Resetting the Bomb

Another era of debt-fueled profiteering is ending with a bailout. How we’re institutionalizing the unfairness economy 

Neil Barofsky, the Special Inspector General for the last bailout, guesses that whoever has his job this time around is going to have a lot of work. 

“There will be S&L-type frauds, absolutely ostentatious frauds,” he says, spitballing a list of potential problems in the $2 trillion Covid-19 rescue package. “I’d be looking for tens of billions of loss to fraud.”

This is unavoidable. If the rescue package signed into law by Donald Trump on March 27 had more regulatory controls — “nothing, nada, zero,” oversight is how another economist explains the existing structure — it might defeat the purpose of getting money out into the economy quickly. It seems possible the rescue was designed with such surreal logic in mind. “Fraudsters spend money, too,” is how Barofsky puts it. 

A second issue has to do with the structure of the Covid-19 relief plan. It features two main components: rescues of Main Street and Wall Street.

The headline-grabbing frauds will be found in the Main Street side, where crooks will scheme to get their hands on (among other things) $377 billion in relief intended for desperate restaurants, hardware stores, nail salons and other real-world employers. 

These will be scams the public can understand, “straight rips,” as Barofsky puts it: insiders creating dummy companies and submitting for loans, employers taking money for payroll and hiding layoffs, con artists Googling their way to successful SBA loan applications, etc. 

Nigerian-letter-type scams, in which crooks impersonate bailout agencies asking for bank info before sending relief, are already being reported across the country. Stories range from mass-texts from “CostCo” offering $110 stimulus checks, to a woman who said she was offered a six-figure Covid-19 grant from “Bill Barr” by phone. 

Those stories are bad, but the exponentially more serious potential for mischief in this new rescue is on the Wall Street side. “With the [Main Street] relief, you might see $50,000 frauds, $100,000, $4 million,” says Barofsky. “It’ll be billions on the other side.” 

There are worries from analysts about the use of bailout funds to manipulate financial markets, finance takeovers and buybacks, subsidize executive bonuses. The crisis will surely be used as a pretext to con the public into taking tens or hundreds of billions in bad investments off the books of dumb companies, in the name of “guaranteeing liquidity.” 

A larger issue is conceptual. What’s the consequence of making the maintenance of prices in financial markets a “systemically important” end in itself?

America’s executive class in the last few decades has settled into a Ponzi-like pattern: borrow, inflate, strip assets, crash, get bailed out, start over. Both the profits and the size of the bag the rest of the country is left holding get bigger with each cycle. 

In the last ten years buybacks, takeovers and other schemes made executives rich, but left companies cash-poor and leveraged to the hilt. When Covid-19 hit, corporate America could with sincerity claim it needed immediate aid to keep doors open and financial markets afloat. 

But the scope of the rescue is as massive as it is in significant part because private-sector cash that might otherwise have buffered the damage had already been stripped out of the economy. As Marcus Stanley of Americans for Financial Reform puts it, “We’re starting to routinize the process of privatizing gains and socializing losses.”   

A week of calls to anxious analysts in quarantine identified a series of related issues hanging over the rescue:

“Debt bomb.” The 2008 mess was triggered in part when companies like Goldman, Sachs issued collateral calls against billions in credit default swap contracts it held with insurance giant AIG. When the latter was unable to come up with the money, mayhem ensued, creating wide-scale losses and necessitating an AIG bailout – through which Goldman ended up being paid $12.9 billion

The pre-2008 economy was built on a combustible pile of mortgage debt, and bets on mortgage debt, that exploded once banks got nervous and started to call in their money. Some cleaning up of the mortgage markets was done, but Wall Street simply moved elsewhere to build new credit sandcastles, leading to an explosion of corporate debt, securitized commercial loans (CLOs), takeovers, etc.  

One new development involved “subscription lines,” a type of financing of private equity deals, the cheery name we use today for leveraged buyouts. 

When a Wall Street takeover artist wants to raise cash to buy up a company, it goes to big-dollar players – often an institutional investor like a pension fund – and elicits commitments to invest. The private equity fund then goes to a bank, which issues “subscription lines” of financing against the promise of those investors (a.k.a. the “limited partners”). 

Subscription lines have existed for decades, but their use was traditionally limited and short-term, with investors coughing up capital within 30 days. In recent years and especially since 2008, though, the scope of subscription line financing has increased, and the time to repay has also been expanding, to up to five years. 

