Anthropic, the Pentagon, OpenAI, Corruption and Tyranny

 Meet Dario Amodei and Daniela Amodei, the brother & sister who are CEO and President of the artificial intelligence company Anthropic.  They look like the kids who ran a lemonade stand down the street about five years ago.  Instead of a lemonade stand, five years ago they left the company OpenAI and founded Anthropic.  While at OpenAI, Dario was a product developer, and Daniela was head of the safety division.  Anthropic is a privately-held company which produces Claude, widely regarded as the best AI engine on the market.  Anthropic was recently valued at 380 billion dollars, in proportion to its most recent private equity offering.
 
The Pentagon has been in a public dispute with Anthropic regarding a $200 million contract for the use of an advanced version of the Claude AI.  Anthropic insisted that the program not be used for two purposes: 1) mass Surveillance of US citizens, and 2) fully autonomous weapons targeting.

“We support the use of AI for lawful foreign intelligence and counterintelligence missions. But using these systems for mass domestic surveillance is incompatible with democratic values. AI-driven mass surveillance presents serious, novel risks to our fundamental liberties. To the extent that such surveillance is currently legal, this is only because the law has not yet caught up with the rapidly growing capabilities of AI.”

“Partially autonomous weapons…are vital to the defense of democracy. Even fully autonomous    weapons…may prove critical for our national defense.  But today, frontier AI systems are simply not reliable enough to power fully autonomous weapons. We will not knowingly provide a product that puts America’s warfighters and civilians at risk.”
https://www.anthropic.com/news/statement-department-of-war

The Pentagon insisted that Anthropic could put no restrictions on its use of the technology, and cancelled the contract.  Further, in an act of retaliation, the Pentagon declared the Anthropic was a “Supply-Chain Risk”.   President Trump issued an executive order calling on all U.S. government agencies to begin a 6-month’s phase-out of Anthropic’s products.  If the designation of “Supply-Chain Risk” is formalized, it would also block companies with any Federal contracts from using Anthropic’s products.  

Most large corporations perform some kind of service for the Federal Government.  Blocking all of those companies would have a throttling impact on Anthropic’s ability to compete with OpenAI.  Trump’s former AI advisor Dean Ball described the Trump administration's actions against Anthropic—specifically the Pentagon's supply chain risk designation—as "attempted corporate murder".

Within hours of cancelling the contract with Anthropic, the Pentagon signed a new contract with OpenAI to provide the same services.  Incredibly, OpenAI issued a public statement that it would also refuse to provide services for autonomous weapons targeting or mass surveillance of Americans.  Apparently, these issues were only pretexts for cancelling the  Anthropic contract, and subsequent blacklisting of the company.   OpenAI’s public statement included the following text:
    “We have three main red lines that guide our work with the DoW, which are generally shared by several     other frontier labs:
        No use of OpenAI technology for mass domestic surveillance.
        No use of OpenAI technology to direct autonomous weapons systems. 
        No use of OpenAI technology for high-stakes automated decisions (e.g. systems such as “social                 credit”).”
https://openai.com/index/our-agreement-with-the-department-of-war/

Oligarchy
There’s little doubt in my mind about the reason for the repression of Anthropic is the political orientation of their leaders.  Sam Altman donated $1 million to Donald Trump’s Inauguration Committee.  In 2024, Dario Amodei donated $214,000 to Democratic candidates, including Kamala Harris.  

There is a class of oligarchs emerging in the United States, consisting of billionaires to centibillionaires.  The oligarchs have taken control of a dismaying range of facets of American society.  In media alone, oligarchs have taken control of a large portion of America’s major newspapers, news organizations, popular entertainment and social media sites.  

In Russia in the early 2000s, the price of great wealth was allegiance to the political authority of Vladimir Putin.  Mikhail Khodorkovsky, head of Russia’s largest oil company, had his company dismantled, his lawyers imprisoned and was himself imprisoned for a decade for politically opposing Putin.  

Today, in the U.S., it appears that Trump and the Republican Party are acting as gatekeepers to the accumulation of great wealth.  Jeff Bezos, Mark Zuckerberg, Elon Musk, Larry Ellison, and Patrick Soon-Shiong have all publicly aligned themselves with Trump, as well as other billionaires, such as Peter Theil, Miriam Adelson, Howard Lutnick, Steve Witkoff, Jared Kushner, and others who were already politically aligned.   A dozen other billionaires have been appointed to high-level positions in the Trump administration.

The notion that political allegiance is necessary for business success is antithetical to the idea of American freedom.  When one of America’s most promising businesses is crushed because of political donations, we have lost American freedom, and become a tyranny.  

"Abundance" Book Review

 

There is a widespread feeling that the American economy is broken.  Data shows that the percentage of families living paycheck to paycheck has risen from around 30% in the late 1990s to 50% to 60% today.  Rising costs and stagnant wages have lowered the standard of living for working families, even as per-capita GDP has reached new records in a linear ascent.  In many aspects of society, we are acting as if we are impoverished instead of wealthy.  Both federal and state government agencies have laid off workers, services are impaired, maintenance of infrastructure is declining, homelessness is rising, etc.  What is wrong?

Ezra Klein and Derek Thompson recently wrote the book “Abundance”, published in 2025 to address issues with the broken economy.  The book expresses the core ideas of supply-side progressivism, a movement originating in about 2010 and building momentum until today.  There's a Wikipedia Page for supply-side progressivism; check it out.

The term “Abundance” is now being widely used by Democratic candidates for Congress, though I suspect few of them have actually read the book.  “Abundance” may become the main campaign theme for the 2026 mid-term elections, particularly for centrist Democrats.  Abundance seems an odd choice as the unifying rallying cry for Democrats – because the main message is a confession that Republicans were right when they said that government regulations were strangling the economy.  

The central thesis of Abundance is that limitations in the supply of goods and services have driven prices higher and impaired American prosperity.  Klein and Thompson lay out the argument that excessive government regulation has been the root cause of those shortages.  Specific examples include goods and services which have increased in price more than the rate of inflation – housing, health care, higher education, and other key necessities, including energy, food and transportation.  For me, there’s an uncomfortable echo of Reagan-era supply side economics, which proposed that lower tax rates, in combination with reduced regulation, would bring prosperity to consumers and higher government revenue.  The theory is largely discredited by current day economists.  

Klein and Thompson title their chapters Beyond Scarcity, Grow, Build, Invent, and Deploy.  The first chapters examine the impact of regulatory over-reach on particular aspects of the American economy.  The final chapter, “Deploy”, emphasizes the role that government should play in encouraging the development and commercialization of new technologies, after invention.  

Klein and Thompson give short shrift to the societal benefits of the last 60 years of government regulations.  We now have cleaner air and water; fatalities per air-travel passenger-mile have fallen by a staggering 99%; fatalities per vehicle-travel passenger-mile have fallen by about 66%; worker safety is greatly improved across many industries; food and medical safety is far better in the United States than in other nations; etc.   But they are correct that there is a cost to regulations, and those costs have not always been weighed accurately against the benefits.

To use a Millennial idiom, one could say that Klein and Thompson are *not wrong*, damning them with faint praise.  I believe the book is correct that policy choices about some regulations have led to scarcity, which then led to rising costs.  Housing and medical treatment are the best examples.  On the other hand, abundance theory is woefully incomplete in describing or remedying the problems with the economy.  

The primary problem with the economy is demonstrably not on the supply side.  Adjusted for inflation, personal earnings (wages and salaries) have increased by only about 12% since 1980, while per capita GDP has more than doubled, according to data from the Federal Reserve Database.  Wage stagnation is the primary reason that working-class Americans are being left behind, not limited supplies of needed goods and services.

