Originally published at The Rude Awakening.

Gentleman’s Price Control

The Rude Awakening (Aug. 27, 2026)

By Sean Ring

Two different politicians from opposite sides of the aisle each held a press event 8 days apart on the same idea.

On July 27, New York Mayor Zohran Mamdani stood in Brooklyn holding a bunch of bananas. He announced 5 city-owned grocery stores, one per borough, selling food at 30% below retail. The crowd cheered.

On August 19, Treasury Secretary Scott Bessent announced Washington would at least double its buybacks of long-dated Treasury bonds. The 30-year yield had crept to uncomfortable highs, and that simply wouldn’t do. Wall Street cheered, too… for about 24 hours.

The right called Mamdani a socialist. And yet, they called Bessent a market technician.

But if you strip away Bessent’s tailoring, they’re running the same play. One of them thinks the price of bread is wrong. The other thinks the price of money is wrong. Both reached for the same tool: the state’s thumb, pressed firmly on the market’s scale.

Ah, but surely it must be permissible for a gentleman to fiddle with the market, you say? This version of corporatism, or socialism, or whatever you want to call it, arrives with a Treasury seal instead of a Little Red Book. But it’ll fail just the same. It just fails in a pinstriped suit.

Two Men, Two Caps

I’ll say this for Mamdani: at least he’s honest about what he is. This economic illiterate wants to freeze the rent on a million apartments starting October 1st. He’d also like to open city stores that critics are already calling ration shops. Oh, and don’t forget taxing second homes in the city. He believes prices are a political choice, rather than a market mechanism, and he says so out loud.

Bessent’s idea needs more translation.

The Treasury’s buybacks target 10- to 30-year bonds and run from September 9th through November 4th. The old limit was $2 billion per operation. The new minimum is $4 billion, and Bessent went on TV to stress it could be more. He swears this is about liquidity, not yield curve control (YCC).

Nobody bought it. Former PIMCO CEO Mohamed El-Erian read the move as YCC wearing a fake mustache. Evercore’s Krishna Guha called it a weak Operation Twist. JPMorgan warned that the Treasury was walking away from its oldest promise, that debt issuance stays regular and predictable, in favor of ad hoc market management.

Traders coined a new phrase for it: the Bessent put.

To paraphrase Mark Twain, when a government official finds himself on the side of moral hazard-addled investors, it’s time to pause and reflect.

The Yellen in the Mirror

In 2024, Bessent hammered his predecessor, Janet Yellen, for issuing short-term bills when interest rates were at rock bottom rather than issuing long-term debt to lock in those historically low rates. That would’ve helped the government’s fiscal situation and made Bessent’s life at the Treasury much easier. He asserted she was putting her thumb on the market’s scale to hide the true cost of Washington’s overspending. He was intellectually correct and morally right.

So how is the Treasury funding its new buybacks? It can’t print money. That’s the Fed’s racket. Instead, it’s issuing more short-term bills and using the cash to retire long bonds.

In other words, it’s the exact maneuver Bessent condemned, that Bessent will now perform at a greater scale.

And for some situational irony, the national debt crossed $40 trillion the same week the policy was announced.

Bessent isn’t a fool. That makes this worse. He’s a Soros-trained macro trader. He knows what a rigged price looks like, because he spent his career hunting for them. The system didn’t fool him. It captured him, like it does every unsuspecting politician. Every Treasury Secretary eventually figures out the long bond yield is a political price. And sooner or later, every one of them succumbs to the temptation of market manipulation.

The Market Called Both Bluffs

The ice water of reality almost immediately splashed both men in the face.

Bessent’s announcement knocked yields down for a few hours. Within a day, the 10-year and 30-year had erased the entire move and closed higher than before he opened his gob. The 30-year sat back above 5.2%. The market looked at $4 billion per operation against trillions in supply and guffawed.

Mamdani’s month ran about as well. A Staten Island judge blocked his second home tax. Landlords sued the city over the rent freeze. And on Monday, a coalition of bodega and small grocery owners, many of them immigrants, sued to stop the city-run stores from ever opening. Their argument was simple: no private shop can compete with a store that pays no rent or utilities and sells below cost on the taxpayer’s dime. Of course, they are correct.

The small businessmen Mamdani claims to champion are now suing him to survive. Oh, the irony.

Why It Always Fails

Prices are information. The 30-year yield is the market’s weighted opinion on $40 trillion of debt, sticky inflation, and a government that spends as if its bill will never arrive.

Bessent can try to cap the price, but he can’t change the market’s ultimate verdict.

Mamdani’s 30% discount doesn’t make food cheaper. It just moves the cost from the buyer to the taxpayer, and drives the honest grocer out of the neighborhood.

Bessent’s buybacks don’t make America a better credit. They swap long debt for short debt, pile up risk, and tell every foreign bondholder that DC is at odds with its own price signals.

There’s one more wrinkle.

