Thursday, May 25, 2023

25: Ukraine

Wagner Group boss, "Putin's butcher," says Russia at risk of losing Ukraine war and facing a "revolution" The man in charge of Russia's notorious Wagner Group private mercenary army, Yevgeny Prigozhin, has warned that Russia could face a "revolution" and lose its war in Ukraine unless the country's "elites" fully commit to the fight and put the country "into North Korea mode," with martial law imposed, to achieve results on the front lines. ........ In a lengthy video interview with a pro-war, pro-Kremlin blogger, Prigozhin lashed out against Russia's Defense Minister Sergei Shoigu and his daughter Ksenia, a sports executive whose New Year wartime vacation in Dubai drew ire from the Russian public. ......... "This duality may end like it did in 1917, with a revolution, when first the soldiers rise up, and after that their loved ones do," he warned .......... Prigozhin said Russian citizens could raid the elites' homes with "pitchforks… and don't think there are hundreds of them, now there are now tens of thousands of relatives of those killed, and there will probably be hundreds of thousands." ........... "We stormed in an aggressive manner and stomped our boots all over Ukraine while looking for Nazis," Prigozhin said. "We approached Kyiv, s**t our pants, and retreated. Next onto Kherson, where we also s**t our pants and retreated, and nothing seems to be working out for us." .......... He said the vague goals stated by his long-time associate President Vladimir Putin and other Russian officials at the beginning of the war, as aiming to "denazify" and "demilitarize" Ukraine, had failed. ........... Prigozhin, who grew rich on government catering contracts and has since branched out, as CBS News' own investigation has found, to bankroll his private army through a vast and brutal international criminal enterprise, offered two potential scenarios of how he believed the war in Ukraine may pan out for Russia: ....... "There are optimistic and pessimistic scenarios. The optimistic one, which I don't really believe in, is that Europe and America will get tired of the Ukrainian conflict, then China will put everyone at the negotiating table," he said. "We will agree that everything that we have already seized is ours, and everything that has not been seized is not ours. It is unlikely that this scenario is possible." ......... Instead, Prigozhin said, Ukraine could get more Western weapons and ramp up its long-expected counteroffensive, which "may succeed in some places." .......... "They will try to restore their 2014 borders, and this could easily happen; they will attack Crimea, they will try to blow up the Crimean bridge, cut off the supply lines, and for us, this scenario won't be good, so we need to prepare for a hard war," he continued. .......... "We are in such a condition that we could f***ing lose Russia, which is the main problem... We need to impose martial law," Prigozhin concluded. ............ For the first time, Prigozhin also commented on his nickname, "Putin's chef," given to him by Russian investigative journalists after they uncovered his vast government catering contracts. "I have never been a chef; I used to be a restaurateur and quite successful. I can't cook myself. They should have just come up with 'Putin's butcher' instead," Prigozhin quipped in an apparent reference to the brutal tactics his mercenary army has now deployed from Ukraine to central Africa. ......... Prigozhin's ability to spew bitter criticism at senior Russian officials with seeming impunity, which is then amplified by cohorts of influential pro-war bloggers on Russian Telegram channels, has puzzled many Russia-watchers. Similar comments, even tamer ones, have landed dozens of political dissidents and others in prison under strict laws passed by Russia's rubber-stamp parliament at the onset of the Ukraine invasion to silence opposing voices. .............. "I love my homeland. I obey Putin. To hell with Shoigu," Prigozhin said in his latest rant. "We will continue to fight."

The Wagner group forecasts disaster if Russia does not move into total war footing. Yevgeny Prigozhin has been ramping up pressure on Russia’s military leadership and extending his criticism to the country’s moneyed elites............ “We are in such a condition that we could lose Russia,” he continued, his speech laced with profanity. “We have to prepare for a very hard war that will result in hundreds of thousands of casualties.” ...... An oligarch closely allied with President Vladimir V. Putin of Russia, Mr. Prigozhin has been ramping up pressure on Russia’s military leadership with bombastic diatribes on public internet platforms, and extending his criticism to the country’s moneyed elites. ........ The Kremlin, Mr. Prigozhin said, must declare a new wave of mobilization to call up more fighters and declare martial law and force “everyone possible” into the country’s ammunition production efforts. .......... “We must stop building new roads and infrastructure facilities and work only for the war, to live for a few years in the image of North Korea,” he said. “If we win, we can build anything. We stabilize the front and then move on to some kind of active action.” ............ “The children of the elite smear themselves with creams, showing it on the internet, ordinary people’s children come in zinc, torn to pieces,” he said, referencing the coffins of dead soldiers, and adding that those killed in action had “tens of thousands” of relatives. “Society always demands justice, and if there is no justice, then revolutionary sentiments arise.” ............ Mr. Prigozhin said Ukraine had “one of the strongest armies in the world” and added that the violence at the border reflected poor leadership at the highest level of Russian military. He has often singled out Defense Minister Sergei K. Shoigu as the object of his ire, and in the interview, Mr. Prigozhin defined his personal credo as, “I love my motherland, I serve Putin, Shoigu should be judged and we will fight on.” ............ “If he doesn’t stop, he will wind up like Aleksei Navalny.” Mr. Navalny, Russia’s most prominent opposition politician, is now in poor health in a penal colony. ........... “You are given everything, permission to break the law, to take people from prisons without asking anyone’s permission, to kill those people if you don’t like them for discipline,” Mr. Oreshkin said about the terms of the deal between Mr. Putin and Mr. Prigozhin. “If he had not brought this victory, he would have been torn apart” by the elites he has been disparaging. .



