The Shutdown

Thanks for reading this newsletter. I ordinarily write about what’s on my mind with an eye toward what’s happening out there.

So what’s happening out there? Well, there’s a federal shutdown on that is cutting off food stamps to tens of millions of American families – about 1 out of 8 families rely on SNAP benefits each month. Two federal judges ruled that the government has to tap emergency funds to pay for SNAP, but it’s unclear how much money is going to get out or when it will reach people, many of whom have already been notified that they won’t get money this month. Also, healthcare premiums are spiking for millions because the government reduced subsidies for Obamacare and the new rates hit on Saturday.

I thought that reason would prevail and that both sides would come to the table before the weekend. After all, why incur all of this hurt, suffering and confusion just to revisit it 48 or 72 hours later?

Things are even worse than I thought. And I thought they were pretty bad. I do think the shutdown gets resolved early this week, but for millions, the damage will have been done.

I’ve had a grim and haunting thought a lot in the past 72 hours: the poor don’t matter in America.

I felt the same way when the enhanced child tax credit – which had cut child poverty in half in 2021 – was allowed to lapse at the beginning of 2022. “We pulled you out of poverty . . . and now you’re heading back down” was the message to millions of American families. There were no protests. Not more than a few press mentions. Just a return to misery.

It’s happening again.

I’ve felt like it’s not getting enough attention that millions of the most cash-strapped Americans are having food stamps cut off for the first time in modern history. Look, on a day-to-day basis most journalists aren’t themselves reliant on SNAP to pay for food – I get that. But even in the media, it seems like this is being treated as a more normal story instead of an historic dereliction of responsibility.

Also this past week, Amazon announced layoffs of 14,000 white-collar workers due to AI, which will set off similar moves at other companies.

Just about every day, someone says to me some version of, “Well, you called AI eating jobs back when no one was talking about it.”

I wrote ‘The War on Normal People’ back in 2018. My fear back then was that as AI kicked in, we would start turning on each other. I wrote, “Increasing levels of desperation will lead to destabilization . . . the best-case scenario is a hyper-stratified society like something out of The Hunger Games, the worst case is widespread despair, violence and the utter collapse of our society and economy.” Maybe it seemed a little bit dystopian back then, but it’s aging well.

One outgrowth of AI is an increasing skepticism of capitalism. As I wrote in TWoNP,

“Capital and efficiency will prefer robots, software, AI and machines to people more and more. Capitalism is like our mentor and guiding light, to whom we’ve listened for years. He helped us make great decisions for a long time. But at some point, he got older, teamed up with his friend technology, and together they became more extreme. They started saying things like ‘Ah, let’s automate everything’ and ‘If the market doesn’t like it, get rid of it’ which made reasonable people increasingly nervous. Even the most hard-nosed businessperson should recognize that the gains and losses from unprecedented technological advances will have dramatic sets of winners and losers, and that the system needs to account for that in order to continue. Capitalism doesn’t work that well if people don’t have any money to buy things or if communities are degenerating into scarcity, anger and despair.”

I’m appearing on the news a lot this week to talk about the mayoral race and the rise of Zohran Mamdani. On CNBC last week, I was asked about New York City, the home of Wall Street, electing a Democratic Socialist as mayor. I answered, “Socialism isn’t a smear to many folks in New York who can’t afford a decent life and have experienced this version of capitalism, which is going to get a lot worse with AI.”

My response in 2020 was to run for President on the idea that government could do much more to alleviate poverty.

Instead, we’re doing less. Dysfunction is increasingly the norm. Just play to your team and ignore the rest. These are sad days.

Check out Forward for a set of local candidates that might be up for election near you. For my conversation with Arthur Brooks of Harvard and the Atlantic on how technology is separating us from our deeper selves, click here. Offline is on the way to Brooklyn, Chicago, SF and LA in November with Scott Galloway’s podcast tour - come out and say hi. Email matt@noblemobile.com if you’d like a few free months off of your wireless bill via Noble. Every bit helps.