Fed Chair Kevin Warsh wants the bond market’s honest opinion, so he can set the Fed’s monetary policy against a market-discovered price. Bessent now stands between Warsh and that number, interfering with the signal. Bessent’s and Warsh’s old boss, Stanley Druckenmiller, doesn’t approve. Neither do the rest of the bond vigilantes.

Wrap Up

Spare me the kabuki theater where one half of the political class faints over a socialist mayor’s grocery stores while the other half applauds this bond-buying scheme.

The difference between Mamdani and Bessent isn’t a matter of principle. It’s merely the difference in perception between an avowed socialist and an alleged free marketeer.

The gentleman’s price control ends the same way the commoner’s does.

The gentleman just gets better press on the way down.

Wikipedia:

The purpose of a system is what it does (POSIWID) is a heuristic in systems thinking coined by the British management consultant Stafford Beer, who stated that there is “no point in claiming that the purpose of a system is to do what it constantly fails to do”. It is used in systems theory, and is generally invoked to counter the notion that the purpose of a system can or should be read from the intentions of those who design, operate, or promote it. When a system’s side effects or unintended consequences reveal that its behaviour is poorly understood, then the POSIWID perspective can balance political understandings of system behaviour with a more straightforwardly descriptive view.

I don’t recall seeing POSIWID before, but I love the concept. A friend sent this to me, with the quip that I forgot to include a link to it in my “What Is the Point of the DMA?” piece this week. Indeed, it encapsulates my arguments about the DMA specifically and the European Commission generally. The purpose the DMA is what it does, not what you imagine it is intended to do.

In the same vein, I have been thinking too about the famous anecdote reported by Adam Lashinsky for Fortune back in 2011:

Steve Jobs doesn’t tolerate duds. Shortly after the launch event, he summoned the MobileMe team, gathering them in the Town Hall auditorium in Building 4 of Apple’s campus, the venue the company uses for intimate product unveilings for journalists. According to a participant in the meeting, Jobs walked in, clad in his trademark black mock turtleneck and blue jeans, clasped his hands together, and asked a simple question:

“Can anyone tell me what MobileMe is supposed to do?” Having received a satisfactory answer, he continued, “So why the fuck doesn’t it do that?”

You can argue all you want that the DMA is intended to give developers and users choice and freedom. My retort is “So why the fuck doesn’t it do that?” The DMA is what it does — and it isn’t that.

(Also, if you follow the link quoted above to Stafford Beer’s Wikipedia entry — man, put a hat on that guy and damned if he doesn’t look like Jim Dalrymple. It would be even more uncanny if his name had been Stafford Heineken.)

"The Bill’s rhetorical appeal rests on the idea that it targets under-16s. Its mechanism does not.

"To reliably prevent a 15-year-old from holding an account, a platform must satisfy itself about the age of every account-holder — which in practice means age-assuring the entire adult population as well.

"Privacy Commissioner Michael Webster made the point bluntly when the policy was first floated. Keeping under-16s out means ... everyone will have to demonstrate they are not under sixteen, including you.

"This is the paradox the Bill never resolves, and it is not a drafting quibble but the whole problem. ... "[L]iberal societies are meant to presume adults free unless there is an overwhelming reason to constrain them, not to demand identification as the price of entry to the public square.
The Bill’s privacy safeguards, though real, do not answer this."

~ David Harvey from his post 'A Law That the People It Targets Can Defeat With a Felt-Tip Pen'

It seems that everyone is talking about data centers these days; they’ve taken over the Internet with memes and conspiracy theories. As a computer professor, I decided to apply an academic research regimen to the situation and cut through the exaggeration and emotion that often accompany these current polarizing issues.

Two important points to begin with: AI’s water and power usage. As I have demonstrated in my previous article, data centers use about 0.02% of the water supply in the US according to recent sources, and most future data centers are already planned to use advanced cooling technology that requires very little water. While it is true that data centers require a lot of electricity, their impact on power systems and customers has been greatly exaggerated. Bloomberg’s often-cited piece on the subject mentions that at the highest instance, one area of the country experienced a 267% increase in wholesale costs. This data describing one area in one instance has been used incorrectly to state that it is the expected or average raise (rather than the high end), and it doesn’t even account for the fact that this is wholesale power costs, which does not translate directly into consumer costs. (Often the tech companies will offset these increases.) What this data does tell us is that there are places where we simply should not build data centers. This is one problem that should be avoided. The other problem is companies acting unethically.

One of the most egregious examples of unethical data center implementation is xAI’s Colossus near Memphis, Tennessee. The company promised years ago that it would not rely on local water supply for cooling. Not only does it continue to use local water daily, but the proposed solution has been delayed. In addition, xAI ran as many as 35 unpermitted methane gas turbines at Colossus 1 beginning in June 2024, generating up to 421 MW without any preconstruction or operating air permits under the Clean Air Act. If there was ever an example of how not to build a data center, it is this one.

