{"id":168922,"date":"2026-02-10T08:36:13","date_gmt":"2026-02-10T16:36:13","guid":{"rendered":"https:\/\/lukeford.net\/blog\/?p=168922"},"modified":"2026-02-10T08:41:04","modified_gmt":"2026-02-10T16:41:04","slug":"decoding-the-scam-economy","status":"publish","type":"post","link":"https:\/\/lukeford.net\/blog\/?p=168922","title":{"rendered":"Decoding The Scam Economy"},"content":{"rendered":"

Tom Owens writes<\/a>: <\/p>\n

Much has been in the news of late regarding fake daycares, fake autism therapy centers, and fake hospices. The scale of the fraud is almost unbelievable, on the order of tens of billions. Since none of these businesses produces legitimate goods in a voluntary transaction with a customer, the money they collect serves to bid up the cost of goods and services for everyone, while contributing nothing to total economic output.<\/p>\n

The idea of building actual things people value, like a Ford or Toyota, seems almost quaint, and it\u2019s hard to say if those who do so are heroic or pitiable. Serving actual customers and making a profit is freaking hard, and there\u2019s certainly the temptation, in a general decline, to, if I can\u2019t beat them, join them, and get what\u2019s mine.<\/p>\n

…Why do we never hear of convenience store and vape shop owners being perp-walked for selling these illegal products? Why do taxpayers subsidize the proliferation of these trashy little stores with SBA loans for non-citizens?1 And how are responsibly manufactured, safe, properly regulated American products supposed to compete when the Chinese flood our country with illegal ones?<\/p>\n

Drug manufacturers in China can \u201cregister\u201d with the FDA, pass one inspection, and sell any drug into compound pharmacies. And in this case, one part of the government doesn\u2019t talk to the other. Such firms can rip off US intellectual property, and this does nothing to affect their FDA approval. Many of these inspections, due to FDA backlogs, are only subject to \u201cremote inspections,\u201d i.e., the FDA looks at paperwork submitted electronically, trusting Chinese firms to self-report their compliance! And, as long as they register with the FDA and apply for inspection, they can begin selling into the US market before they\u2019re ever inspected. And if they get inspected and fail, they can close up shop, register again under a new entity, and be good for another few years. Trump was right, they really must be \u201claughing at us\u201d for being such easy, dumb marks.<\/p>\n

Regulations surrounding such pharmacies, like those of the IRS, depend on Anglo-Saxon norms of voluntary self-regulation, not police inspection. They simply no longer work when those norms are not shared by many of our residents and trade partners.<\/p>\n

Many Americans are likewise unaware that most of their generic medications are made in India or China. These manufacturers, who are outside of US criminal jurisdiction attaching to impure drugs, are allowed by our government to have FDA approval. My first job, some readers may recall, was at an FDA-regulated facility. It was drilled into all of us to never slack on quality or record-keeping because of the dreaded \u201csurprise inspection.\u201d The FDA can show up at any time and start digging, and while rare, veterans at the company shared war stories of previous inspections. The company maintained its own internal \u201cred team\u201d of surprise inspectors, many former FDA, who often showed up at manufacturing plants unannounced to simulate government inspections. QA and manufacturing people could and would be fired if internal inspectors found serious problems likely to surface in an official one. We also knew about the criminal penalties for major negligence discovered in such an inspection. Almost no one actually went to jail for this, of course, but the thought of being arrested and having a \u201ccriminal record\u201d scared our domestic employees terribly. It was understood to be a high privilege to make products people trusted to put into their bodies.<\/p>\n

That system is imperfect enough in the US as Christian norms recede2, but imagine we had a competitor in China or India. Technically, they are FDA-approved and subject to surprise inspections. But the manpower to do so, and the criminal penalties, are absent. And in any of these countries, the odds that the FDA can actually execute a surprise inspection are extremely low, simply because their movements can be easily tracked or shared with the manufacturer by locals. And absent criminal penalties enforced by US courts, records can be falsified, and lies told without consequence. How could a US manufacturer possibly compete with such regulatory asymmetry? The expense in making a medicine is all in quality control and compliance, not raw materials. And the price we pay is impure drugs and the hollowing out of our ability to make the world\u2019s most useful medicines domestically (the most valuable medicines, i.e., the low-hanging fruit, tend to be older proven generics).<\/p><\/blockquote>\n

Gemini says: This essay by Tom Owens is a sophisticated call for a re-alignment of the American elite geometry. Owens identifies a failure in the current “managerial cartel” and proposes a counter-alliance between the populist right and the plaintiff\u2019s bar (trial lawyers).<\/p>\n

Using your favorite tools, we can decode the structural shifts he is advocating.<\/p>\n

