Links I, 08-06-2025: Monetary power (is structural), enshittification vs empire

Charity concert in memory of Woody Guthrie from 1970:

Sarah Bauerle Danzman is all over this Planet Money episode on Trump’s “Golden Share” of US/Nippon Steel.

Blayne Haggart and Randall Germain resuscitate Susan Strange’s relevance. This project has been underway for over a decade already, altho they seem not to have noticed.

Karthik Sankaran on the confusions of US monetary policy and the possibilities for de-dollarization of the global economy. I’ll write more about this eventually.

American power is not being enshittified, it is being corrupted into an imperial logic. These are not the same, and the difference is important in its implications: platforms can be exited, empires cannot be. Primer on enshittification for those needing context. More on this later, probably.

London is the new Vienna?

Antonia Hitchens — rapidly shedding the qualifier “Christopher’s daughter,” now one of America’s better political journalists in her own right — on the enshittification of the US government.

Does Bretton Woods II break in Hong Kong? If so, does Triffin’s dilemma kick back in? I published an essay on this back in 2014 (emph added):

Repeated attempts at moderating American influence in the monetary system has demonstrated that it is unlikely that the U.S. can beeffectively constrained by other economic actors or international institutions. Its domestic politics require its leaders to treat the interests of outsiders as secondary considerations. And because the monetary network is so organized around the U.S., with the former “second world” as well as elements of the “third world” rapidly integrating into the global economy, when the U.S. does act the effects are systemic. Thus the well-worn expression “when the U.S. sneezes the world catches a cold”: when American monetary policy changes in response to the needs of the U.S. economy the effects are contagious. Thus the U.S. has more influence and autonomy in the monetary system than any other state, and these are manifestations of power.

As the global economy develops previous arrangements become increasingly strained, imbalances mount, and adjustment becomes necessary. If the U.S. adjusts in response to domestic political pressure, as it has on multiple occasions since the 1960s, other countries will be forced to adjust as well. Because of its prominent position the U.S. is able to push the cost of adjustment onto others to a disproportionate extent. If adjustments are not managed properly, perhaps because entrenched domestic interest groups resist reforms, then a crisis somewhere in the system is likely. …

Ultimately, though, these actions will only be successful to the extent that the U.S. government, and especially the Federal Reserve, is cooperative. No other institution is capable of sustaining the system in the same way, but because the U.S. benefits so extensively from the preservation of this order, it is likely to take sufficient actions to maintain systemic integrity for as long as it is able. If the Federal Reserve ever is unwilling or unable to preserve the structure of the monetary system, or if the U.S.’s elected leaders refuse to allow it to do so, then a shift away from American monetary prominence may occur. Absent those two conditions being met an approach informed by network theory indicates that is difficult to imagine how such a transformation could take place. In the postwar era, at each moment that it appeared that American monetary hegemony might dissipate its primary challenger has been severely weakened, often as the result of an American policy innovation. And because positive feedback mechanisms inherent in networks with hierarchical topologies tend to reinforce the network structure over time, and even exacerbate it, it becomes increasingly likely that continued American prominence is a prerequisite for system stability.

Song of the day: