Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

The Great Thing About Britain’s Labour Party Is… Nothing

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On June 22, 2026

13 Comments

So, a possible replacement for the execrable Starmer:

Same old, same old. Saw someone mention that the Polish pension is being reduced to age 60, while the British one will start at 69. So I did a bit of research, and in purchasing parity terms the Polish one is larger. British waterways are full of sewage, because they privatized the water companies, which refuse to treat water properly or maintain the plants they bought from the government, but they are paying massive dividends, and that’s what matters. The NHS is in tatters, as it’s the last thing left for the British government to privatize.

And, of course, the UK has been all in on genocide, not just selling the Israelis weapons, but sending ships and planes to actively defend Israel.

Here’s the latest tracking poll:

Well, isn’t that special. This is far worse than I thought, because Labour is still . And that means Britain is extra special doomed. As I have predicted since about 2020, Britain will be the first western nation to fully un-develop. Reform will win the next election. Since they’re conservative idiots they won’t fix anything. Immigrants will get it in the neck, and yes, Britain has brought in too many, but that’s a symptom, not a cause.

So things won’t improve, then Labour will probably get back in and fuck things up some more. Or perhaps the Conservatives.

I had hoped that the Greens would get into second place and the Labour/Conservative duopoly would be broken. Maybe that will still happen, we’ve got a ways to go and I have great confidence in Labour’s ability to run Britain further into the dirt.

But the likely best case is Reform gets four years, then the Greens get in. At that point we’re into the 2030s, and there isn’t much left of the British economy to work with: you’ve got the City (finance) and not much else. Every month I read about some British industrial company being bought out by foreigners, and then they start moving the jobs out.

More likely is that the Greens (or whoever the left wing alternative is) don’t get into power until the mid 2030s. And maybe the Brits will elect Reform, Labour, Reform. They’ve been electing the wrong person and party reliably since 1979 after all.

There’s a lot of ruin in a nation, but it’s not actually infinite, and the Brits have been ruining their nation since 1914 (arguably since 1890.)

All British elites now are is agents for the rich who are looting the remains of what British of past generations built. And there’s almost nothing left to loot.

 

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

 

 

Week-end Wrap – Political Economy – June 21, 2026

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On June 21, 2026

15 Comments

Week-end Wrap – Political Economy – June 21, 2026

by Tony Wikrent

 

War

US Finally Capitulates with ‘Memorandum’ of Surrender

Simplicius [via Naked Capitalism 06-17-2026]

 

Iran Enlisted “Senior Psychologists” to Help Craft Messages to Trump Ahead of Agreement

[Jeremy Scahill, June 15, 2026 [DropSite]

… “We added two senior psychologists to the negotiations’ advisory circle so that we can shape messages intended for President Trump from the perspective of managing what we regard as psychopathic behavior pattern,” an Iranian official told Drop Site. He said the psychologists began assisting Iranian negotiators following the initial round of bilateral talks in Islamabad in April as the two sides began exchanging proposed terms for a potential Memorandum of Understanding.

“[Trump’s] reactions have improved noticeably since we began incorporating the recommendations of these advisers into our messages and written communications,” said the official, who was not authorized to speak publicly.

“Because the exchanged texts will ultimately become part of the historical record, we conduct our negotiations in a manner that ensures the relative weight and sophistication of each party’s negotiating techniques will be evident should these communications be made public in the years ahead,” the official added….

 

The Race for Hypersonic Missiles

[Wall Street Journal, via Naked Capitalism 06-16-2026]

 

The Future of Warfare is Coming Faster Than Most Think

Karl Sanchez [via Naked Capitalism 06-15-2026]

 

Ukraine’s Naval Drone Program: Origins, Development, and the Organizations Behind It 

[Black Mountain Analysis, via Naked Capitalism 06-15-2026]

Read More

Open Thread

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On June 20, 2026

20 Comments

Use to discuss topics unrelated to recent posts. (No Iran.)