The reason for wage stagnation is also pretty clear.  Over the course of my career (1980 – 2026), I saw computer automation eliminate many good-paying jobs.  Managers were issued PCs to do correspondence and clerical work, and secretaries were re-assigned or fired.  A geologist with a workstation could do the work of three to five geologists working with pencils and drafting tables, so 2/3rds of the geologists were fired.  Workstations produced high-quality graphics, so the entire drafting and reprographics departments were fired.  Enterprise-wide accounting software reduced the number of accountants in my department from 28 to 1; the other 27 were fired.  The Internet and internal information archives eliminated the need for information specialists.  In the 1980s, management set a goal of reducing professional headcount from 3000 to 1000, and achieved that goal; also in 1980, there was an aspirational goal to reduce the headcount to 300.  The company has now been sold, so it appears that they achieved that goal as well.  As Thomas Piketty wrote, technology and capital replace labor.  

There is a belief, often cited in articles about economics and technology, that new technologies *always* produce new jobs.  I saw another article citing that dogma two days ago, in an article about the Davos conference and AI.  The argument is empirical, and to my mind, began to break down with the introduction of the PC in 1980.  It may be true that the introduction of the automobile created more jobs for buggy-whip manufacturers, but that will not necessarily be true about the replacement of lawyers by AI.  Empiricism is the weakest scientific argument, because it provides no fundamental explanation for why it is true, and it provides no predictive power for situations outside of the envelope of prior experience.  And the future is always outside of the envelope of prior experience. 

The goal of many Democratic policies of the past 60 years has been to address the symptoms, rather than the cause, of economic dysfunction.  Higher minimum wage, pro-union regulations, food assistance, rental assistance, child-care tax credits, health insurance subsidies, etc., are all band-aids, not solutions to our economic problems.  Neither party has been able to develop policies that improve the fundamental productivity of all individual workers, and the power of those workers to demand greater compensation for their work.  

My employer’s view is that employees were a cost, not an asset.  For 45 years, the pathway to improve corporate profitability has been to employ fewer people.  That put relentless pressure on employee compensation.  

There are a few obvious possibilities.  Nationalized health care would remove the burden on businesses of providing health insurance for employees.  Higher minimum wage might help, but also provides an incentive for businesses to automate low-paying jobs.  It might be possible to tax companies based on the number of good-paying jobs they provide, relative to profits.  But this might put American companies at a disadvantage in global trade.  

Government policies have long been tolerant of the gimmicks that employers (even government employers) use to avoid paying benefits to employees, such as restricting weekly hours, or periodically laying off worked, only to hire them again shortly afterwards.  But as well as ensuring that workers are paid benefits that they deserve, government should help to improve their productivity and value to employers.

In my opinion, there are no clear policy fixes for the problems plaguing the 21st century economy.  Abundance, as a book and as a policy goal, is a good start.  But after 2028, Democrats must not fail to deliver on the idea that Americans deserve prosperity, or we will face a return to the populist politics of grievance and blame which characterizes the Trump administration. 

Democrats, The Government Shutdown, and the Trolley Problem

 On Sunday, November 9th, the US Senate voted 60 to 40 to pass a continuing resolution to reopen the US government, which had been closed for 40 days.  Seven moderate Democrats and one Independent joined Republicans in passing the resolution, to reach the required supermajority of 60 votes to invoke cloture and force a vote on the bill.  The resolution did not contain Democrats’ single, key demand, which was a continuation of the expanded ACA healthcare insurance subsidies for people making more than 4x the poverty level.  The expansion of ACA subsidies was enacted in 2021 as part of Biden’s American Rescue Plan Act, post-covid economic stimulus package.

When the Senate passed the continuing resolution to end the record-breaking government shutdown, Democrats across the country were outraged.  Social media exploded with withering criticism of the Senators who agreed to end the shutdown.  House Democrats, celebrities, late-night hosts and rank & file Democrats almost universally condemned the Senators for “caving” on the confrontation.  

I disagree.  From the outset, I thought that the government shutdown was ill-considered and counter-productive, likely to lead to worse outcomes than doing nothing.  I already published a post on the topic on April 14, 2025, when a government shutdown was proposed in the spring.  

