Michael Roberts: AI and the railway mania

AI and the railway mania

by Michael Roberts

The AI bubble continues. The Magnificent Seven of tech media continue to drive the US stock market, along with the AI companies. The ten largest US companies by stock market value, holding over 40% of the total market cap of the S&P-500 index, have continued to shift upward in price, well above any increase in earnings (profits) recorded.

Recent earnings from major US ‘hyperscalers’ (AI development companies) show that revenue growth remains strong, but free cash flow is being sucked up by accelerating capital expenditure.  So these firms are turning to leasing and new debt to sustain the AI development race. The AI investing companies now represent 75% of S&P 500 returns, 80% of earnings growth and nearly 90% of capital-spending growth in the last year. Global AI infrastructure investment is near $400bn in 2025 and by 2030, cumulative spending could exceed $5–7 trn. Roughly 60% of this investment will go on semiconductors and computing hardware, an unprecedented level of investment in a new technology just starting commercial use.

It is not entirely true that infotech investment is the total driver of US economic activity. A lot of the equipment going into data centres is imported, so that means there are offsetting negative contributions to GDP.  Even so, the ‘silicon mountain’ continues to erupt upwards.

The AI bubble, and that is what it is, has startling similarities with the so-called ‘railway mania’ in Britain in the 1840s and later in the US in the 1870s. Then railways were also seen as a powerful new technology that could transform transport and travel, and so boost productivity. This led to massive speculation in railway shares as company after company launched a new rail line across Britain during the 1840s – and later in the 1870s right across the US, culminating in the transcontinental rail connection.

In the UK, the mania reached its zenith in 1846, when 263 Acts of Parliament for setting up new railway companies were passed, with the proposed routes totalling 9,500 miles (15,300 km). About a third of the railways authorised were never built—the companies either collapsed because of poor financial planning, were bought out by larger competitors before they could build their line, or turned out to be fraudulent enterprises to channel investors’ money into other businesses.

Between the 1860s and the 1900, the transcontinental rail tracks transformed America. They helped populate the west, and as in Britain, developed a new from of capitalist enterprise, the joint stock company, i.e. publicly owned and financed corporations. Rail helped turn the US into a coast-to-coast dual-ocean superpower and revolutionized modern finance. As the historian Richard White wrote in his history of the transcontinentals, Railroaded, “they created modernity as much by their failure as their success,” by leaving behind “a legacy of bankruptcies, two depressions, environmental harm, financial crises and social upheaval.”

So far, the AI investment boom has not yet reached the size of that 19th century railway investment, which eventually hit 6% of US GDP compared to 1.2% of GDP invested in AI datacenters and 4% of GDP in overall information processing so far.  But it’s getting there.

In the ‘Railway Mania’, eventually the stock market bubble burst. In the US, the trigger for the panic of 1873 was the failure of Jay Cooke & Co., America’s premier banking house. Cooke had made his name as the chief financier of the Union army. He agreed to fund the Northern Pacific Railway’s project to connect the Oregon coast with the existing northeastern rail network.  But the first transcontinental line had already been completed and concerns about overcapacity, along with increasing distrust of railroad securities drove down Northern Pacific bond prices. Cooke’s firm went bust in September 1873, precipitating a stock market panic and eventually a worldwide depression that extended into the 1890s.

Marx commented at the time that the huge concentration of stock market investment in US rail companies “gave in one word an impetus never before suspected to the concentration of capital and also to the accelerated and immensely enlarged cosmopolitan activity of loanable capital, thus embracing the whole world in a network of financial swindling and mutual indebtedness, the capitalistic form of ‘international’ brotherhood’”. When the rail company stocks fell, the rest of the market fell and an economic slump ensued.

In Britain, the railway bubble burst around 1847. Marx only analysed that bubble some 20 years later in Capital, Volume 3. There he called it the ‘great railway swindle’ to emphasise that the claims made by the railway companies for huge profits to be made were deliberately overstated. Investors naïvely poured capital into schemes that were significantly less profitable than they expected and promoters and directors had promised. The railway mania of the 1840s took place when the average rate of profit on British capitalism was falling – and it continued to do so through the 1840s. Marx noted, “in the railway swindle from summer 1844, railway investors apparently expected much higher than the average profit rate.”  Those hopes were dashed by 1847.

It’s the same issue now. If the returns on massive AI investments turn out to be lower than expected and claimed, that will cause a serious stock market correction. In other words, the mechanism by which an AI bust could cause a recession is not through suddenly lower growth, but through a failure to obtain expected returns on investments.

For now, optimism remains among the tech sector. Mark Zuckerberg recently predicted that half of Meta’s code would be written by AI within a year. But so far, most companies are seeing little if any benefit from their initial investments. A widely cited study from MIT found that so far, 95 per cent of generative AI projects produce no return in productivity growth or profits. To justify the required investment, annual data-centre revenues would need to rise from $20bn today to about $2trn.  Existing revenues will fall short by $800bn, according to Bain & Company. Even with expected efficiency gains, that gap illustrates how far current valuations depend on unproven revenue streams. That gap will have to be filled by borrowing and raising debt and equity.

