Covid, the Crisis of Government Ops, and the Collateral Damage of the Crypto Craze

Two new books peel back how America mishandled the pandemic and how political grifters played the system for all their money could buy.

What, exactly, have we been up to since the pandemic began three years ago? Before those times get completely swept down the memory hole and we get dragged inexorably into the vortex of the 2024 election, I want to share some gleanings from two new books that come at that question from very different angles: Lessons From the Covid War, written by Philip Zelikow on behalf of the Covid Crisis Group; and The Big Break: The Gamblers, Party Animals & True Believers Trying to Win Washington While America Loses its Mind, by Ben Terris of the Washington Post.

Before you ask what these two books could possibly do with each other, let me state their main point of intersection: Zelikow et al shows how national policymakers mostly failed to address the pandemic with any degree of competence, leading him to ask “Is America still capable of solving big problems?” And Terris shows how Democratic politicos spent the 2020-2022 political cycle chasing the whims of a crypto billionaire who claimed to be interested in pandemic prevention, completely in thrall to his money rather than anything sensible, while Republican politicos sought to cash in on the rampant opportunities offered by the most transactional and corrupt administration since Nixon. Some of our inability to solve big problems is rooted elsewhere, in the kinds of bureaucratic bottlenecks described so well by Jen Pahlka’s book Recoding America, which I discussed here last week. But some are also related to how big money is corrupting our political professionals, incentivizing them to do more to burnish their brands and line their pockets than serve their country. The incentives are out of alignment.

You’ve probably heard of the Terris book because of an excerpt (gift link) that ran in the Washington Post in late April that zeroed in on one of the main characters in his portrait of contemporary Washington lobbying world, Sean McElwee, the 28-year-old co-founder of Data for Progress and the political gambler in Terris’ subtitle, who lost his privileged perch among DC’s cool kids for placing bets against some of his political clients. I’m not going to try to parse that story here, other than to say that McElwee, who I met once a few years ago at a dinner party in Manhattan, reminds me of a type of person seen a lot across the political ecosystem, “the young man in a hurry.” That is, someone typically in their 20s who has decided the most important thing they can do is climb the greasy pole to status. While Terris is interested in him because he’s a compelling character for his somewhat thin book, for me what’s more important is how McElwee’s rise to fame and fortune was powered by his proximity to Sam and Gabe Bankman-Fried’s money, the sharks who plied DC’s waters during these years. McElwee was just one of their fins. More on that in a moment.

Lessons From the Covid War is a short, very readable book with one key aim, as Zelikow pithily puts it: “to alleviate the symptoms of reflection deficit disorder.” But let me warn you. Digesting its contents and relating them to your friends or colleagues will not make you the life of the party. Like other national disasters from our recent past, no one – including the Biden White House and other top Democrats -- wants to talk about the pandemic. (I’m sure it polls terribly.) The people who collaborated with Zelikow in the Covid Crisis Group--public health experts, former top health officials from both Democratic and Republican administrations, leading academics, and one grassroots Covid activist--are different. They are angry. As he writes, “They are angry because they feel they feel that good Americans, all over the country, were let down by ineffective institutions, a slow and uneven initial response, shoddy defenses,, and inadequate leadership….Americans improvised to fight this war, usually doing the best they could. They had to struggle with systems that made success hard and failure easy.”

I found myself underlining constantly as I read Lessons From the Covid War. Here are some top examples:

• Members of the Covid Crisis Group realized early on that “Trump was a comorbidity,” as in a condition that heightens the risk of illness and death.

• At least seven million Americans were hospitalized in the first two years of Covid and more than 1.2 million died, one-third of whom were young or middle age.

• If the U.S. death rate had been similar to the European one, we would have had 391,000 fewer deaths in those two years.

• “Spain performed about 50 percent better in saving its citizens than Florida did….Italy, with its much more elderly population, still performed about 30 percent better than Florida.” (Take that, Ron DeSanctimonious!)

• “During April and May of 2020, the federal government’s executive role in the day-to-day management of the Covid crisis effectively ceased to exist.”

• “What the Covid war exposed…is the erosion of operational capabilities in much of American civilian governance.”

• “No large interest groups have emerged to press for change, except for some tireless efforts by some associations and survivors (often stricken by Long Covid) and the families of some victims.”

• “The policy agendas of both major American political parties appear mostly undisturbed by this pandemic. There is no momentum to fix the system.”

• “One common denominator stands out to us that spans the political spectrum. Leaders have drifted into treating this pandemic as if it were an unavoidable natural catastrophe.”

• “In the absence of a clear picture [of what actually happened], in the absence of constructive ideas for change, people become fatalistic. Their leaders are treating the pandemic as if it were an inescapable tragedy. It is as if a hundred years ago, accepting that life brings fires and floods, it never occurred to anyone that there could be such a thing as building codes or levees.”

