MONEY MATTERS - The Assault of the Butterfly

Written by Drummond Pike

Nearly 3 years ago, a long-haired, hippie looking software developer and wannabe political theorist, Curtis Yarvin, published a paper entitled “The Butterfly Revolution.” (https://graymirror.substack.com/p/the-butterfly-revolution) Elsewhere in this issue, you will see an anonymously compiled report circulating in tech circles that describes how this butterfly is taking flight. While it sounds pretty benign, it is one of the most frightening ideas I’ve yet to encounter. Yarvin’s adherents ensure his ideas ought to scare the lights out of any reasonable person who still believes that the American model of democracy has merit. They include J D Vance, Peter Theil, Marc Andreessen, and others who embrace his ideas for replacing democratic governance with a sovereign CEO or monarch who has the power to replace all government employees with loyalists who would then run the country like an efficient corporation.

He starts with this idea: “Let us imagine a fantasy world into which we could convert the Trump operation, as it is in early 2022, into a truly effective machine for both taking and using power.” He then meanders into a kind of critique of Trump as not being serious about taking and exercising power, in part due to his overvaluing of his brand. But then Yarvin reveals his dream: “a full power start – a full reboot of the USG” by which he means the US government. “We can only do this by giving absolute sovereignty to a single organization – with rough the power that the Allied occupation authorities held in Japan and Germany in the fall of 1945. This level of centralized emergency power worked to refound a nation then, for them. So, it should work now, for us.”

Yarvin’s world was fantasy 3 years ago. But it seems like it’s happening now under the guise of Project 2025 and now Musk’s DOGE. His paper goes on to say this:

Trump himself will not be the brain of this butterfly. He will not be the CEO. He will be the chairman of the board—he will select the CEO (an experienced executive). This process, which obviously has to be televised, will be complete by his inauguration—at which the transition to the next regime will start immediately….

The strategy of the regime in internal exile is to legally construct an alternate regime. In a country that abstractly recognizes the principle of popular sovereignty, the people have the right to replace the current regime with this alternate regime, and can choose to do so in one step, at one time.

Yarvin’s paper then devolves into a strange, fantastical metaphor as larva becomes butterfly that only flies once, by which he implies that in a 2nd Trump regime, it can all come to pass. He, of course, suggests that the strength of this new alternative will be found as Trump calls into the streets his mass of supporters to essentially force other institutions (legislative, judicial) to heel. It’s all a bit of bizarre political theory that argues in democratic systems the people’s will prevails, but that once sanctioned, throwing out the old constitutional order in favor of an unchecked CEO is a done deal because it’s been elected to be so.

The flaws in Yarvin’s construct are many, but his subscribers overlooked them in the effort to curry favor with his biggest backer, Peter Theil. Theil is, of course, that notable “tech bro” who supported Trump in 2016 and stunned many of his fellow out gay men with his full-throated MAGA speech at the 2016 GOP convention. 7 years earlier, Theil had declared, “I no longer believe that freedom and democracy are compatible.” In the intervening years, he somehow overcame his disillusionment with the democratic system enough to become a highly publicized backer of Marco Rubio, JD Vance, Blake Masters, and Kari Lake, spreading vast sums of his wealth among both candidates and facilitators of far-right politics. JD Vance, of course, has ascended to #2 in line for the presidency, should our overweight 78-year-old POTUS have a bad stumble or health crisis.

Now, given his devotion to the likes of Yarvin, Theil seems less likely to have found a new belief in democracy and more likely to be pursuing a venture capitalist’s playbook by using his virtually unlimited funds to own the rightwing corner of one party. Once owned, they will become obedient as the yearning for reelection means taking the knee, as the saying goes. Thanks to Citizen’s United and the introduction of limitless dark money in our political system, the Theil model leads us to the unenviable arrival of Musk and DOGE, precisely the kind of tool Yarvin dreamed of, and Project 2025 planned for. What’s missing from Yarvin’s Butterfly fantasy, however, is the arrival of masses in the streets to support the overthrow of the “old order” (constitutional democracy) in favor of the “new” (CEO Dictator-led technocracy). In fact, at this moment some are beginning to note that Trump’s much hated “deep state” bureaucracy – a central bad guy in the Yarvin / Theil world – is actually being created by those DOGE boys and Musk so ham-handedly trying to shrink government overnight in what might gently be called and “extra-legal” fashion. Federal workers, vast numbers of whom would have worked with the new administration but now find themselves jobless, are forced into the reality that Trump, Musk, and his brown-shirted DOGE boys really do mean them harm – not just by firing them, but denigrating the work they have done for the public for, in many cases, years. Imagine yourself working for 15 years for a company that gave you good performance reviews, welcoming a new CEO, who within a week fired you and hundreds of others and went on TV to say you were a lazy, unproductive person cheating the company and its customers.

I don’t think Musk labeling Social Security as the “biggest Ponzi scheme in history,” and thus implying it ought to be done away with, is going to help them build a crowd pushing for its demise. His critique that the system uses current income from payrolls to pay benefits is accurate, but the failure to provide a long-term, secure financial future for Social Security lies with a Congress that has both mandated that “excess” payments into the system be used for other federal expenses instead of banked, and has failed to index the payroll tax, or increase adequately the “cap” on income on FICA.  When the system was created in 1937, 92% of all wage earners paid the FICA tax which is similar to the portion today. However, the portion of wages taxed, not the number of payers, has fallen from 93% in ’37 to 82% in 2024 which reflects the widening gap between lower wage earners and high earners. The cap is now around $170,000, over which people do not pay more social security tax – which amounts to nearly 20% of gross wage income. This does not count the dubious “work around” where hedge funds and the like are able to exempt their “carried interest” income from FICA taxation.

When Musk calls it a “Ponzi Scheme,” it’s in part because like other super rich people, he doesn’t pay much into the system. And since strong CEO-type technocracy appears to be his end goal, why not just get rid of it? Of more importance to Theil and Musk, though, is the demolition of regulatory parts of the federal government, chief among them being the Consumer Financial Protection Bureau that is a central target of their ire. It’s saved consumers literally billions, but their objective is apparently to replace dollars with crypto, the unregulated “wannabe” currency alternative in which many in the tech world are investing billions. More like Las Vegas than Fort Knox, crypto is better used for money laundering than buying toothpaste at the corner drug store. But, hell, if Melania can have her own meme-coin – a genuine grift, if there ever was one - why not the US Treasury? 

It's not clear where all this will lead. One hopes the Clintonian Oracle, James Carville, is right when he predicts this “Butterfly/Project 2025” flash dance will fall apart of its own weight.

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