The story of American politics this week is the story of two impressive institutions: the Office of the National Security Advisor, and the company WeWork.
First, the Assistant to the President for National Security Affairs, commonly referred to as the National Security Advisor, or NSA.
The most recent, and most important news to come out of the White House last week was the sacking of John Bolton and his replacement by Robert O’Brien. Bolton was widely considered, in and outside of the White House, as a hawk. In his career, Bolton has favored aggressive foreign policy. He clashed with Trump often. According to The Independent, Trump would “goad” Bolton often about his hawkishness:
As Iran claims to have captured spies working for the US and accuses Mr Bolton of trying to start “war of the century”, new details have emerged of the president’s fondness for baiting his adviser in the company of top officials – including foreign dignitaries.
This would happen in a number of places, including the Situation Room:
During a White House Situation Room meeting last year, Mr. Trump reportedly said to his hawkish national security chief: “Ok, John, let me guess, you want to nuke them all?” According to the report by the Axios website, Mr. Trump turned to Mr Bolton in an Oval Office meeting with Irish prime minister Leo Varadkar and said: “John, is Ireland one of those countries you want to invade?” Quoting unnamed senior administration officials, the account claimed the president recently joked that “John has never seen a war he doesn’t like”, repeating sentiments made in public. “If it was up to him he’d take on the whole world at one time, okay?”
The position of NSA is powerful, but serves at the pleasure of the President. Ideally, the NSA informs the President on issues of national security. In a typical arrangement, the President takes the advice of the NSA, and makes informed decisions.
Trump’s NSAs do not live in typical situations. From insider reports of the Trump Administrations, the President hires advisors for various positions in his Cabinet, and then makes decisions without their input—or, often, in direct contradiction to their advice.
WeWork is an Internet-era American real-estate company. WeWork is about to have its initial public offering. For a normal Internet company, an IPO is a highly practiced, incredibly formalized moment. An IPO generally arrives after increased amounts of transparency, financial sector involvement, and stability. Internet companies that enjoy IPOs are typically regarded as safe bets. But WeWork is not a typical IPO.
Helmed by CEO, owner, and founder Adam Neumann, WeWork describes itself as providing “shared workspaces for technology startups.” The company is currently most famous for three things: the eccentric behavior of its founder, the fluctuating valuation of its stock on the eve of its IPO, and the irreverence it creates in tech journalists. Here is The Verge:
WeWork — excuse me, The We Company — is primarily a landlord for freelancers and companies. You pay rent on your desk or whatever, and then you don’t have to work in the same place you live. (There are also conference rooms.) And yet the word “technology” appears 110 times in the S-1. “We provide our members with flexible access to beautiful spaces, a culture of inclusivity and the energy of an inspired community, all connected by our extensive technology infrastructure,” The We Company tells us. But I am having the damnedest time figuring out what the “extensive technology infrastructure” is. Does this just mean Wi-Fi? Is it the neon lights? Is it… lasers?
As a recent story in Inc described, the We Company, WeWork’s parent organization, has seen a sudden re-evaluation by investors:
The We Company, WeWork’s parent organization, which had at one point reached a $47 billion valuation after a funding round in January, was reportedly considering going public at a valuation as low as $10 billion. This despite raising more than $12 billion in funding to date. On Sept. 16, the company issued a statement saying it is delaying the IPO and expects to complete the offering by the end of the year.
As the Times points out:
WeWork takes leases on commercial real estate and converts it into Instagram-friendly spaces that it rents to individuals and businesses of varying sizes. ... WeWork could find itself in a financial squeeze if it can’t find enough customers to fill its spaces. First, it has to make back the enormous sums it spends on sprucing up the spaces it leases from landlords. In the first six months of this year, WeWork had revenue of $1.54 billion but an operating loss of $1.37 billion, twice the loss in the comparable period in 2018.