Increasingly, investment in AI assets is being financed by loans and borrowing by the AI companies, while the stock investors also borrow more to leverage up their financial bets on AI.  OpenAI’s data centre partners are on course to amass almost $100bn in borrowing for investment in OpenAI. So far, SoftBank, Oracle and CoreWeave have borrowed at least $30bn to invest and a group of banks is in talks to lend another $38bn to Oracle and data centre builder Vantage to fund further sites for OpenAI. Investment group Blue Owl Capital and computing infrastructure companies such as Crusoe also rely on deals with OpenAI to service about $28 billion they have in loans.  Lenders and bond holders are starting to get worried and taking out increased default insurance on Oracle if it should not be able to service its debt.

Gita Gopinath, former chief economist at the IMF, has calculated that an AI stock market crash equivalent to that which ended the dot-com boom would erase some $20tn in American household wealth and another $15tn abroad, enough to strangle consumer spending and induce a global recession. But the argument goes that, even if there is financial bust and even if there is an ensuing slump, the best companies will survive and the huge productivity gains from the application of AI in all sectors of the economy will eventually deliver a step-change in the growth of the productivity of labour.  Output will rise because AI will replace human labour, reducing costs for companies and boosting profitability.  After all, even though the 1873 panic led to a market collapse in railway stocks and a deep recession, in the end, the US had a legacy of a rail network across the continent.  Similarly in Britain, after the slump of the late 1840s, the subsequent long boom of the 1850s rested partly on the 6,000-mile rail network which then formed the backbone of the country’s transportation system and helped Britain maintain its global hegemony.

Will AI do the same for US capitalism, currently facing increasing rivalry to its global hegemony?  Possibly not – after all, the Magnificent Seven may be riding high in the stock markets, but their technological advantage is seriously under threat.  Last year, China delivered DeepSeek, a much cheaper, but nearly just as good Large Language Model (LLM) as OpenAi’s ChatGPT.  And this year, there have been new launches of Chinese LLMs that perform as well and cost a fraction of the investment made by the US companies.

Mainstream economists remain divided on whether AI will deliver in the same way that railways did in the 19th century or the internet did in the late 20th century. Stanford University economist, Eric Brynjolfsson predicts that AI will follow a ‘J-curve’ in which initially there is a slow, even negative effect on productivity as companies invest heavily in the technology, before they finally reap the rewards. And then the boom comes. The J-curve can be seen in US manufacturing productivity growth, which fell in the mid-1980s and then after the recession of 1991, accelerated sharply until the mid-2000s.

But Daron Acemoglu, an economist at MIT and 2024 Nobel Prize winner, argues the productivity gains from generative AI will be far less and take far longer than AI optimists think. Moreover, AI companies are too narrowly focused on ChatGPT and other AI products that have little relevance to most business sectors. Others point out that despite smart phones and social media and apps such as Slack and Uber, past digital technologies have done little to grow the economy. Next year should reveal who is right.

Seymour Hersh: ‘DON’T LEAVE UNTIL HE BLEEDS’

‘DON’T LEAVE UNTIL HE BLEEDS’

On Joshua Colangelo-Bryan’s ‘Through the Gates of Hell: American Injustice at Guantánamo Bay’ 

Seymour Hersh 

December 2nd  paid.

A group of human rights activists protesting last year in front of the White House and calling for the release of detainees at the American military prison at Guantánamo Bay. / Photo by Celal Gunes/Anadolu via Getty Images.

One of the initial proposed sites for the prison for alleged Al Qaeda terrorists, I was told more than two decades ago by a senior Army general, as the United States went to war against Osama bin Laden and the Taliban in the wake of the September 11, 2001, attacks on the World Trade Center and the Pentagon, was a deserted island in the South Pacific that had been used after World War II for testing nuclear weapons. But the islands there were still too hot—too radioactive—and so the prison was set up at a once obscure US Navy base on the eastern tip of Cuba known as Guantánamo Bay.

The United States, initially shocked and enraged by the murder unleashed by Al Qaeda on 9/11, looked away as hundreds of suspected terrorists captured in Afghanistan, Pakistan, and elsewhere were sent to a hastily assembled prisoner-of-war camp with nothing close to due process. It was later reported that the US military had paid, sometimes handsomely, for many of the alleged Al Qaeda members who ended up at the prison and were treated brutally. President Barack Obama promised during his 2008 campaign to shut down Gitmo, as the prison was known—there were 242 detainees still there—and issued an executive order to do so on his third day in office. The Congressional and public opposition was intense, and Obama retreated, as the military would say, in the face of fire. It wouldn’t be his only retreat.

Soon enough the abuses at Gitmo were no secret. I was told early on by a knowledgeable American official that the promised rest and relaxation for some prisoners amounted in some cases to being tied in a straitjacket and flung into a secure outside area for an hour spent in the blistering tropical heat of midday. One group that continues to monitor the prison is the Center for Constitutional Rights in New York, a nonprofit that is renowned for its continued efforts to protect the rights guaranteed by the Constitution and the Universal Declaration of Human Rights. Its most recent summary of the situation in the prison doesn’t flatter either Democrats or Republicans.