Making takeovers easier andmore profitable for executives of the Bain Capitals of the world inspired what Barron’s in 2018 described as a “rage” for subscription line financing. This was one of many post-bailout factors inspiring the recent boom in leveraged buyouts: the years 2013-2018 saw the most private equity deals over any five year-period in American history.  

The rub is that capital on those “lines” can be called in at any time, and might be, as the Covid-19 crisis progresses. The funds themselves are also demanding that investors fulfill commitments. In California, the $17.8 billion Orange County Employees Retirement Fund said they received three capital calls over two weeks.

“Investors are terrified that banks are going to start calling the leverage on the leverage,” noted one former private equity firm executive last week. “After 2008, they didn’t defuse the debt bomb. They reset it.”

A March 19 piece by William Cohan in Vanity Fair quoted industry insiders worrying about the “scourge of interconnectivity” returning, with particular concern about debt amassed in the private equity world. A trade publication, Buyouts Insider, likewise quoted private equity investors worrying about a “nightmare scenario” in which nervous banks calling in their lines would cause a “flurry of cash going out the door.”

That situation bears watching. Private equity funds were at the center of another controversy animating Washington last week:

“Equity investors” target the bailout. After the CARES Act was signed by Trump on March 27, it looked like takeover artists might be frozen out. The problem was the “affiliation rule,” which barred businesses from receiving emergency money if they were backed by a sponsor firm controlling companies that collectively employ over 500 people. 

Thousands of businesses are controlled by leveraged buyout firms, employing as many as nine million Americans overall. The number of employed would be higher, of course, if not for the layoffs that often ensue after a private equity fund acquires a firm and begins squeezing it dry. 1.3 million Americans in the retail sector alone were laid off in this way in the last decade, according to one report. 

Companies controlled by private equity often face bigger cash crunches than non-affiliated firms, because in addition to having to make rent, payroll, and other ordinary expenses, they also owe an array of special “dividends” and fees to Wall Street masters. In times like the Covid-19 disaster, these revenue streams ostensibly dry up. But what if financiers could use bailout funds to get their vig paid?

Last Tuesday, Steve Nelson of the Institutional Limited Partners Association, a private equity group whose members include titans like Apollo and Blackstone, sent a letter to Steve Mnuchin (how do we always manage to have a Goldman-trained Treasury Secretary during these crises?). 

“We see no reason why being owned in a fund structure should result in these businesses having less access to the capital needed to keep their employees on the payroll,” Nelson wrote.

This overture was apparently rebuffed at first, but no worry: there was always congress to lobby! By late Tuesday, Nancy Pelosi was writing Mnuchin a letter explaining that “startups are the engine of America’s innovation economy” and that the thousands of firms backed by “equity investors” in the Bay Area and Silicon Valley shouldn’t be frozen out by the affiliation rule. 

The next day, Maxine Waters sent Mnuchin a different note, demanding that any aid to “equity investors” go to workers, not a “government handout for well-funded private funds.” 

Waters added, “any funds granted through this program must not be used to pay any debts or obligations to private funds, including management or consulting fees” – right on the money in terms of what one watchdog agency analyst feared these “avaricious fuckers” were after.

By the next day, House Minority Leader Kevin McCarthy was announcing that startups backed by venture capital would be eligible for bailout cash. Venture capital, which owns a stake in the growth of companies, is not the same as private equity, which controls these firms and often saddles them with fees and obligations. McCarthy said there might be future efforts to “address” private equity-owned businesses, but for now they would use “control” as a determining eligibility factor.

How this all plays out is unclear, but bet on the private equity lobby continuing to hack away until it somehow gets to the bailout money. 

Loopholes. The Main Street provision of the bill is simple in principle. If you run a small or medium-sized business, and you do your banking with an SBA-approved lender, ask your bank for money and you’re basically supposed to get it, up to $10 million. If you don’t lay off any employees, the loan is supposed to be forgiven. 

When the gates opened on the program Friday, a “frenzy” of applications led to about $3.2 billion in loans going out the door in a day, to roughly 10,000 businesses. However, there were widespread reports of problems, with some banks asking for more time – JP Morgan Chase warned customers they wouldn’t be ready – a situation that led some to wonder if banks were stalling for better conditions. 

Banks are scheduled to earn 1% to 5% to underwrite these loans, which are 100% backed by the government, a nice chunk of essentially risk-free money. If the loans are not forgiven after two months, the compensation becomes 1%. That number was 0.5% originally, but banks had the government over a barrel as the start date approached, and the rate was doubled on Thursday, just before the program opened. 

