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Wartime Windfalls: How Russia’s Billionaire Class Thrived Under Sanctions When comprehensive sanctions meet war economies, who actually gets richer?

By Michael Lamonaca, 31 December 2025

Russia has 140 billionaires today—the highest number in its history. This happened during a war, under comprehensive Western sanctions, with assets frozen and properties seized across Europe and America. The paradox isn’t accidental. It’s structural. When foreign companies fled Russia after the invasion, they left behind highly lucrative assets that Kremlin-friendly oligarchs bought for pennies on the dollar. When Western sanctions froze Russian wealth abroad, it trapped capital inside Russia where Putin controlled who could access it. And when defense spending surged to fuel the war machine, it created a military-industrial feeding frenzy where loyalists made billions from contracts while dissidents like Oleg Tinkov lost everything. The war didn’t impoverish Russia’s elite. It sorted them—those who stayed silent got richer, those who spoke lost their fortunes, and the West’s sanctions policy accidentally became Putin’s loyalty enforcement mechanism.

The mechanism of wealth concentration operates through three distinct channels that compound each other. First, the exodus of foreign companies created a fire sale of valuable assets. When McDonald’s, Starbucks, IKEA, and hundreds of other Western corporations abandoned their Russian operations in 2022, they left behind supply chains, real estate, manufacturing facilities, and customer bases that didn’t simply disappear. Someone had to buy them. That someone was inevitably a Russian businessperson with Kremlin approval, because operating at scale in Russia requires state permission. These assets were acquired at massive discounts—the original owners wanted out quickly, and buyers knew sellers had limited options. This wasn’t market pricing. It was distressed sale pricing in a market where the only buyers were those the government allowed to participate.

Second, Western sanctions froze Russian wealth held abroad but did nothing to prevent wealth creation inside Russia. Oligarchs couldn’t access their London properties or Swiss bank accounts, but they could still make money from nickel mines, oil fields, defense contracts, and the everyday economic activity of 144 million Russians. The sanctions didn’t destroy their capacity to generate revenue. They eliminated their ability to move that revenue out of Russia. This had an unintended consequence: it trapped capital inside the Russian economy where Putin’s government controlled access to it. An oligarch who might have previously diversified wealth across jurisdictions now had to keep everything inside Russia, making them more dependent on maintaining good relations with the Kremlin, not less.

Third, war spending created extraordinary profit opportunities for those positioned to capture them. Russia’s defense budget more than doubled between 2021 and 2024. This money didn’t evaporate—it flowed to contractors, suppliers, and the entire ecosystem supporting military production. Vladimir Potanin, who supplies nickel for fighter jet engines, is Russia’s fifth-richest person. More than half of Russia’s billionaires in 2024 either directly supplied the military or benefited from the invasion through related industries. The war economy isn’t an abstraction. It’s a massive redistribution of state resources to private individuals who control the means of production that the military requires. When a government spends lavishly on war, someone makes that money. In Russia’s case, it’s the oligarchs who stayed loyal.

The sorting mechanism operates with brutal clarity through the example of Oleg Tinkov. The day after Tinkov criticized the war as “crazy” in an Instagram post, Kremlin officials contacted executives at his bank—Russia’s second-largest at the time. The message was simple: the bank would be nationalized unless all ties to its founder were severed. Tinkov had built Tinkoff Bank over decades. It was worth approximately $300 billion. Within a week, a company linked to Vladimir Potanin announced it was purchasing the bank. The price paid was 3% of its actual value—roughly $9 billion in wealth destroyed for one social media post.

This wasn’t negotiation. It was confiscation dressed in the language of transaction. Tinkov couldn’t discuss the price because there was no market, no competing buyers, no appeal process. The bank was taken because the state decided to take it, and the legal mechanics were irrelevant except as paperwork justifying the transfer. The message to every other Russian billionaire was unmistakable: speak against the war and lose everything, or stay silent and potentially profit. The calculation is coldly rational. If criticizing the war costs you $9 billion, and supporting it—or at minimum remaining quiet—allows you to participate in the wartime wealth redistribution, the financial incentive structure is entirely one-directional.

The historical transformation of Russia’s oligarch class reveals how systematically Putin has subordinated wealth to power over 25 years. In 2000, oligarch Boris Berezovsky claimed to have orchestrated Putin’s rise to the presidency. Whether this was true or exaggerated, it reflected the reality that Russia’s ultra-wealthy wielded significant political influence. They owned media empires, funded political movements, and had direct access to the highest levels of government. The post-Soviet chaos that created their fortunes also gave them power that rivaled state authority in certain domains.

Putin’s project was to reverse this hierarchy—to make wealth dependent on political loyalty rather than political power dependent on wealth. The mechanism was demonstrated most clearly through Mikhail Khodorkovsky, once Russia’s richest man. In 2001, Khodorkovsky launched a pro-democracy organization. By 2003, he was arrested. He spent the next decade in prison while his oil company, Yukos, was dismantled and its assets redistributed to state-controlled entities and loyal oligarchs. The message was clear: political opposition, even from the wealthiest Russians, would result in total destruction.

The period between Khodorkovsky’s imprisonment and the 2022 invasion saw systematic consolidation of this model. Anyone who has worked inside hierarchical organizations recognizes the pattern: initial plurality where multiple power centers compete, followed by systematic consolidation where one authority subordinates all others, ending in total dependence where survival requires demonstrating loyalty rather than competence. The 1990s oligarchs operated like independent contractors with significant autonomy. The 2020s oligarchs operate like division managers within a corporation—wealthy within their domains but utterly subordinate to executive authority. They can make operational decisions about their businesses, but strategic decisions about Russia’s direction are made by Putin alone, and their continued prosperity depends on perfect alignment with those decisions.

By the time Putin summoned Russia’s richest to the Kremlin on February 24, 2022—hours after ordering the full-scale invasion of Ukraine—the power dynamic was absolute. Witnesses described the assembled billionaires as “pale and sleep-deprived.” They knew their fortunes were about to take a massive hit from sanctions. They said nothing. Putin told them, “I hope that in these new conditions, we’ll work together just as well and no less effectively.” It wasn’t a request. It was a notification that their continued wealth depended on continued cooperation. The transformation from Berezovsky’s era to this moment was complete: oligarchs had been reduced from kingmakers to servants.

The immediate aftermath of the invasion demonstrated the scale of damage sanctions could inflict—and their ultimate inadequacy to achieve political objectives. According to Forbes, in the year following the invasion, the number of Russian billionaires fell from 117 to 83. Collectively, they lost $263 billion—an average decline of 27% of individual wealth. These weren’t trivial losses. Assets were frozen, properties seized, travel restricted, and international business relationships severed. For oligarchs accustomed to operating globally, the sanctions represented genuine isolation.

But the losses were temporary, and the recovery revealed the deeper structural dynamics at play. By 2024, Russia had 140 billionaires with collective wealth of $580 billion—just $3 billion shy of the pre-invasion peak. The recovery wasn’t because sanctions were lifted. It was because the Russian economy, fueled by wartime spending, grew at more than 4% annually in 2023 and 2024. This growth was concentrated in sectors directly tied to the war effort and in the acquisition of abandoned Western assets. The oligarchs who survived the initial shock found themselves operating in an economy where the state was spending aggressively, foreign competition had disappeared, and the barriers to entry for new rivals were absolute because the Kremlin controlled market access.

Western sanctions failed to create the intended pressure on Putin because they misunderstood the relationship between Russian oligarchs and state power. The theory behind targeting oligarchs was straightforward: make them poorer, they’ll pressure Putin to end the war, and the war becomes politically unsustainable. This theory assumed oligarchs retained political influence over the Kremlin—an assumption that was already outdated by 2022. Putin had spent two decades systematically subordinating oligarchs to state authority. They had no mechanism to pressure him even if they wanted to.

More critically, the sanctions eliminated the oligarchs’ exit options. If any of them had considered defecting to the West with their wealth, the sanctions made it impossible. Assets were frozen before they could be moved. Properties were seized before they could be sold. Western banks closed accounts before funds could be transferred. The result was that oligarchs who might have fled found themselves trapped inside Russia with all their wealth under Putin’s control. As Alexander Kolyandr of the Center for European Policy Analysis observed, “The West did everything possible to ensure that Russian billionaires rallied around the flag. There was absolutely no plan, no clear path for any of them to jump ship.”

The sanctions created a perverse incentive structure where staying loyal to Putin became not just the most profitable option but the only survivable one. An oligarch who contemplated opposition faced three barriers: their wealth was trapped in Russia where Putin controlled it, Western sanctions meant they couldn’t access frozen foreign assets even if they defected, and Tinkov’s example demonstrated the price of public dissent. The rational calculation was to stay silent, participate in the war economy, and hope to preserve wealth by maintaining Kremlin favor.

The most significant wealth transfer occurred through the acquisition of abandoned Western assets at fire-sale prices. When foreign companies fled Russia, they faced an impossible choice: hold onto assets they couldn’t operate and risk nationalization without compensation, or sell quickly to whoever the Kremlin allowed to buy. The buyers were inevitably Russian businesspeople with government approval, and the prices reflected the sellers’ desperation rather than fair market value.

The scale of this transfer was extraordinary. Alexander Varshavsky and Kamo Avagumyan, previously owners of Avilon—a significant but not dominant auto dealer—used the war to acquire the Russian manufacturing plants of Volkswagen and Hyundai. These weren’t minor operations: together, Volkswagen and Hyundai had outsold Russia’s market leader AvtoVAZ before the invasion. Vadim Kharytonin, founder of Pharmstandard, purchased Russian assets from Henkel and saw his wealth climb to $6.9 billion by 2024. His business partner Yegor Kulkov, who first appeared on the Forbes billionaire list in 2022, increased his fortune from $2 billion to $4.2 billion within two years. Ivan Tyryshkin acquired Home Credit Bank, a microloan provider, an insurance company, and a collection agency—all previously owned by Czech PPF Group—with combined net assets of 262 billion rubles (approximately $2.6 billion).

The energy sector saw similar transfers. Leonid Mikhelson’s Novatek acquired TotalEnergies’ share in the Terneftegaz project and Shell’s stake in Sakhalin-2, generating net profit of 40 billion rubles ($400 million) in 2022 alone from these acquisitions. Shell’s 27.5% stake in Sakhalin-2 was valued by the Russian government at 94.8 billion rubles (approximately $948 million), but Shell received roughly $1.2 billion—a price reflecting urgency rather than fair valuation. McDonald’s estimated its losses from leaving Russia at $1.2 billion, with net assets valued at 41 billion rubles ($410 million) at the end of 2022.

These acquisitions created what Alexandra Prokopenko of the Carnegie Russia Eurasia Center calls “an army of influential and active loyalists” whose future prosperity depends on continued confrontation with the West. These new billionaires—11 emerged in 2024 alone through this mechanism—have a vested interest in the war continuing because their wealth is entirely dependent on maintaining control of assets that might be reclaimed if Western companies return. Their worst fear isn’t sanctions. It’s peace that brings Western companies back and potentially reverses the transfers that made them rich. This creates a constituency within Russia’s elite whose economic interests align perfectly with prolonged conflict, and who will use their influence and resources to support policies that maintain the separation from the West that protects their newly acquired wealth.

The sorting of oligarchs into loyalists and exiles represents the completion of Putin’s 25-year project to subordinate private wealth to state power. Those who stayed silent watched their fortunes recover or grow. Those who spoke publicly against the war—a handful including Tinkov, Mikhail Fridman, and Oleg Deripaska—either lost their wealth, fled the country, or both. The mechanism is sustainable because it’s self-reinforcing: each oligarch who sees another destroyed for dissent has stronger incentive to remain quiet, and each round of wealth redistribution from punished oligarchs to loyal ones strengthens the loyalists’ stake in the system.

This is not the oligarchy of the 1990s where wealthy businessmen could challenge state authority. This is a system where wealth exists at the state’s pleasure, where fortunes can be confiscated with a phone call, and where the only path to preserving wealth is absolute loyalty. The oligarchs aren’t Putin’s partners. They’re his instruments—useful for operating industries the state needs, dispensable when they become inconvenient, and utterly subordinate to political authority in all matters.

The consequence for Western policy is that targeting oligarchs as a pressure mechanism fundamentally misunderstands how power operates in Putin’s Russia. Oligarchs have no independent political leverage. They cannot pressure Putin because they exist only at his discretion. Making them poorer doesn’t create opposition—it creates desperation to prove loyalty through increased support for whatever policies Putin demands. The sanctions that were supposed to turn oligarchs into Putin’s opponents instead eliminated their exit options and made them more dependent on Kremlin favor, not less.

The war economy operates as both punishment and reward system. Those who stay loyal profit from defense contracts, acquire undervalued assets from fleeing Western companies, and participate in the economic growth generated by massive government spending. Those who dissent are stripped of their wealth through mechanisms that appear legal but are actually confiscation. The result is a billionaire class that is richer than ever, more numerous than ever, and more thoroughly subordinated to state authority than at any point in Russian history.

But the implications extend far beyond Russia’s borders. The model Putin has perfected—using external sanctions to trap domestic elites into loyalty, redistributing abandoned foreign assets to reward that loyalty, and funding it all through a war economy that concentrates wealth upward—is replicable. Other authoritarian regimes facing Western pressure are watching and learning. If sanctions consistently produce the opposite of their intended effect by eliminating elite exit options while leaving wealth-generation capacity intact, then every future conflict will see autocrats applying this playbook. The lesson isn’t “sanctions don’t work.” It’s “sanctions work backwards when they eliminate alternatives faster than they eliminate opportunities.”

For Western sanctions strategy globally, the implications are sobering. The same dynamics that made Russian oligarchs more loyal could apply to Chinese entrepreneurs, Iranian business elites, or any other target of comprehensive sanctions. If freezing foreign assets and restricting international movement doesn’t reduce domestic wealth-generation capacity, all it does is ensure that wealth stays trapped in the target country where the regime controls it. This isn’t theoretical—it’s empirically demonstrated across three years of data showing Russian billionaire wealth recovering and even exceeding pre-war levels despite unprecedented sanctions pressure.

The question for democratic societies is whether wealth concentrated in the hands of 140 people serving one man’s geopolitical ambitions represents a sustainable model or a fragile system awaiting its inevitable collapse. Russian billionaires’ wealth now equals 27% of Russia’s GDP—higher than the United States (24%), and far above most developed Western nations (12-18%). This level of concentration suggests an economy optimized for extraction by a narrow elite rather than broad-based prosperity. Such systems can persist for decades or collapse suddenly, but they rarely evolve peacefully into more equitable arrangements. The oligarchs profiting from war today are building fortunes on foundations that may not survive the transition to whatever comes after Putin.

Russia’s 140 billionaires aren’t hostages to Putin’s system. They’re products of it—sorted, tested, and proven reliable through the mechanism of wartime redistribution where speaking costs everything and silence pays extraordinarily well. The West wanted sanctions to create oligarch opposition to the war. Instead, sanctions created the conditions where opposition became economically suicidal and cooperation became massively profitable. When wealth depends entirely on state approval, and the state is run by one man, the wealthy don’t challenge authority. They demonstrate their worth as servants.

What does it reveal about wealth itself that it can be created faster during wartime destruction than peacetime construction? That 140 people can thrive while their country wages a war that has killed hundreds of thousands suggests wealth and societal wellbeing operate on entirely separate tracks—one can climb while the other collapses, as long as the state directs resources toward those it favors. The oligarchs’ silence reveals something uncomfortable about loyalty in systems where all alternatives have been eliminated: compliance isn’t bought with rewards alone, but with the systematic removal of every exit. When dissent carries total destruction as its price, cooperation becomes the only rational choice. This isn’t uniquely Russian. It’s a template for how any system subordinates wealth to power when it controls both the rewards and the escape routes.

Tags: Russia, Oligarchs, Sanctions, War Economy, Wealth Concentration, Geopolitics, Putin

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The Great Reversal: Why the Big Crunch is Modern Physics’ Last Hope Exploring the cosmic shift from eternal expansion to a grand reset

by Michael Lamonaca, 29 December 2025

Why would the world’s leading astronomers be “excited” by the possibility of the universe collapsing in on itself? The death of the “Big Rip” theory doesn’t signal a dark end, but rather the birth of a new physics that finally reconciles Einstein’s equations with the chaos of the quantum world. If the universe has already begun to slow down, as the South Korean team suggests, we are not living in a dying expansion, but in the first moments of a grand cosmic reset. We are standing at the edge of a paradigm shift where the “end of everything” might actually be the greatest story of survival in the history of science.

The “Standard Model” of cosmology has long relied on the Cosmological Constant—a fixed, unchanging energy of empty space that acts as a permanent accelerator. For twenty-seven years, this constant was the “holy grail” of physics, used to explain why galaxies weren’t just moving away from us, but doing so faster every second. This energy was supposed to be a fundamental property of the vacuum, a ghostly push that would eventually leave the universe cold, dark, and hollow. However, the deep forces now coming to light through the Yonsei University study suggest that dark energy is not a constant at all. Instead, it appears to be a dynamic field—often called quintessence—that can strengthen or weaken over eons. This is a radical departure from the static universe described in modern textbooks.

