Firehose #131: Year of the Snek

Also: Fifth Column giving a Valentine’s Day keynote speech at the University of Florida!

Buckle up, this is going to be a long one. (Also, the word “one” can have so many different interpretations….)

* First things first, always remember in times of acute government-policy stress that there’s a half-decent chance our 8.8-year archive has an episode of relevance. In this case, I would recommend #479 with Cato trade analyst Scott Lincicome (whose Twitter feed is also a must); not even because of its directional conclusions (episode title: “The Case Against Tariffs”), but rather, Lincicome adds just a metric puck-ton of actual useful information and context and media-literacy promotion regardless of whether you agree with him. For instance, this tweet from Friday night:

A few rules for Tariff Weekend 2, NAFTA Boogaloo:

1. Wait for an official implementation document, w/ timing, scope, legal authority, exclusions, etc. Tweets/statements don't count.

2. Don't hysterically predict economic doom: the US is a massive services economy, & trade is a relatively small share of GDP. Things can be bad without being catastrophic (& your doomsaying can come back to haunt you)

3. Watch for market, govt, biz reactions - that'll tell you how serious this is.

4. As always, be nice and have fun!

* Second things second: Speaking of media literacy, your humble podcast hosts on Feb. 14 will be giving the keynote presentation at a day-long University of Florida technology, media & privacy conference on “The Demand for B.S. and How to Stop It.” Other familiar participants include George Mason economists Bryan Caplan and Robin Hanson, the American Enterprise Institute’s Jim Harper, Reason’s Zach Weissmueller, and more. Registration is open. Here’s a whole-ass flier:

* Did someone mention Bryan Caplan? He and former Fif’ guest Alex Nowrasteh (#303) did a Reason Speakeasy interview with Nick Gillespie (Special Dispatch #72, #379) making “The Case for Immigration.”

* Did someone mention tariffs? I wrote Friday on how Donald Trump’s historical BFF, William McKinley, the aptly nicknamed “Napoleon of Protection,” demonstrated throughout his career the logical pairing of mercantilism and territorial expansionism. Excerpt:

Trade rivals were viewed with zero-sum wariness, less-developed countries were treated with paternalistic disdain, and deep-water ports along plum shipping routes were eyed greedily for the plucking.

“We demand such an equitable tariff on foreign imports which come into competition with the American products as will not only furnish adequate revenue for the necessary expenses of the Government, but will protect American labor from degradation and the wage level of other lands,” declared the GOP platform of 1896. (Tariffs, until the revenue-swapping adoption of the federal income tax in 1913, were Washington’s dominant source of funding.) Meanwhile: “The Hawaiian Islands should be controlled by the United States, and no foreign power should be permitted to interfere with them. The Nicaragua Canal should be built, owned and operated by the United States. And, by the purchase of the Danish Islands we should secure a much needed Naval station” […]

[McKinley’s territorial gains in the Spanish-American War, singled out at the top of Trump’s day-one re-re-christening of North America’s highest peak], became America’s 20th century template for mucking about south of the border. McKinley’s vice president and successor, Teddy Roosevelt, who had famously charged up San Juan Hill in 1898, seized on the swelling national sentiment in the aftermath of McKinley’s “splendid little war” by adding his own “corollary” to the Monroe Doctrine. This asserted Washington’s right to “exercise…international police power” in the Western Hemisphere, “however reluctantly, in flagrant cases of… wrongdoing or impotence.”

Such reluctance was not always apparent to residents of Nicaragua, Haiti, Ecuador, Brazil, the Dominican Republic, Guatemala, Bolivia, Chile, Argentina, and Panama.

* Monsignor Moynihan was all over the place this past week. Here he is on The Gist with host Mike Pesca (#343, #418, #467) talking about … did you know he lived in Sweden? “Sweden—once the left’s shining example of social democracy—is now grappling with far-right politics, immigrant buyouts, and a surge in gang violence. How did it get here?... Plus, a deep dive into new data on affirmative action in college admissions, and a look at the latest conflict in the Democratic Republic of Congo.”