The U.S.-Chinese Economic Relationship Is Changing—But Not Vanishing How “De-Risking” Can Preserve Healthy Integration .......... the United States is “for de-risking, not for decoupling,” a formulation first articulated by European Commission President Ursula von der Leyen ........ U.S. export controls would remain “narrowly focused on technology that could tilt the military balance,” adding that “we are not cutting off trade.” ........... Although direct investment in both directions has declined, trade in goods between the United States and China hit an all-time high of $690 billion last year. ........ corporations are already working to mitigate the risk that a single point of failure could upend their operations. .......... The COVID-19 pandemic turbocharged this shift. Supply chain disruptions altered basic assumptions about China’s role in the global economy, undermining the view that China is always open for business and a dependable source of “just-in-time” manufactured goods. Xi’s draconian “zero-COVID” policy spurred boardrooms to reexamine their dependence on foreign suppliers. Russia’s invasion of Ukraine only heightened these concerns. .......... unprecedented export controls on advanced technology, an upcoming screening mechanism on outbound U.S. investment into Chinese technology companies, and industrial policies that encourage the relocation of manufacturing and sourcing to the United States and allied countries............ Chinese consumers increasingly prefer local brands, and Chinese firms now compete more effectively against multinational firms, partly because Chinese state regulators often tilt the scales in favor of domestic champions. ....... little de-risking (let alone decoupling) shows up in the data at first glance. U.S.-Chinese trade in goods reached a record high in 2022, and China remains the United States’ third-largest trading partner after Canada and Mexico, accounting for nearly 20 percent of total U.S. goods imports. ............ European trade with China is also on the rise, with EU imports from China more than doubling since 2016 and EU exports to China increasing by 50 percent. ......... four firms (BASF, Daimler, Volkswagen, and BMW) accounted for 34 percent of all European foreign direct investment into China between 2018 and 2021 ......... Vietnam and Mexico don’t have the capacity of China given their smaller populations, and India is plagued by perceptions of volatile regulation and subpar infrastructure. .......... The reality is that for many companies, the Chinese market is too big and too valuable to abandon, despite the geopolitical risks. China accounts for one-fifth of global GDP and has a consumer class of 900 million people. Its unique combination of infrastructure investments, human capital, and supplier ecosystem has made it a manufacturing powerhouse. De-risking therefore requires sacrificing revenue and efficiency, and a full break is often impractical. ............ One strategy companies are adopting is to localize their branding and operations to cater to a more nationalist market. Many are building “China for China” ecosystems, creating self-contained operational divisions in China that manufacture for the Chinese market while moving manufacturing operations for export elsewhere. ............ Some are also moving final assembly or critical components outside of China—even if many of the inputs are dependent on China—to avoid the “made in China” tag and U.S. tariffs. ........... Finally, companies are actively planning for crisis scenarios that could transform de-risking into rapid decoupling. Many companies were caught flat-footed by Russia’s invasion of Ukraine and don’t want to repeat the same mistake. An escalation over Taiwan is the most-discussed threat, since it would put companies operating on the mainland in an impossible position. But Taiwan is not the only worry: other triggers for decoupling could include a crisis in the South China Sea, policy changes targeting China from a more hawkish U.S. government after the 2024 election, and sanctions in response to Chinese lethal aid to Russia. ............... China is home to 77 percent of global lithium-ion battery manufacturing capacity and dominates 80 percent of the manufacturing stages of solar panels. China is also the global leader in the processing of critical minerals necessary for clean technologies, refining over half of all lithium, nickel, and cobalt. ............

Ten years from now, clean energy supply chains will remain mostly integrated.

........... Export controls, investment restrictions, and subsidies have more power if they are jointly implemented by a U.S.-European superbloc. .

Two Weeks at the Front in Ukraine In the trenches in the Donbas, infantrymen face unrelenting horrors, from missiles to grenades to helicopter fire. ......

If you want to live, dig.