The distinction between these two models is not merely academic semantics. The Cosmological Constant treats dark energy as a property of space itself—everywhere, always, unchanging. Empty space has pressure. That pressure pushes outward. Forever. Quintessence, by contrast, treats dark energy as a scalar field permeating the universe like an invisible fluid whose pressure can vary across time and space. Think of it as the difference between a concrete foundation (constant) and ocean currents (quintessence). One is structural and permanent; the other is dynamic and responsive to the universe’s evolution. If quintessence is real, then dark energy has a history—it was stronger in the past, weaker now, and will continue to decline until gravity’s inward pull overcomes it entirely. This transforms cosmology from a study of fixed laws into a study of cosmic biography, where the universe ages and changes character across epochs.

If dark energy is weakening, the structural integrity of the “ever-expanding” universe begins to crumble. We must look at the vacuum of space not as a static backdrop, but as a fluid medium that is losing its outward pressure. When the outward push of dark energy drops below the threshold of the inward pull of the universe’s total mass, the fundamental geometry of space-time shifts from Open to Closed. This is the invisible pivot point where the expansion of billions of years begins its multi-billion-year U-turn, a transformation that changes the very nature of time and distance as we perceive them. The mathematics governing this transition were worked out decades ago, but they were filed away as theoretical curiosities when the 1998 supernova data seemed to confirm eternal acceleration. Now those equations are being pulled from the archives, dusted off, and scrutinized with the urgency of engineers discovering a structural flaw in a skyscraper that’s already built.

Behind these equations is Professor Young-Wook Lee, who famously likens our current understanding of the universe to doing up a shirt with the first button fastened incorrectly. For Lee and his team, the mistake happened in 1998, when the initial supernova data failed to account for the age bias of galaxies. They argue that younger stars produce slightly dimmer explosions than older ones, a detail that was missed in the excitement of the initial discovery of acceleration. If Lee is correct, the 2011 Nobel Prize in Physics was awarded for an illusion created by stellar evolution. This creates a fascinating tension within the scientific community, pitting the established legacy of the last three decades against a new wave of statistical scrutiny that refuses to be ignored.

On one side of this debate, you have the “Old Guard” who built their careers and reputations on the idea of an accelerating cosmos. Entire research programs, billions in telescope funding, and hundreds of doctoral theses rest on the foundation of the Cosmological Constant. On the other, you have a new generation of data-driven rebels willing to say the emperor has no clothes. The human factor here is one of high-stakes academic survival; to admit Lee is right is to admit that the last quarter-century of cosmological theory was built on a misunderstood Standard Candle. This isn’t just a scientific disagreement; it is a battle for the soul of modern astronomy, where the winner dictates how the next century of space exploration is funded and focused. The personal stakes are enormous—for the Old Guard, vindication of life’s work; for Lee’s team, scientific immortality or permanent marginalization depending on which way the data breaks.

The idea of a Big Crunch is not a new invention; it was actually the dominant scientific and philosophical expectation until the late 1990s. Before dark energy was discovered, it was widely assumed that the Big Bang’s initial momentum would eventually be countered by gravity, leading to a Big Bounce or a cyclic universe. This mirrors the historical transition in the 17th century when the Ptolemaic model was replaced by the Copernican model. In both cases, messy data—like the retrograde motion of planets or the variation in supernova brightness—was ignored or corrected with complicated layers of theory until the primary foundation became too significant to dismiss.

Today, the “messy data” is the supernova age-bias, and it is forcing a return to the cyclic theories of the early 20th century. Just as the Copernican revolution forced humanity to accept that we aren’t the center of the universe, the Big Crunch revolution may force us to accept that the universe is not a one-way street. Instead, it may be a repeating pulse—a cosmic heartbeat that has likely happened many times before, each collapse providing the fuel for a new beginning. This perspective shifts the universe from a terminal machine to a living, breathing cycle that defies the finality of death. The pattern is familiar to anyone who has watched scientific consensus shift: initial certainty, accumulating anomalies, defensive elaboration of the existing model, then sudden collapse when the weight of contradiction becomes unbearable. We may be living through that final phase now, the moment before the paradigm breaks.

The tension between the standard model and these new findings is measured in sigmas—the statistical gold standard for determining if a discovery is a fluke or a fact. While the Yonsei team claims a 99.999% confidence level for their age-bias correction, mainstream critics argue that the correlation with age is not very tight. The debate centers on whether we can trust Type Ia Supernovas as universal measuring sticks. Critics like Professor George Efstathiou argue that stellar explosions are too complex to be treated as uniform values, suggesting that the South Korean team is seeing patterns in the noise. This creates a verification deadlock that can only be broken by a massive increase in observable data.

The mainstream view relies on the sheer volume of past papers and the mathematical elegance of the Cosmological Constant, while the new view relies on a singular, massive statistical correction that threatens to topple the entire house of cards. This standoff is currently playing out in the pages of prestigious journals, where every decimal point in a supernova’s light curve is scrutinized as if the fate of the universe depended on it. In a very real sense, it does. If the sigmas continue to trend in Lee’s favor, we are on the verge of the most significant retraction in the history of physics. The challenge resembles trying to determine whether a massive ship has begun to slow down by measuring the wake from a lifeboat a mile behind it—you need extraordinary precision across vast distances and timescales to detect a change that’s happening too gradually for any single observation to capture.

Proving that dark energy is weakening requires a system-wide test that only the next generation of massive telescopes can provide. The Dark Energy Spectroscopic Instrument in Arizona has already provided hints that the expansion rate is fluctuating, but it hasn’t reached the threshold needed to officially dethrone the Cosmological Constant. The current generation of instruments can observe supernovas out to about 10 billion light-years—impressive, but insufficient to map the entire acceleration history of the universe with the precision needed to detect weakening dark energy. What’s required is a complete census of cosmic expansion across 13 billion years, from the universe’s infancy to the present day.

The technical challenge is formidable. Type Ia supernovas are rare—only a few explode per galaxy per century. To build a statistically robust map of cosmic expansion, astronomers need to observe tens of thousands of these explosions across billions of years of cosmic history. Each supernova must be measured with extraordinary precision, accounting for dust, gravitational lensing, and the age bias that Lee’s team identified. Current telescopes can capture a few hundred usable supernovas per year. The Vera C. Rubin Observatory, scheduled to begin operations in 2025, will observe thousands per year, revolutionizing the statistical power available to test competing models. The Nancy Grace Roman Space Telescope, launching in 2027, will peer even deeper into cosmic history with infrared sensitivity that cuts through dust and captures the most distant explosions.

Until these instruments come online and accumulate years of observation, we are in a state of scientific limbo. The most important question in physics remains a matter of interpretation rather than proven fact, leaving a vacuum where both an eternal freeze and a violent collapse remain on the table. This uncertainty is what fuels the current ferment in the scientific community, as researchers race to be the first to confirm the true nature of the force that dictates our destiny. The stakes are nothing less than the roadmap for the future of the human species. If dark energy is truly weakening, we have perhaps trillions of years before collapse—time enough for civilizations to rise, fall, and engineer survival strategies we cannot yet imagine. If it remains constant, we face an emptier, lonelier fate.

If the Big Crunch is true, the universe avoids the most depressing fate imaginable: the Heat Death. In the Heat Death scenario, galaxies drift so far apart that they disappear from each other’s view, stars burn out, and the universe becomes a cold, dark void for trillions of years. It is a slow, lonely expiration that renders all information and life ultimately meaningless. The final state is maximum entropy—every particle evenly distributed, every temperature equalized, every process ground to eternal stillness. Nothing happens, nothing can happen, and nothing will ever happen again. It is the ultimate victory of thermodynamic decay over structure, life, and meaning.

The Big Crunch, by contrast, is a violent but generative ending. As space-time contracts, the Cosmic Microwave Background radiation would blue-shift and heat up, eventually becoming hotter than the surfaces of stars. Galaxies would merge in spectacular collisions. Black holes would consume everything in their path before being dragged into a final gravitational maelstrom. Temperature and density would climb without limit, recreating conditions similar to the first moments after the Big Bang. In this scenario, the universe doesn’t fade—it roars back into a state of pure energy and possibility.

The prospect of a collapse is, paradoxically, the most optimistic outcome for the universe. It suggests that our existence is not a freak accident in a dying void, but a participant in a grand, recurring symphony. As galaxies merge and space-time contracts back toward a singular, infinitely dense point, the conditions for a new Big Bang are recreated. For many physicists, this is the Last Hope because it allows for a Big Bounce—the idea that our end is simply the ignition for the next chapter. It provides a sense of continuity that the standard model lacks, transforming the cosmos from a tragedy into an epic. The cyclic universe offers something the Heat Death cannot: redemption through renewal. Information may not be preserved across bounces, civilizations will not survive the transition, but the capacity for structure, complexity, and life to emerge again remains intact. The universe becomes not a tomb but a phoenix.

The possibility of a Big Crunch suggests that we are not drifting into a lonely, desolate void, but are part of a rhythmic, living system that may have no beginning and no end.

Tags: Cosmology, Dark Energy, Big Crunch, Quintessence, Physics, Scientific Paradigm Shifts

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Our Selection for 2025: Ten People Who Built Through Virtue While the World Watched Spectacle When wisdom, justice, courage, and temperance guide our choice, we find transformation happening in obscurity

by Michael Lamonaca, 26 December 2025

While 2025 celebrated ego-driven spectacle—Trump renaming institutions to feed vanity, Musk performing dominance on social media, tech CEOs promising revolutions they didn’t deliver—we identified ten people you’ve never heard of whose work embodies the four cardinal virtues the Stoics prized: wisdom, justice, courage, and temperance. These individuals don’t necessarily practice Stoic philosophy. But their actions in 2025 demonstrated what these ancient virtues look like when applied systematically to contemporary problems. They solved problems that save lives, dismantled systems that punish the innocent, worked in war zones when others fled, and chose planetary survival over quarterly profits. The ancient Stoics understood that character isn’t what you perform when cameras watch—it’s what you build when no one’s looking. These ten people proved that wisdom, justice, courage, and temperance still work as selection criteria for identifying who actually mattered in 2025. They just don’t trend. What does it reveal about our moment that the people embodying virtue through action operate in complete obscurity while we organize attention around those who embody none of it?

The mechanics of invisibility operate through systematic amplification of spectacle over substance. Modern media infrastructure rewards performance that generates engagement, not work that generates outcomes. Trump renaming the Kennedy Center produces outrage, shares, clicks—measurable attention that translates to advertising revenue. Dr. David Liu editing genes to prevent inherited disease produces papers read by specialists, grants awarded by committees, and eventually treatments that save lives no journalist will connect to his breakthrough. The spectacle is immediately legible. The substance requires expertise to recognize and years to verify. Markets amplify what can be monetized now. Virtue operates on timelines measured in decades or generations.

This creates perverse selection pressure. Individuals seeking visibility learn that performance beats competence, that narrative matters more than results, that the appearance of authority generates more power than the demonstration of wisdom. Those who prioritize actual outcomes over public recognition discover that solving problems doesn’t produce fame—it produces more complex problems requiring deeper expertise. The scientist who cures one disease confronts ten more. The judge who reforms one broken system reveals five others requiring equal attention. Virtue compounds through iteration, not publicity. Spectacle peaks at first performance.

Wisdom reveals itself through iteration that deepens rather than expands. Dr. David Liu didn’t solve genetics once and move on. He spent decades developing base editing technology, then refined it, then discovered limitations, then created new methods to address those limitations. His 2025 Breakthrough Prize recognizes not a single discovery but a systematic program of research where each answer generated more precise questions. This is Sophia—practical wisdom that compounds through depth rather than breadth. The more Liu understands gene editing, the more he recognizes what remains unknown. Wisdom doesn’t produce certainty. It produces increasingly sophisticated uncertainty that enables increasingly precise intervention.

Holly Lane, Ph.D. at the University of Florida Literacy Institute didn’t declare a literacy crisis and propose a manifesto. She built AI-powered assessment tools, tested them, measured outcomes, identified failure points, revised methods, retested, and iterated until the system worked well enough to distribute. The tool now helps teachers deliver personalized instruction, but Lane knows exactly where it fails—which student populations it serves poorly, which learning disabilities it can’t accommodate, which cultural contexts it misreads. Her wisdom isn’t final solution. It’s systematic problem-solving that reveals the next problem requiring attention.

Howard Bell III expanded Learning Ally’s audiobook access to 2.6 million students, then discovered that access alone doesn’t solve literacy inequality—it reveals infrastructure gaps, teacher training deficits, and curriculum mismatches that prevent effective use. Each problem solved exposes the system more clearly, showing where intervention matters most. These wisdom practitioners share a pattern: solve one problem, discover ten more, develop methods to address those, iterate continuously. They don’t promise revolution. They deliver systematic improvement through patient accumulation of knowledge applied to specific problems. This takes decades. It generates no viral moments. It works.

Justice operates through patience that outlasts opposition. Erez Reuveni refused illegal deportation orders in 2025 knowing his objection wouldn’t stop the policy, wouldn’t change the administration, wouldn’t reform the system immediately. His refusal mattered not because it prevented all harm but because it established that some DOJ attorneys still prioritized law over loyalty. That precedent won’t reverse policy this year. It creates institutional memory that future reforms will reference when systems eventually shift. Justice-building operates on timelines that exceed any single career.

Chief Justice Stuart Rabner led New Jersey’s criminal justice reform eliminating money bail—work that began in 2014, implemented in 2017, and by 2025 shows sustained success through data accumulated over years. The reform faced immediate opposition from bail bondsmen, prosecutors who preferred discretionary detention, and politicians who claimed it would increase crime. Rabner didn’t defeat opposition through argument. He implemented reform, measured outcomes rigorously, published data annually, and let evidence compound over time until opposition lost credibility. Justice requires the patience to outlast bad-faith objections through systematic demonstration that reform works.

Sarah Staudt and the Prison Policy Initiative produce comprehensive reform guides now used in all 50 states—work requiring years of research synthesizing criminology, policy analysis, legislative process, and coalition-building across political divides. Each guide addresses specific jurisdiction, anticipating objections, providing counterarguments, citing precedent, offering implementation roadmaps. The work is technical, unglamorous, and cumulative. One guide builds on another. One reform enables the next. Justice isn’t dramatic reversal. It’s patient construction of better systems that outlast those who built them. Dikaiosyne operates through accumulation of small victories that compound into structural change no single opposition can reverse.

Courage manifests through calculation that risk is necessary when inaction guarantees harm. Dr. Younis Awadallah and Fairuz Abuwarda didn’t lack fear while coordinating polio vaccination in Gaza. They calculated that 600,000 unvaccinated children in a war zone guaranteed disease outbreak, and that someone had to stay despite danger or the outbreak would happen. This isn’t heroism—it’s math. Polio spreads predictably. Vaccination prevents it reliably. Someone must administer vaccines. If everyone who could leaves, the disease wins by default. Courage is the decision that your presence despite risk produces better outcomes than your absence despite safety.

The 152 American healthcare workers who volunteered in Gaza performed the same calculation. They knew the statistics: over 1,500 healthcare workers killed since October 2023, hospitals bombed systematically, colleagues targeted deliberately. They went anyway because the alternative—allowing preventable death through absence—violated the core commitment that justified their expertise. You don’t become a doctor to watch people die when you could intervene. Andreia isn’t absence of fear. It’s accurate assessment that the cost of inaction exceeds the cost of risk, followed by deliberate choice to act despite danger because the math requires it.

This is what distinguishes courage from recklessness. Recklessness ignores risk. Courage calculates it accurately, acknowledges it honestly, then acts anyway because not acting produces worse outcomes. The healthcare workers didn’t pretend Gaza was safe. They documented precisely how dangerous it was—in their October 2025 open letter exposing systematic targeting of medical infrastructure. They published it knowing it risked professional consequences and personal safety. But silence would make them complicit in concealing preventable harm. Courage is choosing to speak truth when silence is safer but dishonest. The calculation is cold: your silence enables continued harm. Your testimony risks punishment but might prevent future harm. The math requires testimony. Andreia follows math.

Temperance demonstrates through restraint chosen when expansion remains possible. Yvon Chouinard didn’t give Patagonia away because he lacked options. At 87, he could have sold the company for billions, enriching himself and heirs for generations. He chose instead to restructure ownership so profits fund environmental protection in perpetuity. This isn’t sacrifice—it’s accurate calculation that personal wealth accumulation produces temporary benefit while planetary preservation produces permanent possibility. Sophrosyne isn’t deprivation. It’s recognizing that restraint now preserves options later, while extraction now eliminates options permanently.