For Democrats, the government shutdown was a trolley problem.  On one track were the people receiving expanded ACA subsidies, and on the other track were the people on food stamps, federal workers, citizens and business using air travel, and other government services of benefit to society.  Democrats threw the trolley switch to try to protect people on ACA subsidies, but threatening people on SNAP (Supplemental Nutrition Assistance Program), federal employees and other Americans.  Democrats believed, wrongly, that Republicans would compromise to restore reliable air traffic, or feel a sense of responsibility to SNAP recipients and throw the switch back.

By early November, the long-term consequences of the shutdown were becoming apparent.  Approximately 3 million federal workers had not been paid for a month.  Federal services, programs, grants and data-collection were all suspended.  In particular, SNAP was suspended, with the immediate prospect that 42 million people dependent on food stamps would be without sufficient food.  And unpaid air-traffic controllers were showing their irritation by creating flight delays, causing the FAA to preemptively cancel thousands of flights, culminating in the cancellation of nearly 3000 flights on November 9th.

Democrats saw this chaos as evidence that Republicans would soon compromise on ACA subsidies.  Nothing could be farther from the truth.  Republicans had absolutely no intention of giving Democrats a legislative win.  If Democrats gave just a moment’s consideration into Republicans’ options, they would have realized that the Trump administration would treat the government shutdown as an opportunity to expand authoritarian control and accelerate the dismantling of functioning government, and above all, to deny Democrats a legislative victory.  

The path forward for Republicans was clear.  First, the Trump administration would have let the shutdown persist until holiday flight travel was hopelessly snarled, and food stamp recipients were suffering malnutrition by the millions.  Then, Trump would militarize air traffic control, declaring all civilian air traffic controllers military inductees.  This would solve the air traffic crisis, and give Trump unprecedented power over private-sector air transportation.  After the chaos and uncertainty of thousands of flight cancellations, restoration of confidence in air travel would be welcomed by the traveling public.  Next, Trump would declare that Congress was derelict in its duties to provide a budget, and issue an emergency order to the Treasury to fund the military and other Republican priorities (but not food stamps).  This would be counter to Constitutional processes, but it is doubtful that the Supreme Court would rule against Trump in an extended crisis.  Third, eventually, he would convince the Republican Senate to end the filibuster, and pass a flurry of voter suppression bills, to ensure that Democrats did not win elections in 2026 or 2028.  

I’m a chess player.  In a situation of conflict, I put myself in my opponent’s shoes, and think about what my opponent is likely to do in response to my actions.  Democrats failed to do that before beginning the government shut-down.  Even a moment’s reflection from the Republican perspective would show that there was no chance in hell that Republicans would compromise with Democrats on the ACA subsidies.  Further, there was no chance that Republicans would responsibly protect SNAP recipients from the Democratic diversion of the trolley onto the track for people on food stamps.  Republicans hate social welfare programs and would celebrate the opportunity to shut down the food stamp program.  From the outset, it was apparent that the shutdown would harm marginalized people – the very people that Democrats claim to defend.

In the end, the legislation passed included a continuing resolution to fund the government at current levels through January 30, 2026.  Three appropriations bills were also passed, funding various agencies through September 30th, 2026, the end of the standard fiscal year.   SNAP benefits were among the appropriations funded through September.  Federal employees will receive back-pay, and mass firings will be reversed.  This action leaves nine more appropriations bills to be negotiated and passed by January 30th.  

The approved bill also included a provision allowing a number of Republican Senators to sue the Justice Department for invasion of privacy, in regard to the FBI investigation into the well-documented attempt to overturn the results of the 2020 election.  Each Senator who was investigated could receive up to $500,000 and compensation for legal fees.  This provision is controversial, even among Republicans, and House Speaker Johnson has promised a vote next week to repeal that provision.  But repeal would require another supermajority vote in the Senate and President Trump’s signature, so the repeal vote in the House is just political theater.