Israel’s Support Is Eroding In the US

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On June 19, 2026

13 Comments

A friend pointed out to me that Israel’s support is eroding hard. The elite consensus is shifting. Point in case:

The hard core Zionists will keep opposing this deal, of course, but there are two groups that are shiftable. The first is the one that Tapper belongs to: he’s an authority follower. He’s been hardcore pro-Israel and loathes Muslims, but his first instinct is to follow the leader. Trump’s made a clear turn, and Jake is following.

The second group are those who need administrative favor. Their livelihood or plans depend on the levers the President controls favoring them. They were for Iraq, for Ukraine, etc… but they have no strong ideological commitment, only self-interest.

Trump made a mistake letting hard core Zionists roll up media and social media, but there’s still enough run by self-interested or follow the leader types that if Trump stays solid, the American elite zeitgeist will shift towards his stance. Israel is an ideological commitment, it’s not, for most elites and courtiers, all that involved with making lots of money or being part of the in-group. If the window shifts, they’ll shift with it.

At a fundamental level what happened is that America got itself involved in a war which it couldn’t just walk away from. Losing in Vietnam was embarrassing but really, who cares? Just walk away. Losing in Afghanistan, likewise.

But the Iranians have the West’s balls in a vise and the vise was slowly tightening. Key reserves were way down. Oil at Cushing OK is near historic lows. Distillates are getting scarce. Market manipulation of the price of oil was very successful, but actual physical shortages were on the way, starting in a month or so. (Ironically, price manipulation meant that oil reserves drew down faster than if actual price discovery had been allowed.)

There is a real world, and a real economy and Iran had control of it. The econo-morons talking about how the effect of this has been less than the oil shocks are right when looking at market numbers, but it wasn’t going to stay less and even Trump figured that out.

So the neocons and the hard Zionists will attack, but if Trump had the least concern for the actual economy, he had to make a choice.

Meanwhile Israel is still fighting in Lebanon and the first real battle of the Lebanese invasion is taking place.

Both Hezbollah and Israel are concerned there’ll be a new, actually real ceasefire and Israel is seeking to create facts on the ground. Ali Taher hill is an important strategic objective, giving whoever controls it sight lines for miles around. This is the first large engagement I’m aware of in this invasion where Hezbollah has chosen to stand and fight, instead hitting and fading. (That’s not a criticism. Guerilla warfare makes sense for them.)

And so far they’re doing well, because the Israeli ground forces are actually crap.

The Iranians have not gone to Geneva for the signing or negotiations. They are holding firm on Lebanon. And that means Trump can either rein in the Israelis or the vise starts tightening around America’s balls again.

America cannot win this war. It is impossible. Even using nukes probably wouldn’t work fast enough. That’s why they agreed to a deal that is very pro-Iranian.

That has not changed. They can rein in Israel or cut it loose now, or they can do it in two months when the US is in much more pain, or in 4 months when there are food riots.

There’s a real world. America lost a war that matters. There’s going to be a price for that. If America is smart and not completely controlled by Israel, they’ll pay that price now and if necessary cut Israel lose, because the price will go up every day if the MOU fails.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

 

Vance Is Trying To Thread That Vice Presidential Needle

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On June 19, 2026

19 Comments

J.D. Vance, Trump’s vice-president has often said that his job is to support the president.

He’s also made sure that people know he was against the Iran war, the 12 day war, and so on, with careful leaks. Publicly he’s all pro-whatever Trump says or does, but he’s trying to have it both ways.

The MOU gave him a present, he was able to say that Israel are ungrateful turds who shouldn’t be so violent: nine million people can’t kill their way out of all of their foreign relations troubles, and that Trump is the only major world leader who has supported them (essentially true. In this calculus only Russia, China, Turkey and the US matter.) Israelis turning on Trump are ungrateful. (Well yes, but you didn’t expect people whose idea of making war is to kill children en-masse to have a fine moral sense.)

Anyway, here he is:

Vance has always had a very narrow road to follow. He wants to be President. He can’t directly oppose Trump on anything publicly because even if Trump is driven from office in disgrace, there’s a hard core of primary voters who will never give him up. On the other hand Trump’s becoming increasingly toxic and it’s pretty clear that he’s going to leave office very unpopular.