* Moynihan also did a live-from-Auschwitz hit with Mark Halperin and the Morning Meeting gang at 2Way:

* And though I mentioned this podcast in last weekend’s email/post, I see now that there’s video of Ol’ Hollywood’s bull session with Jonah Goldberg (#182) on The Remnant:

* On #488 I referenced (and, according to at least one emailer, absolutely botched) famous skeptic Michael Shermer’s discussion about conspiracy theories on The Reason Interview. Judge for yourself:

* Also on the latest epi I cautioned against assuming too quickly that Trump was issuing more executive orders than Joe Biden; putting the likelihood at 60/40. Well, thanks to the great Jack “The History of the Americans” Henneman, comes proof that the 60 side is initially correct:

* The Reason Roundtable now posts lil’ clips on YouTube. Here’s one of me this past week talking about the cultural “exhale” after 10 years of Democrats and left-of-center culture imposing ever-higher taxes on saying the wrong thing:

* We talk a lot on this podcast about the festering problem of American political violence. Over at The Christian Science Monitor, Stephen Humphries wrote a piece on the topic, headlined “An Uncivil Union: Can America Break its Addiction to Violent Rhetoric?” Among those quoted are Martin Gurri (#225), the delightfully named political scientist William Schreckhise, and me:

There’s a tension in our political culture of “velvet-rope bouncers” on the left versus “trolls” on the right, says Matt Welch, editor at large at Reason magazine. In his view, the bouncers trying to police speech – for instance, trying to make “Latinx” happen – irritate ordinary Americans, who then turn to the trolls to throw rocks on their behalf.

“We live in this kind of vulgar moment. It’s hard to stop it, particularly because the institutions in the media – in particular over the last nine years – have really kind of traveled to a more partisan, ideological, more uniform place,” he says. “And so every time Trump does something, or someone who is similar to Trump, does something outrageous, then you can guarantee that a huge pile – this sort of media group over here – is going to pounce and express outrage. The late night comics are all going to sputter with rage and try to make a joke. The cycle continues.”

* Email of the Week is long, but it’s timely and informed, regardless of how one feels about the conclusion. The author included his name, but I am choosing to omit it. Posting without edits:

Kmele, Michael and Matt,

I am long-time listener (4+ years) to your podcast. Though I am too much of a cheap bastard to become a paid subscriber, I credit you guys (and Coleman Hughes) with getting me through the insanity of 2020 with my sanity intact.

I am reaching out to you to share something going on inside the US government that you all should be aware of: The Trump Administration is simultaneously gutting a $40 billion federal agency, defrauding dozens of American businesses and destroying thousands of jobs across the country. It is also pissing off lots of foreign governments we depend upon and causing needless suffering.

A bit about my background: I was a Russian Lit major in college when the Soviet Union collapsed. My marginal Russian language skills combined with a 2-month internship on a congressional campaign (Rep Dick Swett- I kid you not) landed me a job promoting democracy for the National Democratic Institute in Kyrgyzstan, where I lived for 2 years (and met and married my wife of 27 years).

I then spent 3 years in Kazakhstan and 3 years in Moscow with the Eurasia Foundation, making grants to support civil society and entrepreneurship. Spending the wild 90s and early 00s in the former Soviet Union was the most incredible experience of my life – gangsters, oligarchs, KGB agents, copious amounts of vodka- it was a wild ride.

In 2005, I returned to the US, bought a house in Vermont and hung out my shingle as an independent consultant. Over the last two decades, my wife and I have painstakingly built out a company with 100 employees in the US and another 100 or so worldwide. Our largest client is the US Agency for International Development (USAID). We compete for USAID contracts to promote greater collaboration with the private sector, advance entrepreneurship, and promote trade and investment – real left-wing stuff.

When I first read the Jan 20 Executive Order (EO) pausing all foreign assistance, I was skeptical, but tried to remain open-minded. As someone who has worked in foreign assistance for 30 years, I am wholeheartedly in favor of efforts to reform the system, which is incredibly bureaucratic and wasteful. I am not a Trump fan by any means, but like you guys, I was willing to give him the benefit of the doubt.