........ shock waves and shrapnel had reduced the surrounding trees to splintered canes. Artillery had churned up so much earth that you could no longer distinguish between craters and the natural topography. ......... A log-covered dugout, where the soldiers slept, was about five feet deep and not much wider. ........ As for the infantrymen, their mission was straightforward: not to leave and not to die.......... The village was controlled by the Wagner Group, a Russian paramilitary organization notorious for committing atrocities in Africa and the Middle East. ......... “They were like zombies. They used the prisoners like a wall of meat. It didn’t matter how many we killed—they kept coming.” ........... and the conventional troops who replaced them were far less numerous and suicidal ........ “A lot of the new guys don’t have the stamina to be out here,” Pavlo said. “They get scared and they panic.” ........ The uncanny extent to which both men had adapted to their lethal environment underscored the agitation of the recent arrivals, who flinched whenever something whistled overhead or crashed nearby............ Taking out his phone, he swiped through a series of photographs: “Killed . . . killed . . . killed . . . killed . . . killed . . . wounded. . . . Now I have to get used to different people. It’s like starting over.” .......... He’d been there for six weeks and had not so much mastered his fear as accepted the illogic of running: there was nowhere to escape to. All the same, he was so timid by nature that it was difficult to imagine him repulsing a Russian attack. “I hate weapons and violence,” he said with wide-eyed incredulity, as if he still could not believe where he was. “I’m just trying to stay alive until I can get home.” ......... I spent twelve days with the 28th Brigade, and I never once saw Tynda, Odesa, or Bison put on body armor or a helmet. When I asked Bison about this, he replied, “If I’m going to die, I’ll die.” ........ the veterans had so internalized the soundscape of the war that they knew instinctively where each munition was coming from and where it would land .......... The gun’s operator, a rawboned soccer hooligan with brass knuckles tattooed on his hand, spoke of the Maxim like a car enthusiast lauding the performance of a vintage Mustang. ........... In the course of the past year, the U.S. has furnished Ukraine with more than thirty-five billion dollars in security assistance. Why, given the American largesse, had the 28th Brigade resorted to such a museum piece? A lot of equipment has been damaged or destroyed on the battlefield. At the same time, Ukraine appears to have forgone refitting debilitated units in order to stockpile for a large-scale offensive that is meant to take place later this spring. At least eight new brigades have been formed from scratch to spearhead the campaign. While these units have been receiving weapons, tanks, and training from the U.S. and Europe, veteran brigades like the 28th have had to hold the line with the dregs of a critically depleted arsenal. .......... it was “more important to focus on the accumulation of resources” for future battles. “May the soldiers in the trenches forgive me,” Zaluzhnyi said. .............. his mortar teams had fired about three hundred shells a day; now they were rationed to five a day. The Russians averaged ten times that rate. ............. The most important element of any dugout is the roof. Raw logs are brought on trucks as close to the front as possible, then carried by soldiers to the trenches. A proper roof consists of three layers of logs stacked crosswise under three feet of dirt—a thickness greater than the distance that most projectiles can penetrate during the millisecond between their impact and their detonation. Railroad ties serve as vertical posts. The dugout should be deep enough that the top barely crests the ground; from outside, all you see are steps descending to a subterranean door. ................ “I’d seen how people burn alive inside,” he told me. “One R.P.G. or mortar strike, and that’s it.” ........... and as we approached a white church outside Kostyantynivka I noticed Volynyaka crossing himself. In town, I asked him if the war had made him more religious. “No, the opposite,” he said. “I’ve started to question the existence of God.” ........... According to Volynyaka, “almost everyone” who had not already fled the town was pro-Russian. A clerk at the local grocery store had told him, “We don’t want you here.” I asked him if the hostility had eroded his motivation to keep fighting. He shook his head. “I know it’s my land—why should I care what they think?” ............... and asked me if the soil in the United States was as rich and arable as theirs. The fact that this same soil now shielded them against injury and death had only deepened their attachment to it. ............. In his spare time, he tended the vegetable patch, which he hoped would be sprouting when the homeowners returned. ............. He later told me that his preferred avatar in his favorite video game, Skyrim, was an archer. “grove st 4 life,” a reference to Grand Theft Auto, was tattooed on his forearm. When he found enough bandwidth, he planned to download a game called World of Tanks onto his phone. ........... Then, on the eve of the offensive, a young member of the brigade posted a video of himself and his comrades in which he announced where “we will be attacking.” By the time the video was deleted, it had been viewed more than eleven thousand times. ......... When a sergeant overheard a draftee telling me that he was sick, the sergeant interjected, “Everybody is sick.” .......... “Maybe the drone saw the Starlink satellite,” Ivan said. “Or they saw our toilet. It’s obviously for officers.” (The toilet was just a pit that had been dug deeply enough to afford its occupant protection while squatting.) .......... Ivan grabbed a pastry from the food rations. “I want to eat some cake before I die.” ......... Morale was as crucial an asset as any in the infantry. One day, while I was on the Zero Line, an “Army psychologist” had visited. He did not have a degree in psychology, and his role was limited to identifying soldiers who were incapacitated by fear and could not “overcome their paralysis.” He explained, “I try to convey to them why they must follow their orders. If that doesn’t work, then we send them to a real psychologist.” ............. Ivan claimed that men often faked injuries in a bid to escape the trenches. “It happens all the fucking time,” he said. But, he allowed, such desperation could arise from genuine psychological damage. ............ Almost all the veterans had suffered multiple concussions, but, as Kaban had told me, “If we get sent for treatment, who will stay in the trenches?” ............ Post-traumatic stress disorder did not seem to be an apposite diagnosis for anyone on the front, because the traumatic event was still happening. .................. “It’s easier psychologically to stay here. It’s hard to come back after visiting civilization.” ........ Kaban had recalled going to Odesa a few months earlier and experiencing a panic attack as soon as he exited the train station. The overwhelming stimuli—bustling crowds, speeding cars, jarring city noises—felt like an onslaught of potential threats. Strangers were rifling through their bags, making phone calls; Kaban instinctively reached for his Kalashnikov, only to realize that he was unarmed. When he spotted a group of soldiers patrolling the station, he ran to them, pale and shaking. “Don’t worry,” a soldier assured him. “You’re not the first. This happens a lot.” ........ At the start—when there were no Five Hundreds or fainthearted draftees, and everyone was still a volunteer, galvanized by a profound sense of patriotic duty—Oper had commanded twelve extraordinarily courageous men. He had loved them all, and all of them had died. The losses had broken something in him, and he no longer permitted himself to form comparable attachments to his subordinates. ............. The whole country has been affected by the war, but nobody has absorbed its misery and horror the way infantrymen have. ............ and he did not think that having three children should exclude a man from serving. “It should be the other way around,” he said. “They have more to fight for.” ............. “Just like the Battle of Saratoga, the fight for Bakhmut will change the trajectory of our war for independence and for freedom.” This March, Zelensky told the Associated Press that if Ukraine lost the city Putin would “smell that we are weak” and “sell this victory to the West, to his society, to China, to Iran.” .