This issue killed Kamala. She was ahead and doing well. I still remember when she was asked on TV if there was anything she’d have done different than Biden. She said no. And it was at that moment I knew that Trump was going to win: she needed to say something, even something a bit weak “well, I admire what the President has done, but I’d like to have done even more to bring down grocery prices and to end the Gaza war” say.

Vance is attempting to get around this with his loyalty pledge: you support the President even if you disagree, but you can disagree and advise him so be hind the scenes.

He’s hoping that two-step, “I was loyal to Trump, but I would have done some things differently” will keep him electable.

We’ll see. A lot will depend on who Democrats nominate. Democrats rarely select their most popular candidate, they prefer party loyalists who can be expected to keep the corporate pork rolling and not upset important funders like the Israeli lobby.

If Democrats serve up a lukewarm candidate and if Vance makes his turn correctly, he could squeak in as the next President.

Iran MOU update: As predicted the Israelis kept attacking in Lebanon, the Iranians said they wouldn’t go to the signing in Geneva on Friday till the fighting stops, and negotiations won’t start till they do. Israel appears to be attempting to take an important strategic point Ali al-Taher hill. Hezbollah is going all out to stop them. We’ll see if the US is capable (politically, it can easily do so in principle) of discipling Israel. 

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

Text of the Iran/US MOU

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On June 18, 2026

19 Comments

From Dropsite:

Paragraph 1: (end military ops including in Lebanon: this is the one that may blow it up.)

The United States of America and the Islamic Republic of Iran and their allies in the current war by signing this M.O.U. declare the immediate and permanent termination of military operations on all fronts, including in Lebanon, and undertake from now on not to initiate any war or any military operation against each other, and to refrain [from] the threat or use of force against each other and ensuring the territorial integrity and sovereignty of Lebanon. The final deal will confirm the permanent termination of the war on all fronts, including in Lebanon and other provisions of this paragraph.

Paragraph 2:

The United States of America and the Islamic Republic of Iran undertake to respect each other’s sovereignty and territorial integrity, and to refrain from interfering in each other’s internal affairs.

Paragraph 3: (This ain’t final, more to negotiate.)

The United States of America and the Islamic Republic of Iran commit to negotiating and achieving the final deal in maximum 60 days extendable with mutual consent.

Paragraph 4: (Immediate end of US blockade, Iran has 30 days. US to remove forces.)

Immediately upon the signing of this M.O.U., the United States of America will begin the removal of its naval blockade and any disturbances or impediments against the Islamic Republic of Iran, and will fully end the naval blockade within 30 days. During this period, the traffic of vessels will be in proportion to the numbers of prewar traffic being restored by the Islamic Republic of Iran. The United States of America further undertakes to remove its forces from the proximity of the Islamic Republic of Iran within 30 days after the final deal.

Paragraph 5: (no charge for passage thru the strait. At least for 60 days, I suspect Iran/Oman will try and have charges after that.)

Upon the signing of this M.O.U., the Islamic Republic of Iran will make arrangements using its best efforts for the safe passage of commercial vessels with no charge for 60 days only from the Persian Gulf to the Sea of Oman, and vice versa. The traffic of commercial vessels will immediately start, and considering the need for removing the technical and military obstacles and demining by the Islamic Republic of Iran, will be instated within 30 days. The Islamic Republic of Iran will conduct dialogue with the Sultanate of Oman to define the future administration and maritime services in the Strait of Hormuz, in discussion with other Persian Gulf littoral states in line with the applicable international law and the sovereign rights of coastal states of the Strait of Hormuz.

Paragraph 6: (US pays 300 billion in restitution. This is why Iran agreed to no fees for passage, at least for now.)

The United States of America undertakes with regional partners to develop a definitive, mutually agreed plan with at least U.S.D. 300 billion for the reconstruction and economic development of the Islamic Republic of Iran. The mechanism for the implementation of this plan will be finalized as part of a final deal within 60 days. All required licenses, waivers and permissions needed for the relevant financial transactions will be granted by the United States of America.

