Seeds of mistrust

A few personal items to start: First, I’m pleased to announce that The Racket has been accepted into beehiiv’s Media Collective. Nothing will change for you, my awesome readers, but I’ll be getting support and community that can only make this newsletter better.¹ Hope you’re as excited as I am to see what’s next.

And in more momentous news, I’m officially embarking on a new book:

The Legend of Skokie, as it’s tentatively titled, will be my third book. Like its older siblings Gangsters of Capitalism and The Big Truck That Went By, it’ll include deep reporting and genre-bending structures. It will also probably result in occasional lapses in this newsletter, especially later in the year. Sorry about that in advance. But I will make it up to you: Racket subscribers, especially the premium kind, will get exclusive updates on the book’s progress, events, etc. And, as longtime readers will note, the nugget of the idea for Skokie comes out of a past edition of The Racket, meaning that I quite literally could not do any of this without your help.

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It took a few days for Trump’s base to come up with a justification for Elon Musk’s illegal takeover of the federal levers of power, but they’ve landed on one: It doesn’t matter whether Musk or his Gen Z minions have any authority to potentially alter trillions of dollars worth of federal payments, lock civil servants out of essential systems, or unconstitutionally dismantle agencies created by Congress, they say, because he is at last bringing “truth” and “transparency” to Washington.

Never mind that Musk is riddled with conflicts of interest as both a multi-billion-dollar beneficiary of government windfalls and the target of several ongoing federal investigations — including one reportedly by the U.S. Agency for International Development, or USAID, the first agency he is trying to shut down. Far from revealing new information about any of the departments or agencies whose files his so-called “DOGE” lackeys have seized, they have stifled transparency by taking funding databases and agency websites offline. By “transparency” they seem to mean spreading easily debunked claims — such as Musk’s now-admitted lie about millions supposedly spent on “condoms in Gaza” — and spinning evidence that government agencies subscribe to news databases as proof of a nefarious plot. The point is to create a spectacle—an illusion of transparency, without actual transparency—to distract from what they are doing now and to justify what comes next.

The poster child for this effort is USAID. Created by John F. Kennedy at the height of the Cold War, made an “independent establishment” by an act of Congress in 1998, it was until this month both the largest and most visible element of the U.S. foreign aid apparatus. The agency counts over 10,000 workers assisting people in over 130 countries, with total obligations topping $42 billion in fiscal year 2023. In every country I have visited or reported in outside of Western Europe, USAID was a visible and in many cases lifesaving presence. Food boxes, tarps, and shelters with the slogan “From the American People,” often translated into the local language, were a common sight, whether in Haiti, Palestine, or the Philippines.

That central role has made USAID a target for critics of U.S. empire for years, whether from genuine academic critics of neocolonialist aid models or bad-faith propagandists for Vladimir Putin. But no one has been gunning for USAID longer or harder than the U.S. conservative movement. American reactionaries opposed the agency since its inception and foreign aid as a concept before that. The conservative Republican senator Robert Taft set the postwar tone, deriding the proposed 1947 Marshall Plan in America Firster terms as “pouring money down European rat-holes.” Robert Welch, the founder of the John Birch Society, went further, claiming that the “very idea of American foreign aid was dreamed up by Stalin, or by his agents for him.” The arch-conservative (and famously racist) acolyte Jesse Helms would pick up Taft’s phrase in the 1970s, turning it to the more general “throwing money down foreign rat holes,” and making it a slogan in his decades-long fight to dissolve USAID — an effort he only gave up with his retirement in 2003.

This was all of a piece with the general conservative animus toward liberal internationalism, fueled, as Robert Caro has written, by the fear that international treaties like the United Nations Charter and Human Rights Covenant “might not only provide a legal basis for the extension of federal control over matters previously regulated by the states, but might nullify specific state laws, such as the southern segregation laws.” It’s no coincidence that the fight to dismantle USAID was led into the 21st Century by an unreconstructed segregationist like Helms. (Nor that it is now in the crosshairs of a child of South African apartheid and propagator of the “white genocide” conspiracy theory, who appears to be behind Trump’s decision to cut aid to South Africa’s multiracial government and offer asylum to white Afrikaaners while denying it to almost everyone else.)