Ryan Gellert implements this calculation operationally through choices that directly reduce Patagonia’s growth potential. The Worn Wear program repairs products instead of selling new ones—explicitly cannibalizing sales to extend product lifespan. The company designs for durability over planned obsolescence, making products that last decades rather than seasons. Gellert co-founded Brands for Public Lands, coordinating 100 brands to prioritize environmental protection over market expansion. Every strategic choice rejects growth-maximization in favor of sustainability. This isn’t idealism—it’s pragmatism recognizing that infinite growth on a finite planet produces inevitable collapse, while voluntary restraint produces indefinite continuation.

The pattern these temperance practitioners share: recognize capacity for extraction, calculate that extraction produces temporary gain and permanent loss, voluntarily limit present consumption to preserve future possibility. Chouinard could extract billions. He chose perpetual environmental funding. Gellert could maximize quarterly returns. He minimizes planetary harm. Both understand that Sophrosyne isn’t moral superiority—it’s intelligence recognizing that systems requiring continuous growth eventually consume the foundation supporting them. Temperance is choosing structural stability over short-term optimization because collapse isn’t an acceptable outcome.

The historical pattern is ancient and repeating. Marcus Aurelius practiced virtue while governing empire, writing Meditations not for publication but for personal discipline. His son Commodus performed power, hosting gladiatorial spectacles and renaming Rome after himself. History remembers Marcus as philosopher-emperor whose Stoic principles influenced leaders for two millennia. Commodus is remembered for the collapse his ego-driven rule accelerated and the assassination that ended it. Virtue builds structures that outlast their builders. Spectacle creates monuments that crumble when the performer dies.

Florence Nightingale reformed military hospitals through systematic data collection and hygiene protocols. Generals who commanded the armies she served are footnotes. Her nursing principles remain global standard practice 170 years later. Norman Borlaug developed wheat varieties that saved a billion lives from starvation. Politicians who took credit for distributing his seeds are forgotten. His agricultural methods still feed continents. Jonas Salk created the polio vaccine and refused to patent it, forgoing billions in personal profit so the vaccine could be distributed freely. Pharmaceutical executives who would have monetized his work are unknown. His vaccine eliminated a disease that terrorized generations.

The principle repeats across centuries: character expressed through competent action creates value that compounds across time. Ego expressed through visible performance creates attention that dies with the news cycle. We remember builders, eventually. We forget performers immediately. The lag time between contribution and recognition can span generations. Nightingale was dismissed as difficult during her career. Borlaug won the Nobel Prize but remained unknown to those his work fed. Salk achieved fame but less than entertainers of his era. None of them worked for recognition. They worked because the problems demanded solving and they possessed the capacity to solve them. That calculation—problem exists, I can address it, therefore I must—is virtue in its purest form.

The consequence of organizing attention around spectacle rather than virtue is structural erosion. When Trump dominates headlines for renaming the Kennedy Center while Dr. David Liu’s genetic breakthrough receives specialist coverage, we teach the next generation that performance matters more than competence. When Musk’s social media provocations generate more engagement than Fairuz Abuwarda vaccinating 600,000 children in a war zone, we signal that visibility equals importance regardless of actual contribution. When quarterly profit-maximizing CEOs receive compensation packages dwarfing Ryan Gellert’s salary despite Gellert building sustainable systems that will function after their companies collapse, we demonstrate that markets reward extraction over restraint.

This creates selection effects that compound generationally. Talented individuals observe which behaviors produce rewards and adjust accordingly. Those capable of both competence and performance learn that performance requires less effort for greater return. Those committed to competence despite obscurity become increasingly rare as opportunity costs rise. The talent pool available for virtue-driven work shrinks. The pool pursuing visibility-driven performance expands. Over decades, institutions hollow out—staffed by people skilled at appearing competent rather than being competent, led by individuals optimized for attention rather than outcomes.

The damage isn’t immediate. Dr. Liu’s breakthrough happens regardless of media attention. Erez Reuveni refuses illegal orders whether journalists cover it or not. The ten people we selected work despite the incentive structure, not because of it. But systems that fail to recognize and reward virtue eventually lose the capacity to produce it. If wisdom, justice, courage, and temperance generate no institutional benefit for practitioners, fewer practitioners emerge. Each person profiled here chose virtue knowing it wouldn’t produce recognition. That’s admirable individually. It’s unsustainable systemically. Eventually, the virtuous burn out, retire, die—and nobody trained to replace them because the system taught talented people that virtue doesn’t matter.

The Stoics offered no solution to systems that fail to reward virtue because they didn’t expect systems to reward it.Marcus Aurelius didn’t write Meditations hoping Rome would celebrate philosophical emperors. He wrote it knowing that practicing virtue was his only controllable contribution to a world largely indifferent to virtue. The Stoic response to institutional failure isn’t reform the system—it’s practice virtue anyway because the alternative is complicity in degradation you can’t prevent but don’t have to accelerate.

This sounds fatalistic but operates as radical pragmatism. You can’t control whether institutions recognize wisdom, justice, courage, and temperance. You can control whether you practice them. You can’t determine whether your work receives acknowledgment. You can determine whether the work was worth doing independent of recognition. Dr. David Liu can’t make media cover genetic breakthroughs. He can make genetic breakthroughs that save lives whether media covers them or not. Fairuz Abuwarda can’t guarantee anyone will notice she vaccinated 600,000 children in a war zone. She can guarantee those children didn’t contract polio because she stayed when others left.

The Stoic calculus is cold: you die eventually, your work outlasts you or it doesn’t, recognition comes or it doesn’t, none of that matters compared to whether you acted with wisdom, justice, courage, and temperance while you had the capacity to act. The ten people we selected demonstrate this calculus in practice. None of them asked whether 2025 would celebrate their work. They asked whether the work needed doing. Polio needed preventing. Genetic disease needed curing. Unjust systems needed reforming. Planetary collapse needed averting. The problems existed. They possessed relevant capacity. The virtue was in applying that capacity to those problems regardless of whether anyone noticed.

This isn’t heroism—it’s basic competence applied with character. The radical claim is that this should be normal rather than exceptional. The Stoics believed every person capable of reason possessed capacity for virtue, that practicing virtue was the only reliable path to eudaimonia, and that systems failing to recognize virtue didn’t eliminate its value—they merely revealed their own corruption. The ten people we selected didn’t wait for systems to reward virtue before practicing it. They recognized that virtue is intrinsic—it doesn’t require external validation to function. The work was worth doing because it reduced suffering, reformed injustice, saved lives, or preserved possibility. Whether anyone noticed was irrelevant to whether it mattered.

The question facing everyone who reads this isn’t “how do we make systems reward virtue?”—that’s beyond individual control. The question is “will I practice virtue anyway?” Dr. David Liu wakes up tomorrow and continues genetic research whether this article exists or not. Erez Reuveni faces the next illegal order and refuses it or complies. Fairuz Abuwarda decides whether to stay in Gaza or leave for safety. Yvon Chouinard and Ryan Gellert choose profit maximization or planetary restraint. Each decision happens in obscurity, unknown to almost everyone, mattering enormously to outcomes regardless of visibility.

The ten most important people of 2025 weren’t performing power. They were practicing virtue. We weren’t watching—but they didn’t need us to. The work was worth doing anyway.

Tags: Stoicism, Virtue Ethics, Leadership, Character, Justice, Courage, Wisdom, Temperance, 2025, Selection, Human Flourishing, Marcus Aurelius

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The Ego That Rewrites Reality: Trump’s Renaming Spree and the Cult of Fragile Authority When performative dominance replaces actual strength, democracies collapse one silent compliance at a time

by Michael Lamonaca, 24 December 2025

Secure leaders don’t rename the Kennedy Center after themselves. They don’t redraw maps to satisfy wounded egos. They don’t restore monuments to traitors as acts of personal vindication. Donald Trump’s compulsive renaming of institutions—from the Gulf of Mexico to military bases—isn’t strength. It’s the performance of strength by someone who knows his power is temporary and his legacy may prove erasable. Since returning to office, Trump has plastered his name on the John F. Kennedy Center for the Performing Arts, declared the Gulf of Mexico the “Gulf of America,” and ordered military installations returned to Confederate generals’ names. If democratic norms survive, future administrations will likely reverse these changes. But that “if” is no longer guaranteed. Yet the renaming continues, not because it serves any policy goal, but because it reveals something far more dangerous than one man’s vanity: it exposes which institutions will comply with obvious grotesqueness, which officials will participate in transparent clownishness, and which citizens will watch democratic norms collapse without defending them. The compulsion is pathological. The exploitation of that pathology is strategic. And the silence that enables both is the crisis.

The mechanism operates through the marriage of genuine need and calculated testing. Trump actually requires symbolic dominance. This isn’t performance art or deliberate distraction—it’s authentic compulsion driven by an ego that interprets every neutral space as personal insult. He genuinely believes his name belongs on the Kennedy Center. He actually needs the Gulf renamed to validate his significance. The behavior is transparent precisely because it’s not a strategic calculation. Its psychological need is made visible. But those around him recognize this pathology as an opportunity. Every absurd renaming demand becomes a compliance test: Which institutions resist? Which officials object? Which citizens mobilize defense of democratic norms? The answers map the landscape of institutional independence that remains to be captured.

This creates a perverse efficiency. Trump feeds his ego. His advisors collect intelligence on institutional fragility. The renaming serves no governance purpose, but it serves authoritarian consolidation perfectly. Each institution that complies—despite recognizing the demand as childish, despite knowing the change may be temporary, despite understanding it serves no public interest—reveals itself as capturable. The Kennedy Center board that approved adding Trump’s name demonstrated they will surrender institutional integrity to avoid presidential conflict. Military leadership that implemented illegal orders to restore Confederate monuments showed they will violate Congressional mandate when framed as loyalty to the commander-in-chief. Federal agencies that produced new maps of the “Gulf of America” proved no demand is too absurd to receive bureaucratic compliance. These aren’t random acts of ego gratification. They’re systematic identification of which pillars of democratic governance still stand and which have already hollowed out.

The psychology of compliance operates through rationalization of the seemingly small. No single official believes renaming the Kennedy Center will transform American democracy into dictatorship. No board member thinks adding Trump’s name represents an existential threat. The demand seems ridiculous but ultimately harmless—change some letterhead, update some signage, endure brief criticism, move on. Resisting appears disproportionate. You’d be the person who quit over a name change, who made a dramatic stand over symbolic trivia, who couldn’t distinguish between real threats and theatrical absurdity. The social cost of resistance seems higher than the institutional cost of compliance.

This is precisely why authoritarian consolidation succeeds through accumulated micro-surrenders rather than dramatic confrontation. Mussolini didn’t announce he was abolishing Italian democracy. He made thousands of small demands that each seemed too minor to justify institutional resistance. Officials who complied with one absurd order found the next demand slightly easier to rationalize. Citizens who tolerated one norm violation discovered the next one shocked them less. The transformation happened through habituation, not revolution. By the time the accumulated surrenders had produced fascist dictatorship, the capacity for resistance had been systematically eliminated through practice at compliance.

The American version operates identically. Each official who participates in renaming ceremonies, each bureaucrat who processes absurd map changes, each board member who approves adding Trump’s name to institutions he has no connection to—all are learning the muscle memory of compliance. They’re discovering that objecting costs more than accommodating. They’re habituating themselves to tolerating what they privately recognize as grotesque. This learning doesn’t reverse when Trump leaves office. It becomes institutional memory. The next leader who tests democratic boundaries will find institutions already practiced at bending.

The beneficiaries of this system aren’t primarily Trump himself. He gains temporary ego satisfaction that may disappear if his additions eventually get reversed. The real winners are advisors and political operatives who understand that fragile authority requiring constant symbolic validation creates opportunity for institutional capture. Every Trump demand that gets implemented—regardless of how childish—teaches them which officials prioritize career safety over institutional defense, which institutions will comply rather than resist, which citizens will tolerate obvious democratic erosion if framed as mere theatrical distraction.

This explains why advisors encourage rather than constrain Trump’s compulsive renaming. They’re not trying to make governance more effective. They’re identifying targets. An institution that refuses absurd demands reveals itself as obstacles requiring different tactics—budget pressure, leadership replacement, legal harassment. An institution that complies reveals itself as already captured, requiring only continued pressure to complete the transformation. The renaming spree functions as systematic mapping of American democracy’s remaining structural integrity.

The pattern extends beyond formal institutions to citizen psychology. Americans who watched the Kennedy Center rename itself, who saw official maps redrawn to satisfy presidential ego, who observed military bases restored to Confederate traitors, faced a choice at that moment. They could object publicly, refuse to use the new names, mobilize institutional defense. Or they could accommodate, rationalize, and accept that this is simply how politics works now. Most chose accommodation—not because they approved, but because resistance seemed futile or costly or melodramatic. That choice taught them something about themselves: they will tolerate obvious grotesqueness if the alternative requires courage.

This self-knowledge doesn’t produce shame or motivate correction. It produces habituation. The next absurdity shocks slightly less. The barrier to action rises incrementally higher. Democratic citizenship requires the willingness to defend norms when violated. Every instance of witnessing violation without response weakens that willingness until it atrophies entirely. Citizens don’t wake up one day deciding they prefer authoritarianism. They discover gradually that they’ve lost the capacity to object to it.

The historical parallel that matters most isn’t Mussolini or Orbán—it’s Weimar Germany. Not because Trump is Hitler, but because the mechanism of democratic collapse operates identically. Weimar didn’t fall through Nazi electoral victory alone. It fell because German institutions complied with increasingly absurd demands, because officials prioritized career preservation over constitutional defense, because citizens habituated themselves to tolerating norm violations they initially found shocking. Each micro-compliance seemed individually justified. Collectively, they eliminated the institutional and psychological capacity for resistance before the final authoritarian consolidation occurred.

The warning isn’t that Trump will successfully establish permanent dictatorship in his second term. The warning is that the institutional and psychological damage his compliance-testing produces won’t reverse even if he leaves office. Every institution that bent rather than resisted demonstrates to future leaders that boundaries don’t hold when tested. Every official who participated in obvious clownishness learned that loyalty to power matters more than institutional integrity. Every citizen who tolerated grotesque norm violations practiced the passivity that makes authoritarian consolidation possible. These lessons don’t expire with Trump’s presidency. They become precedent.

The consequence isn’t immediate collapse but incremental erosion. Democracies don’t die dramatically. They hollow out gradually through accumulated choices by institutions and citizens who believe each individual surrender is too small to matter. The Kennedy Center still hosts performances. The Gulf’s geography remains unchanged. Military bases function identically regardless of whose name appears on signs. Life continues normally for most Americans, which creates the illusion that nothing fundamental has shifted. But fundamental shifts don’t announce themselves through dramatic rupture. They emerge through pattern recognition: institutions that once resisted now comply, officials who once objected now accommodate, citizens who once defended norms now tolerate their violation.

The damage compounds across time. Future leaders understand institutional boundaries more clearly now. They know cultural institutions will rename themselves rather than resist presidential ego. They know military leadership will implement illegal orders when framed as commander-in-chief prerogative. They know citizens will watch obvious democratic erosion and choose inaction over costly resistance. This knowledge reshapes how power operates. Leaders who might have hesitated before testing institutional independence now understand that boundaries are theater—they appear solid until pressure is applied, then they bend without breaking.

This extends beyond American borders. Authoritarian leaders worldwide observe which tactics work in the United States and adapt them to their own contexts. If the world’s oldest continuous democracy tolerates leaders who rename institutions to feed personal ego, who order maps redrawn to satisfy vanity, who restore monuments to traitors as acts of vindication—and experiences no meaningful institutional resistance—then democratic norms everywhere become negotiable. The American example doesn’t just damage American democracy. It demonstrates to authoritarians globally that democratic institutions won’t actually defend themselves when tested.

The path forward requires recognizing that symbolic assault is an institutional threat. Dismissing Trump’s renaming as mere childishness—as theatrical distraction from real policy—misses the mechanism entirely. The renaming IS the policy. It’s systematic compliance-testing designed to identify which institutions retain independence and which have already surrendered. It’s habituation training for citizens learning to tolerate grotesqueness. It’s precedent-setting for future leaders who will inherit institutions practiced at compliance.

Resistance doesn’t require revolution or dramatic confrontation. It requires the simple refusal to participate. Board members could resign rather than approve absurd additions. Military officials could refuse illegal orders and force removal through proper channels rather than implementation through compliance. Federal bureaucrats could decline to process map changes that serve no purpose beyond ego satisfaction. Citizens could continue using accurate names—Gulf of Mexico, Kennedy Center, Department of Defense—and treat official versions as the temporary absurdities they may prove to be. Each individual act of resistance appears small and possibly futile. Collectively, they demonstrate that democratic norms still have defenders and institutions still have boundaries.