Paragraph 7: (End of sanctions.)

The United States of America undertakes to terminate all types of sanctions against the Islamic Republic of Iran, including the United Nations Security Council resolutions, I.A.E.A. Board of Governors resolutions, and all unilateral U.S. sanctions, primary and secondary, in an agreed-upon schedule as part of the final deal. The Islamic Republic of Iran and the United States of America acknowledge the critical importance of the sanctions termination issue above mentioned, and express their intentions to immediately address these issues in the negotiations in order to achieve mutual agreement on them.

Paragraph 8: (No nukes for Iran. Downblending in Iran under IAEA supervision.)

The Islamic Republic of Iran reaffirms that it shall not procure or develop nuclear weapons. The United States of America and the Islamic Republic of Iran have agreed to resolve the disposition of stockpiled, enriched material pursuant to a mechanism that will be mutually agreed upon in accordance with the schedule mentioned in Paragraph 7, with the minimum methodology to be down-blending on site under the supervision of the I.A.E.A. The two parties also agreed to discuss the issue of enrichment and other mutually agreed matters related to the Islamic Republic of Iran’s nuclear needs, based on the statutory framework being agreed upon in the final deal. The final deal will confirm the provisions of this paragraph. The United States of America and the Islamic Republic of Iran acknowledge the critical importance of the nuclear issues above mentioned, and express their intention to immediately address these issues in the negotiation in order to achieve mutual agreement on them.

Paragraph 9: (No new sanctions, no new nuclear program.)

Pending the final deal, the United States of America and the Islamic Republic of Iran agree to maintain the status quo. The Islamic Republic of Iran will maintain the current status quo of its nuclear program, and the United States of America will not impose any new sanctions, and will not deploy additional forces in the region.

Paragraph 10: (Again, end of sanctions: this time for oil products.)

The United States of America undertakes that immediately upon the signing of this M.O.U., and until the termination of sanctions, U.S. Department of Treasury will issue waivers for the export of Iranian crude oil, petroleum products and derivatives, and all associated services, including banking transactions, insurances, transportation, etc.

Paragraph 11: (Release of all frozen funds.)

The United States of America undertakes to make fully available for use the frozen or restricted funds and assets of the Islamic Republic of Iran upon the implementation of this M.O.U. The United States of America and the Islamic Republic of Iran will mutually agree on the procedures related to the release of these funds during the negotiations. Such funds, whether retained in the original account or transferred, shall be made fully usable for payment to any ultimate beneficiary designated by the Central Bank of the Islamic Republic of Iran. The United States of America undertakes to issue all necessary licenses and authorizations accordingly.

Paragraph 12:

The United States of America and Islamic Republic of Iran agree that an executive mechanism will be established to monitor the successful implementation of this M.O.U. and the future compliance of the final deal.

Paragraph 13: (Negotiation not over yet.)

After signing this M.O.U. and subject to the beginning of the implementation of Paragraphs 1, 4, 5, 10 and 11 of this M.O.U., and the continuing implementation of these measures, the United States of America and the Islamic Republic of Iran will start negotiations regarding the final deal exclusively on the other paragraphs.

Paragraph 14:

The final deal will be endorsed by a binding U.N.S.C. resolution.

Commentary:

This is a decisive victory for Iran and a loss for Israel and America, though I’d argue that the US ending sanctions and military efforts in the Middle East is good for America. Still, there’s no question that this is the sort of deal that gets signed when one side (Iran) won and the other side (Israel and the US) lost.

I mean — 300 billion in reparations. The US end their blockade first. The US says it’ll get move forces out of the region. The US ends pretty much all sanctions and gives Iran back their money.

Massive win for Iran. Iran is now a great power in the region, and no one can deny it.