In 2023, the CCR reported:

• “780 men and boys, all of them Muslim,” have been imprisoned since early 2002.

• Eighty-six per cent “were sold” to the United States during the time when the US military was offering large bounties for capture, as much as $5,000 per man.

• Twenty-two or more were children when taken to the detention camp.

• Fifteen men remain at the prison and have been detained for more than fifteen years.

• Six men were not charged with any crime of offense, including three who had been cleared for release.

• Nine men still had active cases in the military system.

• Only two still imprisoned have been convicted.

• The same number of men, nine, have died at the prison as have been convicted in the last two decades.

• Not a single senior US government official has been held accountable for wrongful detention and torture at Guantánamo Bay.

• It has cost the US Government an estimated $540 million a year to keep Guantánamo open, “making it the most expensive prison in the world.”

A forgotten prison in a forgotten place is the subject of Through the Gates of Hell: American Injustice at Guantánamo Bay, a new book by Joshua Colangelo-Bryan, a former corporate lawyer who is now special counsel at Human Rights First in New York.

It is the story of a pro bono client from Bahrain, given the name of Jaber for this book, who was seized early in the US war against Al Qaeda and called by Secretary of Defense Donald Rumsfeld one of “the most dangerous, best-trained, vicious killers on the face of the earth.” General Richard Myers, the chairman of the Joint Chiefs of Staff, similarly described the captives as being willing to chew through hydraulic cables to bring down airplanes.

‘‘I pictured myself,” Colangelo-Bryan writes, “sitting alone with a big, bearded, menacing Arab who would try to reach across the table for my throat.” Instead, Jaber, surrounded by guards, “when he saw me, broke into a warm smile” and “struggled to get halfway to his feet.” One of his legs was shackled to the floor. “As I walked toward him, I sized him up, a habit I had developed as a kid on New York subways and school playgrounds. I guessed he was about five foot six and 140 pounds—not exactly a gladiator’s build. I started to feel a little embarrassed for worrying about meeting a vicious trained killer.”

At the end of that first meeting, Colangelo-Bryan was astonished to hear Jaber conclude his goodbye by saying, “See you later, alligator.”

“It was as if I had been struck dumb,” Colangelo-Bryan writes. “I knew I was supposed to say something in response, but hearing a ‘vicious killer’ at Guantánamo Bay say ‘See you later, alligator’ proved too much.” In subsequent meetings, Jaber would describe the abuse and torture he had gone through. Colangelo-Bryan would eventually be allowed to study the specific charges the Army lawyers had filed against his client. In each case, the allegations were flimsy, poorly drawn, and easily refuted.

There turned out to be, in Jaber’s telling, no differentiation between those who had been captured in battle and those who had been paid for and flown to the prison at Guantánamo. The original detention facility there, constructed in a few weeks, was known as Camp X-Ray. It was a hell hole: a series of open cages with rats, snakes, and scorpions, but no toilet facilities. Jaber tried to commit suicide within months by breaking off a metal piece in his cell and swallowing it. He survived, and after a few days was returned to his cage, which had been stripped of his few belongings. A complaint was made to a staff sergeant and the camp’s Immediate Response Force was called in. In Jaber’s telling to Colangelo-Bryan, “A very big guard wearing all his gear ran in. He jumped in the air and landed on my back. He held my neck, and two others held my legs. A female guard hit my head on the floor repeatedly. The staff sergeant said, ‘Don’t leave until he bleeds.’ The guard kept choking me and I thought I was going to die. Blood gushed out of my nose and I lost consciousness. Other detainees told me later that the female guard held my face up for the camera.”

Many meetings later a teary and exhausted Jaber would tell his increasingly trusted New York lawyer that he had been stripped and interrogated in Afghanistan before being sent to Cuba. Soldiers there had even injected gasoline into his rectum.

Colangelo-Bryan became convinced that the American military command had no evidence linking the increasingly depressed Jaber to Al Qaeda and the 9/11 attacks, and he decided, after consulting with colleagues, that outside pressure from the media and senior government officials in Bahrain, where Jaber’s wife and family were living, was needed. Jaber was losing hope and made further suicide attempts. The Army command at Guantánamo wasn’t interested in freeing him, but very interested in keeping him alive. After yet another failed suicide attempt, Jaber told his lawyer, he’d been kept tied to a hospital bed for two months.

When Colangelo-Bryan finally was given access to the government’s files on Jaber, he found, no direct evidence of his client’s involvement with bin Laden or 9/11: “No fingerprints, no DNA samples, no voice print analyses, no photographs, no intercepts of communications—just nothing that substantiated the government’s case.”

At this bleak moment, the pressure from Bahrain, home of the headquarters of the US Navy’s 5th Fleet, suddenly paid off. Jaber was released in July 2007 to the custody of Saudi Arabia and flown to his home in Bahrain. Colangelo-Bryan would go there to meet with Jaber, the father of two since his release from prison, and his extended family.