1. Alliance Theory<\/a>: The “Strange Bedfellows” Realignment (Pinsof)<\/strong><\/p>\n

Owens\u2019 central thesis is a textbook example of Alliance Theory. He observes that the current alliance between the GOP and “Big Business” (the Chamber of Commerce wing) is no longer serving populist interests.<\/p>\n

The Current Alliance: Large corporations and “hireling managers” coordinate with the state to maintain a regime of adaptive deception. They use “free trade” and “Section 230” as reputational shields to outsource risk and liability to foreign actors (China\/India) while protecting their own stock options.<\/p>\n

The Proposed Defection: Owens calls for populist Republicans to defect from the “Big Business” alliance and form a strategic coordination with the trial lawyers (the Plaintiff’s Bar).<\/p>\n

The Incentive: Populists provide the votes (sacred power) and the lawyers provide the money and enforcement (profane power). By making it profitable for lawyers to sue “globalist” entities, Owens creates a self-funding political engine that doesn’t rely on the “cowardly” GOP establishment.<\/p>\n

2. The Failure of Authoritative Closure (Stephen Turner<\/a>)<\/strong><\/p>\n

Owens highlights a massive leak in the “legal-managerial” bucket. He argues that the FDA and other regulatory bodies have maintained an authoritative closure that only works on “Dumb WASPs” and “Anglo-Saxons” who share a “guilt culture”.<\/p>\n

The Closure Gap: The FDA uses “remote inspections” and “self-reporting” as liberal property to claim the market is safe. However, foreign actors from “shame cultures” do not respect this closure. They treat the regulatory jargon as a set of rules to be gamed rather than a moral boundary.<\/p>\n

The Result: A state of structural hesitation. The government is too “lethargic” to enforce its own rules against foreign “scammers,” leaving domestic manufacturers\u2014who are trapped inside the authoritative closure\u2014unable to compete.<\/p>\n

3. The Ritual of “Private Purification” (Alexander)<\/strong><\/p>\n

Jeffrey Alexander\u2019s cultural sociology<\/a> helps explain Owens’ view of the law. Owens sees the current regulatory state as polluted by globalist externalities. He proposes a ritual of purification not through the state, but through the tort system.<\/p>\n

The Lawyer as Priest: Owens describes trial lawyers as “entrepreneurial rascals” and “private attorneys general”. In his model, a lawsuit is a liminal theater where a “pure” domestic actor can confront an “unclean” scammer.<\/p>\n

The Bond as a Sacred Barrier: His proposal for a $10MM bond for foreign sellers is a ritual of entry. It forces the “unclean” foreign entity to place a “sacred hostage” (the money) within the jurisdiction of the American “sacred center” (the court) before they are allowed to touch the domestic market.<\/p>\n

4. The “Everything is Bullshit<\/a>” Framework (Pinsof)<\/strong><\/p>\n

Owens uses the “everything is bullshit” lens to strip away the moralizing language of the “Professional Managerial Class” (PMC).<\/p>\n

The Deception: Section 230 is framed by the PMC as a “sacred” protection for free speech. Owens decodes this as bullshit\u2014a mechanism for Amazon to profit from foreign theft while avoiding “joint and several liability”.<\/p>\n

The Reality: The PMC prioritizes the status performance of “efficiency” and “global connectivity” over the profane reality of “impure drugs” and “hollowed-out manufacturing”.<\/p>\n

ChatGPT says: Alliance Theory<\/a>
\nOwens is correctly identifying a realignment opportunity. His core insight is that the current dominant alliance is a quiet but powerful triad of platform capital, regulatory bureaucracy, and globalized low-trust producers. This alliance benefits from asymmetry. They externalize enforcement costs, socialize harms, and privatize gains.<\/p>\n

What he\u2019s proposing is not \u201cmore regulation\u201d but an alliance shift. He wants to replace weak public enforcement with adversarial private enforcement by empowering a new coalition. Populists bring votes, legitimacy, and moral anger. Trial lawyers bring capital, institutional competence, and enforcement capacity. Together they could break the immunity shield that currently protects platforms and foreign actors.<\/p>\n

This is classic alliance logic. He\u2019s not appealing to truth or fairness. He\u2019s saying: these people are winning because they are allied, and you will keep losing unless you build a counter-alliance that can impose costs. He understands that law is not neutral. It\u2019s a battlefield.<\/p>\n

Where Alliance Theory cuts against him is his assumption that elites will tolerate this coalition. The plaintiff\u2019s bar is tolerated today precisely because it mostly targets domestic firms that can pay. The moment it seriously threatens platforms, global supply chains, or geopolitical trade arrangements, elite counter-coalitions will form to crush or neuter it. His proposal is structurally sound but politically explosive.<\/p>\n