The obvious problem here is Israel. If Iran is serious about an end to violence in Lebanon, then this will wind up as a dead letter unless the US tightens Israel’s leash (which it can do, Israel is entirely dependent on US aid). Alternative the US could simply shrug, and make the deal only between them and Iran, and say “if Israel wants to keep fighting, it’s on its own.)

The question here is the power of the domestic lobby, and whether or not Israel has enough blackmail on Trump. (Signing this deal at all makes it look like the answer to , which I thought was “absolutely” may well be “nope, not enough.” We’ll see.)

The US is no longer a superpower. The world no longer has any superpowers. It’s still a great power with worldwide reach, but the days where it was the world’s “super cop” are over. It can still push around weak nations, but not strong regional powers. Took a little less than 30 years from the fall of the USSR for American elites to screw up a completely dominant position.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

Microsoft To Offer Deepseek Based AI Copilot

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On June 17, 2026

4 Comments

Regular readers will know that for a couple years I’ve been saying that Chinese open source AI would win the AI “war” because it’s cheaper and non proprietary (prices can’t just be raised suddenly, or capacities taken away.)

Over the last few months there’s been a lot of screams coming from regular AI users. OpenAI and Anthropic moved to token based billing, which is to say “you pay based on how much you use.” They still weren’t charging full rate, but they were charging a LOT more and users were not happy. One company spent 500 million by mistake: they forgot to put limits on how much their employees could spend.

Oops.

Nor are ordinary users exempt:

I Went From $3,000/Month on Claude to $5/Week on DeepSeek

And honestly? 80% of my work is identical.

For the past two months, I was burning $3-5K monthly on Claude Code. Every idea from design to development to testing – full end-to-end automation, even simulating users to test my products and provide feedback. Extremely token-intensive.

But Claude’s caching sucked, making it insanely expensive. Then I discovered DeepSeek V4.

The numbers: • Claude: $5 input, $25 output per million tokens •

DeepSeek: $0.28 input, <$1 output (with their current discount) • DeepSeek cached: $0.0002 – literally less than a penny The caching optimization is game-changing.

Once DeepSeek has seen content, it basically stops charging tokens. My result: $5/week vs $1,000/week for the same workload.

So now Microsoft has created their own minor Deepseek fork, and will run it on their servers to power Copilot. You can still use a version run by US labs, but if you can’t afford, or justify that, you can use the Deepseek version.

Driving the news: Microsoft says companies using Copilot Cowork will pay based on how much compute they use.
  • The company tells Axios it is exploring a fine-tuned version of DeepSeek V4, or another open-source model, as a lower-cost alternative to the Anthropic and OpenAI models now powering Copilot Cowork.
  • Microsoft says it expects to make a lower-cost model available in the coming weeks and will confirm its choice then.

Worse than this, there’s beginning to be serious pushback on whether AI is all that useful. Uber’s COO opened the door back in March:

In perhaps the most high-profile example of this growing concern yet, Uber COO Andrew Macdonald acknowledged during a recent podcast appearance that gains in productivity simply weren’t being reflected in the oodles of cash the company has been shelling out on AI.

“That link is not there yet, right?” he told Rapid Response host Bob Safian. “I think maybe implicitly there is more that is getting shipped, but it’s very hard to draw a line between one of those stats and, ‘Okay, now we’re actually producing 25 percent more useful consumer features.'”

“If you’re not actually able to draw a direct line to how much useful features and functionality you’re shipping to your users that trade becomes harder to justify because it’s not free,” he complained. “AI is not free.”

As far as I can tell there’s little evidence that US priced AI is more cost-effective than the employees who were laid off because it was so great. I rather suspect that in most cases, it’s less cost-effective.

But more importantly we have the “it’s better to be wrong with the crowd” effect moving against AI. In almost all positions, including executive ones, if you’re wrong in the same way that everyone else is wrong, it’s no big deal. If you’re wrong against the crowd (say not getting into AI when the rest of your industry is) and it turns out that AI is the next big thing, well, you’re fired.

So much of the AI mania was driven by this and a relentless hype cycle. Now that important people are beginning to push back on it, it’s no longer required to be all-in on AI. And that’s bad for Anthropic and Claude.