That’s all just from the book’s first chapter. The whole thing is worth a close reading. It’s the glaring absence of this clear perspective from what passes for the contemporary discourse that leaves me shocked. For example, when Anthony Fauci took his final lap of national media upon his retirement from running the National Institute of Allergy and Infectious Diseases for four decades, did we get a real accounting of his role in the crisis? No, we got more fog of war. David Wallace-Wells interviewed him for the New York Times magazine and asked straight out, “What went wrong?” Fauci dodged, answering “Something clearly went wrong. And I don’t know exactly what it was.” Pushed, he ventures, “some very strange psychodynamics were going on in our country.” (Amazingly, for anyone who has paid attention, Fauci even claimed to Wallace-Wells that if the US had implemented shutdowns in the middle of February rather than a month later, it might not have made any difference, when epidemiologists are sure that tamping the spread sooner would have saved thousands of lives.)

Considering how much Democrats claim to be the party of government, the party that believes in making sure government is a positive force in people’s lives, Lessons From the Covid War offers many lines of opportunity. But in the first two years of the Biden administration and Democratic control of Congress, they spent no time building the historic record of the Trump administration’s Covid failures (say, compared to January 6). Did you know, for example, that July 2020 as the first wave of the virus spread across the country, White House pollster Tony Fabrizio told Trump that 81% of Republicans supported some kind of mask requirement? The idea was shot down by Mark Meadows, the White House chief of staff, “ who told Trump “We can’t do the masks. The base will just turn on you.” By prematurely declaring victory over Covid and then struggling to deal with the Omicron wave, Biden has done a very poor job of educating the public about the complex realities of this evolving virus.

Nor did his administration make a serious effort at rebuilding civic trust on the backbone of the initial vaccine distribution drive, something I’ve written about before. If there’s any silver lining from the last three years, it’s in “how common it was to find selfless cooperation, people sharing best practices and regularly supporting one another across state lines and all political persuasions,” Zelikow writes. We’re going to have to keep that in mind.

Unfortunately, the pathological way that big money warps the political arena, coupled with the death spiral that is the “two-party doom loop,” seemingly insures that as we head into 2024 we’re not about to get any new leaders who dare to say anything critical and sensible about pandemic preparedness or the larger needs of our public health systems. On the Republican side, there is an emerging competition to stake out one’s bona fides solely as a Covid skeptic, led by Governor DeSantis. And on the Democratic side, there’s silence about what actually matters (since no one will speak ill of Biden), which is creating a perverse opportunity for an anti-vaccine activist with a famous name, Robert Kennedy Jr., to soak up attention.

Always Follow the Money

Looking back at the midterm election cycle, it’s striking how much Republicans ran toward their base on the various hot-button issues raised in the wake of the pandemic, like opposing mask mandates, complaining about school shutdowns, and normalizing anti-vaccine attitudes, while Democrats ran … towards the money. And specifically, towards the new money gushing out of the Bankman-Frieds. Terris does a good job of illustrating how that worked, showing how the tens of millions Sam poured into his brother Gabe’s Super PAC Protect Our Future created a reality distortion field around them. If The Big Break has a hero, it’s progressive heiress Leah Hunt-Hendrix, whose Way to Win fundraising network scrambled to fend off the effects of their money on her preferred primary candidates.

One of the more colorful sections of the book shows how Hunt-Hendrix was helped by Marvin Ammori, a net neutrality advocate who had become the chief legal officer for a crypto exchange called Uniswap. Apparently Ammori believed that the industry needed some housecleaning but also imagined that it could be used to “democratize finance,” and so the two joined forces to see if they could advance a “progressive agenda” for cryptocurrency as a way to work with the Bankman-Frieds. And that is how a young Bernie Sanders supporter turned candidate for a Florida House seat, Maxwell Frost, came to be the first challenger to have a “National Crypto Advisory Council,” stocked with people like Sean McElwee. (More on that here and here.) Once Frost got elected, Terris writes that Hunt-Hendrix even permitted herself to imagine that she had managed to cobble together a new progressive coalition—people who thought crypto was important and here to stay but in need of some regulation, who were otherwise progressives. Uh-huh.

“It’s the [Bankman-Frieds’] first cycle, and sort of chaotic,” Hunt-Hendrix told Terris. “I want to get them on our side.” So she didn’t complain publicly about how they were screwing other young progressive candidates like Nida Allam, a promising North Carolina county commissioner who was blown out of her primary by their crypto money (along with attack ads from an AIPAC group. “My lesson from this is if you have a super PAC and you come in with enough money per district, you can make the political field care about whatever issue you want,” Hunt-Hendrix concluded.