“We had fought against a hugely powerful array of forces,” the lawyer wrote, referring to the Bush administration, Congress, the federal courts, and the majority of the American public, which “saw nothing wrong with indefinite detainment in Cuba even if it meant that some innocent people were locked up. And abused.”

I got a similar message when I wrote Colangelo-Bryan a few days ago and asked about lessons learned. “The biggest lesson,” he responded, “which we clearly haven’t learned, is that when the government demagogues people and denies them process . . . there will be abuses that have tragic human costs and no arguable relation to national security. . . . Once more we have a government engaging in expensive performative theater that does nothing to make anyone safer.”

The US Rogue State Running Rampage in the Caribbean.

 Rachel Hurley RachelandtheCity.com

Under the laws of war, you never attack anyone who is hors de combat: shipwrecked, wounded, defenseless, or already in your power. But on September 2, Pete Hegseth gave an order to do exactly that.

 

The DOD Law of War Manual is explicit about this. Section 5.9 states that persons placed hors de combat may not be made the object of attack, and it specifically includes persons incapacitated by shipwreck. The Manual continues: “Persons who have been incapacitated by shipwreck are in a helpless state, and it would be dishonorable and inhumane to make them the object of attack.”

 

This isn’t some obscure legal theory. The ban on no quarter - the rule that you don’t kill people who can’t fight back - is the bedrock of lawful command. Every officer is trained on it. The Lieber Code prescribed the death penalty for violating it back in 1863.

 

Here’s what happened off the coast of Trinidad back in September. The U.S. military struck a “suspected” drug boat. The first missile killed nine of the eleven people aboard. Two survivors were left clinging to burning wreckage in the water. 

 

Admiral Frank “Mitch” Bradley, then head of Joint Special Operations Command, watched them on the drone feed. He ordered a second strike. Those two men were blown apart.

 

According to the Washington Post, which broke this story on Friday, Hegseth’s spoken directive to forces was clear: “kill everybody.”

 

Multiple military lawyers are calling this murder. This not hyperbole. Actual murder under military law.

 

The Senate Armed Services Committee announced a bipartisan investigation yesterday. Republican Roger Wicker joining Democrat Jack Reed matters because Wicker doesn’t typically break with Trump. This is serious enough that even the GOP chairman who leads the committee is worried about where this goes.

 

But here’s the thing that I haven’t see anyone put together yet. This isn’t just about one illegal order. It’s about what happened next.

 

Six weeks after those strikes, Hegseth kicked the entire Pentagon press corps out of the building. In mid-October, he demanded that correspondents sign a new policy requiring them to not obtain or use any unauthorized information - even if it’s unclassified.

 

Nearly every major outlet refused to sign. The Associated Press, Reuters, The New York Times, The Washington Post, The Atlantic, CNN, NPR, Fox News. About 40 to 50 journalists walked out together at the 4 p.m. deadline on October 15, carrying boxes, chairs, books, and old photos from workspaces some had occupied for two decades. Hegseth responded to their statements on social media with a hand-wave emoji - showing his clear arrested development.

 

The only outlet that signed the new policy? One America News Network. And now Hegseth is hosting meet-and-greets this week for right-wing outlets and influencers who’ve never regularly covered the Pentagon before - Gateway Pundit, Post Millennial, Human Events, National Pulse, and far-right activist Laura Loomer. You know, the great journalistic minds of our time. 

 

And, for the first time since the Eisenhower administration, no major U.S. television network or publication has a permanent presence in the Pentagon.

 

Then October, Trump retroactively declared the United States in armed conflict with drug cartels. While we’re all just thinking that he’s just being his imbecile self, what he was actually doing was helping Hesgseth cover his tracks.

 

Look at the timeline. September: the illegal strikes start. October: Trump tires to legally justify the killings after the fact. October: the press corps gets expelled from the building. October: Admiral Alvin Holsey, the four-star who oversaw U.S. Southern Command and that September strike, announces his early retirement after raising concerns about the mission in a tense meeting with Hegseth. November: Hegseth launches investigations into six Democratic lawmakers for reminding troops they can refuse illegal orders. November: the Washington Post breaks the “kill everybody” story anyway.

 

That looks pretty suspicious to me and it’s textbook authoritarian behavior. Do the illegal thing. Remove the people who can report on it. Push out the military leaders who object. Then investigate anyone who reminds people it was illegal in the first place.

 

Those six lawmakers - the “Seditious Six” as Hegseth branded them - all have military or intelligence backgrounds. Senators Mark Kelly and Elissa Slotkin, Representatives Jason Crow, Chris Deluzio, Chrissy Houlahan, and Maggie Goodlander. They released a 90-second video last week with a simple message: “Our laws are clear. You can refuse illegal orders. You must refuse illegal orders.”

 

They didn’t cite specific examples. They didn’t need to. Everyone knew exactly what they were talking about.

 

Trump called it “SEDITIOUS BEHAVIOR, punishable by DEATH!” Hegseth said their video was “despicable, reckless, and false.” The Pentagon announced it would investigate Kelly, a retired Navy captain, for potential recall to active duty and court-martial. The FBI is now seeking interviews with all six lawmakers.

 

Think about that for a second. 

 

They might court-martial a sitting U.S. senator for reminding troops about their legal obligation to refuse illegal orders, while the Defense Secretary who actually gave an illegal order gets a Senate investigation that will probably lead nowhere - and he’s conducting that investigation with no independent press in the building to watch what happens.

 

Bradley tried to justify the second strike by arguing the survivors were still legitimate targets because they could theoretically call other traffickers for help - but that’s wrong. 

 

The DOD Manual is crystal clear: incapacitated survivors may not be targeted unless they commit a hostile act or attempt to escape. Men clinging to burning wreckage aren’t doing either. They’re shipwrecked. That puts them off limits.

 

Admiral Bradley had a legal duty to refuse Hegseth’s order. Section 18.22.4 of the DOD Manual requires officers “to refuse to comply with clearly illegal orders to commit violations of the law of war.” The prohibition on targeting disabled combatants is so clear there’s no gray area here. 

He ordered the second strike anyway.

 

Now here’s what makes this whole situation darker than just one war crime. 

 

Trump’s memo declaring the United States in armed conflict with drug cartels went to Congress in October. The boat strike happened in September. He built the legal framework retroactively. That’s not how war works. That’s not how law works. That’s how coverups work.

 

The confidential memo claims drug cartels are “unlawful combatants” who wage “armed attacks” against America by selling drugs. Under this logic, anyone on a boat the intelligence community “assesses” might be affiliated with a cartel becomes a legitimate military target. No trial. No evidence. No survivors required.

 

They’ve killed over 80 people across at least 23 boats using this framework. The Pentagon has refused to provide Congress with evidence that any of these boats actually carried drugs. They’ve refused to specify which cartels we’re supposedly at war with. They’ve refused to explain how they determine who’s “sufficiently connected” to a cartel to warrant being blown up in international waters.

 

It looks to me like Hegseth just decided he wanted to play WAR one day and started indiscriminately attacking boats.

 

And now there’s no Pentagon press corps in the building to even ask questions. Just OANN and Laura Loomer.

 

Venezuela isn’t even a major cocaine source - it’s a transit hub. According to current and former law enforcement officials, most cocaine moving through the Caribbean is heading to Europe, not the United States. But the administration designated Venezuela’s Cartel de los Soles as a terrorist organization anyway, which conveniently makes anyone on a boat anywhere near Venezuela fair game under this new framework.

 

The legal theory here is borrowed directly from the Bush administration’s war on terror. Declare a conflict. Designate terrorists. Kill enemy combatants without trial. But even that framework required congressional authorization after 9/11. Trump just sent a confidential memo to Congress and started blowing people up.

 

Former military lawyer Todd Huntley told the Post these strikes “amount to murder.” The law of armed conflict requires that targets pose an immediate military threat. Selling drugs, even deadly ones, is not an armed attack. A boat in the Caribbean carrying cocaine to Europe is not attacking America.

 

Secretary of State Marco Rubio was more direct about the actual strategy when asked about 

legal authority for the strikes. “Interdiction doesn’t work,” he said. “What will stop them is when you blow them up, when you get rid of them.”

 

That’s the whole game. They’re not trying to stop drugs. They’re establishing precedent for extrajudicial killings anywhere in the Western Hemisphere under the pretext of counternarcotics operations. Today it’s alleged drug boats in international waters. Tomorrow it’s anyone the administration claims is connected to a cartel, which could mean literally anyone in certain parts of Latin America.

 

Here’s the twisted legal logic. The Office of Legal Counsel reportedly blessed the drug boat campaign by saying the law of armed conflict governs these strikes. But if the law of armed conflict governs, then killing shipwrecked survivors is explicitly illegal under that same law. The OLC can’t have it both ways. Either armed conflict rules apply and this was murder, or armed conflict rules don’t apply and all the strikes are illegal.

 

Even a completely loyal Office of Legal Counsel can’t justify this retroactively. The legal framework they already established forbids exactly what happened on that boat.

 

Admiral Holsey understood this. That’s why he raised concerns about authorizing strikes without warning or interdiction. That’s why the meeting with Hegseth got tense. That’s why a decorated 37-year Navy veteran announced his retirement just over a year into what’s normally a three-year command. Combatant commanders don’t walk away in the middle of major military operations unless something is fundamentally wrong.

 

Senator Jack Reed called Holsey’s unexpected departure “troubling” and said it “sends an alarming signal of instability within the chain of command.” Retired Rear Admiral Mark Montgomery was more direct: “We’re conducting extremely unusual operations in Southern Command right now that a reasonable person could disagree with the legality of.”

 

But when Holsey objected, he got pushed out. When the Pentagon press corps tried to report on it, they got kicked out of the building. When Bradley executed shipwrecked survivors, he kept his command. When six lawmakers reminded troops about their legal obligations, they got investigated by the FBI and threatened with death by the president.

