organization. Although part of Tomorrow Is Yesterday is dedicated to making the case against the two-state solution, the authors are not especially interested in proposing alternative frameworks, and devote only a few pages toward the book’s end to a cursory listing of ideas for possible federation, confederation, or even “two superimposed states.” While partition into two sovereign entities may still seem like the only logical alternative to outside do-gooders, considering that neither side is currently in the market for peace plans, it may make sense to let the imagination run wild with more unconventional ideas for the future.

The authors are mainly intent here on arguing that while the Israelis and their American sponsors (who come in for the most extensive criticism in the book) were looking to make what was in effect a real estate deal that would leave Israel safe and secure, the Palestinians were seeking justice. For them, the “notion that Israel was ‘offering’ land, being ‘generous,’ or ‘making concessions’ seemed … doubly wrong—in a single stroke affirming Israel’s right and denying their own. For the Palestinians, land would not be given. It would be given back.”

Fundamentally, the conflict was about much more than land: It was about the roughly 300,000 of the indigenous Palestinians (and their descendants) who went into exile as a result of Israel’s creation, and the question of how the loss of their homeland and property

would be recognized, if not compensated for. It was also about Palestinian insistence that Jerusalem, meaning the Arab, eastern half of the city, including the Muslim holy sites in the Old City, serve as their capital.

For even the most sympathetic Israeli politicians, by contrast, peace talks were expected to begin with discussion of the fate of the territories conquered in the 1967 Six-Day War: the West Bank, Gaza Strip, and maybe Jerusalem. Anything other than that, such as a demand for recognition of refugees’ “right of return,” was tantamount to “reopening the 1948 file,” meaning negotiating the very basis for Israel’s establishment, which the international community had already agreed upon in 1947. That was never going to happen.

Though the authors don’t make this point explicitly, it was Yasser Arafat who was largely responsible for this state of affairs, after he agreed—implicitly in 1968 and explicitly two decades later—to have the PLO Charter changed so as to accept the idea of two states, with the Palestinian one to be formed in lands occupied by Israel in 1967. This may not have reflected a particular ideological vision, but Agha and Malley suggest that Arafat was principally interested in maintaining Palestinian unity. At this

he succeeded, and even when his decisions caused internal dissent and anger, his “preeminent position was seldom questioned.”

Arafat’s gradual adoption of the twostate concept is what made it possible for Israel to begin speaking with Palestinian representatives, but it also meant that when the Oslo process began, in 1993, the sides leapfrogged over cardinal issues that spoke to the essence of the conflict. That may have resulted in what seemed like progress in negotiations, write Agha and Malley, but in fact disregarded that it was “impossible to resolve the conflict in the present without pronouncing some judgment on its past. Palestinians insist on acknowledgment of, and redress for, the Nakba; Israelis look for genuine acceptance of their material and spiritual connection to the land; each desires accountability for what the other has inflicted on them; both have 1948 in mind even as they speak of 1967.”

The authors put their finger on the essence of the problem in this way: “Palestinians hoped they could achieve their goals even as they persisted in denying the Jewish people’s historic attachment and entitlement to even part of the land. Israelis trusted that if they granted Palestinians some kind of restricted governing role in a portion

of territory, the whole problem would fade away. It is only a slight exaggeration to describe the talks as a confidence game, a tacit agreement to elude the historic core of the matter through disingenuous ambiguity.”

(About the wily and elusive Arafat, the authors write: “He never read a proposal he rejected; never read one to which he agreed, either. If you knew how to listen, you could discern the truths he dispensed without meaning a word of what he said.” To which they later add that violence “was merely one among the few instruments at the Palestinians’ disposal, neither more nor less legitimate than others.” The Arafat they describe might make for a fascinating literary figure, but not one on whom you would want to depend in negotiating a life-or-death contract. And since 2004, when Arafat departed the stage, no Palestinian leader has wielded similar authority among his people.)

The point is not so much, then, that the two-state idea was always bound to fail (although the authors are persuasive in arguing that neither side ever truly believed in it), but rather that successive attempts to implement it, beginning with the Peel Commission recommendations of 1937, and continuing with the U.N. plan in 1947 and on through the Camp David summit in 2000 and beyond, ignored both sides’ fundamental needs and fears.