How To Unlock The Magic Of Pixar’s 22 Storytelling Rules As A Digital Writer

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Wednesday, May 24, 2023

24: Social Housing

How Scorsese, DiCaprio and De Niro Made ‘Killers of the Flower Moon’ In this true-life crime tale, they focused not on the investigators but on the evildoers, and made the Osage woman played by Lily Gladstone central......... His latest film, “Killers of the Flower Moon,” took around seven years to come together, Scorsese and his collaborators explained on a sunny Cannes terrace the day after the Apple-financed project premiered there to glowing reviews. (It will be released in theaters this October, then debut on the streaming service at a later date.)....... The initial version was meant to be a gripping mystery like its source material, the nonfiction book by David Grann that follows the straight-arrow F.B.I. agent Tom White as he investigates a string of murders of Native Americans in 1920s Oklahoma. There, the Osage Nation is the country’s most prosperous tribe; indeed, the discovery of oil on their land has turned them into the wealthiest people per capita in all of America. But members of the Osage are regularly dying in suspicious ways, and even though the tribe has received pledges of help from the prosperous cattle baron William Hale (played in the film by Robert De Niro), no one has yet been brought to justice. ......... White eventually uncovers a vast conspiracy that implicates not only the wealthy cattleman but also his nephew Ernest, who has married an Osage woman, Mollie, and stands to benefit if other members of her family perish, since their land rights will eventually make their way to his wife (and then him). This real-life twist is the revelation the book is building to, but when the screenplay by Scorsese and Eric Roth was structured in the same way, it never came alive. .......... “The tricky thing was to work against this cliché of white savior," Plemons said. After all, it’s white people who perpetrated these crimes, too. But the subjects of his character’s investigation have motivations that often appeared baffling, like DiCaprio’s Ernest, so loving and attentive to his wife. ....... “It was one of the most twisted love stories I’d ever come across,” DiCaprio said. “I can’t even believe it myself that these two people were in love and stayed together.” ......... De Niro still found himself at a loss for words when asked to unpack Hale, who goes out of his way to endear himself to the Osage Nation even while reducing its numbers. ......... “He’s a sociopath. You don’t know why he would love them and betray them in such a way.” It wasn’t simply about money, De Niro said: Hale had plenty of it already. “Greed is a real condition, but it seems like a simpler word than what has happened,” he said. “Greed can make greedy people, but they don’t behave like that.” ........... When asked, Scorsese didn’t mince words: It has to do with white supremacy, he said. ........ “It’s about somebody not being from European culture, or white culture,” the filmmaker said. “Just ‘not up to par,’ and therefore, it’s maybe easier to kill them. I mean, whoa! And I believe that’s real thinking.” ............ At the film’s news conference yesterday, De Niro spoke about the film’s depiction of “the banality of evil” and said, “We see it today and you know who I’m talking about but I’m not going to say his name — that guy is stupid.” Later, he couldn’t help himself:

“I mean, look at Trump!”

.......... “The Zone of Interest,” which follows a Nazi commandant and his family, who live next to Auschwitz and ruthlessly compartmentalize the atrocities carried out on the other side of their garden wall. ............ Scorsese consulted extensively with the Osage to ground the film in their traditions and lived experiences. .