There are other battles. Wells Fargo is using the crisis to ask for relief from regulatory caps imposed after a string of scandals. Other banks are asking for a relaxation of anti-money laundering controls, higher interest rates, freedom from liability in case of fraudulent applications, and a host of other requests, many of them reasonable given the situation, but which may also have longer-term implications.

All these issues, in conjunction with the logistical problem posed by a huge rescue program being administered by the notoriously slow and overwhelmed SBA, add up to worry that money will not get to employers quickly enough, or at all. A program with similar conception after 2008, the HAMP mortgage relief plan, closed up shop after providing very limited real-world aid. That shouldn’t happen this time, but there are a lot of steps between the pile of government cash and the millions of non-finance-sector human beings who need it.

Meanwhile, money has been pouring almost unabated into the financial markets. The CARES bill included a $454 billion appropriation to Treasury, which insures a vast program of Federal Reserve asset purchases and direct loans. These, too, ostensibly have conditions, but loopholes were baked in that could accelerate pre-Covid problems.

A major issue in the post-crash era, and especially in the last few years, has been the orgy of stock buybacks and redemptions. According to Americans for Financial Reform, the biggest banks in the country have returned an obscene $265 billion to shareholders just in 2018 and 2019, which represents 110% of net income. This is another way of saying bank shareholders heading into this crisis had hovered up all of their recent cash flow and a little bit more of reserves to boot, leaving little for the very rainy day we’re now experiencing. 

It wasn’t just banks. Companies overall spent $7 trillion on buybacks between 2004 and 2014, and nearly $2.5 trillion in the years 2018 and 2019 alone. A 2018 study by the Roosevelt Institute found that Lowe’s, CVS, and Home Depot could each have given workers $18,000 raises across the board with money that was instead spent on buybacks. The restaurant industry outdid banks by spending 140% of its profits on buybacks during the same period, 2015-2017.And so on.

In recent weeks, there’s been a lot of self-congratulation among members about rules imposed in the CARES Act to prevent stock buybacks. “We ensured in the bill that any taxpayer dollars given to industry goes first and foremost to worker paychecks and benefits, not CEO bonuses, stock buybacks or dividends,” is how Pelosi put it.  

However, the rule only speaks to direct loans. There are countless other ways for companies to get money in this rescue. It appears a corporation that issued bonds and sold them into the Fed’s giganto-buying programs could take the proceeds of those sales and buy its own stock, for instance. 

Marcus Stanley of Americans for Financial Reform points out that buybacks are actually mentioned in the terms for the Fed’s new Primary Corporate Credit Facility. The Fed program offers an arrangement where certain companies (likely, the ones in serious trouble) can issue bonds without having to pay interest for a year. “A borrower that makes this election may not pay dividends or make stock buybacks during the period it is not paying interest,” the rules state.

Presumably, that means a company that issues bonds in normal fashion and sells them into the facility may pay dividends and make buybacks. “That’s how I read this, that they considered that,” says Stanley. 

There are other worries about the financial rescue. For instance, the world’s largest asset manager, BlackRock, will oversee the Fed’s new corporate bond-buying program, an arrangement that inspires gallows laughter among analysts. BlackRock sells corporate bonds under the brand name iShares, and it has some of the biggest bond-backed ETFs (exchange-traded funds), including a major one that trades under the name LQD that was in freefall in March, but rallied since BlackRock’s appointment

“’Conflict of interest’ is kind of a quaint 20th-century term to describe the BlackRock arrangement,” says Stanley.

Firms like BlackRock will guide hundreds of billions in Federal Reserve purchases, effectively setting prices as massive buyers in the very markets in which they operate. “The big asset managers are the choke points,” agrees another economist.  

The difference between the Trump rescue and the Bush-Obama bailouts of 2008 is that this time, we’re at least not rescuing the direct culprits behind the crash. Coronavirus isn’t the fault of Bain Capital or Citigroup or Home Depot.

What’s the same is that instead of fixing glaring structural problems, we’re once again throwing trillions at the unfairness economy, essentially guaranteeing that we’ll be right back in this same spot again soon, bailing out the next era of “record profits.” We’re resetting the bomb again. 

Announcement to Readers: I'm Moving

Substack is now my full-time job.

From now on, my online writing will be published on Substack. This is my full-time job now.

