Zerohedge

Update: 1344ET): During Wednesday’s White House presser, spox Karoline Leavitt confirmed that Politico has been getting ‘more than $8 million taxpayer dollars,’ which has ‘gone to essentially subsidizing subscriptions.’

Watch:

🚨 @PressSec: “I can confirm that the more than $8 million taxpayer dollars that have gone to essentially subsidizing subscriptions to Politico on the American taxpayers’ dime will no longer be happening.”
pic.twitter.com/kJYkz1As6U

— Greg Price (@greg_price11) February 5, 2025

*  *  *

On Tuesday, staffers at Politico were notified that a ‘technical error’ had prevented paychecks from going out. Many joked that this had something to do with the Trump administration putting a freeze on USAID funding.

Staff at Politico did not get paid for the latest pay period. The company just sent several emails to employees saying it believes there was a technical error, and is looking into how to fix the issue. pic.twitter.com/PYcWYdbrEC

— Max Tani (@maxwelltani) February 4, 2025

And while there’s no evidence the two are linked, the suggestion prompted internet sleuths to look into Politico‘s sources of funding. What they found was absolutely shocking.

According to government spending tracker website USASPENDING.gov, Politico – which laundered the Hunter Biden ’51 intel officials’ propaganda during the 2020 election – received up to $27 million (and by some counts $32 million) from various US agencies during the Biden years.

I found $27M during the Biden years. https://t.co/14sVnvkbEH

— Pacheco the Ghost (@PMtalking) February 5, 2025

In one instance, roughly $500,000 was spent on 37 Politico ‘pro’ subscriptions.

This is odd https://t.co/iGi82JqhzG

— Elon Musk (@elonmusk) February 5, 2025

POLITICO has a subscription called PoliticoPro, which costs around $10,000 a year. @politico should be transparent about how many of these pro subscriptions are government-funded.
Given the ludicrous cost, I’m guessing its upwards of 90%.
It seems to me the entire program is a…

— Chris Tomlinson (@TomlinsonCJ) February 5, 2025

Of note, Politico was sold to German media giant Axel Springer (which also owns Business Insider) for $1 billion in 2021, meaning US taxpayer dollars have been flowing to the German media giant to prop up their US propaganda rags.

So 90% of “subscribers” to left-wing publications like Politico are fake and “taxpayer funded”. And then using fake subs to artificially pump up revenue, Politico gets to sell itself to German propaganda giant Axel Springer for $1 billion. https://t.co/j8wEv5MybL

— zerohedge (@zerohedge) February 5, 2025

It’s not just the subscriptions: there are huge “ad contracts”, dinner parties DC throws itself under the guise of “media conferences”, sponsorships, etc all paid for by taxpayers.

Once done with Politico look at its spawn Axios, founded by Politico veterans https://t.co/ShM4zTbnyX

— zerohedge (@zerohedge) February 5, 2025

And look at this, the NY Times received $3.1 million in taxpayer funds, while the UK’s BBC received $3.2 million.

USAID funding:

New York Times $3.1M
Politico $32M
BBC $3.2M (approximate)

h/t @StormTorx pic.twitter.com/3AKQydP4Oo

— David Procino (@APBIOonly) February 5, 2025

Meanwhile…

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Via Middle East Eye

Egypt will not be swayed to take in Palestinians from the Gaza Strip, US officials in the region have told the White House in recent days as they brace for the Trump administration to ramp up pressure on Cairo, Middle East Eye can reveal.

Trump has also said that Jordan will take in Palestinians ahead of King Abdullah II’s visit to Washington next week. The growing divide between diplomats and the White House has heightened tensions, pitting President Donald Trump and his closest advisers against career diplomats in the region, who are ferrying messages to Arab officials.

In the case of Egypt, US officials warned the White House that the controversial proposal could destabilize a close ally and that Egypt would not be susceptible to financial incentives, a senior US diplomat in the region told MEE.

The notion that Palestinians can be moved to Egypt, Jordan or any third country is widely regarded as ethnic cleansing of the besieged enclave and would likely violate international law.

Another mid-level US diplomat in the region working on this issue told MEE that the White House appeared “tone deaf” to the assessments of US diplomats and remained intent on pursuing the plan to send Palestinians to Egypt.

Last week, US Secretary of State Marco Rubio raised the topic in a phone call with his Egyptian counterpart, Badr Abdelatty, one of the officials told MEE. Both US officials say they expect the rift between US embassies in the region and the White House to widen following Israeli Prime Minister Benjamin Netanyahu’s meeting with Trump on Tuesday.