That was a mistake.

On Jan 24 Friday Marco ‘Little Hands’ Rubio issued a Stop Work Order (SWO) immediately halting all foreign assistance programs. SWOs are usually used when a contractor or grantee is suspected of committing fraud or is performing badly. In this case, the SWO was used against literally hundreds of US business and non-profits and probably thousands of international organizations – ranging from the UN to health clinics in Africa.

The SWO was bad, but not devastating. Under federal regulations, we are supposed to be paid all of our approved invoices and able to invoice for additional minor costs during the SWO. It would have been tough, but we could have survived while they reviewed programs. It sucks, it is disruptive, but we could live with it.

Then the floor dropped out. On January 25, Trump appointees turned off USAID's accounting system (GLAAS), meaning all payments stopped – even invoices for work that had been completed and approved for payment. Again, this is happening to hundreds of organizations in the US and around the world- they are owed many hundreds of millions if not billions of dollars with no idea how or when they will get paid.

Let me repeat that: the federal government is not paying its bills. As of this morning, it appears that Elon now has direct control over all payments by the federal government.

On a typical USAID contract, we earn a profit of 5%, so there is not a great ability to build up cash reserves for a small business such as ours. We also never anticipated that the federal government would not pay our invoices- that was inconceivable ten days ago. The impact on our business has been devastating. Overnight, we have had to let go of almost 90% of our US employees. Remaining employees are taking drastic pay cuts as we try to save the company. It was brutally painful to let so many great people go with no warning whatsoever.

Across the foreign assistance space, layoffs are already well into the thousands and could total 50,000 worldwide by next week. Dozens of companies are teetering on bankruptcy and many NGOs are preparing to shutter their doors.

Around the world, millions of lives are now at risk as health clinics, refugee camps and other essential programs are shuttered. We are already seeing an Ebola outbreak. The famine early warning system is offline. Governments- including many vital to US interests- are furious that the US- with no warning- abandoned long-standing commitments and contractual obligations. This includes places like Australia, Germany, Indonesia, Vietnam to name a few.

Worse is still to come. Today, the USAID website (a $40bln agency) simply went dark. It appears Sec State Rubio is going to close USAID – even though he has no legal authority to do so. As many of you know, Trump fired the Inspectors General (IG) at most of the big federal agencies, making these actions almost impossible to investigate.

I spoke twice yesterday to Vermont Senator Peter Welch and he, along with a few others in the Senate, are trying to do what they can, but unless a couple of Republicans step up and object to the power grab, there is little they can do as a minority. Sadly, though not surprisingly, there is silence from Hill Republicans. Even long-time supporters of foreign assistance like Lindsey Graham are saying nothing.

This leaves the courts. Next week, we will be supporting an effort to file an injunction against the SWO in federal court so that at least we can get paid what is legally owed to us.

With the IGs out of commission, we are reaching out to states’ attorneys general to see if we can get criminal investigations launched at the state level where Trump has no power to intervene. What is the crime? A conspiracy to defraud American businesses and workers. It is outrageous, criminal and simply cruel is to stiff workers, businesses and non-profits who entered into agreements with the US government in good faith and did their work dutifully. It is simply stupid to do so in a way that also antagonizes governments whose goodwill we may well need in the years ahead.

This isn’t reform, it is a quiet coup – blessed by Trump and masterminded by Elon. I suspect it is the opening act of what is likely to be a much larger gutting of large swaths of the federal government. While that might appeal to Matt and Kmele’s libertarian impulses, let’s remember this is setting a precedent that others will follow. The situation feels eerily reminiscent of Russia in the late 90s: power-grabbing oligarchs controlling the levers of the state and the government blatantly violating its own laws.

The great irony for us is that much of my company’s work is actually in support of Trump’s agenda. We are promoting greater US trade and investment in Greenland. We are also implementing a program initiated by Ivanka Trump’s office to increase the income of women in agriculture through entrepreneurship and better business practices.

So that’s the score gentlemen. Keep up the great work!

Walkoff music is from another real one we just lost.