I first started writing for Rolling Stone in 2003 and will continue a relationship with my good friends there, contributing print features and also maintaining the Useful Idiots podcast with Katie Halper. I love Rolling Stone and have been proud to represent the magazine over the years. If anyone cares to know, I wasn’t asked to leave.

I’ve been thinking about this for some time. Having had experience with Substack – I’ve serialized two books here in the last few years, including Hate Inc.– I believe the path for independent journalists is in a subscriber-based model. 

Compensation in news media traditionally involves a reporter working for a corporation or a wealthy patron, who ostensibly paid staff with revenue from advertising and subscriptions. This used to be necessary because delivering content was expensive and required additional labor: design, printing, distribution, marketing, etc. 

Distribution is instant now, design can be automated, and there are no printing costs. The logical endgame is cutting out middle steps and having journalists work directly for readers. I think I.F. Stone, who did it with a printed newsletter, had the right idea. This should not only be sustainable, but the preferable way to go.

Down the road you may see me commissioning work from other writers and investigative reporters, and publishing their work in this space. This would be in the spirit of the Neither Side News idea I’ve talked about occasionally. For now, however, I’m going to focus on doing as much of my own reporting as I can, especially in this crazy time. 

A quick note on why independent journalism is needed more than ever: 

As I wrote about in Hate Inc., the news business in America has for some time been cleaved into two groups. Roughly speaking, commercial news outlets are right-leaning or “left”-leaning. I put “left” in quotation marks because the orientation of outlets like MSNBC or the Washington Post is not really “left” but “aligned with the Democratic Party,” not the same thing.

This dynamic accelerated in recent years. Because Donald Trump is central to the marketing strategies of most outlets – MSNBC crafts news for Trump haters, Fox for the MAGA set, etc. – political reporting is mostly shaded in pro- or anti-Trump directions. When breaking stories happen (the assassination of Abu Bakr al-Baghdadi is just one example) outlets scramble in the first moments to find pro- or anti-Trump angles, because audiences have been trained to look for them. 

worried about where this was headed four years ago:

The model going forward will likely involve Republican media covering Democratic corruption and Democratic media covering Republican corruption. This setup just doesn’t work.

Reporting and arguing blame used to be two separate activities, but journalists in the Trump era are trained to narrativize everything, with the consequence that we’ve drifted away from complex issues and toward saleable, simplistic, sports-like controversies. Heading into the Covid-19 disaster, we argued about Bernie Bros, Lev Parnas, Russian Facebook ads, and a host of other things that don’t seem all that important now. I was guilty of this, too. 

The media business as constructed is expert at mass-generating binary streams of hot takes and talking points, and selling ads to a public engaged by them. It’s great business: cable profits have soared. But it’s a lousy system for getting to the bottom of difficult subjects, and boy do we have a lot of those to deal with all of the sudden.

Having spent the better part of eight years covering the subprime crisis and its aftermath, I hope to focus in this space on the financial aspects of the coronavirus mess. The moment we’re in right now equates to September 2008, when the world was melting down and historic, transformational decisions were being made at light speed. This time around, I want to catch as much of it in real time as possible, and will do so here on Substack. My first article on the crash and the rescue response is coming out today.

I’ll also be covering the presidential race – still going on the road as I have for five campaigns now – and if and when life returns to normal, will dip back into a true crime project and other subjects. The longer-term goal is to show that this is a model that can work for independent-minded reporters, not just financially but creatively.

Please bear with me as I get used to being an editor again, in addition to a writer. For instance, for the bailout piece I have coming out today, I wasted a good half-hour trying to find an illustration by entering “rich greedy assholes” in a Getty Images search. I’ll need a few turns to work out those kinks.

For those of you who’ve been subscribers already, I want to thank you. Had you not shown support in the last few years, I would have been afraid to make this move. In return, I’ll try to produce as much as I can, especially during this crisis period. 

This also means, however, that you’re my full-time job now, and I’m going to have to be less shy about asking for your continued help. For now, however, stay safe, and let me thank you again for helping me try a new way of doing the job that I love. 

Note on a new book

On the Great Russia Caper

After the holidays, I’ll be starting a new serial book in this space, replacing Untitledgate with The Great Russia Caper.

I spent a good part of the last three years, and much of this past summer and fall, talking to people in and around the Russia investigation. Two themes kept emerging, in conversation with everyone from targets of the investigation to government investigators to reporters bylined on “bombshell” news stories.