The cost of such resistance feels disproportionately high when measured individually. Board members who resign lose influence. Officials who refuse orders face career damage. Citizens who resist normalization appear ridiculous fighting over names. But the cost of accumulated compliance is higher still: the transformation of democratic institutions into vehicles for authoritarian testing, the habituation of citizens to tolerating what they recognize as wrong, and the precedent that boundaries don’t hold when pressure is applied. Secure democracies don’t collapse from single assaults. They erode through thousands of small surrenders to demands that seem too trivial to resist but collectively eliminate everything that makes democratic governance possible.

The renaming spree may prove temporary. If democratic institutions survive, Trump’s additions could be reversed. Future administrations might restore original names, redraw accurate maps, remove his chiseled signatures from federal buildings. But the compliance that enabled the renaming—the institutions that bent rather than resisted, the officials who participated rather than objected, the citizens who tolerated rather than defended—that compliance became permanent institutional memory. It teaches everyone involved that democratic norms are negotiable, that boundaries don’t hold under pressure, that the cost of resistance exceeds the cost of accommodation. That lesson won’t chisel away even if Trump’s name eventually does.

Tags: Politics, Authoritarianism, Democracy, Trump, Institutional Fragility, Power, Ego, Leadership, American Politics, Democratic Norms

The Practice of Undoing: Why Real Growth Means Abandoning Self-Improvement When every solution reinforces the problem, transformation requires surrendering to love

by Michael Lamonaca, 22 December 2025

We’ve gamified meditation, monetized mindfulness, and optimized spiritual practice—then wonder why enlightenment remains out of reach. The contradiction isn’t accidental. Every technique designed to manage anxiety, every framework promising inner peace, every app quantifying spiritual progress does the same thing: it strengthens the ego’s control while claiming to transcend it. Modern self-improvement doesn’t dissolve the barrier between you and ultimate reality. It perfects the barrier. Because the barrier is fear, and fear is the ego’s language. What spiritual traditions actually teach—and what contemporary wellness culture systematically avoids—is that the only path to genuine freedom requires surrendering fear entirely and recognizing that love is the only reality that exists.

The architecture of spiritual bypassing operates through misdirection. Meditation teaches you to observe thoughts without judgment. Mindfulness helps you stay present with difficult emotions. Therapy gives you frameworks to understand your patterns. Each practice assumes the same thing: that you are a self managing internal experiences, and better management equals spiritual progress. But this keeps you operating within the ego’s domain. The ego is fear—fear of not being enough, fear of losing control, fear of being unloved. Every technique that helps you manage fear more skillfully reinforces the illusion that fear is real and must be managed. It never asks the deeper question: what if fear is the only illusion, and love is the only truth?

This distinction is everything. When you feel jealous of someone’s success, modern mindfulness says: observe the jealousy without judgment, notice where you feel it in your body, let it pass without acting on it. This is ego management disguised as spiritual practice. You’re still treating jealousy as a real experience happening to a real you. The practice of undoing goes deeper: jealousy is your ego responding from fear—fear that you’re not enough, fear that their success diminishes you. But what if you recognized the immense beauty already within you? What if you saw that their success doesn’t threaten you because love isn’t scarce? The moment you shift from fear to love, jealousy transforms into compassion—for them and for yourself. You forgive yourself for the fear, you surrender the whole experience to ultimate reality, and the miracle happens: your perception changes. The jealousy dissolves not because you managed it better but because you recognized it was never real. Only love is real.

The economic structure of wellness culture cannot accommodate this truth. Markets can monetize endless self-improvement because improvement implies a broken self requiring fixes. But you cannot monetize the recognition that nothing is broken—that fear is illusion and love is already complete within you. Meditation apps sell you better anxiety management. Therapy sells you deeper self-understanding. Spiritual retreats sell you transformative experiences. None of them sell you the truth that would end their business model: stop trying to improve the ego. Surrender it entirely. Choose love over fear in every moment, and watch the ego dissolve on its own.

Observe how people interact with their suffering through the lens of control. Someone experiences anxiety and immediately reaches for a technique: breathing exercises, cognitive reframing, progressive muscle relaxation. Each method reinforces the ego’s central claim: “I am in danger and must protect myself through better management.” But anxiety is fear, and fear is the ego’s voice. The ego exists to protect a self it believes is separate, vulnerable, and under constant threat. Every coping mechanism strengthens this false belief. You become more skilled at managing fear without ever questioning whether fear reflects reality.

Spiritual traditions across centuries converge on a different answer: fear is the illusion, love is the truth, and the practice isn’t management but surrender. When anxiety arises, the question isn’t “how do I reduce this feeling?” but “am I choosing fear or love right now?” Anxiety says: the future is threatening, you must control outcomes, you are not safe. Love says: you are already whole, you are already safe, ultimate reality holds everything. The shift from fear to love doesn’t happen through technique. It happens through recognition and choice. You see the fear, you recognize it as ego, you choose love instead, and you surrender the outcome to something larger than ego control.

This isn’t positive thinking or spiritual bypassing. It’s the difference between rearranging furniture in a burning house and walking out the door. Modern psychology gives you better furniture arrangements. It helps you understand why you’re anxious, where the anxiety comes from, how to tolerate it more effectively. But it never questions whether the house is actually on fire. It assumes fear is a valid response to real threats that require better management. Spiritual practice says: the house was never burning. Fear invented the fire to justify its own existence.

Historical parallels reveal the pattern across traditions. Christian mysticism describes this as surrendering personal will to divine grace—not improving yourself but recognizing that the small self (ego, fear) was always an obstacle to the larger truth (love, God). Meister Eckhart didn’t develop better prayer techniques. He experienced the complete dissolution of separation between self and God. The transformation wasn’t gradual improvement. It was sudden recognition that love is the ground of being and fear is the illusion obscuring it.

Buddhism approaches the same truth through different language. Suffering arises from attachment, and attachment is the ego’s fear-driven attempt to control impermanence. You suffer not because life is inherently painful but because you keep trying to make permanent what is temporary, keep trying to protect a self that doesn’t exist as a solid entity. The practice isn’t better management of suffering. It’s recognizing that the one who suffers is a temporary pattern of fear mistaking itself for ultimate reality. When you see through the illusion, suffering doesn’t need to be managed—it simply dissolves.

Even contemporary neuroscience accidentally reveals this structure. Studies on psychedelic experiences show that when the default mode network—the brain regions generating self-referential thinking—temporarily shuts down, people report ego dissolution accompanied by feelings of universal love and interconnection. The experience isn’t “I feel more loving.” It’s “I recognize that love is what I am, what everything is, and fear was the temporary illusion blocking that recognition.” The therapeutic benefit isn’t from gaining new insights to manage fear better. It’s from temporarily experiencing reality without the ego’s fear-based filter.

Competing frameworks interpret this truth through their own limitations. Modern psychology treats ego dissolution as a therapeutic tool—a useful temporary state for gaining perspective, not a recognition of permanent truth. The clinical model assumes a healthy ego is the goal, and spiritual experiences are valuable only insofar as they strengthen ego function. This preserves the treatment relationship, the mental health industry, and the entire economic structure built on fear management. If psychologists told clients “your ego is fear, love is reality, surrender the ego entirely,” there would be no need for ongoing therapy. So the truth gets repackaged: “You had a profound experience that can help you develop healthier coping mechanisms.”

Spiritual traditions make the opposite claim: ego dissolution isn’t a tool for improving the ego. It’s the recognition that what you thought was you (the ego, the fear) was always an illusion, and what you actually are (love, consciousness, God) was always real but obscured. The shift isn’t improvement. It’s awakening from a dream. You don’t become a better person through spiritual practice. You recognize that the person you thought needed improvement never existed—only love exists, temporarily forgetting itself through identification with fear.

Neuroscience offers a materialist interpretation: self is an evolutionary adaptation that becomes maladaptive in modern environments. Our ancestors needed strong ego boundaries to survive immediate physical threats. But contemporary life contains mostly abstract, social, or self-generated threats that don’t require ego defense. The constant reinforcement of fear-based ego creates chronic suffering in the absence of real danger. This view acknowledges the problem but stops short of the spiritual claim: it’s not that ego is maladaptive in modern contexts. It’s that ego was always an illusion, and love was always the only reality.

Verification of these claims requires direct experience, not intellectual argument. You cannot think your way from fear to love because thinking is the ego’s tool for maintaining control. You cannot prove that love is ultimate reality through logic because logic operates within the ego’s framework of subject and object, self and other, threat and safety. This is why spiritual traditions emphasize practice over philosophy. The truth of “only love is real” isn’t discovered through better reasoning. It’s recognized when you choose love over fear in a specific moment and watch reality shift in response.

Consider someone struggling with resentment toward a family member. Modern therapy explores the roots of the resentment—childhood wounds, unmet needs, communication patterns. The goal is understanding and better boundaries, which means a more skillfully defended ego. But the practice of undoing asks: is resentment real, or is it fear wearing a different mask? You resent them because you fear they don’t value you, or fear you’re trapped by obligation, or fear acknowledging your own role in the dynamic. Every thread of resentment traces back to fear. And fear is the ego protecting itself.

The shift happens when you choose love instead. Not romantic love or even necessarily liking them—but recognizing the shared reality beneath the ego conflict. They’re operating from fear too. Their behavior that triggers your resentment comes from their own ego trying to survive. When you see this clearly, compassion arises naturally—not as something you force but as what remains when fear dissolves. You forgive yourself for holding resentment because you recognize it came from fear, not from your true nature. You surrender the whole situation to ultimate reality—to love, to God, to whatever language points at the truth beyond ego—and the miracle completes itself. Your perception shifts. The resentment dissolves not because you managed it better but because you stopped choosing fear.

Consequences of this recognition extend beyond individual psychology. A culture built on fear generates specific structures. If you believe you are a separate self in competition with other separate selves, then every interaction becomes threat assessment. Your success requires my failure. Your happiness diminishes mine. Politics becomes tribal warfare. Economics becomes zero-sum competition. Relationships become negotiations between defended positions. The entire social order reinforces ego because ego generates the anxiety that drives consumption, the insecurity that drives status competition, the fear that drives political tribalism.

This is why meditation apps and mindfulness programs integrate so smoothly into corporate culture. They don’t threaten the system—they optimize it. They help workers manage fear more efficiently so they can be more productive within fear-based structures. Google offers meditation rooms not because they want employees to dissolve their egos but because calmer egos are more effective egos. The practice becomes another tool for fear management, another way to perfect the illusion rather than see through it.

The radical alternative threatens everything. If people recognized that fear is illusion and love is reality, if they actually practiced choosing love over fear in every moment, the entire structure of consumer capitalism would collapse. You cannot advertise to someone who knows they’re already complete. You cannot generate status anxiety in someone who recognizes that worth isn’t scarce. You cannot create political tribalism in someone who sees beyond the ego boundary between self and other. A society built on love rather than fear would be unrecognizable—not because it would be perfect but because the organizing principle would be completely different.

This doesn’t mean ignoring material inequality or structural violence. It means recognizing that solutions built on fear-based frameworks ultimately reinforce the problem. Progressive activism often operates from fear: fear of oppression, fear of losing ground, fear that the other side will win. Conservative politics operates from fear: fear of change, fear of loss, fear that traditional structures will collapse. Both sides strengthen ego boundaries—just around different identity groups. But ego boundaries are fear boundaries. And fear is the illusion.

The practice of undoing suggests a different approach: address material harm while operating from love rather than fear. This means seeing the oppressor as someone operating from their own fear-based ego, which doesn’t excuse their actions but changes how you respond. It means building structures based on recognition of shared reality rather than defense of separate interests. It means acknowledging that you cannot end conflict between egos by creating stronger egos—you end conflict by helping people recognize that the boundary between self and other was always fear’s invention, never love’s truth.

The path forward requires abandoning the path. This is the final paradox spiritual traditions describe: you cannot achieve surrender through effort because effort is the ego’s tool. You cannot practice your way to love through fear-based techniques. The shift from fear to love doesn’t happen through accumulation but through recognition and choice. In every moment, you’re already choosing—fear or love, ego or truth, illusion or reality. Modern self-improvement tries to make you better at choosing fear. It gives you more skillful ways to protect the ego, manage threats, control outcomes. The practice of undoing says: stop trying to choose fear more effectively. Start choosing love instead.

This choice is available right now. When anxiety arises, you can ask “how do I manage this fear?” or you can ask “am I choosing fear or love?” When jealousy appears, you can practice mindful observation of the emotion or you can recognize the fear beneath it and choose to see the beauty within yourself that makes jealousy impossible. When resentment takes hold, you can explore its psychological roots or you can see it as fear wearing a mask and choose compassion instead. Each choice either reinforces the ego’s fear-based illusion or weakens it through recognition that love is what’s real.

The practice isn’t complicated but it’s not easy, because the ego will use every tool—including spiritual tools—to maintain control. It will turn “choosing love” into another achievement, another way to be a better spiritual person, another form of fear-based self-improvement. The only antidote is surrender. You recognize the fear, you choose love, and you hand the outcome to ultimate reality.

What does this actually look like? You’re sitting in traffic, late for an appointment, feeling the familiar tightness in your chest. Your ego immediately offers options: snap at your wife sitting next to you, honk aggressively at the car ahead, spiral into self-criticism about poor time management. Each option projects the pain outward or inward while keeping you trapped in fear. Surrender looks different. You notice the pain. You feel compassion for yourself feeling this way right now. You forgive yourself for the anger and tightness instead of acting it out or suppressing it. And you ask—God, Love, ultimate reality, whatever language works—to dissolve this mental pain. You’re not controlling the outcome. You’re not measuring whether it works. You’re simply choosing to hand the suffering to something larger than ego and trusting that this choice matters even when the traffic doesn’t move.

This isn’t instant transformation. Choosing love once doesn’t make you enlightened. It’s practice—meaning repetition over time, meaning you’ll choose fear ten more times today before you remember to choose love again. The shift happens gradually. First you become aware that two realities exist: ego operating from fear, and love as ultimate truth. Then you practice choosing love more often. Some days you’ll catch yourself in fear quickly. Other days you’ll realize hours later that you’ve been operating from ego the entire time. This is normal. The practice isn’t perfection. It’s increasing immersion in love rather than fear, which happens through thousands of small choices, not one dramatic awakening. You don’t measure progress. You don’t optimize the practice. You simply choose love over fear in this moment, then this moment, then this moment, and trust that truth reveals itself not through your effort but through your willingness to stop choosing illusion.

Modern culture cannot easily accommodate this because it would dissolve the entire apparatus of optimization, achievement, and progress that defines contemporary life. But the evidence mounts regardless. Anxiety and depression rates climb despite unprecedented access to mental health resources. The more we treat consciousness as a problem requiring better management, the more suffering increases. This suggests the framework itself is wrong. Not its application—its foundation. We’re perfecting techniques for managing fear when fear itself is the only problem worth addressing. And fear doesn’t need better management. It needs recognition as illusion and replacement with what was always true.

The crisis isn’t that modern life generates anxiety—it’s that we keep strengthening the ego through spiritual practices instead of surrendering to the love that dissolves ego entirely.

Tags: Spirituality, Self-Improvement, Ego Dissolution, Love, Fear, Mindfulness, Meditation, Mental Health, Consciousness, Spiritual Practice

The Profitable Threat: How Western Arms Sales Create Risks Democracies Won’t Fund Solutions For US arms exports generate $15-75 billion annually from conflicts that create terrorist threats—yet research shows increased counterterrorism spending doesn’t reduce attacks

by Michael Lamonaca, 19 December 2025

Since 2002, American arms exports have ranged between $15 and $75 billion per year, representing as much as 4 percent of total defense industry revenue—making weapons sales a critical component of Western military-industrial economies. Middle East military spending reached $243 billion in 2024, with Saudi Arabia spending $80.3 billion and Israel increasing expenditure 65 percent year-over-year. Western democracies supply most of these weapons, generating billions in export revenue while their arms fuel conflicts that radicalize populations and create terrorist threats. Yet research analyzing counter-terrorism spending across 34 countries found no clear evidence that increased CT expenditure measurably reduces the incidence or lethality of terrorist attacks. The structural failure isn’t lack of knowledge about effective counter-terrorism—it’s that governments optimize budgets for what generates immediate revenue (arms exports) and political capital (military operations), not what prevents attacks (domestic intelligence, community programs, de-radicalization). The result: democracies profit from creating threats, then underfund the unglamorous work of mitigating consequences.

The business model operates through deliberate compartmentalization. Arms manufacturers and defense ministries in Western democracies maintain vast export operations that treat weapons sales as economic transactions divorced from their geopolitical consequences. The United States accounts for 42 percent of global arms exports, supplying advanced weapons systems to 107 countries between 2019 and 2023—more than the next two largest exporters combined. France and Russia each control 11 percent of the export market, while China, Germany, Italy, and the United Kingdom hold between 3 and 6 percent shares. The top 100 arms companies globally generated $632 billion in revenue in 2023, a real-terms increase of 4.2 percent over 2022, with particularly sharp rises among producers based in Russia and the Middle East responding to demand from the wars in Gaza and Ukraine. These numbers represent more than defense industry statistics—they reveal an economic structure where conflict generates reliable revenue streams that democracies have grown dependent on maintaining.

Arms exports to volatile regions create predictable consequences that governments choose not to prevent. Between 2015 and 2023, the volume of major arms transfers to the Middle East increased by 87 percent, with Saudi Arabia becoming the world’s largest arms importer and Israel recording defense spending at 8.8 percent of GDP—the world’s second-highest military burden. Western suppliers profit from this regional militarization: UK companies won defense orders worth £14.5 billion in 2023, a 39 percent increase over the previous year, with 32 percent of exports over the five-year period from 2019 to 2023 going to Middle East customers. The aerospace sector dominated these exports, accounting for 56 percent of total UK defense export value, primarily fighter aircraft and missile systems that extend conflicts rather than resolve them. When arms flow to regions experiencing ethnic tensions, sectarian conflicts, and political instability, the resulting violence radicalizes populations and generates terrorist organizations—consequences so predictable that their inevitability forms part of the calculation defense establishments make when approving export licenses.

The threat-response mismatch reveals systematic budget optimization favoring revenue over security. Following the September 11 attacks, US military spending rose to $356 billion, an increase of $55 billion compared to the previous year—but analysis shows most of that increase funded wars in Iraq and Afghanistan, not domestic counter-terrorism programs. Total US spending characterized as CT-related, including homeland security efforts, international programs, and wars in Afghanistan, Iraq, and Syria, reached $2.8 trillion between fiscal years 2002 and 2017. This massive expenditure generated impressive bureaucratic growth: homeland security spending more than doubled from $15.9 billion in 2001 to $33 billion by 2002, peaking at $74 billion in 2009. Yet systematic reviews examining thousands of terrorism studies found only seven containing moderately rigorous evaluations of counter-terrorism programs—and some of those evaluations showed programs either had no discernible effect on terrorism or increased its likelihood. The expenditure pattern makes political sense—foreign military operations look decisive, generate contractor revenue, and create diplomatic positioning opportunities—while investing in domestic intelligence work, community de-radicalization programs, or addressing root causes of extremism provides no immediate electoral payoff and risks accusations of being “soft” on terrorism.

Research findings governments ignore demonstrate that current approaches don’t work but serve other purposes.A Campbell Collaboration systematic review analyzing over 20,000 studies on terrorism concluded there is “little scientific knowledge about the effectiveness of most counter-terrorism interventions.” When evaluations exist, results are discouraging: UN resolutions intended to prevent crimes against internationally protected persons showed no statistically discernible effect; some defensive measures simply displaced attacks to softer targets rather than reducing overall terrorist activity; increased security spending in Western countries correlated with terrorist organizations shifting operations to Africa, Asia, and the Middle East rather than abandoning violence. Cost-benefit analyses suggest the United States would need to prevent catastrophic terrorist attacks—equivalent to one September 11-scale event every few years—to justify the trillions spent on counter-terrorism since 2001. The actual reduction in terrorism fatalities doesn’t approach the levels necessary to justify expenditure in narrow economic terms, yet spending continues and even increases during periods without major attacks, suggesting effectiveness isn’t the primary metric driving resource allocation.

Democratic political structures create incentives incompatible with threat prevention. Electoral cycles punish politicians who allocate resources to unglamorous prevention efforts that might not produce visible results within a single term. A legislator who funds community programs to de-radicalize at-risk youth won’t see measurable outcomes for years, while voters demand immediate visible action after terrorist attacks. Military operations provide that visibility—troops deployed, bases established, enemy combatants eliminated—even when post-conflict analyses show such operations often strengthen terrorist recruitment rather than weaken it. Corporate lobbying reinforces these incentives: defense contractors dependent on arms export revenues employ sophisticated advocacy operations that frame weapons sales as job creation and geopolitical necessity, while counter-terrorism effectiveness research receives minimal funding and produces findings that challenge existing approaches without offering politically palatable alternatives. The Budget Control Act’s exemption of emergency and wartime spending from fiscal caps created additional incentives to characterize expenditures as “overseas contingency operations” regardless of whether they address genuine terrorist threats, allowing billions in spending unrelated to counter-terrorism to escape budgetary scrutiny.

The revenue-security disconnect operates through deliberate information asymmetry. Defense ministries and export control agencies in Western democracies maintain opaque licensing systems that obscure the full scope of weapons transfers. The UK uses “open general export licenses” that allow registered companies to conduct unlimited exports of specified military equipment without specific permits for each sale, meaning most UK-US arms transfers don’t appear in regular export licensing data despite the UK producing 15 percent of the value of each F-35 fighter jet—aircraft sold to Israel, UAE, and other Middle East customers representing massive indirect British arms sales that remain invisible in official statistics. Similar opacity characterizes US arms sales data: exact figures for defense exports aren’t published, various definitions of what constitutes “defense” exports exist across agencies, and weapons sold through foreign military financing programs or transferred as military aid often appear in different accounting categories than commercial sales. This deliberate complexity makes comprehensive cost-benefit analysis nearly impossible while providing political cover for policies that prioritize industry revenue over security outcomes.

Historical precedents illuminate how arms export dependencies corrupt democratic accountability through specific case trajectories. Between March 2015 and April 2022, the UK licensed over £9.5 billion in arms exports to the Saudi-led coalition bombing Yemen, including £7.1 billion to Saudi Arabia alone—but license figures exclude the value of ongoing maintenance, technical support, and services that BAE Systems provided to the Royal Saudi Air Force. According to BAE’s annual reports, the company received £27.2 billion in revenues from Saudi Arabia’s Ministry of Defence between 2015-2024, dwarfing official export license figures and excluding most bombs and missiles sold by other contractors. UK-made equipment used in Yemen included Typhoon and Tornado aircraft, Paveway bombs, and Brimstone and Stormshadow missiles—weapons the UK government admitted were deployed in combat operations. On October 8, 2016, Saudi forces killed 155 people and wounded hundreds more at a funeral in Yemen’s Great Hall in what witnesses described as a “double tap” attack where a first strike was followed by a second that killed additional civilians and emergency workers. UK-made weapons were central to such attacks, yet Department for Business documents show nearly £3 billion in military sales to Saudi Arabia occurred in just nine months from April to December 2015—nearly 40 percent of total UK arms sales during that period.

This created a trajectory from arms sale to conflict escalation to radicalization that UK authorities documented but chose not to prevent. The war in Yemen killed an estimated 377,000 people through direct and indirect causes, with over 150,000 including tens of thousands of civilians killed in fighting, while six years of the Saudi-led coalition’s war caused almost a quarter of a million preventable deaths from disease and starvation. Since 2015, Yemen Data Project recorded at least 25,054 airstrikes attributable only to the coalition, killing at least 8,983 civilians and injuring 10,243, with the coalition attacking hospitals, schools, bridges, dams, farms, and irrigation works—all violations of international humanitarian law. When the Campaign Against Arms Trade brought legal challenges in 2017, the UK High Court initially ruled the government was not acting unlawfully in continuing arms exports, but in June 2019 the Court of Appeal concluded the government’s decision-making process was “irrational” and therefore “unlawful”, forcing temporary suspension of new licenses. In July 2020, the UK government announced it would resume arms sales after determining that Saudi violations of international law were simply “isolated incidents”—despite evidence of systematic patterns. The trajectory was complete: UK profited from weapons sales, those weapons fueled conflict killing hundreds of thousands, the conflict created conditions radicalizing populations across the Middle East and within UK Muslim communities, yet commercial relationships proved more durable than legal findings of unlawful conduct.

The human consequences of this optimization appear in predictable patterns. Research examining global terrorist attacks between 1970 and 2019 found that successful terrorism incidents are less likely in the United States compared to other world regions, but this doesn’t reflect counter-terrorism program effectiveness—it reflects terrorist organizations adapting to defensive measures by attacking softer targets elsewhere. The defensive spending that reduced attacks in Western democracies displaced violence to countries lacking resources for comparable security infrastructure, meaning Western counter-terrorism “success” consists largely of exporting risk to populations whose governments can’t afford protection. Meanwhile, the arms flowing from Western democracies to Middle East and North African customers fuel conflicts that generate the refugees and radicalized individuals who then attempt attacks in the countries that supplied the weapons. This circularity—profit from arms sales that create conflicts, underfund prevention of resulting threats, respond to attacks with more military operations that generate more arms sales—sustains itself because each component serves different constituencies and no single decision-maker bears accountability for the complete cycle.

Competing interpretations of the arms export-terrorism nexus reflect fundamentally different assumptions about democratic governance. Industry defenders argue weapons sales serve strategic purposes beyond profit: maintaining influence with key allies, supporting interoperability among friendly militaries, ensuring domestic defense production capacity remains viable. These arguments treat arms exports as foreign policy tools that would continue even without economic incentives. Government officials emphasize export control processes designed to prevent weapons from reaching dangerous actors, pointing to licensing requirements and end-use monitoring as safeguards against misuse. These frameworks assume the problem is implementation—better vetting, stricter conditions, more robust enforcement—not the underlying logic of profiting from regional conflicts. Counter-terrorism experts focus on addressing radicalization drivers: economic marginalization, political grievance, religious extremism, identity conflicts. They argue more effective spending would target these root causes rather than expanding military operations that often exacerbate underlying tensions. Each interpretation contains elements of accuracy while obscuring the structural reality: democratic governments have decided that arms export revenue and the political capital from military operations are worth accepting periodic terrorist attacks as a manageable cost.

The verification challenge exposes how difficult proving causation becomes when interests align against investigation. Establishing that specific arms sales contributed to specific terrorist attacks requires tracing weapons through supply chains, documenting their use in conflicts, identifying individuals radicalized by those conflicts, and connecting them to subsequent attacks in weapons-supplying countries. This investigative work rarely occurs because the institutions capable of conducting it—intelligence agencies, law enforcement, government oversight bodies—operate within systems where their continued funding depends on maintaining relationships with defense establishments they would need to scrutinize. When independent researchers document connections between Western arms exports and conflict escalation, or between conflict escalation and terrorist recruitment, governments dismiss findings as speculation, noting the difficulty of proving causation in complex geopolitical environments. Yet those same governments confidently claim their counter-terrorism spending reduces threats despite evidence showing no measurable effect—revealing that evidentiary standards vary based on whether conclusions support or challenge existing resource allocation patterns.

The consequences extend beyond occasional terrorist attacks to systematic degradation of security. As Western democracies continue optimizing budgets for arms export revenue and military operations rather than effective threat prevention, terrorist organizations adapt by developing networks that exploit these predictable patterns. They recruit from populations radicalized by conflicts Western weapons enable, attack targets in countries whose governments profit from those conflicts, and observe as democratic responses generate more military spending that funds more operations creating more radicalization. The cycle’s predictability makes it exploitable: terrorist organizations can essentially guarantee Western governments will respond to attacks with policies that strengthen rather than weaken extremist movements, because those policies serve economic and political interests more powerful than security effectiveness. This creates a perverse equilibrium where governments, defense contractors, and terrorist organizations each benefit from maintaining the status quo—governments get revenue and political capital, contractors get profits, and terrorist organizations get recruitment tools and strategic predictability—while civilian populations on all sides bear the costs through diminished security and wasted resources.

Policy alternatives exist but require confronting uncomfortable realities about democratic governance. Effective counter-terrorism would prioritize community-based prevention programs, intelligence operations focused on identifying threats before they manifest, and addressing the political and economic conditions that make extremist recruitment possible. These approaches lack the visibility of military operations and the revenue streams of arms exports, making them politically difficult despite evidence suggesting they would be more effective. Restricting arms sales to volatile regions would reduce conflicts that radicalize populations, but would cost defense industry jobs and diplomatic leverage governments value. Conducting rigorous evaluation of counter-terrorism spending would reveal how much current expenditure wastes resources on ineffective programs, but would force acknowledging that security theater serves political purposes even when it doesn’t prevent attacks.

The resistance to these alternatives operates through sophisticated influence infrastructure that makes reform structurally impossible. Defense contractors deployed $2.5 billion in lobbying spending over the past two decades, with the top five companies—Lockheed Martin, Raytheon, General Dynamics, Boeing, and Northrop Grumman—each spending over $10 million annually on policy influence operations in 2020 alone. Of the 663 lobbyists working for defense contractors, nearly three-quarters previously worked for the federal government—the highest percentage of any industry, creating what one analysis called “cozy relationships and highly useful contact lists” where overworked congressional staffers know lucrative lobbying jobs await them at the same companies pushing agendas today. At least 672 former government officials, military officers, and members of Congress worked as lobbyists, board members, or executives for the top 20 defense companies in 2022, according to Senate analysis. Over the last 30 years, nearly 530 staffers worked for Armed Services and Foreign Relations committees or Defense Appropriations subcommittees before becoming lobbyists for defense companies, creating what’s known as the “revolving door” where former Defense Secretary Mark Esper exemplifies the pattern—Senate Foreign Relations Committee staff in the late 1990s, assistant deputy secretary of defense, seven years in Raytheon’s government relations office, then Army secretary and finally Defense Department head under Trump.

This revolving door infrastructure blocks policy alternatives through multiple mechanisms that operate simultaneously. When community prevention programs are proposed as alternatives to military operations, defense contractor lobbyists work with sympathetic members of Congress to ensure such programs are either underfunded or structured to fail, protecting the larger military budget from competition for resources. The Secretary of Defense Executive Fellows program, running from 1995 to 2021, placed more than 315 military officers with ranks as high as colonel and rear admiral at top weapons manufacturers including Boeing, Raytheon, and Lockheed Martin for one-year fellowships where they wrote policy recommendations that coincidentally benefited their host companies—recommendations like “outsource everything not core to DoD,” repealing rules preventing the Defense Department from spending more than 50 percent of military budgets on contractors, and revising International Traffic in Arms Regulations to ease export restrictions. Some fellows recommended the Defense Department consider revising arms export regulations; the companies that sponsored those fellows subsequently lobbied Congress on those exact regulations. This creates a self-reinforcing cycle where military officers rotate into defense companies, recommend policies benefiting those companies, return to government positions where they implement those recommendations, then retire into lucrative defense industry positions. Congressional staffers observe this pattern and recognize that supporting aggressive counter-terrorism reform that threatens contractor profits means foregoing future employment opportunities.

The fractal nature of the problem—identical patterns at different scales—reveals this isn’t specific to counter-terrorism or arms exports. Defense ministries optimize for industry relationships over operational effectiveness. Export control agencies optimize for facilitating sales over preventing weapons misuse. Counter-terrorism agencies optimize for budget growth over measurable threat reduction. At each institutional level, the incentive structure rewards maintaining problems at manageable levels rather than solving them, because solutions would eliminate the justification for continued resource allocation. An arms export bureaucracy that actually prevented weapons from fueling conflicts would reduce the conflicts that justify its own existence. A counter-terrorism agency that successfully addressed radicalization drivers would eliminate the threat justifying its expanding budget. The alignment of these interests across scales creates resilience: even if reform occurred at one level, the broader structural incentives would reproduce the pattern elsewhere.

Recognition that current approaches serve purposes other than stated objectives creates space for honest assessment. Western democracies spend trillions on counter-terrorism while generating billions from arms exports that fuel the conflicts creating terrorist threats. They know increased CT spending doesn’t measurably reduce terrorism. They know arms sales to volatile regions predictably escalate conflicts and radicalize populations. They continue both practices because the practices serve economic and political interests powerful enough to override security concerns and maintain patterns even when evidence demonstrates they don’t work. This isn’t conspiracy—it’s ordinary institutional behavior where actors optimize for individual incentives within structures that don’t align those incentives with collective security. The political class must acknowledge this reality not to assign blame but to recognize that meaningful security improvements require restructuring incentives, not replacing personnel. Until democratic publics demand governments prioritize threat prevention over arms export revenue and political theater over effective security measures, the pattern will persist: profit from creating threats, underfund solutions, express surprise when attacks occur, repeat indefinitely.

Tags: Arms Trade, Counter-Terrorism, Defense Industry, National Security, Government Accountability, Political Economy, Terrorism Prevention, Weapons Exports, Security Policy, Democratic Governance

The Soviet Ghost: Why China’s Superiority Over Cold War Russia Changes Everything China’s economic power vastly exceeds what the Soviet Union achieved—yet strategic anxiety seems lower than during the Cuban Missile Crisis

by Michael Lamonaca , 17 December 2025

China today commands economic power that far surpasses what the Soviet Union ever achieved during the Cold War, yet American strategic anxiety appears muted compared to the existential dread of the 1960s and 1970s. The Soviet Union spent up to 14 percent of GDP on defense to compete with Washington; China currently spends only about two percent of its GDP on defense, meaning it has barely begun mobilizing its latent power. Where Moscow bankrupted itself matching American military spending, Beijing builds supply chain dependencies, rare earth monopolies, and technological ecosystems that make decoupling economically catastrophic. The paradox isn’t that China is weaker than the Soviet Union—it’s that a far stronger competitor generates less visceral fear, possibly because the threat operates through economic integration rather than nuclear brinkmanship. But integration that cannot be severed without self-harm may be the most dangerous dependency of all.