Start-Ups Bring Silicon Valley Ethos to a Lumbering Military-Industrial Complex Small, fast-moving U.S. tech firms are using the war in Ukraine to demonstrate a new generation of military systems but face the challenge of selling them to a risk-averse Defense Department. ......... But they are facing a stiff challenge on another field of battle: the Pentagon’s slow-moving, risk-averse military procurement bureaucracy. ......... When it comes to drones, satellites, artificial intelligence and other fields, start-up companies frequently offer the Pentagon cheaper, faster and more flexible options than the weapons systems produced by the handful of giant contractors the Pentagon normally relies on. ........ As the United States seeks to maintain its national security advantage over China, Russia and other rivals, Pentagon leaders are only now beginning to figure out how to bring a Silicon Valley ethos to the lumbering military-industrial complex. ........ “This kind of change doesn’t always move as smoothly or as quickly as I’d like,” Defense Secretary Lloyd J. Austin III conceded during a speech in December before a crowd in Simi Valley, Calif., that included executives from many start-up technology companies. ........ Industry executives refer to their situation as the “Valley of Death,” where the slow pace of government contracting can lead them to bleed out their funding while they await decisions. ...... One San Francisco-based start-up, Primer Technologies, makes an artificial intelligence tool that analyzed thousands of hours of unencrypted Russian radio communications to help find targets, but has struggled to stay afloat as it has waited for major defense contracts. ....... “Small companies can’t just sit there twiddling their thumbs for two or three years until our contract gets in place,” Heidi Shyu, the under secretary of defense for research and engineering, said late last year at the Reagan National Defense Forum. ........ small drones and a denser collection of satellites are also helping to provide the capacity for pervasive surveillance, allowing Ukraine to identify and track threats and targets constantly. ........ A new generation of cheaper and more precise attack drones carrying bombs can loiter in the air autonomously until they find their targets. Artificial intelligence-backed computer systems can fuse this collected data and other feeds to make targeting decisions, faster than any human. ......... the shift from infantry that traveled by foot in World War I to the motorized and mechanized armies of World War II. ......... an unmanned vehicle that lifts off when an enemy drone is detected, tracks the incoming weapon and, using a Spider-Man-like net, disables it. .......... This American-based technology is arriving in Ukraine through a variety of arrangements. They include donations by the companies, direct acquisition by the Ukrainian government or groups that support it, or purchases by the United States government, which then sends it to Ukraine............. “This is really the first major war in which commercially available satellite imagery may play a significant role in providing open source information about troop movements, military buildups in neighboring countries, flows of refugees and more,” Ukraine’s minister for innovation, Mykhailo Fedorov, wrote in March 2022 at the outset of the war, accurately predicting the vital role this commercial data has since played. .............. the new-generation drones are much smaller, cheaper and easier to build, and could give the military new battlefield options. ........... the military is moving toward using swarms of small drones in attacks, with perhaps 50 or even several hundred of them descending on targets at the same time. ......... “An enemy can maybe even defeat 10 percent to 20 percent of those assets coming at it,” Mr. Nawabi said. “But they can’t defeat half-plus. And that is why a swarm can be effective.” ....... a rifle-like device that sends targeted radio pulses to jam the enemy drone, disabling it before it can hit its target. ........ artificial intelligence, which has been used in Ukraine to help sift through the massive loads of data being accumulated from surveillance, will ultimately prove as disruptive to the nature of war-fighting as nuclear weapons. ............. “A.I. is able to make millions of decisions, even before the human knows there is a decision to make...... It’s kind of like being at the starting block of a new era of warfare.” .............. This same work would have taken hundreds of intelligence analysts to identify the few relevant clues in the mass of radio traffic. Now it was happening in a matter of minutes........... Mr. Gourley said he decided instead to invest more money in a government relations push, hiring a former top aide to the Senate Armed Services Committee to help the company promote its business in Washington. “The big defense companies, they don’t really kind of invest in the tech,” he said. “They just invest in how to navigate this bureaucracy. That kind of sucks, but that’s how you’ve got to play this game.” .............. “They don’t get promoted by taking risk,” Mr. Banazadeh said of the contracting officers. “So now you have to go through this arcane process of three years of budget planning while the war fighter is screaming and yelling and saying, ‘I really want this stuff.’” ....... The Defense Innovation Unit created a program that evaluated various surveillance drones coming onto the market and set up a contracting tool that allows Pentagon agencies to buy them directly, without a multiyear acquisition process. Mr. Austin, the defense secretary, recently announced that the Defense Innovation Unit will report directly to him, supervised by a new recruit from Apple. .



A.I. Needs an International Watchdog, ChatGPT Creators Say . To regulate the risks of A.I. systems, there should be an international watchdog, similar to the International Atomic Energy Agency, the organization that promotes the peaceful use of nuclear energy, OpenAI’s founders, Greg Brockman and Ilya Sutskever, and its chief executive, Sam Altman, wrote in a note posted Monday on the company’s website. .........

“Given the possibility of existential risk, we can’t just be reactive”

.......... “it’s conceivable that within the next 10 years, A.I. systems will exceed expert skill level in most domains, and carry out as much productive activity as one of today’s largest corporations.” ........ The latest A.I. tools could upend the economics of the internet, turning today’s tech giants into has-beens and creating the industry’s next powerhouses. ......... Goldman Sachs estimated recently that A.I. could expose 300 million full-time jobs to automation. .

