A liberal democracy, if you can afford it

Turns out the social contract had fine print: “Void where wealthy.”

This week, we’re talking:

• What do your property taxes have to do with plutocrats, NDAs, and the collapse of liberal democracy? More than you’d think 🏠🧾🤷

• Trump’s latest move has tax experts flashing red lights — and historians pointing to Nixon 💰🌊🚨

• Two judges. Two wins. One tech giant suddenly on the ropes 🔍⚖️💥

• New ChatGPT models can guess where a photo was taken — sometimes down to the exact street 📸🧭😬

• A paternity test. A $15 million NDA. And a tech mogul’s quest to “reach legion-level before the apocalypse.” 🍼🤐🧬

• Tom Friedman told Ezra Klein that the US is thinking about China all wrong. Actually, the language he used was pretty straightforward: “we’re screwed.” Is he right?

My Take:

Your taxes were due this week. If you didn’t know, now you know.

And while you were probably busy scrambling to file, Venmoing your accountant, or praying to the extension gods, here’s what billionaires weren’t doing: paying taxes on their paper gains.

For most Americans, their home is their primary asset and source of wealth. It gets taxed every year via property tax. Wealthy people, meanwhile, ride the rocket of rising asset values tax-free, until and unless they decide to sell. Even then, they’ve got loopholes stacked like Legos.

I enjoy the same advantage on my own investments. While it’s legal, I don’t think it’s fair, nor does it make any sense. Why do ordinary Americans pay taxes on paper gains via property taxes but others don’t?

It’s one of the most quietly enraging asymmetries in the system. And it’s where the bipartisan camaraderie among wealthy tech bros really shines. Red or blue, they’ll shit an elephant if you suggest they pony up the same way regular people do.

Remember the fairness principle? The idea that we all play by the same rules? It’s what underpins not just free markets, but liberal democracy itself. Even self-made tech elites (Bezos, Zuck, and company) owe their fortunes to the rich soil conditions provided by a rules-based democratic order and fair, free markets.

We all contribute our share to preserve that order—for our kids, for our grandkids. So they can inherit a democracy, not an inherited aristocracy.

So, one more time:

Why do regular people pay taxes on the potential value of their homes, but millionaires don’t do the same for their assets?

If that asymmetry were better understood, Trump’s promise to slash another $2 trillion in taxes for the wealthy—while simultaneously tanking markets with on-again-off-again tariffs—might not go down so easily. DOGE-coded efforts to "streamline government" are just the sideshow. The main act is an unfair, grinding transfer of wealth from the middle class to an increasingly rapacious oligarchy. While there can be no question that too many government programs suffer from bloat and inefficiency, the solution is to reform and fix them, not to gut them haphazardly.

Our culture reflects the growing discontent with this new normal. There is a reason the new TV and film villains are all Tech CEOs. (Paradise, Industry, The Morning Show, Don’t Look Up, Jurassic World, Ex Machina - I could go on, but you get the point.)

At a recent party, someone mentioned their kid is studying computer science and got hit with: “Oh, are you okay?” It was as if they’d just disclosed that their son had decided to go into the adult film industry or join a drug cartel.

Underneath the question is the presumption that being in tech means you’re either a plutocrat, an asshole, or both. Someone who doesn’t care about fairness, service, or civil society—just compounding your stack.

But it wasn’t always this way.

After the 1929 crash and the Great Depression, we rebooted. The New Deal poured money into infrastructure, created jobs, reined in Wall Street, and ushered in a new ethic of corporate responsibility. Companies reinvested profits into their workers. Unions ensured rising wages and job security. The wealth gap between the machinist and the manager was there, but it was sensible – each worker compensated differentially for his skill and business impact.

In 1932, Adolf Berle and Gardiner Means wrote The Modern Corporation and Private Property, arguing that corporations were inextricably linked to the health of their communities—and therefore bore real responsibilities to them. It wasn’t radical. It was common sense.

GE’s CEO Gerard Swope led the way with what he proudly called “welfare capitalism”—profit sharing, health benefits, better wages. His chairman, Owen D. Young, put it plainly in a speech at Harvard:

“Think in terms of human beings—one group who put their capital in, another who put their lives and labor in a common enterprise for mutual advantage.”

The pendulum had swung away from the Gilded Age. America's success was corporate America's success, and vice versa.

Then Milton Friedman came along and torched the whole thing.

In 1970, he dropped his now-infamous op-ed in the New York Times, declaring: “The social responsibility of business is to increase its profits.”

The idea that companies should prioritize profits above all else became the core argument for reshaping the social contract. Friedman dismissed the notion that businesses had broader duties: “What does it mean to say that ‘business’ has responsibilities? Only people can have responsibilities,” he wrote. He warned that “businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”

The result? Fifty years of CEOs embracing the gospel of short-term profits and externalizing every other cost to middle-class workers and American taxpayers. It reached its pinnacle during the Great Recession of 2008 when the government bailed out banks led by financiers who knew they were operating an unsustainable Ponzi scheme. They had responsibilities but shirked them. Not a single one of them ever went to jail.

Friedman’s logic became the operating system of modern capitalism. Anything that stood in the way of shareholder value was labeled naïve, inefficient, or Marxist. Responsibility was rebranded as weakness. We have now approached the beginning of the end of that ideology.

Rising inequality. Collapsing trust. A new generation that sees tech not as the future, but as the latest avatar of unchecked greed.

We should stop pretending this is normal. It’s not.

Regular people pay their share. Rich people should, too.

If you’re in tech and you still believe in fairness, speak up. Push for a fairer tax code. Support better policy. Pay your taxes to a government that funded your roads, your research, your internet, your first lucky break. Because democracy only works if the powerful believe in it. And right now, they’re cashing out.

My Media Diet:

Google Makes History With Rapid-Fire Antitrust Losses by Steve Lohr via NYTimes 🔍⚖️💥

In a pair of landmark rulings, federal judges found Google guilty of using its dominance in search and ad tech to illegally squash competition — a double whammy that antitrust experts say has no modern precedent. For years, Silicon Valley’s giants have banked on slow courts and shifting politics to dodge serious consequences. But with judges now weighing breakups and regulators staying aggressive across administrations, even Google might have to sweat.

We tried the ChatGPT 'reverse location search' trend, and it's scary by Tim Marcin via Mashable 📸🧭😬

We then uploaded a photo taken from a car on a recent trip to Japan, and ChatGPT's new o3 model was able to identify the exact location. "Final answer:📍 Arashiyama, Kyoto, Japan, near the Togetsukyo Bridge, looking across the Katsura River." When we ran the same prompt with an older reasoning model, the results were much more general: "Given the combination of mountainous terrain, the style of the guardrail, the road, and the overall setting, this looks very much like it could be Japan...The scenery is reminiscent of the areas around Kyoto or Nara, where the countryside meets historic and cultural sites."

With Harvard Threat, Trump Tries to Bend the I.R.S. to His Will By Andrew Duehren, Alan Rappeport and Russ Buettner via NYTimes 💰🌊🚨

Back in office, Trump is picking up where Nixon left off — but without the subtlety. He’s slashing civil servant ranks at the IRS, replacing them with political allies, and threatening Harvard (and other universities) with revoking their tax-exempt status over perceived slights. Tax experts warn that turning the IRS into a revenge machine could gut public trust and tank compliance — because why play by the rules if they’re being written to punish the other team?

“If the I.R.S. becomes politicized, and people feel like only one party is playing by the rules, then I would expect noncompliance would go up.” — Michael Graetz, Columbia Law

The Tactics Elon Musk Uses to Manage His ‘Legion’ of Babies—and Their Mothers by Dana Mattioli via WSJ 🍼🤐🧬

Musk refers to his offspring as a “legion,” a reference to the ancient military units that could contain thousands of soldiers and were key to extending the reach of the Roman Empire. During St. Clair’s pregnancy, Musk suggested that they bring in other women to have even more of their children faster. “To reach legion-level before the apocalypse,” he said to St. Clair in a text message viewed by The Wall Street Journal, “we will need to use surrogates.” He has recruited potential mothers on his social-media platform X, according to some of the people. Musk has used his wealth to buy the silence of some women who have his kids, according to St. Clair as well as other people, text messages and documents reviewed by the Journal.

Buzzings from the Hive:

Going to IAPP Global Privacy Summit in DC? — head to booth #97 to catch Ketch.

👀 New product launching LIVE at IAPP
Drumroll 🍗🍗🍗🍗🍗 our official Ketch mascot debut
Our annual Welcome Hang at Yardbird will be bigger than ever 🎉

Kantar Study Proves Rembrand’s In-Scene Media Drives Significant Brand Awareness and Differentiation

A new study conducted by Kantar, the world’s leading marketing data and analytics company, reveals that Rembrand’s Augmentation Intelligence (RAI) significantly enhances brand awareness and differentiation for advertisers, proving its effectiveness alongside traditional social and video advertising strategies.

The research, based on ten campaigns across multiple industries, found that unaided brand awareness (first mention) increased 1.3 times post-exposure, rising from a control group average of 13% to 28%. Unaided brand awareness (any mention) increased 1.5 times post-exposure, moving from 22% to 37%. The study also showed that brand differentiation measured 1.8 times higher than Kantar norms, with 34% of respondents stating that the brand felt different from others after exposure.