Jeffrey Alexander and sacralization
\nOwens is trying to re-sacralize \u201chonest production\u201d and \u201cfair play\u201d by framing scams as civilizational pollution. The essay repeatedly contrasts the sacred world of trusted manufacturing, inspections, and moral fear of wrongdoing with the profane world of arbitrage, loopholes, and sham compliance.<\/p>\n

What\u2019s notable is what he does not do. He does not ask for public rituals like commissions, blue-ribbon panels, or moral sermons about values. He wants punishment, exposure, and consequences. That\u2019s an attempt to shift purification from symbolic rituals back to material enforcement.<\/p>\n

But Alexander would predict a problem. Elites prefer symbolic purification because it preserves discretion. Tort-based purification is dangerous because it is decentralized and unpredictable. It does not allow elites to choreograph repentance, narrative closure, or controlled scapegoating. That\u2019s why so much fraud is reframed as \u201ccomplexity\u201d or \u201cregulatory lag\u201d rather than moral violation. Owens is trying to drag these practices back into the moral register where they can be punished, not managed.<\/p>\n

David Pinsof and signaling logic
\nPinsof\u2019s lens explains why Owens sounds increasingly exasperated. The scam economy thrives on credibility theater. FDA registration, remote inspections, platform \u201cpolicies,\u201d and compliance paperwork are all signals that substitute for actual enforcement. They are not meant to stop bad behavior. They are meant to reassure downstream elites and deflect responsibility.<\/p>\n

Owens is attacking a signaling equilibrium. Everyone involved knows the system is porous. But as long as the right boxes are checked, participants can claim innocence. The bullshit is not ignorance. It\u2019s plausible deniability.<\/p>\n

His emphasis on cultural norms matters here. Voluntary compliance only works when people care about internal moral reputation. Once signaling replaces conscience, the system collapses into adversarial gaming. Owens is describing what happens when high-trust institutions are opened to low-trust actors without changing enforcement regimes.<\/p>\n

Where Pinsof would critique Owens is his occasional moral essentialism. The issue is not that some cultures are shame-based and others guilt-based in the abstract. The issue is that incentives select for behavior. Even guilt cultures will produce scammers if punishment is rare and profits are high. Owens is right about enforcement failure but sometimes over-attributes causality to culture rather than to structural incentives.<\/p>\n

Stephen Turner and expertise
\nThis essay is quietly a demolition of the expert-managerial settlement. Owens shows how expertise has become procedural rather than substantive. Regulators certify forms, not outcomes. Platforms hide behind legal interpretations they did not write but aggressively exploit. Professionals are trained to avoid liability, not prevent harm.<\/p>\n

Turner\u2019s key point applies cleanly here. Expertise has become a form of property that insulates decision-makers from accountability. FDA approval without enforcement, Section 230 immunity without responsibility, and international trade regimes without jurisdiction all convert expertise into a shield.<\/p>\n

Owens\u2019 solution bypasses expert authority entirely. He doesn\u2019t want better regulators. He wants adversarial pressure that forces experts to care again because failure becomes costly. This is deeply anti-technocratic, even though it uses legal sophistication rather than populist rage.<\/p>\n

The internal tension
\nThe essay\u2019s biggest strength is also its biggest risk. A tort-populist alliance would work precisely because it is hard, ugly, and coercive. It would not feel \u201cliberal\u201d or \u201cnice.\u201d That makes it effective but also politically radioactive.<\/p>\n

Elites will frame it as chaos, litigiousness, and the end of innovation. They will sacralize platforms and global trade as fragile goods needing protection. They will use the language of stability and growth to defend immunity. Owens underestimates how quickly his proposal would trigger moral panic among the ruling class.<\/p>\n

This is a serious alliance proposal, not a rant. It correctly diagnoses that the scam economy exists because enforcement has been symbolized, outsourced, and neutered. It correctly sees that moral appeals are useless without cost imposition. And it correctly identifies that law, not regulation, is the remaining lever that still terrifies powerful actors.<\/p>\n

What it lacks is a clear theory of elite counter-mobilization. The moment this coalition becomes real, it will be treated as an existential threat. That doesn\u2019t make it wrong. It just means Owens is describing the opening move of a conflict, not a policy tweak.<\/p>\n

In Alliance Theory terms, he\u2019s calling for a regime change in enforcement power. And that is why the essay feels dangerous in a way most \u201creform\u201d writing does not.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tom Owens writes: Much has been in the news of late regarding fake daycares, fake autism therapy centers, and fake hospices. The scale of the fraud is almost unbelievable, on the order of tens of billions. Since none of these … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[43035,2603],"tags":[],"class_list":["post-168922","post","type-post","status-publish","format-standard","hentry","category-alliance-theory","category-fraud"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t