To those who say the various two-state plans always failed because of “bad luck”— “Barak had the intellect but lacked the subtlety and empathy to match; Arafat possessed authority but could not fashion himself a statesman; Sharon left the scene too soon or saw the light too late; Olmert was farsighted, but corrupt, Abbas overly cautious, the Palestinians divided”—Malley and Agha cite the blues musician Albert King, who famously sang, “If it wasn’t for bad luck, I wouldn’t have no luck at all.”

The authors devote significant space to analyzing the car crash that was Camp David. In their telling, Arafat did all he could to convince Clinton that the time was

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not yet ripe for talks. Israeli Prime Minister Ehud Barak, however, had his reasons for insisting on going ahead with the summit, while for the U.S. president, the hourglass was running out on his second term, meaning that it was now or never. When the talks failed, Clinton joined the Israeli premier in pinning the blame on Yasser Arafat, and that is the version that is most widely accepted today. It says that the Israelis presented the Palestinians with the “most generous offer” they ever received, and the Arabs turned it down. That, combined with the outbreak of the intifada just a few months later, characterized as it was by a wave of shocking suicide bombings, served to permanently convince most Jewish Israelis that peace would never be possible with this adversary.

In this telling, once again the Palestinians had made the wrong choice, and forever after, “Camp David” would serve as “the two-word answer to all manner of difficult questions about Israel’s actions, behavior, and intentions. When Israelis strike at Palestinians, a reaction stands ready: The Palestinians had their chance. They blew it.”

It’s not obvious that one can expect “justice” to emerge from a diplomatic negotiation where details of an agreement are being hammered out, but it is clear that neither Palestinian nor Israeli leaders ever laid the necessary groundwork by which their people would understand and internalize the legitimacy of the other side’s narrative, which is what was required to make any legal deal receive their support. That is how it is that in the Israel of 2025, we have a government that can deny that the Palestinians suffered a catastrophe (the literal meaning of “Nakba”) in 1948, and it is how there has never been a serious national debate over the fate of the territories and the settlements.

On the Palestinian side, the corresponding fear or unwillingness of the leadership to convince their society of the legitimacy of the Jews’ claim to a national home in the Land of Israel explains in part how there can be widespread support for Hamas and more radical Islamic organizations, which are constitutionally incapable of accepting Israel within any borders. No wonder Israelis have always been reluctant to make the necessary concessions: “When violence rages,” the authors write, “they cannot afford to consider far-reaching compromise. When it fully subsides, they no longer need to.”

Tomorrow Is Yesterday is a short book, only a little over 250 pages, and it does not purport to be comprehensive. Still, it is a shortcoming that in its criticism of successive U.S. governments—for failing to play the role of honest broker, for failing to press Israel at critical points, for going along with arrangements that turned the Palestinian Authority into a subcontractor for Israel’s security, and thus eroded its credibility in Palestinian society—it doesn’t mention the role played by the Jewish establishment in America, in particular AIPAC (the American Israel Public Affairs Committee), in twisting arms in every branch of the U.S. government to acquiesce to Israel’s demands. The authors acknowledge the internal politics that Israeli and Palestinian leaders had to contend with, but don’t take it into account sufficiently when it comes to American politicians.

Agha and Malley also provide a concise but illuminating history of Hamas and of its own civil war with Arafat and Abbas’s Fatah. But while they acknowledge that

Hussein Agha and Robert Malley would not have written their book if they did not think a better future was possible.

When Camp David talks failed, President Clinton joined Israel in blaming Yasser Arafat.

Hamas’s ideology prevents it from ever conclusively coming to terms with Israel, they do insist that Israel missed several opportunities to come to a long-term cease-fire with Yahya Sinwar, the mastermind of the October 7 attack, which might well have prevented that particular bloodbath. But in a book that so convincingly argues for dealing with fundamentals, and resisting the temptation to accede to quick fixes, that advice, even offered retroactively, seems to contradict the main message.