 

The system now works like this: giving illegal orders gets you protected by retroactive legal memos, reminding troops about illegal orders gets you investigated for sedition, and trying to report on illegal orders gets you expelled from the building.

 

Trump is already talking about taking military action on land in Venezuela “very soon.” The USS Gerald R. Ford aircraft carrier is parked in the Caribbean with up to 5,000 troops. Rubio keeps saying Trump “wants to wage war” on Venezuelan drug traffickers. They’re not preparing for more boat strikes. 

 

They’re building toward ground operations. And they’re doing it without independent press coverage from inside the Pentagon to scrutinize what’s happening.

 

The “Seditious Six” were right. Service members can refuse illegal orders. They must refuse illegal orders. That’s not sedition - that’s basic military law that’s been on the books since 1863. And the American public has a right to know when their Defense Secretary violates those laws, which is exactly why Hegseth kicked out every independent journalist who might tell them.

 

Senator Mark Kelly put it simply: “If this is meant to intimidate me and other members of Congress from doing our jobs and holding this administration accountable, it won’t work.”

 

But here’s what everyone’s missing while they debate whether Hegseth’s exact words were “kill everybody” or something more professionally phrased. Trump already made the order legal. He did it quietly, retroactively, without congressional approval, and with no press corps in the building to watch it happen. The Senate investigation into Hegseth will probably go nowhere because Trump’s memo already declared everyone involved exempt from prosecution.

 

The only accountability mechanism left is the pardon power. Trump can immunize everyone involved in these strikes. He probably will.

 

That’s how this story ends. Not with accountability for war crimes, but with presidential clemency for illegal killings that were covered up by expelling the press and defended by investigating the lawmakers who dared to remind American troops that they have a choice when given illegal orders.

 

If that doesn’t scare you more than one defense secretary’s bloodlust, you’re not paying attention to how power actually works.

 

And I can hear my comments already…

 

“So what about The Hague? Could Hegseth actually face the International Criminal Court?”

Technically, yes. The boat strike happened off the coast of Trinidad, which is a member state of the Rome Statute. The ICC can exercise jurisdiction over war crimes committed on the territory of member states, even when the perpetrators are citizens of non-member countries like the United States. 

 

That’s how international law works - if you commit crimes in someone else’s territory, you’re subject to their jurisdiction.

But here’s reality. 

 

The United States is not a party to the Rome Statute and never will be. Trump just imposed new sanctions on the ICC in February. The American Service Members Protection Act, passed back in 2002, strictly limits U.S. cooperation with the court and authorizes the president to use “all means necessary” to free any American detained by the ICC. Critics literally call it “The Hague Invasion Act.”

 

The ICC operates on something called “complementarity” - it only acts when national courts are unwilling or unable to genuinely prosecute. So if the Senate investigation leads to charges, or if military justice pursues this, the ICC steps back. But if Trump pardons everyone and the U.S. does nothing? That’s when the ICC says a country is “unwilling” to prosecute.

 

The problem is enforcement. The ICC has no police force. It relies on member states to arrest people under ICC warrants. The U.S. would never hand over Hegseth. No country with U.S. military bases or that depends on American aid would dare arrest him either. Just look at how Netanyahu traveled freely despite ICC warrants - powerful countries protect their people.

 

So theoretically, Hegseth could be indicted by The Hague. Sure.

 

But practically, even if he was prosecuted, he’d just never travel to any of the 125 ICC member states. He’d be confined to the United States and a handful of allied countries that wouldn’t arrest him. That’s not exactly justice, but I guess it’s more than nothing. At least it would be a permanent record that what he did was a war crime under international law, even if American power makes him untouchable.

 

Opinion. China-Taiwan: How the Relationship Will Be Reconciled

China-Taiwan: How the Relationship Will Be Reconciled 

 

Navdeep Singh

11-29-25

 

No one in Fujian is worried about missiles being fired from across the straits. Why? Because 25% of passport holding men in Taiwan work in Fujian and the mainland, often marrying into Fujian families. Why not? They are all ethnically Han Chinese, they eat the same foods, they speak the same language, they have the same cultural traditions. Imagine that. There is little to no personal animosities between the Han Chinese who live in the Republic of China and the Han Chinese who live in the People’s Republic of China. 

 

Let’s talk a bit about Min-Tai relations, the historical interactions between Han Chinese in Fujian province and Taiwan province. As noted: “Taiwan residents are mostly descendants of immigrants from mainland China, of which the southern Fujian ethnic group is the main group, accounting for 73.5% of Taiwan's total population. In terms of culture, language, religion, and customs, Fujian and Taiwan also share similarities”. Fujian province is about 3-4 times larger than Taiwan province, (121k square km to 36 K square km) and contains about double the population. (41 million people to 23 million people). 

 

People forget that the official name of Taiwan is the Republic of China, formed by the KMT, the Kuomintang, which was the SOLE ruling party in all of China from 1927-1949 and the sole ruling party in Taiwan from 1949-1987. The. Republic of China basically existed under conditions of martial law for the first 38 years of its existence. 