Another prime example is Project Blue in Tucson, Arizona. Beale, the project developer, actively deceived the city and used the local water supply to clean dust from the data center. And they used a lot of it. This caused Tucson to shut down its water supply. Not only that, but city staff and Amazon had signed an agreement to keep knowledge about the center secret from its residents for three years. It’s no wonder that many communities are suspicious of tech companies coming into their neighborhoods and deceiving them about their plans and the benefits they will bring.

There are cases where companies are unethical in their approach to data centers, and there are cases in which the location is just not suitable. Sometimes, both points of failure occur. Colossus 1 is an example of both, where the deception was extreme and its use of water is actively causing problems with the local aquifer.

An example of poor location choice but good ethics is Microsoft’s West US 3 in the Phoenix area. Microsoft separately agreed to invest $40 million directly into the water utility. Microsoft is testing a new zero-water cooling strategy, and it published its water use and other relevant information in its Environmental Sustainability Report. However, it built these data centers in the middle of an extremely arid, low-water area. There are reasons for doing this, but, generally speaking, drawing water from a nearby desert city’s supply is not ideal. It’s not entirely bad news, in that it has spurred Microsoft to invest in new cooling strategies that do not draw on the local water supply. This problem should not affect future data centers as much because of the new cooling technologies that require little to no water from the local supply.

You probably haven’t heard of too many examples of successful data center developments, and that’s partly because “something worked; everything is just fine” is not a common news story. However, CNN recently reported on exactly that: Quincy, Washington, is home to over 30 data centers and has experienced an incredible boom as a result.

The data centers now cover an estimated 57% of Quincy’s property tax revenue, funding a wave of public infrastructure projects: a $15 million aquatic center, a 143,000-square-foot indoor sports complex, a $120 million high school, a new hospital, library, police and fire stations, paved sidewalks, sewage systems, and a wastewater treatment plant.

Residential electricity rates in the county rose 3.5% last year, while large industrial users, such as the data centers themselves, absorbed a 9.1% increase. The data centers there are paying for their own added infrastructure and generation costs rather than spreading those costs to households.

Another advantage of this site is that it has abundant cheap hydroelectric power. As for water, Microsoft partnered with the city to build a $30 million water reuse facility. The only real caveat here is that the data centers generated so much revenue and development that housing prices have risen across the area.

As you can see, there are definitely ways to build, and examples of ethical and beneficial data centers. The benefits to a local community are substantial. Not only do local tax revenues increase, but data centers come with the benefit of being a generally low-traffic, relatively quiet development. Revenues can increase without needing to build many new roads, or bring large amounts of noisy traffic.

This goes along with the fact that we simply need more data storage. Yes, AI is driving much of the current surge, but we have continually created more data and need a place to store it. We take pictures with our cell phones, leave voice notes, and write emails. With self-publishing, so many people now are writing books. So many songs are written and digital videos made. All of that goes into data centers. All of your apps: data centers. All of the Internet: data centers. Nearly all human knowledge is now stored in these data centers; they are the modern archives of human creativity, education, and achievement.

Efficiency gains in AI are real and dramatic. OpenAI’s Sam Altman has pointed out that ChatGPT models have become roughly 1,000 times more efficient at a given level of intelligence in less than two years. But this doesn’t mean data center demand will eventually shrink; it means the opposite. Every time a computing resource has gotten this much cheaper, historically we haven’t used less of it; we’ve found a thousand more uses for it. Drops in data-storage prices didn’t lead to people using less data; now no one deletes anything. Altman’s prediction that we will use AI and data in the same way that we use utilities such as water and the Internet will likely come true, and in some ways, it already has.

This is not only happening in the United States. China, Europe, the Middle East, and Southeast Asia are all rushing to build data centers, and they are encountering very similar issues. This is a global phenomenon, and, the way things are going, data centers will be as much a part of modern infrastructure as airports, phone lines, and railroads, which people once opposed. Farmers once believed sparks from railroad tracks would burn their land, and doctors at the time warned the human body couldn’t survive driving at speeds over 20 miles per hour. We see the same patterns of resistance to new technology repeated throughout history.

The truth is, data centers themselves aren’t the problem. Poor location choices and unethical business practices cause the failures we’ve seen. If we’re wise about where we build and who we trust, we can avoid the pitfalls and reap the rewards.

Over the next few years, interested users around the world will get an increasingly complete picture of how Ayn Rand developed as a thinker and writer over time. Facilitating this opportunity is the Ayn Rand Archives’ ongoing effort to digitize, transcribe, and release Ayn Rand’s manuscripts on the public internet.

Ayn Rand’s handwritten material is not easy to read. Much of it is in cursive, a writing style that fewer and fewer people learn how to read. Even for those who can read cursive, her unique penmanship can still be a challenge, as many pages of material in her personal papers were notes or drafts never intended to be legible to anyone other than herself. Therefore, just putting the scans of these pages online would not achieve the Ayn Rand Archives’ goal of making this material globally accessible.

For that, we needed to add something: typed transcripts.

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The following examples are taken from this page (shown above), this page, and this page, all part of Rand’s planning material for her first novel, We the Living.

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