Main Span
Links for you. Science:
A Two-Person Startup Has Fixed One of the Most Hated Sounds in Modern Life
The academic culture of compensation
More than 18,200 cyclosporiasis cases now suspected in US: Where it’s getting worse (1/1000 Michigan residents have been infected)
Public health improvements stall amid Trump’s DEI crackdown
Life Identification Numbers: A strain nomenclature approach to aid epidemiological surveillance of bacterial pathogens
Longitudinal trajectories of long COVID among hospitalized patients with omicron infection in Changzhi, China
Falling asleep: the importance of ribosome hibernation in bacteria
Other:
Reality is a Communist Plot. Of MAGA and the totalitarian mindset
Watching the show trials. Anthony Fauci and the politics of retribution
Grand Prix in DC: Info on road closures, Metro and possible airport delays. Parking and traffic restrictions will be phased in and out from now through mid-September as crews prepare and then remove the course and viewing stands. (Bowser, of course, said she wants this every year. It’s almost like she doesn’t even live in the city)
Bike lanes and speed cameras disappear from the DOT’s list of proven safety measures
Metro tried to make bus service better. Somehow, ridership and speeds are both down
Dallas birthed the booming DFW region. It’s now bleeding people, arenas and companies to the suburbs.
Competing Clans
Trump Badly Screws Susan Collins as Maine ICE Death Takes Darker Turn
The Washington Nationals Are Stuck With a Zombie Crypto Sponsorship
FEMA said yes to Democratic disaster requests. Trump killed them anyway.
Nancy Shia’s been photographing D.C.’s resistance for 50 years
Mauricio Pochettino, U.S. Soccer ‘close’ on deal to renew USMNT coach
Christian preachers are turning airplanes into unwanted worship services. Evangelists are exploiting captive audiences who can’t walk away—and broadcasting it online
AI Doomsday Bullshit Is Getting Tired
WHY IS HALEY STEVENS USING HILLARY CLINTON’S 2008 PLAYBOOK?
DHS Official Resigns, Citing ‘War on Immigrants’
The Revolt of the Insiders
Mamdani’s Grocery Stores Will Offer 30 Percent Discount on Some Products
Hack “Writers” Fuming After ChatGPT Starts Refusing Prompts to Copy a Specific Author’s Style
How Influencers Like Audrey Peters Have to Pivot
Gianni Infantino Is Putting The World Cup Up For Sale
Anthony Fauci’s high-profile Senate hearing: what we learned
US government map of Africa mislabels every country at global conference
WNBA Suspends Seattle Storm Minority Owner For Being Rude To Transphobic Shitheads
Polymarket, Kalshi push back after Wisconsin Elections Commission warns against ballot betting. The commission says the prohibition against betting on elections is outlined in state law
Across The DC Region, Rent Growth Is Splitting Along The Beltway
An ongoing military exercise happening hundreds of miles above Earth has—for the first time in an unclassified setting—demonstrated how future satellites might evade and pursue one another in a future conflict.
That was the announcement Wednesday from True Anomaly, one of the companies involved in the exercise. True Anomaly's Jackal satellite, also known as Panther, played the cat-and-mouse game with another spacecraft named Puma, based on Rocket Lab's Pioneer satellite platform.
"This is what we've really been building towards for the past four years," said Even Rogers, True Anomaly's co-founder and CEO.
Sixty years ago today, on July 30, 1966, Medicare and Medicaid went into effect. A year earlier, President Lyndon B. Johnson had signed the Medicare and Medicaid amendments Congress had made to the Social Security Act of 1935, establishing two national health insurance programs. Medicare used federal funds to cover seniors, while Medicaid covered people who qualified on the basis of income using federal and state funding. The programs expanded health insurance to millions of uninsured Americans.