The idea that foreign aid is both wasted on (nonwhite) foreigners and threatens (white) Americans’ prosperity and safety at home was self-reinforcing, and persists to this day. A whole chapter of the Heritage Foundation’s Project 2025 was devoted to plans to restructure USAID; its author claims, drawing on both the Helmsian and Bircher traditions, that the Biden Administration has “deformed the agency by treating it as a global platform to pursue overseas a divisive political and cultural agenda that promotes abortion, climate extremism, gender radicalism, and interventions against perceived systemic racism.” (Suggestions for fixing this included dismantling USAID’s “DEI apparatus” and using USAID to promote Christian Nationalist initiatives under the guise of “International Religious Freedom.”) In the face of such emotional triggers, rational rejoinders — like the fact that foreign aid generally makes up just 1% of the federal budget, and carries clear benefits for American influence and “soft power” against geopolitical rivals, just as JFK intended — struggle to break through.

Yet while Helms’s faction failed to end foreign aid, they did manage to hamstring it, often with the help of liberals and Democrats. A series of laws have imposed protectionist restrictions on foreign aid for decades, from requirements that at least half of U.S. food aid be shipped on expensive U.S.-flagged carriers to ensuring through law and the congressional appropriations process that U.S.-based businesses and nongovernmental organizations have gotten priority in USAID projects and grants.

Priority was given to projects that helped U.S. corporations and red-state constituents, such as shipping rice from Arkansas and Louisiana (a de facto subsidy for U.S. rice growers) instead of buying locally in Africa or Latin America. Meanwhile a short list of U.S.-based NGOs, sometimes nicknamed “Beltway Bandits,” are constantly at the top of the annual USAID grantee lists including Chemonics International, FHI360, DAI Global, and Catholic Relief Services.² As the Center for Global Development’s Justin Sandefur wrote in 2022: “Foreigners don’t receive much of America’s … annual foreign aid budget, at least not directly. Less than ten percent goes to local charities, companies, or governments in developing countries.”

Despite constant harping on the point by aid critics (including me!), and a widespread realization by officials including former USAID administrator Samantha Power that such change is needed, the big NGOs and their allies in Washington have repeatedly defeated efforts to reform the system — in part by making sure the public was not properly informed about what was actually going on.

I don’t want to overstate the case here: USAID has been an effective force in many cases, especially its support for the President’s Emergency Plan for AIDS Relief, or PEPFAR, which until Trump’s funding freeze supported HIV treatment for 20 million people worldwide. Losing it on the eve of another possible global pandemic, cutting off embattled allies and aid recipients who have nowhere else to turn, will be a catastrophe.

But the America-centric way of doing business has also resulted in decades of ineffective, often wasteful projects that prioritize U.S. economic and political interests over helping people on the ground, often failing to do either.

An example close to my heart is of course the U.S.-led response to the 2010 earthquake in southern Haiti. The capstone of the response was a $300 million garment plant and port in the north of Haiti, whose construction was primarily financed and overseen by USAID, to use Haitian labor to cheaply produce garments for U.S. consumers to buy in stores including Walmart, Gap, and Old Navy. That project, known as Caracol Industrial Park, was a failure, creating far fewer jobs or exports than needed to justify the exorbitant price tag, and contributing little to Haiti’s economic or social recovery.

Yet instead of acknowledging the role of American chauvinism in creating these fiascos, isolationist critics have used them as proof that foreign aid is inherently wasteful, and should be eliminated entirely. Again this has a long pedigree: In 1995, the Heritage Foundation claimed, without evidence, that “not only has U.S. development aid been wasted, it has actually retarded economic development in the countries that receive it.” During the Bush years, the American Enterprise Institute tried the crocodile tears approach, claiming the agency should be overhauled according to conservative priorities because of its failures in “Africa, once known as the Dark Continent in the pre-PC era.”

Now, Musk’s defenders are pushing the lie that Chelsea Clinton personally lined her pockets with USAID funds, including misleadingly citing my previous reporting as corroboration. It doesn’t matter that there is not even the slightest indication, in either “DOGE’s” reporting or the open records, that anything like this happened. The ultimate proof, in their minds, is that “despite all the money spent, Haiti is still a hellhole.”

So, to summarize: Reactionaries spent decades selling the lie that huge portions of the U.S. Treasury were being handed to undeserving minorities overseas. At the same time, politicians and conservative ideologues turned foreign aid programs into a sop to U.S. corporations, red-state farmers, and NGOs. This made these programs less effective than they otherwise might have been, leading to headline-grabbing failures that convinced the publics at home and abroad that foreign aid must all be some sort of elaborate scam.

All of this set the stage for this spectacular moment, in which a hypocritical billionaire and a president with his own history of corrupt foreign schemes can dismantle a vital agency, hiding its records under the guise of “transparency” — all in the name of focusing on “problems at home” that they helped create.

1  Fellow bMC member Court Watch has a rundown of what it entails.

2  DOGE fanboys discovered Chemonics during their search of publicly available online filings, with predictably hilarious results.