As the Times notes, the biggest threat to WeWork is the difference between the average length…
of the leases it enters into (roughly 15 years in the United States) and the time its customers typically agree to use the space (less than two years). The mismatch may not matter in good times, but in a recession — or in the face of increased competition — a significant number of customers could leave when their agreements expire, depriving WeWork of revenue it may need for its lease payments.
As it turns out, $47 billion is the amount that the We Company is on the hook for:
Because We’s business model hinges on securing long-term leases and then subleasing those spaces to its tenants at a premium for short-term durations, the company must pay the rent even when there’s no one occupying the buildings. According to its financial disclosures, We is on the hook for $47 billion in long-term leases.
It’s not clear at present if WeWork will be a long-lasting, profitable company, or whether it will not bear the scrutiny of the market. That said, it is clearly not great news for them that some members of the board are now attempting to remove Neumann as CEO. In parallel, it is not clear whether Robert O’Brien will succeed in his tenure as NSA any more than the far more famous Bolton did.
According to the best data the public has, WeWork acts more like a very large bank account with an unproven business model. It does not seem to have the vitality that others ascribe to it.
According to what we know from inside the White House, Robert O’Brien holds the position of National Security Advisor, but does not seem to have really any more say-so over national security than John Bolton did. He does not seem to have the power that others ascribe to him.
What the position of NSA and WeWork have in common is that they seem to be collections of hollow signifiers. The careers of WeWork and O’Brien (and Bolton before him) are emblematic of a time in American public life where all the important signifiers are present before us, but none of the signified are present. It’s a bit like the Lion King live-action relaunch. We have the same symbols saying the same lines, but there’s a sense that something is missing.
The National Security Advisor and WeWork are famous for what they are supposed to be: namely, a powerful position, and a sustainable company. Of course, it’s an old saying that appearances can deceive. It is part of human nature, and the societies humans build, to play expected roles, even if the substance of the role is not there. “All the world’s a stage,” after all.
But in these days, there seems to be an unambiguous separation between what is claimed and what is done by public institutions. This isn’t just true of IPOs and national security positions. According to Pew Research this past July:
About two-thirds (69%) of Americans say the federal government intentionally withholds important information from the public that it could safely release, and 61% say the news media intentionally ignores stories that are important to the public.
And according to a 2018 Atlantic article, there are declining levels of institutional trust:
It used to be that what Edelman labels the “informed public”—those aged 25 to 64 who have a college degree, regularly consume news, and are in the top 25 percent of household income for their age group—placed far greater trust in institutions than the U.S. public as a whole. This year, however, the gap all but vanished, with trust in government in particular plummeting 30 percentage points among the informed public. America is now home to the least-trusting informed public of the 28 countries that the firm surveyed, right below South Africa. Distrust is growing most among younger, high-income Americans.
There is a theory about why irony came to prominence after World War I. It was because of the huge divide between what was said, and what was done. On one hand, there were the philosophical claims that European civilization made about itself. On the other hand, you had the reality of what Europeans were doing on the battlefield. The difference was too large to ignore.
A hundred years later, we live in an irony-drenched world. We have the things our society ostensibly stands for, and what our society actually does. The chasm is so vast that even when authoritative institutions engage in the old patterns of action, they don’t seem committed to the playacting. What has also changed is the pretense. Institutions and powerful people have always vied for power, but in past times, at least pretenses were maintained. That’s the major difference. Senator McConnell’s refusal to allow Merrick Garland during the last year of Obama’s second term could serve as a single example; there are others, of course.
However, there are encouraging signs when we look to grassroots and committed individuals and organizations. If recent political history has shown Americans anything, it is that disenchantment with the status quo, and the habits of the status quo, seems to be the first step to real change. In the last several weeks, massive protests have disrupted the establishments in Hong Kong, Russia, and even in Bolsonaro’s Brazil. However dubious the claims of new companies, or of presidential appointees, the public is sincere in what they say and do. Real change is coming: read the signs.