 

How is it going to play out, the relations between the People’s Republic of China and the Republic of China ? The Hong Kong-Macao solutions! Duhh! Hong Kong could have been taken over the PRC in 1949–the mainland controls its food and water. But they opted for the long term negotiated solution, with the handover happening 48 years after the formation of the PRC, in 1997, followed by 50 years of “One Country, Two Systems”, which will end in 2046. 

 

Expect the “One Country Two Systems” solution in Taiwan. There are now rumblings that the DPP will be crushed in the next round of national elections, possibly electorally wiped out. Who will be back in power, again? The KMT. If it’s an overwhelming victory, they can re-write the constitution to enact a solution along the lines of (1) 50 years of same status-China and Taiwan are effectively independent entities; (2) 50 years of “One Country, Two Systems”, where Taiwan keeps it’s own system, except for its armed forces. 

 

That’s going to happen. It’s fully consistent with Chinese history. What is the overarching factor in Chinese history? Emphasis on the long view of history, the Big Picture. 

The Trump Speech As Read By a British Woman

Richard Mellor

11-28-25

I have to say, this is brilliant. He’s talking a lot about Kemala Harris as well. But the more I think about it is the important conclusions we must draw from it. 

 

Aside from the comments, comedic as they may be, especially read by an older English woman with a middle class accent and a smile, they reveal just how unhinged Donald Trump really is. 

 

But more importantly is that we have a situation where this cretin is in the most important political office on the planet, a position that has the ability to destroy human progress or wreak havoc on humanity. And Trump, like most of them since the disastrous defeat in Vietnam, chooses the latter.  It does make one think deeply about Kennedy’s murder as he was clearly an obstacle to a protracted war in Vietnam. On another note, thinking of the US War on Vietnam, there is an interesting review of David Halbertson’s book,The Best and The Brightest here.

 

But there’s more. The Democrats were forced to eventually tell the truth about their esteemed leader, that he was losing his marbles despite the rest of us victims of a dysfunctional state witnessing it with our own eyes and ears. We watched the press conferences under Biden as lie after lie spewed from various representatives’ mouths. What a carnival. For me, watching Blinken, a war criminal by any measure, was as bad as having to watch or listen to Trump. 

 

So the Democrats lied to the US population until they could no longer do so. Staying in power is far more important than producing positive results for the populace, the lucrative rewards of power are too great to be sacrificed on the alter of truth and decency.

 

But the whole scene has turned in to a cinematic epic as the menagerie of mad scientists, defenders of sex traffickers and, genociders (in common with the previous administration) cover for Trump. They actually praise his speeches like the one covered here. It’s like a Monty Python sketch.

 

The only conclusion we can draw is not that Trump or Biden are examples of bad presidents; the evidence is overwhelming that US capitalism is in a serious political crisis, it is rotting from within. It’s not the only country in which the body politic reflects internal decay in general, but it’s the most important, the guy with the big stick.

 

With a systematic crisis, no political party or individual that doesn’t see the need to change it, that society needs to be restructured, as a young woman at the No Kings protest in my town pointed out, can correct the problem. The system is too far gone and a band aid might slow the bleeding but can’t fix the wound.

Michael Roberts: UK, the ‘make or break’ budget

by Michael Roberts

The UK had an apparently important financial event today.  The Labour government’s finance minister (called the Chancellor of the Exchequer, a feudal royal term), Rachel Reeves presented the government’ s tax and spending measures for the year (and years ahead).

It was billed as a ‘make or break’ budget for the Labour government which is languishing badly in the opinion polls – its share of support has halved from an already low election result of 34% in July 2024 when Labour won a landslide of seats.  The anti-immigration, pro-Brexit Reform party is now polling near 35%, with the Conservative party also down in the teens. 

The Labour government’s 18 months in office has been nothing short of disastrous.   First, it launched a series of vicious cuts in welfare spending: dropping the annual winter fuel allowance for pensioners just at a time when energy prices reached an all-time high.  Then it announced cuts in benefits for disabled people.  And just so another section of vulnerable Britons were not missed, it announced the maintenance of the ‘cap’ on child benefits to families with no more than two children.  This meant that any family with more than two kids was badly hit.  There are already 4.3m children officially in poverty in the UK and the cap would drive that poverty level to new heights.

PM Starmer and Reeves were wedded to the idea that the government had to fill a ‘fiscal black hole’, namely running an annual deficit of spending over revenue that would drive up the public sector debt, already 100% of GDP. 

To stop that rising, the ‘black hole’ had to be filled with tax rises and spending cuts, so that holders of government bonds (banks, pension funds, insurance companies, foreign investors etc) would not sell bonds and/or demand higher interest to buy them.  The last government that intended to raise spending and finance it by ‘printing’ money (by the Bank of England) was the ill-fated and very short reign of Conservative PM Liz Truss.  The bond market sold off and the pound slumped.  Truss and her Chancellor were ousted by their own party within days.

