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Gangster capitalism

Summary:
In the previous post I mentioned that Ben Thompson was highly critical of the TikTok deal. Here’s Jordan Schneider: The current deal does not solve any of the concerns I initially had about TikTok’s US operations.TikTok’s sort of sale to Oracle + Walmart doesn’t do anything to address algorithmic manipulation of political content, access to American’s data, or content moderation. . . It used to be nice to think that in the 21st century, American crony capitalism was limited to small-time stuff like the occasional hundred grand in a Congressman’s freezer. . . . Thanks to the Trump administration’s behavior, US diplomats trying to preach clean government won’t face “quizzical looks,” they’ll face belly laughs. TechCrunch has a scathing essay by Danny Crichton describing

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In the previous post I mentioned that Ben Thompson was highly critical of the TikTok deal. Here’s Jordan Schneider:

The current deal does not solve any of the concerns I initially had about TikTok’s US operations.

TikTok’s sort of sale to Oracle + Walmart doesn’t do anything to address algorithmic manipulation of political content, access to American’s data, or content moderation..

It used to be nice to think that in the 21st century, American crony capitalism was limited to small-time stuff like the occasional hundred grand in a Congressman’s freezer. ..

Thanks to the Trump administration’s behavior, US diplomats trying to preach clean government won’t face “quizzical looks,” they’ll face belly laughs.

TechCrunch has a scathing essay by Danny Crichton describing the beginning of the end of American exceptionalism. It’s entitled:

Gangster capitalism and the American theft of Chinese innovation

Here are a few excerpts:

It used to be “easy” to tell the American and Chinese economies apart. One was innovative, one made clones. One was a free market while the other demanded payments to a political party and its leadership, a corrupt wealth generating scam that by some estimates has netted top leaders billions of dollars. One kept the talent borders porous acting as a magnet for the world’s top brains while the other interviewed you in a backroom at the airport before imprisoning you on sedition charges (okay, that might have been both).. .

Hell, we’re apparently demanding a $5 billion tax payment from ByteDance, which the president says will fund patriotic education for youth. The president says a lot of things of course, but at least the $5 billion price point has been confirmed by Oracle in its press release over night (what the tax revenue will actually be used for is anyone’s guess). If you followed the recent Hong Kong protests for a long time, you will remember that patriotic youth education was some of the original tinder for those demonstrations back in 2012...

Dozens of smart, brilliant entrepreneurs aren’t even trying to migrate, instead rightfully seeing their home markets as more open to innovation and technological progress than the vaunted superpower. The frontier is closed here, and it has moved elsewhere.

So what are we left with here in the U.S. and increasingly Europe? A narrow-minded policy of blocking external tech innovation to ensure that our sclerotic and entrenched incumbents don’t have to compete with the best in the world. If that isn’t a recipe for economic disaster, I don’t know what is.

But hey: at least the youth will be patriotic.

And this, from Jeff Bezos’s newspaper:

Last summer, President Trump asked for an investigation into the contract over concerns that the contract requirements had been tailored for Amazon. Newly installed Defense Secretary Mark T. Esper then launched his own “review” of the department’s approach. The Pentagon then awarded JEDI to Microsoft, prompting a lawsuit from Amazon.

In its bid protest, Amazon alleged that Trump’s interest in the JEDI contract was motivated by his antipathy toward Amazon founder Jeff Bezos, who also owns The Washington Post. Bezos, who bought The Post in 2013, does not weigh in on The Post’s coverage decisions, the news organization’s leaders have said.

But there was an “investigation”, so clearly there is nothing to see here:

An in-depth investigation from the Defense Department’s inspector general found no evidence that key decision-makers in the Pentagon were acting on Trump’s orders when they gave the contract to Microsoft. But the investigation failed to answer important questions about the White House’s role and influence because the White House refused to make key officials available for questioning.

I’m sure the key officials were too busy to answer questions.


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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