AI is not the next coming. It is not going to make it to general AI (not this generation of large language models anyway) and while it does have some utility the US frontier models cost far more to operate than any conceivable return most of their customers will receive. It isn’t the “get rid of three-quarters of your employees” super app corporate leaders were promised.

And to the extent it is useful, well Chinese open source models are more cost effective. As good? Generally no. But they keep catching up, and paying 70 to 97% less makes up for being somewhat behind.

So to the extent that AI is a real industry, odds are high China’s going to win the race. Since the models that will win will be built off open source models that’s not a crisis for anyone, it’s a good thing, far better than a proprietary future.

BUT it does mean that US AI expenditures are probably going to turn out to be the biggest misallocation of resources in centuries: bigger than the housing bubble and bigger than the dot-com bubble (which at least did have a world changing technology behind it.) Not quite the Dutch tulip bubble, but at least the Dutch got lots of pretty flowers of that, instead of massive ugly data centers.

Business is driven by stupid people engaged in group think, especially in the West, far more than most people will admit. Everything Silicon Valley does these days is someone trying to create a monopoly or oligopoly so they can be insanely profitable, while China actually competes on price, and that’s why China keeps eating the West’s lunch.

I’d cry, except that an open source AI world is a far better one than a proprietary one, and every tear some Silicon Valley tech bro cries over a lost opportunity to make a monopolistic buck an angel gets their wings.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

 

The Cruelty Is the Point: American Execution Edition

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On June 16, 2026

9 Comments

I recently stumbled across a story about the Supreme Court (not exactly bleeding heart liberals) refusing to let Alabama use nitrogen suffocation:

An Alabama man facing the death penalty by nitrogen gas was spared Thursday as the U.S. Supreme Court refused to set aside a lower-court ruling that found the method is unconstitutionally cruel, issuing a brief order that came well after the hour originally planned to initiate Jeffery Lee’s execution…

…During the previous Alabama nitrogen executions, the inmates shook, pulled at the restraints and exhibited labored breathing. During the state’s last execution by nitrogen gas, 30 minutes elapsed between Anthony Boyd exhibiting signs of being impacted by the gas and state officials closing the curtain to the viewing room to signal the execution was complete.

The idea is that you breathe, but the gas you’re breathing is nitrogen, so eventually you die.

Of course this is going to suck, anyone who’s ever suffocated or had serious breathing issues knows that one of the worst feelings in the world is not being able to breathe.

There’s been a lot of this sort of thing going on: the company that used to sell drugs for execution stopped doing so, and various US states have been looking for alternatives. The prisoner in this case wants a firing squad, figuring it’s quicker and less painful.

Meanwhile up here in Canada we have legal assisted suicide. It’s a controversial program, because it seems like the government or various relatives are a little too eager about it. (After all, dead people don’t take up hospital beds and dead relatives don’t cause problems.) I think assisted suicide is often a good thing, but easily abused, however we’ll leave a moral deep dive for another article.

The thing is there’s never any criticism that it is a painful death. I looked into it. They give the patient:

  1. An anxiolytic and sedative drug: Midazoloam.
  2. They give them a drug to put them into a coma-like state with a rapid acting drug: Profofol. Then,
  3. They give them a drug which causes paralysis, including of the lungs. Rocuronium. The patient dies of suffocation, same as with helium (or Hemlock, which Socrates was executed with.)

But the patient doesn’t suffer, because they’re deeply unconscious.

This protocol works, it’s well known, so why not use it?

Because Alabama and other US states want the prisoner to suffer. Moaning about expense is ridiculous, however expensive it is it’s cheaper than keeping a prisoner on death row, same as it’s cheaper than keeping a patient in hospital.

Executing prisoners without causing undue suffering is a solved problem. Alabama and other states like it just want the prisoner to suffer, so they keep searching for a method that will be painful and courts will allow.

What I write here is for the benefit of everyone, but alas, I live in capitalism and I, and the site, take money to keep running. If you value the writing here and can, please subscribe or donate.

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