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DC insider: America faces more Trumps — or worse
Profit Is the Policy
The Ledger
The source gives away the whole story in the numbers. Worker compensation rose 0.8 percent from the fourth quarter of 2025 to the first quarter of 2026. Corporate profits rose 2.7 percent. Since the end of 2019, hourly wages are up 3 percent in real terms while corporate profits are up 50 percent. Workers now take the smallest share of national income since 1947, while profits claim the largest share since 1950.
That is not a mysterious economic drift. It is a transfer.
Who Holds Power
Actual institutional power sits with the firms that dominate prices, jobs, credit, health care, energy, logistics, and capital itself: Amazon, Alphabet, Apple, Microsoft, Nvidia, Meta, Walmart, the big insurers, the big banks, the oil majors, and the private equity giants. The source is right to call them the gravitational center of the economy. These are not passive market participants. They shape what is paid, what is charged, what is financed, and what becomes politically possible.
When corporations can both raise prices and suppress wages, they are not merely “successful.” They are governing.
How Blame Gets Blurred
The weakest part of the framing is the polite question mark around power. “Did Trump decide to go to war because he thought it necessary, or because Big Oil nudged him into it?” That is too generous to the structure. The point is not whether one industry whispered in one president’s ear. The point is that concentrated capital has the leverage to make public policy indistinguishable from private gain.
When energy prices surge and energy profits follow, the system does not look confused. It looks captured.
Labor Was Stripped First
The source notes that more than a third of private-sector workers were unionized in the 1950s and that number is now 6 percent. That collapse matters more than any single presidential speech. Once labor lost bargaining power, wages stopped setting the terms of growth and profits did. Global labor substitution and software have made workers easier to replace; AI is about to sharpen that threat.
This is why the coming wave of AI is not just a technological story. It is a bargaining story. If labor has no leverage, automation becomes a tool for extraction, not productivity.
AI as Accelerant
The article correctly sees AI as an accelerant, not a cause. The deeper trend toward higher profits and lower wages began decades ago, but AI will intensify it by enlarging the class of people whose labor can be discounted, displaced, or made precarious. The expected trillion-dollar valuations for SpaceX, OpenAI, and Anthropic are not merely a sign of innovation. They are a bet that wealth will keep concentrating upward while the costs are socialized downward.
That is why vague reassurances about “innovation” are political cover. The gains are being priced for capital. The losses are being assigned to everyone else.
The Pattern Beneath the Story
The larger pattern is simple: monopoly power, weak labor, and political dependence have fused into a single regime of extraction. That regime produces anger, then blames the anger, then sells demagogues as the answer. Trump is not an accident outside the system; he is one of its recurring outputs. The source says as much, even if it still sounds surprised by the result.
The real lesson is harsher. When wages are crushed, profits are protected, and public policy bends toward concentrated wealth, authoritarian politics does not arrive from nowhere. It is what institutional cowardice looks like after it has been monetized.
Get full access to Systemic Error at paulstsmith.substack.com/subscribe
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By Paulo SantosProfit Is the Policy
The Ledger
The source gives away the whole story in the numbers. Worker compensation rose 0.8 percent from the fourth quarter of 2025 to the first quarter of 2026. Corporate profits rose 2.7 percent. Since the end of 2019, hourly wages are up 3 percent in real terms while corporate profits are up 50 percent. Workers now take the smallest share of national income since 1947, while profits claim the largest share since 1950.
That is not a mysterious economic drift. It is a transfer.
Who Holds Power
Actual institutional power sits with the firms that dominate prices, jobs, credit, health care, energy, logistics, and capital itself: Amazon, Alphabet, Apple, Microsoft, Nvidia, Meta, Walmart, the big insurers, the big banks, the oil majors, and the private equity giants. The source is right to call them the gravitational center of the economy. These are not passive market participants. They shape what is paid, what is charged, what is financed, and what becomes politically possible.
When corporations can both raise prices and suppress wages, they are not merely “successful.” They are governing.
How Blame Gets Blurred
The weakest part of the framing is the polite question mark around power. “Did Trump decide to go to war because he thought it necessary, or because Big Oil nudged him into it?” That is too generous to the structure. The point is not whether one industry whispered in one president’s ear. The point is that concentrated capital has the leverage to make public policy indistinguishable from private gain.
When energy prices surge and energy profits follow, the system does not look confused. It looks captured.
Labor Was Stripped First
The source notes that more than a third of private-sector workers were unionized in the 1950s and that number is now 6 percent. That collapse matters more than any single presidential speech. Once labor lost bargaining power, wages stopped setting the terms of growth and profits did. Global labor substitution and software have made workers easier to replace; AI is about to sharpen that threat.
This is why the coming wave of AI is not just a technological story. It is a bargaining story. If labor has no leverage, automation becomes a tool for extraction, not productivity.
AI as Accelerant
The article correctly sees AI as an accelerant, not a cause. The deeper trend toward higher profits and lower wages began decades ago, but AI will intensify it by enlarging the class of people whose labor can be discounted, displaced, or made precarious. The expected trillion-dollar valuations for SpaceX, OpenAI, and Anthropic are not merely a sign of innovation. They are a bet that wealth will keep concentrating upward while the costs are socialized downward.
That is why vague reassurances about “innovation” are political cover. The gains are being priced for capital. The losses are being assigned to everyone else.
The Pattern Beneath the Story
The larger pattern is simple: monopoly power, weak labor, and political dependence have fused into a single regime of extraction. That regime produces anger, then blames the anger, then sells demagogues as the answer. Trump is not an accident outside the system; he is one of its recurring outputs. The source says as much, even if it still sounds surprised by the result.
The real lesson is harsher. When wages are crushed, profits are protected, and public policy bends toward concentrated wealth, authoritarian politics does not arrive from nowhere. It is what institutional cowardice looks like after it has been monetized.
Get full access to Systemic Error at paulstsmith.substack.com/subscribe