I think the shutdown, and the Democratic response to the shutdown, shows that today’s Democratic party has lost its heart, its soul and its collective mind in panic over Trump’s authoritarianism.  I am most disappointed that the Democratic party has completely lost sight of caring for the needs of people.  Today’s Democratic party is willing to harm people for an unrealistic hope of political gain.  Dems were foolish regarding their chances of success, and heartless in their decision on the trolley problem.  Republicans were absolutely never going to compromise on ACA, so the trolley would hit both sets of victims.

Republicans decisively won the elections in 2024, at all levels.  At this time, Democrats simply do not have the votes for constitutional resistance, and un-constitutional resistance would take the country into uncharted territory.  Democrats need to realize that when there's chaos in society, before long, citizens will be happy for an authoritarian to step in and end the chaos.  That's the real hazard of a protracted shut-down.  It would have been an opportunity for Trump to expand authoritarian control, to dismantle more of the federal government and for Republicans to put in place mechanisms to ensure permanent one-party rule.  I'm glad the eight Democratic and Independent Senators voted to restore funding.  These Senators saved the nation from a progressive disaster.

Without question, American democracy is threatened by Trumpian authoritarianism.  But we have to be smarter about the kind of resistance to Trump.  Our bulwark is the Constitution, our institutions, and our long history as a representative democracy.  We will have elections in another year, if Democrats do not provide justification for cancelling those elections.  There will be bitter fights over the mid-cycle gerrymandering, but we will still have elections.  The public can be fooled for a while, but not for long.   We will have an election for a new president in 2028, and the public will render judgment on Trump and his legacy.  I am confident that we will begin rebuilding in 2029, and build a stronger nation, based upon the values of governmental responsibility, truth, and care for our citizens.
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Appendix
Background for the 2025 Government Shutdown.
On October 31,, 2025, the US Federal government shut down due to a failure of Congress to pass a budget or continuing resolution to fund the government.  Republicans, with a narrow majority in both chambers, had constructed their proposed 2026 budget with no input from Democrats.  The Democrats demanded a single item to support the Republican budget – the extension of a health-insurance subsidy tied to the Affordable Care Act.  The insurance subsidy was included for low-income families in the original ACA legislation of 2010.  In 2021, a Democratically-controlled Congress expanded those subsidies, to include families making more the 4x the minimum wage.  The expanded subsidy was scheduled to expire in November 2025.  According to Google, 22 million people use the expanded subsidy to lower their insurance costs.  Online sources cast some doubt on that number, suggesting that the real number is about 11 million people.  There may be some confusion between the people receiving any ACA subsidies, and the people with relatively higher income receiving the expanded subsidy.  

On November 12, the House of Representatives passed the revised Continuing Resolution passed by the Senate, ending the eleventh government shutdown at a record 42 days. Democrats in the Senate had invoked the privilege of the filibuster to block passage of the bill for 40 days.  By Senate rules, a super-majority of 60 votes was necessary to end debate and force a vote on the bill.  Republicans had only 52 votes, with one Republican dissenter.  

By mid-November, the stakes in the conflict grew higher.  Air traffic controllers had not been paid in over a month, but were required to still work.  The controllers began slow-downs and walk-outs to put pressure on Congress to end the stalemate.  The FAA curtailed permitted flights, resulting in cancellations ranging from 1000 flights to 3000 flights per day.  Three million federal employees are not receiving paychecks.  And most importantly, 42 million Americans who receive SNAP (food stamp) benefits have stopped receiving benefits as of the beginning of the month.  There were legal battles about whether states can step in to temporarily fund the program, whether available funding should be used until depleted, and whether the federal government is permitted to make partial payments with available funds.  

The deal with Republicans funds the government through the end of January, 2026, and funding for some agencies through September, 2026.  The deal will reverse firings of federal employees during the shutdown, provide back-pay for federal employees, and fully fund SNAP through September 2026.
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The image in this post was generated by a free on-line AI program.
References:
https://en.wikipedia.org/wiki/2025_United_States_federal_government_shutdown#Affordable_Care_Act_subsidies

https://cei.org/blog/obamacares-subsidy-cliff-how-many-enrollees-are-actually-affected/