Americans and their leaders had called for government support for healthcare since the early 1900s, but the final push to expand healthcare coverage in the United States came out of the New Deal. In 1945, President Harry Truman continued to expand the social safety net anchored by the 1935 Social Security Act signed into law by his predecessor, Franklin Delano Roosevelt. On November 19, 1945, Truman reminded Congress that in September he had proposed an Economic Bill of Rights that guaranteed “certain rights which ought to be assured to every American citizen.”
“One of them,” he reminded them, “was: ‘The right to adequate medical care and the opportunity to achieve and enjoy good health.’ Another was the ‘right to adequate protection from the economic fears of…sickness....’”
“Millions of our citizens do not now have a full measure of opportunity to achieve and enjoy good health,” he said. “Millions do not now have protection or security against the economic effects of sickness. The time has arrived for action to help them attain that opportunity and that protection.”
Truman reminded Congress how shocked Americans were when the WWII military draft revealed “the widespread physical and mental incapacity among the young people of our nation.” About 30% of those examined for military service were classified as unfit. Of those who made the cut to join the military, about a million and a half had to be discharged for physical or mental disability and an equal number had to be treated for preexisting diseases or infirmities. More than a third of the women applying to the Women’s Army Corps were also rejected.
Access to the benefits of modern medical science had never been equal, Truman said, and never would be “unless government is bold enough to do something about it. People with low or moderate incomes do not get the same medical attention as those with high incomes. The poor have more sickness, but they get less medical care. People who live in rural areas do not get the same amount or quality of medical attention as those who live in our cities.
“Our new Economic Bill of Rights should mean health security for all, regardless of residence, station, or race—everywhere in the United States.
“We should resolve now that the health of this Nation is a national concern; that financial barriers in the way of attaining health shall be removed; that the health of all its citizens deserves the help of all the Nation.”
Truman proposed a new healthcare program funded through fees and taxes, but Republicans who took control of the House in 1946 opposed new taxes and, although Truman had been careful to insist that the state would not take over hospitals, warned that the program looked too much like “Communism.” Instead, under Republican president Dwight Eisenhower, Congress passed a bill covering healthcare costs for indigent elderly Americans.
When he took office, President John F. Kennedy made the expansion of health insurance a priority, but while the American people liked the plan, it faced strong opposition from the American Medical Association, the chair of the House Ways and Means Committee, and the chair of the Senate Finance Committee. In 1964, after Kennedy’s assassination, both chambers passed their own measures, but they couldn’t resolve their differences to pass a law.
When LBJ won a landslide victory over right-wing Republican senator Barry Goldwater of Arizona in 1964, he had the votes to pass Medicare and Medicaid. LBJ made a point of signing the new measure into law at the Harry S. Truman Library in Independence, Missouri. He gave Truman and his wife Bess Truman the first two Medicare cards.
In his remarks at the signing, Johnson told the crowd: “The people of the United States love and voted for Harry Truman, not because he gave them hell—but because he gave them hope.” He told Truman that those like him—men of vision who are willing to stake their reputations and position to help others—“illuminate the life and the history of a nation.” He and his advisors had come to Independence not in tribute to Truman himself, Johnson said, but in tribute to the America that he represented. “For a country can be known by the quality of the men it honors,” he said. “By praising you, and by carrying forward your dreams, we really reaffirm the greatness of America.”
Johnson explained what the measure did. “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years. No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and their aunts.”
“And,” he said, “no longer will this Nation refuse the hand of justice to those who have given a lifetime of service and wisdom and labor to the progress of this progressive country.”
But now, in 2026, the Republicans in charge of our government reject the vision of a government that works to support its people. They see government regulation, taxation, and a social safety net as an attack on individual liberty.
In their One Big Beautiful Bill Act, which they passed in July 2025 with no Democratic votes, the Republicans delivered Trump’s signature economic policy. The law partially offset trillions of dollars in tax cuts by cutting $911 billion from Medicaid over ten years. Most of those cuts will begin to take effect in late 2026 and early 2027, after the midterm election.