Overall, though, Tomorrow Is Yesterday deserves widespread attention and praise. That includes appreciation for the writing itself, which sometimes sings. If it is exceedingly difficult to see grounds for optimism in Israel-Palestine right now, it is reasonable to suggest that Hussein Agha and Robert Malley would not have written their book if they did not think a better future was possible. For the people who live here, there truly is no alternative to believing that and to working toward it. If the authors’ main contribution has been to conduct a “debriefing,” in which they identify the failings of past efforts, we will have reason to thank them, as the popular Israeli song from 1967 has it—“if not today, then tomorrow, and if not tomorrow, then the day after.” n

David B. Green is a writer living in Jerusalem, and a former longtime editor and writer at Haaretz English Edition. He posts at https://davidbeegreen.substack.com.

America’s Greatest Mistake

Globalization left millions behind as a policy and transformed the world politically, a new book argues.

By Siddhartha Mahanta

The World’s Worst Bet: How the Globalization Gamble Went Wrong (And What Would Make It Right)

By David J. Lynch PublicAffairs

For a time, globalization was synonymous with utopia: the untrammeled flow of capital across borders, new markets waiting to be opened, the growth of developing nations flaunting their comparative advantage in manufacturing jobs. If you covered the chaotic end of Suharto’s rule in Indonesia, the ruble crisis in Russia, China’s integration into global markets, and the plight of abandoned American workers, however, you may be convinced globalization is the single-best explanation for the economic upheaval and political polarization of our current age.

This is where David J. Lynch, a longtime global economics reporter for The Washington Post, has landed. For years, he has covered every major trade agreement and its impact on workers around the world. In The World’s Worst Bet: How the Globalization Gamble Went Wrong (And What Would Make It Right), he delivers a new history of the euphoric rise and eventual backlash of this era of the connected world.

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Living through the past decades, you may feel like you know the story all too well. But by focusing on the tension between capital and labor, he brings fresh insight to the weighty decisions and missteps that brought us from the heady days of neoliberalism to the full-on return of a nationalist world order.

Lynch structures the book as a narrative autopsy of each presidential administration’s respective failures to shield

the American worker from globalization’s most backbreaking consequences. Anchored in exhaustive reporting and dozens of interviews with those who built or challenged the system, it is a Greek tragedy of messianic, world-shaking hubris, starring an elite class of politicians whose betrayal of working-class Americans helped trigger a populist surge that has engulfed the world.

In the 1990s, President Bill Clinton viewed globalization as an unparalleled force for spurring prosperity at home and spreading political liberalization abroad. He lifted barriers to trade, signing the North American Free Trade Agreement (NAFTA) and bringing China into the World Trade Organization (WTO), which was founded in 1995 to establish the rules of global commerce.

While most Americans supported China’s accession to the WTO, nearly three-fifths believed that workers at home would suffer. In the academy, economist Dani Rodrik argued that gains for investors and highskilled labor would come at the expense of low-skilled and less-educated workers, whose jobs would be taken by Chinese labor. Over time, Rodrik added, this gap would foment social and political tensions, while increased mobility of capital would make it easier for corporations and the rich to dodge taxation.

Clinton wasn’t ignorant of such concerns, Lynch notes. Yet he saw himself as a realist. Companies had been shifting blue-collar jobs overseas anyway; better that the U.S. get some benefits in the exchange. To offset the pain for workers, he turned to his party’s favored solution since the Kennedy years: “trade adjustment assistance” (TAA), or investments in job training, infrastructure, and technology to ease workers into more productive industries.

TAA had long underperformed, thanks in part to cumbersome application processes that sharply limited enrollment, Lynch writes. Only 10 percent of eligible workers received benefits. Yet Clinton still saw TAA as the cure for what he was about to unleash on workers, including a version of it in NAFTA . Whether due to deficit hawks in Clinton’s own party or House Republicans who took over after the 1994 midterm elections, TAA once again failed to deliver much more than meager charity for workers undercut by offshoring.