On gaining office, Reeves and Starmer assured the ‘bond vigilantes’ (as the City of London is often called) that Labour would not be spendthrift  but instead would close the ‘fiscal gap’ and keep public debt under control.  And they did what would appeal to the vigilantes the most: austerity for the poor and subsidies and deregulation for the rich. This was a political disaster and under pressure from their own MPs, the Labour leaders have rowed back on all those cuts. This November budget finished that 180 degree turn by announcing the end of child benefit cap.

However, the problem remained that the government still thought it needed to meet the bond market’s demands.  How to fill the ‘fiscal hole’?  The trouble is that this hole is imaginary – it’s in the minds of the government and the financial sector; and it varies in size depending on how fast the British economy is growing.  The faster it grows, the more tax revenues rise and spending falls on welfare and unemployment benefits.; and so the hole gets smaller.  But here’s the rub.  The UK economy is stagnating, more or less, in real terms, the only growth is in nominal GDP, in other words, in price inflation. The UK has the highest inflation rate among the top G7 economies.  As a result, money lenders have kept their interest rates high in order to maintain their real gains and so small companies and household mortgage holders are suffering badly. 

The body that oversees the credibility of government tax and spending measures, the Office for Budget Responsibility (OBR), has finally recognised that the UK economy is crawling along.  Having previously optimistically forecast an economic growth rate that was never achieved, the OBR has now reduced its forecast for real GDP growth from 1.8% a year to 1.5% for the next few years.  If those new forecasts were right, it would mean that government would not get enough tax revenues to match spending.

But it was not true that welfare spending was ‘out of control’. Welfare spending has held roughly steady as a share of the economy since 2007. Total welfare spending in Britain in 2025-26 is estimated to be 10.8 per cent of GDP. That’s just 0.8 per cent of GDP higher than in 2007-08, and spending has actually fallen fallen by 1.2 per cent of GDP since 2012-13. Nevertheless, big business and the financial sector still demand welfare cuts and oppose tax rises – at least for the rich.

So what has Reeves done?  In order to ‘fill the fiscal hole’ to keep government debt from rising, she has not raised taxes on the rich; she has not raised the tax rate for the richest earners; she has not introduced a wealth tax on the super-rich.  Instead, she has raised a ‘stealth tax’ on average earners which she admits will “hurt working people. I won’t pretend otherwise.”  So the tax burden as a share of national GDP will reach an all-time high by the end of the Labour government’s term of office in 2029 (if it lasts that long). 

In order to cover the cost of the reversal of its previous welfare cuts, Reeves has also raised taxes on gambling; introduced a mansion tax on very expensive properties (ie valued at over £2m) and increased taxes on dividends and capital gains.  But the Resolution Foundation thinktank reckons that, even with the “mansion tax”, someone with a £5m home in central London will still pay less local tax as a proportion of the value of their home than someone with an average home in far north Sunderland.  Moreover, most of these increased taxes on richer Britons are not starting until near the end of this parliament, while the hit to average households will be from April next year.

And the likelihood of meeting even the government’s fiscal targets are low.  As the OBR says: “the economic outlook depends on uncertain judgements on the paths for productivity, inactivity, and net migration. The fiscal forecast also remains highly sensitive to movements in interest rates and inflation given the level of debt.”  The OBR puts fiscal success at just 59%.

This is no ‘make or break’ budget, except perhaps for the Starmer-Reeves government in meeting the demands of the City of London.  For most Britons, the British economy is already broken.

Let me remind you.  Britain has the highest inflation in the G7; the highest electricity prices in the OECD; rising unemployment hitting 5%, stagnating real incomes since 2019; rising inequality and poverty (with 3m-plus living off ‘food banks’); the widest regional disparities in Europe; the lowest benefits relative to average wages in the OECD; public services in tatters; NHS waiting lists at a record high; local governments going bankrupt; care workers exploited by private companies and the government; more ‘social housing’ being sold to private landlord companies than are being built; water and energy companies making huge profits, while sewage pours into rivers and the beaches; and the prison and justice system paralysed.

None of this Humpty Dumpty British economy will be put together again by tinkering with a few tax measures in order to fill an imaginary fiscal hole. Speaking to Labour MPs before the budget, Reeves said that “We know there is more to do. That’s why we are investing £120bn more than the previous government in national infrastructure, cutting red tape and unnecessary regulation for businesses, introducing a new planning bill and securing new trade deals across the globe.” But this £120bn is not public investment; the government is only spending just £7bn in public funding of projects; the rest is supposed to come from the private sector through the much discredited public-private partnerships that land hospitals, schools, and other projects in permanent debt to private equity companies. Even that figure is way too small – an LSE research study reckoned that up to £60bn a year was needed to repair the economy and its people.

The government is not increasing the funding of local councils in real terms. It is not meeting the urgent needs of the National Health Service, the schools and universities.  It is not going to build anywhere near enough ‘affordable housing’ because there is no public building programme, just measures of deregulation of planning and environmental controls over private developers.  On the other hand, ‘defence’ spending is set to rise dramatically over this parliament in order to protect the nation from Russian invasion.

Make or break?  Broken now and not being remade.