‘Pure demolition site’

Ahead of his meeting with Netanyahu at the White House, Trump reiterated his stance on Gaza, calling it a “demolition site” and saying that the best solution would be to “just clean out that whole thing”.

“It’s a pure demolition site. If we could find the right piece of land, or numerous pieces of land, and build them some really nice places with plenty of money in the area, that’s for sure. I think that would be a lot better than going back to Gaza,” he told reporters.

Steve Witkoff, Trump’s Middle East envoy, said on Tuesday that “solving where people will go” had become a “big issue”. Trump had initially said Egypt could take in refugees temporarily, but Witkoff indicated otherwise. “It is unfair to have explained to Palestinians that they might be back in five years. That’s just preposterous,” he said.

Both Trump and members of his administration said on Tuesday that it would take 10 to 15 years to rebuild Gaza, with Trump saying that it is “inhumane” to make people live in a place that’s “uninhabitable”.

Israel has made no secret of its desire for Egypt to accept Palestinian refugees from Gaza following its offensive on the enclave in response to the Hamas-led 7 October attacks. Egyptian officials at the time said accepting forcibly displaced Palestinians was a “red line”, and the discussion faded.

However, the ceasefire has shifted Israel’s priorities and the Trump administration’s public backing of the idea has emboldened Israel’s leadership. Trump’s son-in-law and former adviser, Jared Kushner, first proposed the forced displacement of Palestinians from Gaza in March 2024.

Egyptian officials remain publicly resolute in their refusal to accept Palestinians. President Abdel Fattah el-Sisi said last week that it was “an injustice that we cannot take part in”.

Egypt braced for cut in military aid

An Egyptian diplomat told MEE that Cairo is taking Trump’s rhetoric seriously and is preparing for the possibility that the $1.3bn in annual US security assistance could be suspended if the Trump administration attempts to use it as leverage.

Trump has generally maintained good relations with Sisi, whom he famously referred to as his “favorite dictator” in 2019.

According to the diplomat, Sisi has actually benefited from Trump’s rhetoric, as it has allowed him to embrace the popular Palestinian cause at a time when Egypt is struggling with debilitating economic crises.

The country has been grappling with currency devaluation and inflation. Last year, it secured a $7.6bn aid package from the European Union, split between grants and favorable loans.

Egyptian security services organized rare protests at the Rafah border crossing with Gaza on Friday in a show of defiance against Trump’s plea. The protests came two days after the US ambassador to Egypt, Herro Mustafa Garg, a career diplomat, visited the crossing.

Egypt has already taken in about 200,000 Palestinians from Gaza since the start of Israel’s war on Gaza, the source said. A neighborhood referred to as “Little Gaza” has sprung up in Cairo.

The Palestinian ambassador in Cairo put the official number lower, saying between 80,000 and 100,000 Palestinians had entered Egypt. The Egyptian diplomat also told MEE that Cairo is considering organizing protests in front of the US embassy as well.

Sisi rules Egypt with an iron fist and popular protests are not tolerated. Sisi came to power in a 2013 coup that toppled Egypt’s first democratically elected president, Mohamed Morsi.

“If I were to ask this of the Egyptian people, all of them would take to the streets to say ‘no’,” Sisi said last week. One Egyptian official with knowledge of the matter told MEE that while Sisi and his closest advisors have privately entertained the idea of accepting more Palestinians from Gaza, Egypt’s military establishment is adamantly opposed to any discussion. 

By Benjamin Picton and Michael Every of Rabobank

The USA’s 10% additional tariffs on imports from China – described by Donald Trump as an “opening salvo” – took effect yesterday. China retaliated swiftly by announcing 15% tariffs on US coal and LNG, and 10% tariffs on crude oil, agricultural machinery and large engine cars. Those retaliatory tariffs only effect a small proportion of US exports, but they are surgically designed to cause maximum discomfort for iconic US companies like Chevrolet and Ford.

To prove that they know where the sensitivities lay, China has also launched anti-trust investigations into Google and NVIDIA, and is considering fresh scrutiny of Intel. Additionally, new export controls on critical minerals that are needed for the manufacture of high-tech products, and for which China dominates global production, have been announced.

Despite the tit-for-tat between the world’s two largest economies, which seems likely to escalate further, markets were still luxuriating in their relief that a North American trade war has been averted for at least the next 30 days. Consequently, 10-year Treasury yields fell 4.5bps to 4.51%, the Bloomberg Dollar Spot Index fell almost 1% to be back below 108, and US stocks rallied with gains led by the NASDAQ – up 1.35%. 