After NAFTA’s signing, factory employment remained stable. But workers most exposed to competition from Mexico were hit hard, spurring working people to believe the Democratic Party had abandoned them and fueling a wave of anti-globalization protests that crested at the WTO’s meeting in Seattle in 1999. Led by trade expert Lori Wallach, activists succeeded in blocking new trade talks, but only after a violent crackdown by authorities.

China started slashing tariffs and courting investors in the early 1990s. After joining the WTO, it revised thousands of regulations in accordance with the body’s rules. In the first six years of its membership, U.S. investment in China more than doubled, and firms devised globe-spanning, super-lean supply chains, slashing inventories by almost a third between 1992 and 2005. “Just-in-time” logistics exacerbated the risks of supply chain disruption, but executives saw them as a boon for their stock prices, Lynch writes. And with China committing to market liberalization, political reform would soon follow. Or so the endof-history thinking went.

Then unexpected things began to happen. Imports from China spiked by 50 percent in the first three years of its membership in the WTO; wasn’t it supposed to go the other way around? Beijing also began flouting its trade commitments, particularly around subsidy phaseouts.

Perhaps the most alarming development was the hollowing out of blue-collar America. In 2016, economists David Autor, David Dorn, and Gordon Hanson published a paper on the “China shock,” estimating that low-wage Chinese competition had taken some 2.4 million American jobs from 1999 to 2011. While companies benefited from cheaper Chinese products, slightly increasing U.S. employment, the job losses that did occur were concentrated among less-

CULTURE

educated and less-skilled Americans, just as Rodrik predicted.

With a few ineffectual exceptions, the Republican Party under George W. Bush showed little interest in either trade enforcement against China or trade adjustment assistance for impacted workers. By the mid-2000s, Washington was spending a smaller share on education and training than it did at the end of the Cold War. Even the halting efforts toward protectionism were ill-fitting. Bush, heeding the lessons of the Democrats’ fallout with West Virginia steelworkers, tried to use tariffs to protect their industry, only to have the WTO rule them illegal.

The massive trade surplus with America meant China was flush with dollars that it plowed into low-risk U.S. Treasurys. Eventually, Beijing became the single-biggest holder of U.S. government debt, giving it immense power over Washington. For Americans, it also helped keep borrowing costs low. This would prove toxic. Bush argued that construction jobs created by the ill-fated housing boom could help fill the gap left by the vanishing manufacturing sector. When the bubble popped, so did the remnants of that strategy.

As a senator, Barack Obama observed that globalization had “changed the rules of the game,” leading to the loss of jobs, health care, and retirement security. As president, Obama’s Affordable Care Act and stimulus would attempt to stanch some of the bleeding. But few of his insights about globalization carried over to his presidency, even as Beijing’s litany of misbehaviors expanded.

Undervaluing the yuan made China’s exports ultra-cheap. Its state-backed corporate espionage operation was responsible for an estimated 50 to 80 percent of global intellectual property theft. Stories emerged of Chinese regulators coercing U.S. companies into reincorporating in their country or even selling to state-backed private equity funds for a fraction of their value.

Yet Obama would continue to regard globalization as the righteous path, while continuing to inadequately compensate the policy’s losers. In 2011, Goodyear closed a plant in Union City, Tennessee, laying off 1,900 employees. Of those who finished TAAfunded training, only a little over one-third found work in their new fields, Lynch writes. Those who did saw their earnings shrink, in some cases by half.

To sway China’s neighbors into the U.S. sphere of influence, Obama pushed for the Trans-Pacific Partnership, a 12-nation free-trade pact with Asian and South American countries. Wallach, Republican attorney Robert Lighthizer, and a cadre of anti-globalization activists viewed the TPP’s pro-business protections, including a provision allowing companies to sue governments for passing laws that weaken future profits, as evidence that corporations would continue to take precedence over labor and the environment. White House polling showed that while collegeeducated Democrats and left-leaning

Imports from China spiked by 50 percent in the first three years of its membership in the WTO; Joe Biden poured hundreds of billions into building American factories to reverse that slide.

independents generally supported the TPP, Republicans no longer supported trade deals, with particularly fierce opposition from non-college-educated whites. Obama ultimately secured a “fasttrack” process allowing a yes-or-no vote on the TPP ’s passage, but only after 151 House Democrats voted against his initial attempt. In the end, both candidates in the

2016 presidential election turned against the TPP, and the winner rejected it on his first day in office.