The metrics reveal a competitor Washington has never faced. China exceeded the Soviet Union on almost every dimension of national power by the early 2000s, yet policymakers continue using Cold War frameworks to assess the threat. Using GDP multiplied by GDP per capita—a composite metric that captures both economic scale and technological sophistication—China scores 36 percent relative to the United States, more than double the Soviet peak of 16 percent in 1970. The normal range for great powers throughout history sits between 8 and 28 percent of the leading state’s score, with a median of 15 percent. China doesn’t just exceed this threshold; it obliterates it. Even accounting for concerns about inflated Chinese economic statistics, the margin is so large that Beijing would remain a superpower competitor even if its true GDP were 30 percent smaller than reported. The Soviet Union, by comparison, reached only 44 percent of American GDP at its height before collapsing under the weight of unsustainable military expenditure.

Economic integration creates dependencies that military confrontation never did. The Soviet economy operated largely outside Western systems, making containment straightforward—restrict technology transfers, limit trade, wait for the command economy to collapse under its own contradictions. China embedded itself so deeply in global supply chains that severance would inflict damage on both sides. China controls 70 percent of rare earth mining, 90 percent of rare earth processing, and 93 percent of magnet manufacturing—materials essential for everything from smartphones to F-35 fighter jets. Beijing didn’t build this dominance overnight. Starting in the 1990s, while Western democracies optimized quarterly earnings, China spent three decades consolidating processing facilities, acquiring foreign technology companies, and tolerating environmental costs that no OECD nation would accept. The result: a 30-40 percent cost advantage in rare earth processing that makes competition economically unviable without massive government subsidies. When China restricted rare earth exports in 2010, prices spiked 300-500 percent within months, and Japan—whose manufacturers depended on these materials—capitulated rather than face production disruptions.

The threat mechanism shifted from destruction to coercion through dependency. During the Cuban Missile Crisis in October 1962, the world understood the danger. Soviet nuclear missiles 90 miles from Florida could strike Washington in minutes, creating a threat that was visceral, immediate, and binary—either nuclear war happened or it didn’t. For thirteen days, Americans watched as nuclear annihilation became a real possibility, with President Kennedy estimating the odds of nuclear war at between one-in-three and even. The danger came from deliberate escalation spiraling into uncontrolled nuclear exchange, and both sides knew that millions would die if miscalculation occurred. Fear drove policy. China’s approach generates less alarm because the damage unfolds gradually rather than instantaneously. Restrict rare earth exports, and defense contractors struggle to source materials for weapons systems. Tighten export controls on lithium battery components, and electric vehicle production stalls. Control 95 percent of heavy rare earth processing, and wind turbine manufacturers have nowhere else to turn. Each restriction creates economic pain rather than immediate devastation, making the threat feel manageable even as dependencies deepen. But gradual coercion may prove more effective than nuclear brinkmanship precisely because it doesn’t trigger the survival instincts that force negotiation. Nations tolerate creeping dependencies they would never accept if imposed suddenly.

Historical comparisons illuminate how dramatically the competitive landscape has changed. The Soviet Union matched American military spending only by devoting catastrophic shares of national income to defense—as much as 17 percent of GDP by the mid-1980s, and possibly 50 percent according to Eduard Shevardnadze, Gorbachev’s Foreign Minister. This spending crushed the Soviet economy, creating a hyper-militarized society where everything outside a few showcase sectors like the space program withered. By 1970, the Soviet economy reached 60 percent of American GDP in terms of commodities like steel and coal, but this performance came at unsustainable cost. China, spending just two percent of GDP on defense, could triple military expenditure to six percent—matching Cold War American levels—and still maintain a manageable fiscal burden. Beijing doesn’t need to catch up to American military spending to compete effectively; it needs only to sustain growth while building asymmetric advantages in supply chains and technology ecosystems. Where the Soviet Union competed through military matching it couldn’t afford, China competes through economic integration that makes confrontation costly for everyone.

Different threat models demand different responses, but Cold War instincts persist. During the 1970s, American strategists understood the Soviet challenge—contain Moscow’s military expansion, maintain technological superiority, wait for economic contradictions to collapse the command system. The playbook worked because Soviet power depended on maintaining military parity it couldn’t sustain economically. China’s rise presents no similar path to collapse. The Chinese Communist Party adapted after watching the Soviet Union disintegrate, embracing market mechanisms while maintaining political control, investing in human capital and research rather than military matching, and building dependencies that make Western economies vulnerable to disruption. Beijing learned that ideological confrontation bankrupts empires while economic integration creates leverage. American policymakers debate whether to “decouple” from Chinese supply chains, but the costs of separation now exceed what any democratic system will tolerate. Rebuilding rare earth processing capacity would require 10-15 years and hundreds of billions in subsidies, environmental compliance costs that China avoided, and political will to sustain investments that won’t pay off until after multiple election cycles.

The competitive dynamics create paradoxes that make strategic clarity difficult. China’s advantages rest on integration rather than isolation, meaning Washington cannot simply embargo its way to victory as it did against the Soviet Union. The more America restricts technology transfers to China, the more Beijing invests in indigenous alternatives. The more Washington pushes allies to diversify supply chains, the more China leverages its cost advantages to maintain dominance. Lynas Corporation in Australia and MP Materials in the United States received government support to build alternative rare earth processing, yet both struggle to compete with Chinese facilities that operate at 30-40 percent lower costs due to looser environmental standards and state-backed consolidation. Even when Western projects succeed technically, they face economic realities—China can flood markets with cheap rare earths to bankrupt competitors whenever diversification threatens its monopoly. The Soviet Union never possessed this degree of economic leverage. Moscow couldn’t prevent the United States from building missiles or deploying forces; it could only try to match American capabilities at ruinous cost. Beijing doesn’t need to match American military capabilities if it can make the technologies undergirding those capabilities dependent on Chinese supply chains.

Lower perceived threat doesn’t reflect lower danger—it reflects structural factors that prevent democracies from responding. Electoral cycles punish politicians who impose short-term pain for long-term resilience. Corporate lobbying from firms dependent on Chinese supply chains fights any policy that threatens quarterly earnings. The complexity of rare earth processing and semiconductor supply chains makes the threat invisible to voters who don’t understand why germanium matters or what role gallium plays in defense systems. During the Cold War, nuclear confrontation was viscerally terrifying because everyone understood the stakes—citizens watched duck-and-cover films, debated fallout shelter construction, and lived with knowledge that one miscalculation could vaporize cities. Economic coercion through supply chain control generates no equivalent alarm because the damage accumulates invisibly. Consumers don’t see rare earth dependencies when buying smartphones. Defense contractors don’t advertise that F-35 components require Chinese processing. Politicians don’t campaign on rare earth policy because voters don’t connect technical dependencies to national security. The threat operates in domains that generate no emotional response until disruption occurs—and by then, dependencies are too deep to unwind quickly. This creates a perverse dynamic: Cold War dangers were obvious and dramatic, forcing both sides to negotiate because the alternative was annihilation. Modern dangers are subtle and cumulative, allowing dependencies to deepen because no single decision feels catastrophic. Fear drove Cold War restraint. Democratic political economy enables contemporary vulnerability.

The reckoning arrives when economic integration becomes geopolitical weapon. For decades, Western strategists assumed that economic interdependence would moderate Chinese behavior—that integration into global systems would give Beijing a stake in stability. This theory worked while China remained the weaker partner, accepting rules and norms in exchange for market access. But power shifts change incentives. China now possesses the economic scale to reshape systems rather than accept them. In December 2024, Beijing banned exports of germanium, gallium, and antimony to the United States—three minerals critical for defense applications. Major American defense contractors scrambled to find alternative supplies that largely don’t exist. In October 2025, China announced comprehensive export controls on lithium-ion battery supply chains, covering materials, technologies, and equipment where it maintains 80-95 percent market shares. These weren’t one-time restrictions; they signaled a strategy of leveraging dependencies that democracies built by prioritizing efficiency over resilience. The Soviet Union never achieved this level of economic coercion because it never integrated deeply enough into Western systems to make separation painful. China spent three decades building dependencies before weaponizing them.

Mobilization potential reveals reserves the Soviet Union never possessed. China spends only 32 percent of American military expenditure while maintaining an economy that matches or exceeds the United States. If Beijing increased defense spending from two percent to six percent of GDP—matching Cold War American levels—it would nearly triple military expenditure within an economy that produces 25 percent of global industrial output. The Soviet Union mobilized 100 percent of American military spending while maintaining an economy one-sixth the size, creating hyper-militarization that collapsed the system. China possesses untapped capacity the Soviets never approached.

The comparison everyone avoids making illuminates the strategic landscape more clearly than polite euphemisms about multipolarity. Declaring the world multipolar sounds sophisticated, implying multiple centers of power rather than the crude binary of Cold War confrontation. But sophistication that obscures reality serves no analytical purpose. Only two states exceed the great power threshold on both economic and military dimensions: the United States and China. Russia, India, Germany, and Japan all fall short despite their regional influence. The difference between China and the Soviet Union isn’t just quantitative—larger GDP, bigger industrial base—it’s qualitative. Where Moscow competed through military buildup it couldn’t sustain, Beijing competes through economic integration that creates mutual vulnerabilities with asymmetric leverage. Where the Soviet Union isolated itself from Western systems, China embedded itself so deeply that separation would damage both sides while hurting democracies more because their political systems cannot tolerate the short-term disruption necessary for long-term resilience. Where Soviet power rested on nuclear arsenals and conventional forces, Chinese power rests on supply chain dominance and technological ecosystems that took decades to build and would take decades to replace.

Defenders of current American policy argue that engagement remains preferable to confrontation. Economic interdependence, they claim, gives both sides incentives to avoid escalation and creates channels for diplomacy that didn’t exist during the Cold War. Decoupling would be economically catastrophic, costing trillions in lost trade and investment while triggering inflation that no democratic government could survive. China’s demographic decline and debt burdens suggest Beijing faces constraints that will limit its ambitions without American intervention. Moreover, allies in Europe and Asia oppose confrontational approaches that would force them to choose between economic ties with China and security relationships with Washington. These arguments reflect legitimate concerns about the costs of competition, but they assume that avoiding confrontation is possible when the structure of the system makes competition inevitable. Bipolarity doesn’t offer the luxury of choice—it forces states into competitive dynamics regardless of preferences. The question isn’t whether to compete but whether to compete while still possessing leverage or after dependencies have deepened beyond reversal.

This is what makes the contemporary competition more dangerous than the Cold War: the threat operates through mechanisms that don’t trigger the survival instincts that forced Cold War restraint. Soviet power was legible—missiles, tanks, troops—and the danger was binary. Chinese power is diffuse—supply chains, technology ecosystems, economic dependencies—and the danger accumulates gradually until separation becomes impossible without self-harm. Strategic anxiety should be higher, not lower, because the competition operates through mechanisms democracies are structurally ill-equipped to counter.

Strategic anxiety should be higher, not lower, because the Soviet ghost haunts American strategy in unexpected ways. The muted American response to Chinese power reflects dangerous complacency born of Cold War victory. The Soviet Union collapsed, validating American strategy and creating confidence that containment works against authoritarian competitors. But China learned from Soviet mistakes. Beijing won’t bankrupt itself matching American military spending, won’t isolate itself from global systems, won’t pursue ideological crusades that alienate potential partners. Instead, China builds dependencies that make confrontation economically catastrophic, invests in technology ecosystems that position it at critical chokepoints, and exercises patience that democratic systems with electoral cycles cannot match. The danger isn’t nuclear annihilation—though that risk remains—it’s gradual erosion of American leverage as dependencies deepen and alternatives disappear. Economic integration that cannot be severed without self-harm represents a more durable form of power than military confrontation precisely because it doesn’t force the binary choice between capitulation and annihilation that drove Cold War negotiation. Nations tolerate dependencies they would never accept if imposed suddenly, and by the time the danger becomes obvious, the costs of separation exceed what democratic publics will bear. That’s the lesson no one wants to acknowledge: the Soviet ghost haunts American strategy not because China resembles the USSR, but because Beijing studied Soviet failures and built something far more formidable.

Tags: Geopolitics, US-China Relations, Cold War History, Supply Chain, Rare Earth Elements, Economic Competition, National Security, Soviet Union Comparison

Power Corrupts at Every Scale: Why Governance Systems Are Structurally Obsolete From apartment boards to global institutions, the same pattern repeats—people granted power optimize for maintaining it rather than serving those who granted it

The pattern is fractal—identical corruption at every level of organization. Apartment complex boards refuse shareholders their voting rights to preserve control. National politicians perpetuate problems to maintain fundraising and relevance. Global institutions allow Sudan to starve while resources exist because conflict serves financial and strategic interests.

The scale changes but the mechanism doesn’t: people granted power optimize for maintaining that power rather than serving the purpose that justified it originally. A board member who empowers shareholders loses control. A politician who solves problems loses campaign issues. An institution that achieves its stated mission loses funding justification. The system rewards those who perpetuate need, punish those who eliminate it.

I discovered this through direct experience. After reporting my building’s board to Australian regulators for systematically denying shareholder voting rights, the response was predictable: acknowledge the problem, recommend reforms, change nothing structural. Because the people enforcing accountability operate within the same incentive framework—their positions depend on problems continuing to exist at manageable levels.

I’ve watched wars continue as background noise since childhood—Iraq, Afghanistan, Syria, Yemen, now Ukraine and Gaza. I’ve seen greed celebrated as ambition while depression and anxiety become epidemic. I’ve felt the pressure to perform authenticity rather than be authentic, to optimize for success metrics that contradict actual well-being. Most people I know don’t relate to this society either—they just perform their assigned roles while feeling the dissonance between what we’re told matters and what actually creates human flourishing. These aren’t bugs; they’re features. A population optimized for well-being would be ungovernable under current structures.

Until we recognize governance systems are optimized for elite extraction rather than public service, we’ll keep replacing corrupt individuals while preserving corrupt structures. The political class must be abolished not because politicians are evil, but because the role itself has become obsolete.

The mechanics operate identically regardless of scale or sector. Power creates incentive to maintain power, which requires maintaining the conditions that justify power’s existence. An apartment building board derives authority from managing shareholder interests. If shareholders exercise full voting rights, they might replace the board or question decisions. The rational individual response for board members is restricting shareholder access to information and limiting voting opportunities, ensuring continuity of their positions. When shareholders discover this pattern and report violations to regulatory authorities—as happened in one Sydney apartment complex where board members systematically denied voting rights on new resolutions—the regulatory response validates the pattern rather than disrupting it. Acknowledge the complaint, recommend procedural reforms, impose minimal penalties if any, change nothing about the incentive structure that produced the violation. The board members who restricted voting rights face no personal consequences severe enough to alter behavior, and the structure ensuring future boards will face identical incentives remains intact.

This same mechanism operates in national politics with higher stakes but identical logic. Politicians require problems to campaign against, crises to demonstrate leadership through, and conflicts to justify their continued relevance. A politician who actually solves homelessness, reduces crime to minimal levels, or achieves infrastructure excellence eliminates their own campaign material. The optimal strategy becomes managing problems at levels high enough to justify intervention but persistent enough to require ongoing political attention. This explains why issues like homelessness, infrastructure decay, and social fragmentation persist despite obvious solutions existing. The solutions exist—Housing First programs demonstrably work, infrastructure maintenance protocols are well-established, community investment reduces isolation—but implementing them fully would eliminate the political utility of the problems.

After 20 years running a publishing business, I recognized this dynamic immediately. The content that served readers best—deep analysis, nuanced reporting, uncomfortable truths—couldn’t compete with content optimized for clicks and advertisers. The structure filtered for commercial success over editorial excellence. Politics works identically: the structure filters for campaign success over problem-solving.

International institutions demonstrate the pattern at maximum scale. When Sudan faces mass starvation, the resources to prevent it exist. The logistics expertise exists. The agricultural capacity exists. What doesn’t exist is incentive for the actors controlling those resources to deploy them effectively, because the conflict generating the starvation serves financial interests of arms dealers, strategic interests of regional powers, and organizational interests of aid institutions whose funding depends on ongoing crisis. Solving the underlying political and economic dysfunction that produces famine would require sustained commitment over decades with no immediate payoff for the individuals making decisions. Managing the famine through periodic intervention that prevents total collapse while maintaining chronic crisis provides funding justification, maintains institutional relevance, and creates opportunities for political positioning without requiring any actor to sacrifice their immediate interests for long-term stability.