How to Use the Debt Ceiling to Inflict Cruelty on the Poor for millions of low-income Americans who depend on the federal government for health care and basic nutrition, the debate is about their very lives. That’s because Republicans have singled them out, yet again, as a prime target in this year’s extortion scheme. ......... The bill that Speaker Kevin McCarthy muscled through the House last month would impose tough new work requirements on Medicaid, food stamps (now known as the Supplemental Nutrition Assistance Program, or SNAP) and welfare for needy families. The demands would effectively cut off health care for 1.7 million low-income people and cut off food stamps for 275,000 people. House Republicans say that if their demands are not met, they will refuse to raise the debt ceiling, plunging the country into an unprecedented default and almost certainly creating a recession. ......... And they are going after the same group of people their party has demonized for decades. ........ “I don’t think hard-working Americans should be paying for all the social services for people who could make a broader contribution and instead are couch potatoes,” said Representative Matt Gaetz of Florida. (His deep concern about excessive spending didn’t stop him from requesting a $141.5 million earmark for a helicopter training hangar at Naval Air Station Whiting Field in his district.) ........... “Couch potatoes” isn’t that far from the “welfare queen” myth conjured by Ronald Reagan or Newt Gingrich’s 1994 claim that a system of orphanages was necessary because low-income babies were being dropped off balconies or showing up in dumpsters. None of these slurs had any significant basis in reality, and all were intended to whip up fears among members of the white middle class that they were being played for fools by people of color who were lazily living it up on taxpayer dollars and ignoring their family responsibilities. ........... a vast majority of the people receiving these benefits are already working or are unable to work. ......... In 2018, Arkansas became the first state to impose very similar work requirements on Medicaid, before a federal judge ended the experiment the next year. A study in The New England Journal of Medicine found that 13 percent of Medicaid recipients there lost their health coverage — about 17,000 people — but that there was no significant change in employment. ........ The Congressional Budget Office estimated that the work requirements in the McCarthy bill, which the speaker said on Tuesday were a “red line” for his caucus, would save $120 billion over 10 years........... The most important thing the White House could do right now is say explicitly that using the debt ceiling as a cudgel to change federal safety net policy is unacceptable and inappropriate and will not be the subject of negotiation. Mr. McCarthy shouldn’t be the only one at the table with red lines, particularly when the health of millions of people is at stake. .

The Way Out of the Debt Crisis Could Lead Back Through the Civil War In fact, were the government to run short of cash, the Treasury should manage the shortfall by prioritizing interest payments and reducing funding on ordinary budget items such as national parks, the military and education. This would be painful, and possibly extralegal, but it would be the best of bad options. Responsible nations honor their debts. .......... President Abraham Lincoln and Republicans in Congress recognized that preserving America’s credit was the key to financing the Civil War, and therefore to the government’s continued health and existence. .......... in early 1862, the United States faced an actual financial crisis. As it became clear that the war would be longer (and bloodier) than expected, its cost quickly surged to $1 million and then $2 million a day, a level that would exhaust the government’s annual revenue base in only a month. ........... The only seeming solution was to borrow, but America’s credit was not held in high regard. The U.S. had recently agreed to 12 percent interest (a high rate that was an expression of investor mistrust) — and even at that rate, offers of loans were scarce. In 1861, Lincoln’s Treasury secretary, Salmon P. Chase, dispatched an emissary to England and continental Europe to scope out interest in loans; the response was poor. The Economist smugly reported, “It is utterly out of the question, in our judgment, that the Americans can obtain, either at home or in Europe, any thing like the extravagant sums they are asking, for Europe won’t lend them; America cannot.” Unlike today, when the dollar is treated as a reserve currency, the United States could not simply print paper and expect the world to accept it. ............ But in December of that year, when America’s banks ran out of gold to lend to the Treasury (which had been supporting the war over its first months), the 37th Congress proposed to do just that: print paper. With neither private banks nor the government possessing enough gold to finance the war, Congress proposed a revolutionary expedient: “legal tender”— paper money — supported only by the full faith and credit of the U.S. government, not by gold. It would be money by government fiat, standard today but novel in 1862. .............. As one had put it, paper could not be money any more than a contract to deliver flour was flour itself; it was only a promise to deliver the real thing. ......... Had the country simply printed money to cover the entire budget, it would have risked a ruinous inflation, as would indeed occur in the Confederacy. Therefore, Congress limited the issue of legal tender paper notes to $150 million (later it would authorize two more issues). But it still faced a dilemma: how to print legal tender and preserve the nation’s fragile credit? ............ Fessenden’s amendment was critical to winning the war. Although inflation in greenbacks was serious, ultimately about 80 percent, the United States had surprisingly little trouble borrowing money, because bondholders (many of them overseas) knew that interest payments would be in specie. ......... The public debt climbed to $2.68 billion by the end of the war — 41 times its level at the onset of Southern secession. Yet the United States emerged with its credit improved at home and abroad — able to borrow more and at lower interest rates. A Confederate leader ruefully concluded, “The Yankees did not whip us in the field. We were whipped in the Treasury Department.” .......... Today, when the Treasury market is vastly larger and more central to the world economy, preserving America’s credit is even more important. Hopefully, the debt ceiling will be raised and the crisis fabricated by House Republicans will be averted. .