“I spent a lot of the year staring into the eyes of politicians,” Gabe Bankman-Fried told Terris. “And I don’t think it’s a helpless endeavor. I mean, you get a sense of who is legit.” Seriously, folks, sitting on a big pile of money doesn’t make you smarter. Terris writes that “Gabe’s days were all meetings, with candidates, with Chuck Schumer, with top White House officials.” He knew they were just there in hopes of a possible payday, but imagined that all this access meant his issue—preventing future pandemics—was also getting more than lip service. If it wasn’t so deathly important, this whole scene would be tremendously amusing: a bullshit artist backed by a bullshit billionaire being bullshitted by the best bullshitters inside the Beltway.

As Terris illustrates, Gabe used his brother’s billions to act like a “one-man advocacy group” for a $30 billion package aimed at shoring up things like production of masks and respirators, replenishing medical stockpiles and proactively developing more vaccines. Since he had money, people took his calls. But, other than hiring people like Sean McElwee to help “socialize” the importance of this proposed legislation by talking it up among his pals, he invested nothing in actually building any kind of grass-roots power base to push his plan forward. And so it was among the first measures to be dropped as Congress debated the big infrastructure bills of 2022.

According to OpenSecrets, “Cryptocurrency industry lobbying and political contributions skyrocketed in 2022.” Spending on lobbying alone jumped from $2.5 million in 2020 to $21.6 million in 2022. Coinbase, the US crypto exchange now being sued by the SEC for running an illegal currency exchange, hired three former Schumer staffers to lobby for it. Alone, the company spent $3.4 million on lobbying in 2022, more than any other in the industry. And political contributions from crypto firms and executives jumped ten-fold in 2022 to $2.3 million, of which nearly a million came from Sam Bankman-Fried. That number, of course, was dwarfed by the $38.8 million he pumped into outside groups during the cycle, along with tens of millions more from his FTX colleagues Ryan Salame and Nishad Singh. (And this is all an undercount, since it leaves out the political machinations of other firms and individuals with big investments in crypto, like Reid Hoffman, who bet big on bitcoin and invested early in companies like Coinbase.)

What we probably will never know is just how much additional collateral damage the crypto craze did to the political fabric, or the opportunity cost of so much political talent tilted toward a bullshit effort to address the pandemic crisis instead of something serious. I don’t think there’s been much of a reckoning or even much chagrin among the people who played along while the money seemed good. But best to let Ari Rabin-Havt, a former top aide to Bernie Sanders who frequently showed up at Sean McElwee’s poker nights, have the last word, per Terris [Mom, stop reading here]: “It’s so gross. You have all these fucking Democratic operatives being like: ‘Let me tickle your taint. I’ll take the left ball, you take the right ball. And, oh, by the way, would you consider a donation to my blabbity blah blah.’ Tell me what Gabe Bankman-Fried has fuckin’ accomplished. Other than being sperm ejaculated from the same fucking nuts as his brother, what has he done in life? I’m not trying to insult the guy.”

Odds and Ends

—Disinformation researchers are dealing with a outpouring of demands from House Judiciary Committee Chairman Jim Jordan (R-OH), Naomi Nix and Joseph Menn report for the Washington Post. Among the organizations targeted with broad documents requests: the Stanford Internet Observatory, the University of Washington, the National Conference on Citizenship, and New York University’s Center for Social Media and Politics and its Tandon School of Engineering.

—A wellness nonprofit, the National Eating Disorder Association, decided to shut down its hotline after workers voted to unionize, and instead rely on its AI wellness chatbot, Tessa, to handle calls for help. That was until a viral social media post showing how the chatbot was encouraging unhealthy eating habits. “This robot causes harm,” Sharon Maxwell wrote. “Every single thing Tessa suggested were things that led to the development of my eating disorder.”

—The Electronic Privacy Information Center is out with a preliminary but comprehensive look at all the harms that generative AI can produce, including turbocharging information manipulation, harassment, impersonation, extortion, increased opaque data collection, increased data security risks, damages to intellectual property rights, worsening climate change, labor manipulation, theft and displacement, discrimination, and more market concentration.

—New York City councilmember Justin Brannan has the best line in this long reported piece by Politico’s David Freedlander on why Republicans are gaining ground in New York, a supposedly blue state: “Well, we beat Trump and everyone went back to sleep,” Brannan said. “But he planted the seeds, and they are growing.”

Deep Thoughts

Make time for Nina Luo’s new essay in Dissent on “Money Power” which explores the ways funders distort progressive organizing and suggests some ways forward.

End Times

If you need a laugh, Ben Palmer is here to deliver.