In Donald Trump’s opinion, free trade had allowed a cabal of global elites to destroy American workers, either replacing them with faceless hordes of immigrants or shipping their jobs overseas. On the campaign

trail, he warned that Hillary Clinton, who had backed the TPP before later rejecting it, would extend her husband’s trade legacy—a potent, effective attack.

After plowing through the GOP primary field and defeating Clinton, Trump declared war on trade, setting about renegotiating

tsunami that hit Fukushima, Japan. But businesses were completely unprepared for rapid consumer shifts and haphazard lockdowns at Chinese factories.

As a result, inflation jumped to levels not seen in nearly half a century. By the end of January 2021, ocean-shipping costs had skyrocketed by 80 percent. Executives around the world were forced to accept that just-in-time may have gone just a bit too far.

NAFTA , engaging China in contentious trade talks, and tasking Light hizer, his top trade official, to use targeted tariffs in a blunt attempt to force reshoring.

Yet his nationalist agenda, assembled without any input from labor groups, fell short, Lynch writes. The United StatesMexico-Canada Agreement, NAFTA’s successor, largely resembled its predecessor. With China, Trump suspended a threatened second round of tariffs in exchange for a promise from President Xi to buy more U.S. goods. Structural concerns that Lighthizer had raised around things like intellectual property went unaddressed.

COVID -19 initially ground the world economy to a halt, but quarantining consumers, boosted by federal aid, started shelling out for furniture and fitness gear. Panic buying exacerbated shortages of everything from medical equipment to computer chips. The world had absorbed the risks from hyper-lean global supply chains before, notably after the 2011

Joe Biden had backed NAFTA and Beijing’s integration into the global economy as a senator. But the China shock changed his mind, convincing him to vote against trade agreements and support punishing China for devaluing its currency. As vice president in the age of Occupy and the Tea Party, he questioned whether free trade could deliver for working Americans.

As president, Biden pledged to break with globalization and recenter U.S. workers, with hundreds of billions in fresh spending for American-made computer chips and clean energy, leading to record-high spending on factory construction. Defying environmentalists, he slapped a 100 percent tariff on China’s electricvehicle sector and other cleanenergy components, while keeping in place the bulk of Trump’s tariffs. Yet there was little hope of reversing a 70-year slide in manufacturing employment, one fueled largely by automation, and, later, by NAFTA and the China shock.

In the 2024 election, the Democrats would be doomed in part by Biden’s pursuit of a second term despite his evident infirmity. But Vice President Kamala Harris’s failure to articulate a working-class economic agenda and speak to voter concerns about runaway inflation once she replaced him on the ticket showed, yet again, how little the party had learned.

Since reclaiming the presidency, Trump has decimated large parts of the federal bureaucracy, delivered a massive tax cut for the rich, launched a deportation army, and unleashed a flurry of new trade wars. Without Lighthizer’s steadying hand, the tariff regime has been chaotic, and unpopular amid inflation fears. It has not delivered promised benefits for workers; manufacturing employment has fallen for six straight

months as of August, and the spike in factory construction is over.

Even amid the tariff wars, nearly $600 billion worth of merchandise passes between the two nations each year. And China remains an irreplaceable supplier for American manufacturing. Those salivating for a true break may be disappointed, Lynch suggests.

Near the end of the book, Lynch presents a statistic sure to haunt even the most diehard globalization evangelist: In places hit hardest by China’s rise, Washington has spent more than 30 times as much per person on lifetime disability benefits than on TAA .

For the true believers, Lynch recommends some soul-searching. Writing off defenses of the manufacturing work central to the fabric of countless small towns as “ignorant protectionism” appears to have done little good. “Treating the livelihoods of individuals and communities as just another variable in an equation might be the right way to run a regression, but it was the wrong way to win and hold political power,” he writes.