One is rank comedy. Elements of this story involve serious abuses of power, but the defining characteristic of the Russia controversy is the proud American ignorance of the main characters. In that respect, it’s similar to the Iraq story. That was about oil, yes, but our Commander-in-Chief also didn’t learn there was a difference between Sunnis and Shiites until a year after the invasion, saying: “I thought Iraqis were Muslims!”

The subtext of Russiagate involves a Dr. Evil-style expansion of the surveillance state and the cynical commandeering of the news media for a xenophobic scare campaign. But the major plot twists are informed by slapstick cluelessness. 

The Russia “expert” whose dossier cripples a presidency doesn’t speak Russian (and hasn’t been there since the Buffalo Bills played in a Super Bowl). The FBI director has never heard of Gazprom. The ranking member of the Senate intelligence committee warms up for hearings on Russian interference by reading “Tolstoy and Nabokov.” 

National security officials explaining the need to arm Ukraine invoke the specter of communism, dead for thirty years; the former head of the DNC worries the “communists” are “dictating the terms of the debate”; belief that the Cold War is still on runs so strong that intelligence officials blame Russia for mysterious “acoustic attacks” on American diplomats in China, Cuba, and Uzbekistan. 

The idea of a Deep State plot to undermine Donald Trump is popular in Republican circles, but all this lunacy at least somewhat undermines that analysis. Russiagate turns out to be impossible to understand minus the element of sincere, if misguided or insane, belief. Investigators and then press figures reasoned themselves into one proposition, only to end up on a years-long roller-coaster embracing pee tapes and acoustic brain attacks and killer Putin-dolphins (trained for the inevitable trans-polar Russian assault). 

A section of the recently-released report by Justice Department Inspector General Michael Horowitz exemplifies how key players became captive to their own mind loops. 

Horowitz found out key assertions about Trump-Russia collusion appeared to come from Russian oligarch and metals baron Oleg Deripaska, who in 2016 employed ex-spy Christopher Steele to help him in a lawsuit against Trump aide Paul Manafort. This was the same Deripaska whose ostensible ties to Russian intelligence would end up being central to Trump-Russia collusion theories, as he reportedly received polling data from the Trump campaign through a middleman.  

In other words: when information was going to OlegDeripaska, he was an FSB villain. When it came from Deripaska, it was trusted. Why? Horowitz quoted counterintelligence chief Bill Priestap:

Why the Russians, and [Deripaska] is supposed to be close, very close to the Kremlin, why the Russians would try to denigrate an opponent that the intel community later said they were in favor of who didn’t really have a chance at winning, I’m struggling with… I know from my Intelligence Community work: they favored Trump, they’re trying to denigrate Clinton, and they wanted to sow chaos. I don’t know why you’d run a disinformation campaign to denigrate Trump on the side. 

To dig into one of the most serious investigative questions the country had ever faced – the possibility that a presidential candidate was in league with foreign intelligence – the FBI turned to an ex-spy with a reputation for “poor judgment” and a “lack of self-awareness” who happened to be on the payroll of both the rival presidential campaign and a Russian plutocrat pal of Vladimir Putin. Asked why they had confidence in this person and his sources, the sincere answer was, “Why would they lie?”

Intelligence officials launched an investigation based on a series of assumptions, then used those assumptions as a reason not to question the assumptions. As one congressional investigator put it to me, “You can’t make this shit up.”

The second major theme is the other shoe finally dropping on a War on Terror domestic spying machine dating back decades, and reconstructed in the Bush-Cheney era. The scandal is not that agencies like the CIA and NSA decided on bogus pretexts to conduct broad-scale intrusive surveillance on a presidential candidate like Trump. It’s that they do this to everybody.

While the hubris in the way security officials felt so little compunction about injecting themselves into a presidential race is certainly telling, the larger story is the broad application of secret tools that appeared in this one case.  

Short of assassination, much of the domestic spying kit-bag came out in Russiagate: FISA, National Security Letters, confidential informants, monitoring of journalists, systematic illegal leaks of classified intelligence, the busting open of attorney-client communications, disinformation through the press, the non-discoverable use of counterintelligence tools in criminal prosecutions (i.e. “parallel construction”), even spying on members of congress. 

There’s no way for Americans, and especially progressives, to really appreciate what the Russia story means without going back to the domestic spying programs first exposed by reporters like Seymour Hersh in the mid-seventies. 