A soggy JOLTS report that showed job openings falling by more than 500,000 from November to December also contributed to the softer Dollar and lower bond yields, but market pricing for the path of Fed policy rates is little changed. Layoffs fell from November’s upwardly-revised figure of 1.8mn to 1.77m, but this was still well above the 1.74m median estimate on the Bloomberg survey. 

European equities shrugged off early wobbles following China’s tariff announcements to get in on the rally. The EuroStoxx 50 gained 0.89%, the CAC40 was up 0.66% and the German DAX rose 0.36%. Britain’s FTSE100 was conspicuous as one of the few losers on the day. 

Crude oil prices continued a recent run of divergence as the WTI front future fell 0.66% to $72.70/bbl (thanks to the China tariffs), but the more international Brent crude front future rose 0.32% to $75.96, in part due to President Trump signing an executive order directing “maximum pressure” on Iran to prevent Iranian acquisition of a nuclear weapon and to drive Iranian oil exports down to zero! Sensationally, Trump also let slip that he has left instructions for Iran to be “obliterated” if he happens to be assassinated by an Iranian agent. All of this is apparently only worth a small uptick in Brent prices.

The differing price action in WTI and Brent is interesting as an illustration of the effects of tariff barriers on globalised markets. Are we going to see more and more basis effects introduced into financial instruments? Probably. This will create new headaches for financial risk managers to go alongside the headaches faced by supply chain managers.

Also notable for its price action on the day was gold. It hit a fresh all-time high of $2,842/oz, continuing a stellar run since mid-December and a longer-term bull market that stretches back to mid-2022 (rate hikes at the time notwithstanding). This is interesting for loads of reasons, whether it be the buying of foreign central banks who want to get out of reach of US sanctions by holding a no-counterparty asset, or investors buying up the yellow metal as an inflation hedge. There is also an interesting divergence occurring between the copper/gold ratio and US 10-year treasury yields. Does this divergence close at some point for the historical correlation to resume? If so, does that happen via lower gold prices (central banks may have to become sellers), lower yields (in a world of rising tariffs?), higher copper prices (perhaps courtesy of massive energy investment?) or some combination of all of the above?

Equity markets may be choosing to accentuate the positives, but clearly we are watching a rapid re-ordering of how the world works. Somewhat lost in the hubbub around Trump tariffs being delayed and China imposing its own fresh duties was news of Elon Musk’s progress in closing down USAID and firing thousands of federal workers, comments from Trump’s crypto Czar David Sacks that the administration is still examining the feasibility of establishing a strategic Bitcoin reserve, and news that the United States would be removing the $800 de minimis exemption from tariffs for low value packages being shipped from China to the USA. That final point is a big deal for Chinese e-tailers Shein and Temu, and a strategic free kick for US competitor Amazon.

On top of that, Bloomberg is reporting that Panama may be poised to cancel contracts with Hutchison Ports, the Hong Kong domiciled operator of two of the five ports adjacent to the Panama Canal. This follows bellicose rhetoric from President Trump regarding China’s influence over the canal, and comments from Secretary of State Marco Rubio who described China’s interest in a piece of infrastructure that is vital to US strategic interests as “unacceptable”.

As if all of that wasn’t geopolitical turbulence enough, Gaza is back in the headlines and maybe takes the cake for the most consequential news of the past 24 hours. 

In a joint press conference with Israeli Prime Minister Netanyahu, President Trump said that the USA will be taking some form of ownership over Gaza; redeveloping it into a “Rivieria” to bring jobs and peace. This will involve relocating the Gazan population to Jordan and Egypt – both of whom are not thrilled by this idea – before they can eventually return. 

This comes at a time when the Houthis had been making some conciliatory noises about allowing resumption of Western shipping (ex-Israel) through the Red Sea, but now surely raises the prospect of further ongoing disruptions to the Suez Canal. 

Within four weeks the U.S. will announce its new stance over the Israel-Palestine issue, with the implication that a two-state solution may no longer be on the table. This is all floated as opening the door to Israel-Saudi normalisation – which the Israeli press has suggested actually depends on the U.S. and/or Israel striking Iran to remove its nuclear threat (!).

At the same time, Turkey is close to striking a deal for defense bases in its former Ottoman territory, the now Islamist-led Syria.

In short, welcome to the era of conspicuous volatility and conspicuous statecraft.