Yet these individuals and communities are largely absent from his book. So too is any extended discussion of trade’s disparate impact on different ethnic groups, much less between genders. Lynch’s policy prescriptions also feel unsatisfying: He recommends rebuilding our tattered social safety net via higher corporate tax rates and a renewed commitment to ending tax avoidance. For Lynch, proposing policies seems less important than forcing a reckoning with a world of borderless capital, an all-powerful China, and populist tumult.

Inevitably, Lynch’s book leads him back to Bill Clinton, the man who started it all. While he accepts that globalization hasn’t worked out the way he’d hoped, he regards the backlash as a combination of economic, social, and cultural factors. In his mind, there’s still time to find a new script for globalization, and this time, to do right by the American worker. “The obligation of the government is to minimize loss and find people something else to do so we can keep growing.” n

Siddhartha Mahanta is a New York City–based editor and writer. His work has appeared in The New York Review of Books, The New Yorker, Texas Monthly, and elsewhere.

PARTINGSHOT

Why Winning Is Bad for Democrats

Oh, you want life to get better now, do you? Do you even understand politics?

By Anonymous Democratic Consultant

Take it from me: I understand losses. I am a longtime Democratic consultant who has been pivotal in the losses of at least 27 Democratic campaigns. I am, by all accounts, a loser.

One time, however, I did win. That person is no longer in office and does not answer my calls, but I still won. That gives me the credibility, knowledge, and expertise to explain that the imminent victory of Democratic nominee Zohran Mamdani in the New York City mayoral race would be a dangerous loss for Democrats in the long run.

Political novices put far too much value on winning. Think about a game of basketball against your eight-year-old son. You may have scored more points, but now his feelings are hurt. Wouldn’t it have been better to simply let him win? The same thing goes for the Democratic Party. When progressives like Mamdani are too focused on winning, they don’t consider the feelings of more-established candidates who deserve to win because they want to. Or because it’s “their turn.” Or their dying wish.

the Wall Street guys who ask women on the street if “they’re sisters or something”? Was winning worth their tears?

As someone who won one time, I can tell you winning is often not worth it. You know what happens after you win? Governing. You know how hard that is? Who wants that kind of responsibility? Making people’s lives

tion. As I’ve always told my clients, instead of giving a mouse a cookie, we should give him the ability to qualify for one chocolate chip, provided he completes a three-year apprenticeship program in an underserved neighborhood, and as long as his income doesn’t exceed $50,000 a year.

Let’s talk about the kind of candidate Democrats should win with. Mamdani is a telegenic, intelligent guy with real convictions. If he wins, what will that mean for the average, boring Democratic legislators and candidates who pride themselves on receiving all their beliefs from polls and the crypto industry? In a way, Mamdani winning is an ableist erasure of candidates incapable of believing in anything at all. Our big-tent party must make space inside for those who are dead inside.

better by advancing policies? Responsibility is incredibly stressful.

Let’s imagine that Zohran Mamdani does win, with a coalition of multi-class young people, immigrants, unions, renters, faith leaders, and pansexual mustache men. What does that mean for the losers?

The investment bankers, the landlords, and

Should Mamdani win and begin to deliver on some of his campaign promises like free buses, city-run grocery stores, or a rent freeze, it will certainly be a slippery slope. Giving Democratic voters what they want is just like the book If You Give a Mouse a Cookie . Whenever the mouse gets something, it only wants more and more, until the point where it is well-fed, well-rested, and happy. It’s a primrose path that will ultimately accustom Democratic voters to creature comforts like health care or educa-

Finally, winning just isn’t who Democrats are. This rebrand might take voters aback and give them pause before hitting Donate on their next URGENT, ALL HANDS ON DECK, WE’RE DOOMED fundraising email. None of this is to say that winning isn’t important. It is. And Democrats will eventually win again. But we must manage how, when, why, where, and with the support of what billionaires this win happens. I live by the old Democratic Party adage, passed down by generations of neoliberals: Only after everything has been lost is it time to win. So let’s be patient, shall we? n –Francesca Fiorentini

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The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

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