Imagine a Renters’ Utopia. It Might Look Like Vienna. Soaring real estate markets have created a worldwide housing crisis. What can we learn from a city that has largely avoided it? .......... When Eva Schachinger married at 22, she applied for public housing. Luckily, she lived in Vienna, which has some of the best public housing in the world. It was 1968. .......... In Vienna, a whopping 80 percent of residents qualify for public housing, and once you have a contract, it never expires, even if you get richer. Housing experts believe that this approach leads to greater economic diversity within public housing — and better outcomes for the people living in it. ........... Vienna’s generous supply of social housing helps keep costs down for everyone ........ 49 percent of American renters — 21.6 million people — are cost-burdened, paying landlords more than 30 percent of their pretax income, and the percentage can be even higher in expensive cities. In New York City, the median renter household spends a staggering 36 percent of its pretax income on rent. ......... Vienna invites us to envision a world in which homeownership isn’t the only way to secure a certain future — and what our lives might look like as a result. ......... Buying a home near work is more lucrative than working. The growth of asset values has outstripped returns on labor for four decades, and a McKinsey report found that a majority of those assets — 68 percent — is real estate. ......... Last year, one in four home sales was to someone who had no intention of living in it. These investors are particularly incentivized to buy the sorts of homes most needed by first-time buyers: Inexpensive properties generate the highest rental-income cash flows. .......... Real estate is a place where money literally grows on tree beams. In the last decade, the typical owner of a single-family home acquired nearly $200,000 in appreciation. ......... “Another word for asset appreciation is inflation” ...... “an increase in monetary value without any corresponding change in the nature of the good itself or the conditions of its production that would make it scarcer or justify an increased demand for it.” ............ in 2019, the median net worth of U.S. renters was just 2.5 percent of the median net worth of homeowners: $6,270 versus $254,900. .......... the asking price of the median U.S. rental reached $2,000 a month, a record high .......... The fixed-rate, 30-year mortgage is a particularly American invention, possible only because the federal government insures the debt — if a borrower defaults, the government is on the hook. (Only one other country, Denmark, offers the same instrument.) ............ the bigger the mortgage, the bigger the deduction. Homeowners can deduct up to $10,000 of their property taxes from their federal taxes too, and if they sell their primary residence, they may be able to avoid paying capital gains on profits of up to $250,000 per person ($500,000 for couples). As housing activists like to point out,