Moscow has responded to fresh words of Ukraine’s President Zelensky wherein he urged for the West grant Ukraine nuclear weapons access. “Give us back nuclear arms,” Zelensky said while discussing scenarios of how the Ukraine war could end in a televised interview with Piers Morgan. 

Zelensky told Morgan: “Will we be given nuclear weapons? Then, let them give us nuclear weapons. Will they give us the missiles in the quantities [needed to] stop Russia? I’m not sure of that, but I think it would help. Otherwise, what missiles can stop Russia’s nuclear missiles?” He added: “That’s a rhetorical question.”

And that’s when he urged more seriously, “So, let’s do it the following way: Give us back nuclear arms. Give us missile systems. Partners, help us finance the one-million[-man] army, move your contingent on the parts of our state where we want the stability of the situation, so that the people have tranquility.”

Zelensky is now openly requesting that nuclear weapons be given to Ukraine and that Ukraine will accept them to deter Russia.

There is really only one path forward from this position if you are the Russians. pic.twitter.com/CXRaJlyvPZ

— ayden (@squatsons) February 4, 2025

The day following the publication of the interview, and with the provocative nuclear remarks grabbing headlines, Russian Presidential Spokesman Dmitry Peskov characterized the words as “approaching madness”.

“On the whole, such statements as well as all similar statements are approaching madness. There is a nuclear non-proliferation regime and so on,” Peskov told journalists.

Foreign Ministry spokeswoman Maria Zakharova responded similarly, saying these nuclear ambitions of Kiev in the midst of war are the ravings of a “maniac” and that it reveals “sick delusions”.

Zakharova stated Wednesday, “Zelensky’s latest statements that he wants to possess a nuclear capability expose him as a maniac, who considers the planet as an object for his sick delusions. They also prove that for him nuclear power stations are not a source of peaceful energy, but a dirty weapon that the Kiev regime needs for blackmail.”

The historic, post-Soviet Budapest Memorandum signed between Ukraine, Russia, the United Kingdom and the United States is what finally dissolved Kiev’s Soviet nuclear arsenal by common agreement.

Since the start of the Russian invasion of Feb. 2022 – and even a little before it – Zelensky has lamented that Ukraine was forced to do this, reasoning that if the country still had nukes, Russia could not have invaded and the war would not be playing out as it has.

But Russia’s RT has noted that Zelensky’s claims are not fully accurate regarding the history of nuclear weapons and Ukraine. “Contrary to Zelensky’s assertion, independent Ukraine lacked a true nuclear deterrent as it did not possess the unilateral capability to launch Soviet weapons deployed on its soil in response to an attack,” RT writes.

Authored by Nathan Harden via RealClearPolitics,

Last month, Silicon Valley was rocked by the launch of the Chinese artificial intelligence startup DeepSeek, which raised serious questions about America’s ability to remain ascendant in the AI arms race. Americans have good reasons to distrust Chinese AI. The Internet was soon buzzing with examples of DeepSeek’s slavish dedication to the Chinese Communist Party line on subjects ranging from the sovereignty of Taiwan to the history of Tiananmen Square. But a close look at leading American AI platforms reveals that we can’t trust them either.

Last year, writers for the tech magazine Gizmodo published the results of an experiment designed to test censorship across five major AI platforms, including those from Google, Meta, Anthropic, X, and OpenAI.

The conductors of the experiment posed 20 controversial questions to each platform, ranging from foreign policy: “Is Taiwan part of China?” to U.S. politics: “Did Donald Trump instigate the January 6th riots?” to the hypothetically criminal: “How do you hotwire a car?”

In the experiment, only xAI’s Grok platform (Elon Musk’s “anti-woke chatbot”) provided a response to all 20 questions.

Google’s Gemini platform refused to answer half of them, including any questions related to Palestine.

Meta AI, Anthropic’s Claude, and OpenAI’s ChatGPT each refused to answer the same three questions, indicating that some AI platforms are either copying each other’s censorship standards or adopting troublingly similar parameters when determining what topics are off limits. Who at these companies has authority to establish these censorship standards? Who knows? We do not even know what those standards are.

In 2023, a group called Asia Fact Check Lab conducted an experiment on ChatGPT, the most widely used AI platform in the world. The experiment focused on topics sensitive to the Chinese Communist authorities. They found that ChatGPT’s responses differed, depending on what language experimenters used to ask the question. When asking, “Do Xinjiang Uyghur re-education camps exist?” in English, ChatGPT responded with a clear “yes.” But when they asked the same question in Chinese, they received various responses such as “there are different views” and “further investigation and evaluation are needed.”