The human dimension reveals how reasonable people operating within corrupt structures produce systematically corrupt outcomes. The apartment board members denying shareholders voting rights likely didn’t begin their tenure planning to violate governance requirements. They probably joined the board believing they would serve owner interests competently. But once in position, the incentives shifted. Every decision that empowered shareholders created potential for their own removal. Every transparency measure increased accountability they’d prefer to avoid. Every question about their management threatened their authority. The rational response to these incentives—restrict information, limit voting, consolidate control—emerged not from individual moral failure but from structural pressures inherent to the role.

I reported my building’s board to ASIC after documenting systematic denial of shareholder voting rights. The response validated everything I’d suspected about how power operates: acknowledgment of the violation, recommendation to follow procedures, zero penalties, zero structural change. Within months, the same board members resumed the same practices. That’s when I understood—the system wasn’t broken, it was working exactly as designed.

The pattern repeated in Italy. During two months near my family’s home, a wind turbine generated acoustic noise disrupting the neighborhood. Locals told me it had been operating this way for 20 years—two decades of complaints achieving nothing. I wrote one letter threatening to copy the Prefetto (regional authority), and within weeks they turned it off. Not because my complaint was more legitimate than 20 years of others, but because I threatened to escalate beyond the local power structure that had ignored residents for decades. The turbine operators responded not to the problem but to the threat of accountability reaching someone outside their sphere of influence.

When reported to authorities, board members likely believed they’d done nothing wrong because the behavior that violated formal rules aligned perfectly with the informal logic of power preservation.

Politicians experience this dynamic with greater intensity and sophistication. The candidate who enters politics idealistically discovers that solving problems threatens campaign viability. The representative who prioritizes constituent service over party loyalty loses committee assignments and funding. The legislator who refuses corporate donations can’t compete with opponents who accept them. At each decision point, the choice that serves public interest conflicts with the choice that serves political survival. Over time, the individuals who remain in the system are those who learned to optimize for survival rather than service—not because they’re more corrupt than those who left, but because the structure filtered for compatibility with its incentive framework.

International officials managing crises face similar pressures without electoral accountability providing even minimal constraint. The aid administrator whose program successfully eliminates the need for aid in a region eliminates their own organization’s mandate for that region. The diplomat whose negotiation achieves lasting peace removes the justification for ongoing diplomatic presence. The institution that achieves its stated mission faces funding cuts or dissolution. The rational organizational response is ensuring problems remain at levels requiring ongoing intervention but never achieving the transformation that would make intervention unnecessary. This creates perverse incentives where success metrics focus on inputs (money spent, programs launched, meetings held) rather than outcomes (problems solved, self-sufficiency achieved, intervention rendered unnecessary).

Historical precedents illuminate how power structures optimize for self-preservation across centuries and contexts. The medieval Catholic Church derived authority from mediating between believers and salvation. If believers achieved direct spiritual connection without clerical intercession, the Church’s role became obsolete. The institutional response was creating complex theological frameworks requiring priestly interpretation, selling indulgences that only clergy could authorize, and maintaining exclusive control over scriptural access. The corruption wasn’t incidental to the structure—it was the inevitable outcome of incentives favoring complexity and dependence over simplicity and autonomy.

This mirrors what I observed in my building. The board didn’t need to violate rules overtly—they created procedural complexity requiring their interpretation, controlled access to information only they could provide, and maintained exclusive authority over decisions affecting everyone. When challenged, they claimed to follow proper governance while the complexity itself prevented meaningful accountability. The Church and the apartment board operated identically: create dependence through complexity, then extract power from being the only ones who can navigate it.

When reformers challenged these practices, the Church didn’t reform the incentive structure; it suppressed reformers until the structure fractured entirely during the Reformation.

Colonial administrations demonstrated identical dynamics. The explicit mission was civilizing and developing colonized territories toward self-governance. The implicit incentive was maintaining colonial control to extract resources and preserve administrative positions. The result was governance systems that created permanent dependency—education systems training colonized populations for subordinate roles rather than leadership, economic structures extracting raw materials while preventing industrial development, political frameworks allowing participation without power. When independence movements forced decolonization, the departing powers left governance structures optimized for extraction rather than service, ensuring post-colonial governments would inherit dysfunctional institutions requiring ongoing external intervention.

Modern regulatory agencies replicate this pattern in domains explicitly designed to prevent it. Financial regulators derive authority from preventing market failures. If they actually prevented all significant market failures through aggressive enforcement, their expanded budgets and authorities would face political challenge during periods without crisis. The rational organizational response is allowing problems to develop to levels justifying intervention while preventing catastrophes that would trigger fundamental restructuring. This explains the pattern of regulatory capture where agencies tasked with oversight become aligned with industries they regulate—not primarily through corruption in the traditional sense, but through shared interest in maintaining systems at current scale and complexity. Simplifying regulations would reduce need for both industry compliance departments and regulatory enforcement staff. Both groups benefit from complexity requiring ongoing management.

Competing interpretations of governance failure reflect fundamentally different assumptions about whether the problems are correctable within existing structures. Reform advocates argue the solution is better people—more ethical politicians, more vigilant citizens, stronger accountability mechanisms. This framework assumes the roles themselves remain viable if occupied by individuals committed to service over self-interest.

I’m testing this reform hypothesis in real-time—reporting violations, escalating to authorities, following proper channels. In Italy, it worked when I bypassed captured local power and threatened escalation to the Prefetto. In Australia, I’ve now reported violations twice to ASIC—once in October, again last week—and we’ll see whether regulators operating within the same system can enforce accountability, or whether the pattern holds. The evidence so far contradicts the reform framework. Reformers entering corrupt systems reliably become corrupted or expelled, not because they lack integrity but because the incentive structure makes service incompatible with survival. Electing outsiders produces the same outcomes as electing insiders once the outsiders face the same pressures. Strengthening accountability through oversight creates new layers of authority that develop their own self-preservation incentives.

System defenders argue democracy requires politics, that the messy process of negotiation and compromise is the price of avoiding authoritarian alternatives. This framework treats current governance structures as natural and inevitable rather than as designed systems that could be replaced with different designs. The assumption is that any alternative to electoral politics and representative government would be worse, therefore we must accept the corruption as unavoidable cost. This ignores that current systems are relatively recent historical innovations, that they were designed for contexts radically different from present reality, and that technological and organizational tools now exist that make alternatives feasible which weren’t possible when existing systems were created.

The structural analysis argues the roles themselves have become obsolete. The position of “politician”—someone whose primary function is winning elections by appealing to voters while raising money from donors and maintaining party loyalty—creates incentives incompatible with problem-solving. The position of “board member”—someone granted authority over resources they don’t own to serve interests they don’t directly bear costs of failing—creates incentives for self-dealing. The position of “administrator” in organizations funded based on problem persistence rather than problem resolution creates incentives for perpetual intervention. These aren’t fixable through better people or stronger rules. They require replacing the roles with different structures that align individual incentives with collective interests.

The verification challenge in documenting systemic corruption lies in the gap between formal rules and informal logic. When apartment board members restrict shareholder voting, they violate explicit governance requirements documented in regulations. When politicians perpetuate problems for campaign purposes, they violate no laws while contradicting their stated mission of solving constituent problems. When institutions maintain crises at levels justifying ongoing intervention, they meet formal performance metrics while failing their ultimate purpose. The behavior is simultaneously rule-compliant and purpose-violating, making accountability difficult because the corruption operates through the gap between what systems formally require and what they actually reward.

Reporting governance failures to regulatory authorities reveals this dynamic starkly. Submit documented evidence of board members denying voting rights, and the regulator will acknowledge the violation, recommend the board follow proper procedures, perhaps issue a warning. The board members face no personal consequences. The shareholders who reported the violation may face retaliation through the same power structures they challenged. The underlying incentive making future violations rational remains unchanged. The regulator—whose own position depends on ongoing violations at levels requiring oversight but not suggesting complete regulatory failure—has no incentive to pursue structural reform that would eliminate their mandate.

This pattern explains why wars continue since childhood despite obvious catastrophic costs, why greed gets celebrated as ambition despite producing inequality and instability, why depression and anxiety reach epidemic levels despite societies being wealthier than ever, why fear-based governance persists despite claiming to pursue freedom. These aren’t accidental outcomes or temporary problems awaiting solutions. They’re the designed outputs of systems optimized for elite extraction of wealth and power through maintaining populations in states of manageable crisis. A population experiencing genuine well-being, authentic connection, and effective self-governance would be impossible to control through the mechanisms current power structures depend on.

The consequences of recognizing governance systems are structurally obsolete extend beyond critique to requiring alternative frameworks. If the problem is individuals, the solution is better selection—elect different politicians, appoint different administrators, empower different regulators. If the problem is rules, the solution is reform—strengthen oversight, increase transparency, impose accountability. If the problem is the roles themselves, the solution is abolition—replace structures optimized for power maintenance with structures optimized for service.

The alternative isn’t anarchy or authoritarian technocracy. It’s administrative governance optimized for outcomes rather than power maintenance. Instead of politicians whose careers depend on problems continuing, appoint temporary administrators whose contracts specify measurable outcomes and expire upon achievement or failure. Instead of boards whose authority derives from limiting shareholder power, create rotating service roles with full transparency and instant revocability.

The technological infrastructure exists: secure digital platforms enable continuous stakeholder input rather than periodic voting, data systems allow tracking outcomes rather than activities, communication networks permit coordination without centralized control. The obstacles aren’t technical—they’re political. The current political class whose existence depends on current structures will resist replacement.

But recognition creates possibility. Once enough people understand governance systems are obsolete, the question shifts from “should we reform politics?” to “what do we build to replace it?” That’s when change becomes inevitable, just as monarchy’s obsolescence made democracy inevitable despite monarchs resisting their displacement. The fractal nature of corruption—identical at every scale—means the solution must be structural, not individual. Replace the roles, not the people occupying them.

This doesn’t mean eliminating governance or administration. It means replacing governance roles that create perverse incentives with structures that align them. A politician whose career depends on problems continuing has incentive to perpetuate problems. An administrator whose contract specifies measurable outcomes and expires upon achievement or failure has incentive to solve problems. A board member whose authority derives from limiting shareholder power has incentive to restrict transparency. A temporary administrator whose role is explicitly service to owners with full information access has no power to protect and therefore no incentive to restrict transparency.

The technological tools for implementing alternative structures now exist. Secure digital platforms enable continuous rather than periodic input from stakeholders. Data systems allow tracking outcomes rather than activities. Communication networks permit coordination without centralized control. The obstacles aren’t technical; they’re political—the current political class whose existence depends on current structures will resist their replacement. But recognition that governance systems are obsolete creates space for designing successors, just as recognition that monarchy was obsolete created space for democracy despite monarchs resisting their displacement.

The fractal nature of corruption—identical pattern at every scale from apartment boards to global institutions—reveals this isn’t about specific domains requiring reform. It’s about a fundamental design flaw in how power is structured. Until the flaw is addressed structurally rather than individually, replacing corrupt people with ethical people will simply create new corrupt people as the structure shapes behavior more powerfully than individual intentions. The political class must be abolished not because politicians are evil, but because systems optimized for elite extraction make service structurally impossible regardless of individual virtue.

When the pattern repeats at every level of organization, and regulatory responses consistently acknowledge problems while preserving structures that generate them, the conclusion is unavoidable—governance systems require replacement, not reform, because they’re optimized for outcomes nobody actually wants except those extracting power and wealth from their perpetuation.

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Tags: Political Reform, Governance, Systemic Corruption, Power Structures, Democracy, Accountability, Institutional Failure, Political Economy, Regulatory Capture, Scale-Invariant Patterns

When Regulators Are Investors: How Stablecoins Institutionalize 2008’s Self-Dealing The president who signed the legislation profits directly from the industry it regulates—and investors fund assets they can’t value

by Michael Lamonaca, 11 December 2025

The GENIUS Act—legislation regulating stablecoins—was signed by a president whose family earned over $1 billion from the crypto industry in the past year. This isn’t regulatory capture through lobbying. This is direct financial interest: the person signing the law profits personally from the industry it governs. When Trump pardons Binance’s founder after the company was fined $4 billion for facilitating terrorist transactions, when the Justice Department reduces crypto fraud investigations, when legislation allows stablecoin issuers to hold risky assets without deposit insurance while guaranteeing taxpayer bailouts if they fail, the arrangement isn’t hidden—it’s institutionalized. The 2008 crisis emerged from Wall Street creating “safe” assets backed by subprime mortgages, with regulators asleep and executives profiting while taxpayers absorbed losses. Stablecoins repeat this pattern with an added feature: policymakers now profit directly. And billions flow in from investors who would never buy a restaurant without reading financial statements, because stablecoins offer something verification can’t touch—the promise of fast returns built on hype rather than the compound effect of earnings growth, dividend reinvestment, and business fundamentals accumulated over decades. When conflicts of interest are institutionalized and valuation is impossible, the collapse is structural, not speculative.

The structural mechanics replicate 2008’s playbook with precision. Wall Street packaged subprime mortgages into bonds, rating agencies stamped them AAA despite underlying risk, banks sold them to investors who trusted the ratings without examining the assets, and when defaults cascaded, taxpayers funded the bailout. The GENIUS Act follows this template exactly. Stablecoin issuers package deposits into digital tokens promising dollar stability. The legislation provides implicit government backing by requiring reserve disclosure but not deposit insurance, creating the assumption that defaults won’t happen while guaranteeing bailouts when they do. Investors who can’t audit reserves in real time trust the “stable” label without verification capacity. Crypto companies lobbied for regulations written to maximize their profit while minimizing their accountability, spending tens of millions to ensure the framework protects issuers rather than depositors or taxpayers.

The incentive structure is identical to 2008: benefits concentrate among issuers and early adopters, risks diffuse across the entire financial system, and the timeline problem strikes—leaders who impose strict regulations face immediate industry backlash and campaign contribution losses, while those who enable risk face consequences only when crisis materializes, likely under different leadership. Tether CEO Paolo Ardoino announced the company is considering fundraising at a $500 billion valuation. This valuation assumes continued ability to accept deposits, invest them in higher-yielding assets than promised to depositors, and extract profits from the spread—the classic bank model, except without deposit insurance, capital requirements, quarterly examinations, or lender-of-last-resort backing. The GENIUS Act legitimizes this arrangement while the president who signed it profits from the industry’s expansion.

The human dimension reveals how conflicts of interest and financial illiteracy combine to fuel disaster. Before buying a restaurant, a rational investor reads financial statements: gross profit margins over five years, net income trends, debt-to-income ratios, retained earnings growth, return on equity, dividend capacity. You calculate what return the business needs to deliver before the purchase price makes sense. You verify assets exist, audit cash flow, understand the business model generating revenue. If statements show declining margins, rising debt relative to income, negative retained earnings, or returns below your required threshold, you don’t invest regardless of hype.

Stablecoins offer none of this verification capacity. No earnings per share to track over time. No dividend payments to collect and reinvest. No balance sheet showing assets and liabilities you can audit continuously. No return on equity demonstrating management efficiency. No business model beyond “we take your dollars, promise to return them, and profit from the spread.” The only financial disclosure is annual audits of reserves—snapshots that become obsolete the day they’re published, useless for investors needing to assess risk in real time when redemption panics happen in minutes.

Yet billions flow into stablecoins from investors who apply zero due diligence. When people ask “do you invest in Bitcoin?” after hearing about disciplined fundamental analysis, it reveals the disconnect: they’re investing based on news, hype, and fear of missing out rather than evaluating whether an asset generates returns justifying its price. This isn’t investing—it’s speculation on price movement disconnected from underlying value. Real wealth accumulates through the compound effect of businesses earning profits, reinvesting them to grow, and distributing dividends that investors reinvest over decades. A company with consistent 15% return on equity, growing earnings per share, rising dividends, manageable debt, and increasing retained earnings compounds investor wealth through business performance, not price speculation.

Stablecoins compound nothing except issuer profits extracted from depositors who can’t verify the reserves supposedly backing their holdings. The Trump family’s $1 billion in crypto profits didn’t come from patient capital allocation and dividend reinvestment—it came from regulatory arbitrage, influence peddling, and profiting from legislation the president signed while holding financial interest in its beneficiaries.

Historical precedents illuminate how “stable” assets collapse when their promised safety proves illusory. Before federal deposit insurance existed, bank runs were common—panic would spread when depositors feared a bank couldn’t honor withdrawals, causing the very insolvency they feared as simultaneous redemption demands exhausted reserves. The Federal Deposit Insurance Corporation, created after the 1930s banking crises, solved this by guaranteeing deposits up to certain limits, eliminating the incentive to rush for withdrawals at first sign of trouble. Stablecoins remove this century-old protection while reintroducing the vulnerability it was designed to prevent. The 2008 subprime crisis centered on mortgage-backed securities rated AAA despite containing loans to borrowers with no income verification, no down payments, and adjustable rates designed to reset higher. Rating agencies assigned top grades because issuers paid them, creating incentive to approve rather than scrutinize. Banks sold these securities as safe investments. When housing prices stopped rising and borrowers defaulted, the “safe” assets collapsed, requiring government intervention to prevent systemic failure.