Originally tabbed the “Son of Watergate,” Hersh’s December 1974 report about “huge” spying operations – detailed in an internal CIA document known as the “Family Jewels” – led to revelations of wide-scale domestic surveillance of antiwar and black liberation movements, assassination attempts, misinformation campaigns, surveillance of reporters, a mail-opening program, human experimentation, and other activities so revolting that Henry Kissinger, not exactly a shrinking violent when it comes to such authoritarian stuff, called it the “horrors book.” Public disgust reached the point where there were calls for the abolition of spy agencies in general. 

But a second backlash after Watergate never happened. News agencies, concerned that investigative reporting had gone “too far” after unseating a president, backed off the domestic spy story. The Pulitzer Committee quietly decided not to consider Hersh’s report, because it was “over-written, overplayed, under-researched and underproven.” Of course, every last detail of the “underproven” story would turn out to be true, but that wouldn’t be known for sure until 2007, when the “Family Jewels” were finally declassified. By then, the agencies had regrouped, and the spy programs reinvigorated. 

When he returned to the White House as Vice President, onetime Ford administration official Dick Cheney rebuilt the secrecy bureaucracy. Intensely concerned with restoring the powers the executive branch lost in the seventies of his bitter experience, Cheney armed all the new or revived spying programs with a protective Catch-22. Extreme measures undertaken on national security grounds would henceforth also be protected from legal challenge on the same national security grounds. 

Anyone hoping to contest any of these activities – secret FISA monitoring, inclusion on a no-fly or even an assassination list, the receipt of a National Security Letter from the FBI demanding access to communications information, an ordinary criminal prosecution buttressed by secret evidence – first had to win a difficult battle to prove that any of these things had even taken place. 

Once past that hurdle, there would be a second battle to see the government’s reasons for taking these actions. Then, another battle to win the right to contest them. And so on.

Throughout the last three years, this pattern has repeated, often in absurd fashion. The lowlight was probably Special Prosecutor Robert Mueller’s indictment of a series of Russians connected to the Internet Research Agency. 

When lawyers for one of the defendants unexpectedly showed up in court, Mueller declared millions of pages of non-classified documents “sensitive,” and obtained a protective order preventing defense counsel sharing discovery evidence – with their own clients! Nobody in the ostensibly “liberal media” even blinked at this dystopian insanity. 

This is the metaphor still playing itself out as Connecticut Attorney General John Durham winds up his investigation of the investigation. We’re still at the stage of fighting over how much the public is entitled to learn what secret measures were undertaken on its behalf. That it takes this long and is this difficult for even the President of the United States to learn what tools were used to investigate him should be an enormous red flag, even to those who despise Trump. 

It’s my hope that if people see the long background of how such tools have been used against less prominent targets – from Muslims on the Watch List to inner-city drug defendants tried in “tip and lead” cases to Internet companies fighting long court battles just to publicly fight the secret subpoenas they’ve received from the FBI – they might start to think differently about this story.

Russiagate is like the Iraq story in another sense. Even after we found out there were no WMDs, the intellectual argument for pre-emptive war remained. The pretext vanished but the idea persisted; we’re still over there. In the same way, the core ideas of the Russia caper are almost sure to survive Donald Trump.

In early 2017, the outgoing Obama government issued an Intelligence Assessment about Russian interference. Coverage focused on the notion that a foreign country had helped elect Trump, but the paper pushed other themes. It talked about Russian determination to fuel “radical discontent” and “dissatisfaction” among us, in order to “undermine the US-led liberal democratic order.” 

The paper previewed concepts pundits would continue hammering for years:

  • “Discord” in America is foreign-inspired;

  • Complaints about financial inequality, wars, the inefficacy of American democracy, and other problems are also fueled by foreigners;   

  • There is danger in allowing crossover between the left and right populist movements appealing to these complaints;

  • The free press and an unregulated Internet are the devil’s playgrounds, and the vigilance of experts is needed to protect us from foreign “disinformation.”

These ideas have pushed us into an experience straight out of Orwell: a dramatic and almost instantaneous flipping of popular assumptions. Self-described “progressives” who just a decade ago rallied behind the Dixie Chicks now gobble up scare tracts written in faux-Cyrillic texts about “assets” in our midst. The same terror before unseen threats that gripped small-town Americans after 9/11 has now conquered our urban upper classes. Donald Trump is not sufficient to explain this.

Even if public opinion doesn’t change, it feels worth writing a history of this madness. I hope future generations will be sane enough to disbelieve it. 

Part one, next, begins with the Family Jewels, a War on Terror primer, and a pair of lawsuits. 

(Photo by Mandel Ngan/AFP via Getty Images)

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