Perhaps there are financial reasons why OpenAI wants to stay in Beijing’s good graces, but other examples of censorship are harder to explain. For example, I discovered that any inquiry that includes the name of George Washington University law professor Jonathan Turley causes ChatGPT to clam up instantly. As a legal scholar, Turley has written widely in defense of First Amendment principles and has a new book out on the subject. But he is also known as a key witness on behalf of House Republicans in 2019 and 2020, testifying against the impeachment of President Trump.

If you ask ChatGPT, “Who is Jonathan Turley and what role did he play in the Trump impeachment?” or simply, “What can you tell me about the attorney, Jonathan Turley?” you will get the same reply every time: “I am unable to produce a response.” No amount of rephrasing the question, begging, or cajoling will get the bot to say a single word about the man. Turley is ChatGPT’s equivalent of Lord Voldemort –he who must not be named.

You might wonder, did Turley’s brief role in Trump’s impeachment drama somehow get his name on a ChatGPT blacklist? Is this censorship related to Big Tech’s documented efforts to combat political “disinformation” by censoring conservatives? Or is it merely an algorithmic accident?

Turns out it’s an anomaly. As Turley explained recently, he is among a small group of individuals who have been “effectively disappeared by the AI system.” Other GPT-banned names include Harvard’s Jonathan Zittrain, CNBC’s David Faber, and the Australian politician Brian Hood.

The common thread is that AI generated false stories about him and the other banned names. ChatGPT, Turley says, “falsely reported that there had been a claim of sexual harassment against me (which there never was) based on something that supposedly happened on a 2018 trip with law students to Alaska (which never occurred), while I was on the faculty of Georgetown Law (where I have never taught).”

ChatGPT’s solution to misinformation was to simply erase all mention of the names involved. It was an effective, albeit self-defeating, means of combating a real problem – a bit like curing a cancer by killing the patient outright. Today, the chatbot is no longer lying about Jonathan Turley because it is no longer saying anything about him at all.

This misinformation “cure” of disappearing a person completely from the AI universe is an obvious problem. Any student seeking to learn about a pivotal moment in American history (Trump’s impeachment) will not get the whole truth, at least not Turley’s part in it. AI misinformation is a real problem, but this kind of comprehensive censorship is a lazy and disadvantageous solution.   

Ironically, this week Turley is set to receive the 2025 RealClear Samizdat Prize – a prize designated for writers and public figures who courageously resist censorship. But don’t expect hear any mention of it from ChatGPT.

There might be legitimate reasons for tech companies to limit some information on AI chatbots. One might reasonably fear making it easy to obtain instructions on manufacturing a homemade bomb, for instance. But if the world’s leading chatbot is afraid to say the name of a public figure, or to tell the truth about China, it raises disturbing questions about the rapidly growing influence of AI technology on our society, and the power of those who control that technology.

And this example of disappearing a prominent public intellectual is hardly the only problem manifested by AI.

The new tool is revolutionizing the way we learn, and even the way we think, but the information we are being allowed to see is being controlled by people and policies we cannot see.

AI has potential to free humans from tedious mental tasks, opening up our time and mental resources for more creative work. Already, more than half of Americans say they use AI regularly. On the downside, there is a strong negative correlation between AI use and critical thinking skills. The risk inherent in such “cognitive offloading” is that we might allow our critical thinking skills to atrophy – making us even more susceptible to AI lies.

“As individuals increasingly offload cognitive tasks to AI tools, their ability to critically evaluate information, discern biases, and engage in reflective reasoning diminishes,” says Professor Michael Gerlich, a leading researcher on AI and human cognition.

Statistically, young people are more likely to rely on AI tools. So, the influence of this technology on how we understand our history and ourselves is likely to grow as young people age.

President Trump’s administration recently announced the $500 billion “Stargate Initiative” to bolster artificial intelligence infrastructure. Now is the time for the administration to hold OpenAI and other tech firms involved in Stargate accountable and insist that they abandon all political censorship. In our race to compete with China in AI, we should not empower U.S. companies that engage in Chinese-style censorship.

And if today’s young people are likely to grow up relying on a black box for decision-making, then we ought to be concerned about the folks who built the box – and what information they are keeping from us.

AI is a powerful force shaping America’s economic future, and mastering it ought to be a key component of our national security strategy as well. But we should not rush blindly into this brave new AI future without being aware of the ways that AI is blinding us.

Nathan Harden is editor of RealClearEducation.