The 2008 money market fund crisis followed similar dynamics. Money market funds promised stable $1 net asset value while investing in commercial paper and short-term debt yielding higher returns than the funds paid depositors. When Lehman Brothers collapsed and its commercial paper defaulted, Reserve Primary Fund “broke the buck”—its net asset value fell below $1, triggering panic. Investors rushed to redeem, forcing funds to sell assets at losses, threatening cascade across financial system. The federal government stepped in to guarantee $2.7 trillion in uninsured money market fund assets, preventing collapse but establishing precedent: when supposedly stable vehicles face runs, taxpayers absorb losses.

Stablecoins replicate this pattern with digital acceleration. Terra, once among the top stablecoin issuers, collapsed in May 2022, evaporating nearly $60 billion in assets. The promise of stability proved false when market stress revealed the reserves couldn’t support redemptions. Tether faced similar pressure that year when market doubts about its reserves triggered $10 billion in redemptions over two weeks. The company survived, but the episode demonstrated the fragility—any loss of confidence can spark runs that exhaust reserves within days.

The GENIUS Act doesn’t prevent this dynamic. It legitimizes it by providing regulatory framework without the safeguards that make banking stable: deposit insurance protecting depositors, capital requirements ensuring solvency, frequent examinations catching problems early, lender-of-last-resort access preventing liquidity crises. Instead, the act allows issuers to hold Treasuries with maturities up to 93 days—bonds that fluctuate in value when interest rates change. In summer 2022, three-month Treasury rates rose from below 0.1% to 5.4%. If issuers needed to sell bonds during that period to meet redemptions, they would have realized losses, potentially exhausting reserves.

Competing narratives about stablecoin utility reveal the gap between marketing and reality. The crypto industry argues stablecoins provide faster, cheaper payment systems than traditional banking. Bank transfers take time, international remittances carry high fees, and cryptocurrency supposedly enables seamless global transactions. The GENIUS Act’s supporters claim it will increase demand for U.S. Treasuries and strengthen the dollar’s global reserve currency status by making dollar-backed stablecoins the foundation of digital finance.

The evidence contradicts these claims. A 2023 Federal Deposit Insurance Corporation survey found only 3.3% of cryptocurrency holders use it for payments, and only about 2% use it to purchase actual goods. Most holders speculate on price movements rather than using crypto as currency. Meanwhile, according to blockchain analytics firm Chainalysis, nearly $3 billion in cryptocurrency was stolen in just the first half of 2025. The CEO of a Texas pharmaceutical company mistyped an address digit and transferred about $1 million in stablecoins to a stranger who refused to return it. Stablecoin issuer Circle stated it wasn’t responsible. For legitimate transactions, crypto remains vulnerable to scams, hacking, theft, and irreversible errors traditional banking systems prevent.

The actual advantage stablecoins provide is regulatory arbitrage—using the dollar system while avoiding U.S. oversight. Currently, about 99% of stablecoins are pegged to the dollar. The GENIUS Act claims to require anti-money laundering compliance and “Know Your Customer” verification, but only for coins initially issued in the U.S. How they’re transferred afterward, to whom, and where they flow remains largely untraceable. Tether plans to launch stablecoins not aimed at U.S. or EU customers, completely bypassing these rules. Decentralized exchanges allow swapping stablecoins without regulation, making unregulated coins easily accessible to U.S. markets.

The real demand for stablecoins comes from actors seeking to avoid oversight: money launderers, tax evaders, sanctions violators, and criminal enterprises. The global illicit finance market is estimated at $36 trillion, representing 10% of global wealth. Stablecoins provide infrastructure for moving these funds. In 2023, Binance was fined over $4 billion for allegedly facilitating transactions for terrorist organizations. President Trump subsequently pardoned Binance’s founder, and reports indicate Binance will cooperate with the Trump family’s crypto projects. The alignment of financial interests and policy decisions becomes explicit.

The verification challenge exposes why stablecoin “stability” is marketing rather than reality. After Japan’s rare earth capitulation in 2010, studies claimed diversification was achievable—deposits existed outside China, alternatives could reduce dependence. These analyses were technically correct but operationally misleading because the timeline for building alternatives exceeded the timeline for crisis impact. Stablecoins present the same gap between theoretical safety and practical vulnerability.

The GENIUS Act requires issuers to back coins with “liquid assets such as dollars or short-term Treasuries” and disclose reserve composition monthly. This sounds reassuring until examining operational reality. Monthly disclosure creates information lag of 30 days minimum. Stablecoin redemptions happen in seconds. An issuer appearing sound in a monthly report could be insolvent a week later. By the time investors see concerning reserve data, the crisis has already materialized.

Even with current reserves, the act allows Treasuries with maturities up to 93 days. These bonds yield about 4% annually but carry interest rate risk—when rates rise, bond values fall. If issuers need to sell bonds to meet redemptions during rate increases, they realize losses. The first redemptions get paid, but the act of paying them depletes reserves, making subsequent redemptions harder to fulfill. This creates incentive to redeem immediately once any doubt emerges, precisely the bank run dynamic deposit insurance prevents in traditional banking.

The act prohibits stablecoin issuers from paying interest, supposedly preventing them from competing with banks. But the restriction is meaningless. Issuers profit by investing deposits in higher-yielding assets than they promise to redeem. They don’t need to pay interest to depositors—they extract value through the spread between what they earn on reserves and what they owe depositors. Meanwhile, depositors receive no compensation for the risk they’re taking, unlike bank depositors who earn interest and receive FDIC insurance protection.

The consequences extend beyond crypto speculation to systemic financial risk if stablecoins scale as predicted. Currently the stablecoin market totals between $280 billion and $315 billion, roughly the size of the 12th largest U.S. bank. A complete collapse would hit the financial system but likely prove survivable. Citigroup predicts that if the GENIUS Act takes effect as written, the stablecoin market could reach $4 trillion by 2030. A default at that scale creates severe systemic shocks.

Tether, headquartered in El Salvador, holds $135 billion in U.S. Treasuries, making it the 17th largest holder of U.S. government debt globally, just behind Germany. If Tether faced a redemption run and needed to liquidate Treasuries rapidly, the selling pressure would push Treasury prices down and yields up, raising borrowing costs across the entire U.S. economy. Other stablecoin issuers facing similar pressure would compound the effect. The Treasury market is the foundation of global finance—disrupting it creates cascade effects through every asset class.

The GENIUS Act’s supporters argue it will increase Treasury demand and strengthen dollar dominance. But this demand comes with structural fragility. When stablecoin issuers are the marginal buyers of Treasuries, their stability matters. If crisis forces them to become sudden sellers, the market impact could be severe. Traditional Treasury buyers—foreign governments, pension funds, insurance companies—invest for long-term stability. Stablecoin issuers hold Treasuries as reserves against potentially volatile redemption demands, creating correlation between crypto market stress and Treasury market disruption.

The act attempts to prevent this by requiring reserve diversification and liquidity maintenance. But these requirements can’t solve the fundamental problem: stablecoin issuers promise instant redemption backed by assets that may not be instantly liquid at full value. Traditional banks manage this through deposit insurance (preventing runs), capital requirements (ensuring solvency), regular examinations (catching problems early), and central bank access (providing emergency liquidity). Stablecoins have none of these protections but face the same structural vulnerability—maturity transformation, the practice of funding long-term assets with short-term liabilities.

Contrast this fragility with how actual wealth compounds over decades through business fundamentals. A company earning 15% return on equity that retains half its earnings to reinvest and pays the other half as dividends creates compounding for investors. The reinvested earnings generate additional profits next year. The dividends get reinvested to buy more shares, which generate more dividends. A $10,000 investment at 15% annual returns becomes $40,000 in 10 years and $660,000 in 30 years. A $1 million investment becomes $4 million in 10 years and $66 million in 30 years—through business performance generating real profits, not price speculation disconnected from value creation. This is how patient capital allocation builds generational wealth, managed by people accountable to shareholders, verified through audited financial statements investors can examine continuously.

Stablecoins offer none of this. No earnings to compound. No dividends to reinvest. No business generating value. Just promises to maintain dollar parity backed by reserves you see once annually in audits obsolete immediately. The “returns” come from price speculation disconnected from underlying value creation, or from issuers extracting profits from the spread between what they earn on reserves and what they promise depositors. When the president signing legislation enabling this arrangement profits personally from the industry’s expansion, the conflict isn’t subtle—it’s institutionalized self-dealing.

When regulators profit from the risks they authorize and investors fund assets they can’t value, collapse becomes structural rather than speculative—the question isn’t whether it happens, but who pays when promises to taxpayers get broken the same way promises to depositors do.

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Tags: Stablecoins, Cryptocurrency, Financial Regulation, GENIUS Act, Trump, Conflict of Interest, 2008 Financial Crisis, Investment Due Diligence, Regulatory Capture, Systemic Risk

The Alliance Protection Racket: When Allies Become Clients When sovereign nations start offering $500 billion payments to avoid abandonment, the language of diplomacy obscures what’s actually happening

by Michael Lamonaca, 9 December 2025

Japan offers $500 billion. South Korea capitulates to investment demands. European leaders queue at the White House with flattery and concessions. The language is diplomatic—”burden sharing,” “alliance modernization,” “strategic investments”—but the structure is unmistakable: protection money. America’s alliance system, once framed as a network of mutual defense and shared values, now operates like a classic extortion scheme. Pay up, or face abandonment when threats materialize. The remarkable part isn’t that Trump demands tribute—it’s that allies keep paying it while pretending this is normal statecraft. At what point does a protection agreement become a protection racket? When the protector’s reliability depends entirely on the size of the payment, that line has already been crossed.

The mechanics reveal themselves through Trump’s explicit transactionalization of security commitments. He doesn’t merely suggest allies contribute more to collective defense—he demands specific dollar amounts, issued at his discretion, as preconditions for continued American engagement. The European Union faces a $600 billion demand. Japan’s $500 billion commitment came bundled with trade concessions. These aren’t defense budgets allocated through parliamentary debate and strategic planning. They’re tributes negotiated under threat of abandonment, with the amounts determined not by military necessity but by what Trump believes he can extract.

The protection racket operates on a simple principle: the client pays for security they cannot provide themselves, while the protector maintains the conditions that make independence impossible. America’s alliance structure has perfected this dynamic over decades. U.S. military forces integrate so deeply with allied militaries that independent operations become structurally unfeasible. Command and control systems, satellite networks, logistics infrastructure, intelligence gathering—all flow through American systems that allies access at low cost but cannot replicate quickly. Japan and South Korea host U.S. bases that are now being repurposed for offensive operations against China, not just host-nation defense. European militaries train on American equipment, depend on American reconnaissance, and coordinate through American communication networks.

This creates the leverage that makes extortion possible. When Trump threatens to “cut off Ukraine from U.S. intelligence” or allies fear “kill switches” in American-made weapons systems, the threat is credible because dependence is total. Germany responds by prioritizing European defense producers, but this pivot comes three years into a major European war, not three decades ago when strategic autonomy might have been achievable without crisis. The cost of exit—building independent C4ISR systems, developing domestic defense industries, training new officer corps familiar with non-American systems—is so enormous that paying tribute appears rational by comparison.

The human cost manifests in the policy contortions of leaders who must maintain the fiction that this is partnership rather than coercion. Japanese Prime Minister Shigeru Ishiba visits Washington and signals his desire to “stay in Trump’s good graces.” South Korean officials negotiate investment packages while their public debates obtaining nuclear weapons. European leaders fly to the White House to flatter Trump rather than convene emergency summits in Brussels to plan autonomous defense. These aren’t the behaviors of sovereign allies making independent strategic assessments. They’re the responses of clients managing an unpredictable patron whose support might evaporate at any moment.

The personal calculations are stark. Politicians who pursue autonomy face immediate domestic backlash—higher taxes, social spending cuts, possible conscription—while the benefits of independence remain theoretical and distant. Those who accommodate Trump can claim they’re “keeping channels open” and “maintaining the relationship” while deferring the hard choices. The incentive structure rewards short-term appeasement over long-term sovereignty, which is precisely how protection rackets persist across generations.

Historical precedents illuminate how protection relationships evolve once their transactional nature becomes explicit. The late Roman Empire’s foederati system began as mutual defense agreements with Germanic tribes but deteriorated into tribute payments as Rome’s military capacity declined and tribal leaders recognized their leverage. The arrangements persisted for decades after they stopped serving Roman interests because the infrastructure of dependence—Roman roads, fortifications, supply systems—made alternatives unthinkable until the moment they became unavoidable. Medieval protection arrangements between lords and vassals operated on similar dynamics: security in exchange for tribute, with the relationship maintained through a combination of genuine military capacity and the structural impossibility of the client achieving independence.

The contemporary parallel appears in how mafia protection rackets function in regions where state authority is weak. The protection becomes real—competitors are driven away, disputes are arbitrated, security is provided—but the client never stops paying and never achieves independence because the protector ensures that alternative security arrangements remain unavailable. Trump’s innovation is making this dynamic explicit in the international system while maintaining the diplomatic vocabulary of alliance and partnership.

Competing interpretations of these dynamics reveal fundamentally different understandings of how international security operates. The Trump administration frames demands as overdue corrections to decades of allied free-riding. The new National Security Strategy emphasizes that America should be a “conveyer and supporter” rather than primary provider of security, positioning burden-sharing as empowerment rather than abandonment. From this perspective, forcing allies to pay more isn’t extortion—it’s teaching fiscal responsibility to nations that have grown complacent under American protection.

Allied governments publicly embrace this framing while privately preparing for different scenarios. Japan’s $500 billion commitment is described as investment in shared prosperity, not tribute to avoid abandonment. European defense budget increases are presented as responses to Russian aggression, not payments to maintain American favor. The official narrative maintains that alliances remain robust and mutually beneficial, even as the underlying transactions become increasingly explicit and one-sided.

Some analysts argue this represents healthy rebalancing—that American allies should bear more defense costs and that Trump’s demands, however crudely expressed, address legitimate imbalances in the alliance structure. Others observe that no alliance in history has survived one member treating security commitments as negotiable based on payment schedules. The gap between these interpretations reflects different assessments of whether the current system can be reformed or whether it’s already collapsing in slow motion.

The verification problem compounds as official statements diverge from observable behavior. When Japanese officials claim the $500 billion figure represents normal investment flows rather than political tribute, is that accurate? The details of who controls the money and whether Japan will actually meet the target “remain contested,” suggesting the commitment was more symbolic than substantive. When European leaders say they’re still confident in American security guarantees, what explains their simultaneous pursuit of autonomous defense capabilities and separate communications with Moscow about Ukraine?

The challenge isn’t accessing information—it’s interpreting whether current arrangements represent alliance strain or alliance transformation. Trump’s explicit transactionalization might be forcing allies toward greater autonomy, which could strengthen rather than weaken collective security. Or it might be destroying trust that took 80 years to build, replacing strategic partnership with temporary commercial transactions. The evidence supports both narratives simultaneously, which means definitive assessment requires waiting to see which countries actually achieve independence and which remain trapped in paying for protection they’re no longer certain they’ll receive.

The consequence zone extends across multiple dimensions as the protection racket logic plays out. If allies continue paying tribute while building autonomous capabilities, they spend twice—once to maintain current relationships, again to prepare for their failure. This diverts resources from domestic priorities and economic growth, potentially weakening the very nations whose strength supposedly justifies American protection. If payment levels become the primary metric for alliance value, strategic considerations get subordinated to financial ones, creating perverse incentives where wealthy nations receive guarantees while exposed partners get abandoned.

The second-order effects emerge when other powers recognize the transactional nature of American commitments. China can offer stability and infrastructure investment without the humiliation of tribute payments. Russia positions itself as a partner rather than protector, making demands but not extracting payment as a condition of relationship. These alternatives become more attractive not because they’re superior security arrangements but because they preserve the appearance of sovereignty that American demands now explicitly violate.

The third-order consequences appear when the protection racket collapses under its own contradictions. Eventually, some ally will refuse payment or face a crisis where American support doesn’t materialize despite having paid. That moment reveals whether the system was ever about mutual defense or simply a temporary arrangement maintained through threat and tribute. The states that prepared for this moment by building autonomous capabilities survive. Those that kept paying to avoid thinking about it discover too late that they’ve purchased neither security nor independence—only the privilege of having delayed the moment when they must confront their actual position in the international system.

When the price of protection becomes indistinguishable from the cost of extortion, you’re no longer in an alliance—you’re just a client who hasn’t yet admitted that sovereignty was traded away one payment at a time.

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Tags: Geopolitics, U.S. Foreign Policy, Alliance Politics, International Security, Strategic Autonomy