everyone who has a mortgage is living in subsidized housing

. ............. Vienna. Perhaps no other developed city has done more to protect residents from the commodification of housing. In Vienna, 43 percent of all housing is insulated from the market, meaning the rental prices reflect costs or rates set by law — not “what the market will bear” or what a person with no other options will pay. The government subsidizes affordable units for a wide range of incomes. The mean gross household income in Vienna is 57,700 euros a year, but any person who makes under 70,000 euros qualifies for a Gemeindebau unit. Once in, you never have to leave. It doesn’t matter if you start earning more. The government never checks your salary again. Two-thirds of the city’s rental housing is covered by rent control, and all tenants have just-cause eviction protections. Such regulations, when coupled with adequate supply, give renters a level of stability comparable to American owners with fixed mortgages. As a result, 80 percent of all households in Vienna choose to rent. .............. Vienna’s choice illustrates a fundamental economic reality, which is that a large-enough supply of social housing offers a market alternative that improves housing for all. .......... Noomi Anyanwu, the 23-year-old founder of Black Voices Austria, told me that she grew up in a Gemeindebau with an Austrian mother and a Nigerian father. When she wasn’t more than 5, a white boy in the complex who was a bit older called her brother a racial slur while everyone was playing in the courtyard. Overhearing the spat, the fathers descended into the courtyard. But the white father didn’t apologize; he doubled down, repeating what his son said. Just a few years later, Anyanwu said, her father left the country because of employment discrimination and racist treatment by the police. .............. (Vienna actually has a slightly higher percentage of foreign-born residents than New York City.) .......... As an adult, she moved into her own Gemeindebau studio. Ozmen says affordable housing gave her the stability to study for a Ph.D. in fine art while also pursuing a rap career. She makes 1,000 to 2,000 euros a month from her shows and from organizing cultural events. “I have a car,” she told me. “A Mercedes A-Class from the ’90s. I eat out. I drink one coffee out every day. I don’t have a lot of money. But I live rich.” ........ Social housing like Vienna’s might seem inconceivable in America. But American politicians seriously considered it in the 1930s. After the stock-market crash of 1929, the U.S. housing market also collapsed; half of mortgage debt was in default by 1933. .......... During the Great Depression, one-quarter of all Americans were unemployed, and the construction industry was hit particularly hard. The United States needed the same things as Vienna at the time: employment and better housing conditions for workers. Housing is “the wheel within the wheel to move the whole economic engine,” said Marriner Eccles, Roosevelt’s Federal Reserve chairman. ........... Roosevelt sought a housing plan that didn’t require the government to keep footing the bill. At a time when Communism was gaining traction, he preferred to wed Americans to capitalism. The best way to do that? Broaden the base of homeowners — increase the number of Americans with a personal investment in property. ............... Congress’s National Housing Act of 1934 would rescue the housing market and establish the housing policy that defines America today. It made permanent the fixed-rate, long-term mortgage that the H.O.L.C. had helped introduce. Banks were reluctant to assume risk over decades, so the act created the Federal Housing Administration (F.H.A.) to insure mortgage debt with the full backing of the U.S. Treasury as long as loans conformed to standards it set — for instance, homes had to appraise for the purchase price and had to be in a stable-enough neighborhood, which meant a white-enough neighborhood, to make sure the government wouldn’t lose money if a borrower defaulted. ............ On its maps, the F.H.A. colored the neighborhoods deemed too risky for mortgage insurance in red — a form of “redlining,” a policy that did a great deal to create the grave racial disparities in wealth that persist today. “No agency of the United States government has had a more pervasive and powerful impact on the American people over the past half-century,” Jackson writes. ........... America’s public housing was designed to fail: to be unappealing to anyone who could afford to rent. .......... But the U.S. government prioritized support for banking rather than construction. The 30-year mortgage was a huge economic boon for the millions of Americans who took one out, benefiting from the federal subsidies and the nation’s long upward trajectory in home prices; the instrument leveraged many a renter and public-housing resident into homeownership and “turned many a former dependent of the public sector into a small-time fiscal conservative,” as Adkins, Cooper and Konings write in “The Asset Economy.” ................. “homevoters”: a coalition of Americans who — consciously or not — vote to protect the value of their property. ............ They tend to oppose local development and favor exclusionary zoning — which ensures maximum appreciation and prevents their tax dollars from extending to poorer neighborhoods. This tendency, alongside stagnant wages, has transformed the nation’s housing stock into an ever-scarcer and ever-more-expensive class of speculative asset. It’s almost impossible to “cater to the expectations of an existing constituency of middle-class homeowners without raising the barriers of entry for the rest of society,” Adkins and her colleagues write. “A middle-class politics of asset democratization has ended up undermining the conditions of its own viability.” ............. State Assemblywoman Emily Gallagher, a Democrat who had recently unseated the incumbent Democrat in the 50th Assembly District, which includes parts of Greenpoint, Williamsburg and Fort Greene, live-tweeted the tour on her phone. ........ “Can you be paroled here?” she asked, her voice husky and direct. This affected many of Bradley’s friends and relatives who, upon release from prison, were left homeless because they weren’t allowed to join family living in public housing. ......... “Of course,” Schranz said. “Why not? If you’re out, you’re out.” .......... He told me that a member of his organization had been arrested more than 40 times because whenever he visits his family in the Gowanus projects, he violates the terms of his plea deal. ........... “We aren’t used to this,” the college student said, unlocking the case, by which he seemed to mean American patterns of consumption. The American need to own. ......... Vienna has succeeded in curbing the craving to own. It has done it by driving down the price of land through rezoning and rent control. .......... Today limited-profit housing accounts for half the city’s social housing. Limited-profit housing associations are restricted to charging rents that reflect costs. Investors — banks, insurance funds — may buy shares of the limited-profit housing associations, generally to help fund initial construction. They are paid a low rate of annual interest on their shares. Any profits beyond that must be reinvested in the construction of new social housing. “It creates a revolving flow of financing for social housing,” said Justin Kadi, a professor in planning and housing at the University of Cambridge. Vienna’s main outlay toward housing is now providing low-cost financing for construction — and the government gets that money back. ........... His rent for a nearly-1,200-square-foot apartment was 824 euros — an amount that would be reasonable for Amarillo, Texas, or Shreveport, La., but out of the question in any of the 50 largest American metro areas. ......... “You mean I could be in the sauna when my kids are in the playroom?” said Julie Colon, a Bronx organizer who told me she gave birth alone while in the shelter system. “This is crazy.” Shanti Singh, a tenant-rights activist from the Bay Area with short, asymmetrically cropped hair, lingered in the sunny library with its tall windows and honey wood walls. “I never want to leave,” she said. ............ The problem with housing in the United States is that it has been locked in as a means of building wealth, and building wealth is irreconcilable with affordability. The housing crisis in the United States is proof. Even in 2017, before the pandemic, around 113 million Americans — some 35 percent of the nation’s population — were living with a serious housing problem, such as physically deficient housing, burdensome costs or no housing at all, notes Alex F. Schwartz, an urban-studies professor at the New School. ............ The United States government intervenes heavily in the housing market. It’s just a two-tiered system ............

There’s generous support for affluent homeowners and deliberately insufficient support for the lowest-income households.

.......... In 2017, the United States spent $155 billion on tax breaks to homeowners and investors in rental housing and mortgage-revenue bonds, more than three times the $50 billion spent on affordable housing. .......... That $50 billion isn’t nothing. In fact, in many U.S. cities, public spending per capita on housing and community-development subsidies is higher than in Vienna. But it seems clear that much of this money is misspent, whether through inefficient private-public partnerships like the low-income-housing tax credit; or through distortionary vouchers; or, most dubiously of all, through subsidizing homeowners, the people who need it least. ......... “If you give everyone demand-side subsidies, like vouchers, and there’s a supply shortage, it’s going to drive up prices,” Chris Herbert, the managing director of Harvard’s Joint Center for Housing Studies, told me. It costs the state more, and landlords often wind up pocketing the profits............... Though the Gemeindebauten represented a large initial government outlay, Vienna’s social housing is now self-sustaining. ........... Social housing drives down rents in the private market by as much as 5 percent. ........

In 2020, New York and California spent $377 and $248 per capita, respectively, in housing development, while Vienna spent just $124 — and approximately half of Vienna’s spending is on low-interest financing that will be repaid and then re-lent.

............... “If people don’t have to struggle all day long to survive — if your life is made safe, at least in social conditions — you can use your energy for much more important things.” .

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