And the cuts continue. On Tuesday, Anna Wilde Mathews of the Wall Street Journal reported that the Trump administration is planning to end a Biden-era program that capped out-of-pocket spending for drugs for Medicare recipients at $2,000 a year. The program provided subsidies for Medicare Part D, a Medicare prescription plan for seniors, by paying insurers. It also allowed Medicare to negotiate prices with drug companies for certain medicines.
The Trump administration has taken aim at the subsidies in this program.* It says the subsidies encouraged insurers to raise rates and that they weren’t needed because other policies that hold down the cost of drugs will stay in place. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, posted: “We are stabilizing the market so this bailout is no longer needed.”
Mathews notes that higher prices for drugs could drive more Medicare participants into the private-insurer version of Medicare, called Medicare Advantage. Pushing people toward Medicare Advantage was outlined as a desired outcome in Project 2025, the right-wing program to unwind the modern American state.
“History shapes men, but it is a necessary faith of leadership that men can help shape history,” Johnson said as he signed the measure creating Medicare and Medicaid. He credited FDR with beginning the process of creating a basic social safety net when he signed the 1935 Social Security Act.
He noted that FDR at the time called the Social Security Act “a cornerstone in a structure which is being built but it is by no means complete.”
—
*Added on July 31 to clarify that the Trump administration is ending the subsidies, but has not said anything about the other pieces of the Biden program.
Notes:
https://www.trumanlibrary.gov/education/presidential-inquiries/challenge-national-healthcare
https://www.lbjlibrary.org/news-and-press/media-kits/medicare-and-medicaid
https://www.ssa.gov/history/lbjsm.html
https://time.com/archive/6624161/the-congress-packing-byrds-nest/
https://www.senate.gov/artandhistory/history/minute/Medicare_Signed_Into_Law.htm
https://thehill.com/policy/healthcare/5996677-part-d-subsidies-expiring-2027/
X:
DrOzCMS/status/2082217750374834270
Not a good week at all. As of Monday 9am, D.C. had reported four homicides this week, bringing the total for the year to 58*. Last year, during the same time period, we had 94 homicides, and in the surge year of 2023, there were 142 homicides during that time. Unfortunately, most other crime categories also trended upwards this week.
We are still well on pace for another 33 percent drop in homicides for the third straight year–in fact, it looks like D.C.’s per capita homicide rate could be the lowest this year since 1900 (that’s not a typo).
Here’s to hoping that next week gets us back to a zero homicide week.
*Three of the 61 murders reported this year actually occurred in other years (e.g., a missing persons case from 2023 turned into a homicide case this year with new evidence).
NASA’s next flagship space telescope is set to launch in late August, nine months ahead of schedule.
The post Roman Space Telescope on track for late August launch appeared first on SpaceNews.
In this episode, David Ariosto speaks with former NASA Administrator Jim Bridenstine, who is now the CEO of Quantum Space. Bridenstine talks about the strategic shift to proliferation in low […]
The post Jim Bridenstine on his new role at Quantum Space appeared first on SpaceNews.
Vendors will compete for orders to build satellites, sensors and systems for more realistic military space exercises
The post Space Force picks 15 companies for $981 million training range contract appeared first on SpaceNews.
A NASA official says that work with Boeing on the company’s CST-100 Starliner vehicle is making “good progress” but declined to offer a date when the spacecraft could fly again.
The post NASA still assessing Starliner-1 flight opportunities appeared first on SpaceNews.
In March 2021, while serving as a senior fellow at the Brookings Institution, I hosted a discussion with General Chance Saltzman, now Chief of Space Operations for the United States […]
The post The new space wars: lessons from Ukraine and the Middle East appeared first on SpaceNews.
As companies develop large constellations of orbital data center satellites, experts say now is the time to start thinking about some critical space safety topics and rules of the road.
The post Rules of the road needed for orbital data center constellations appeared first on SpaceNews.
The Series D more than doubles the satellite manufacturer’s valuation in seven months and will fund a production ramp to as many as 100 large spacecraft a year
The post K2 Space raises $500 million for commercial, defense satellite expansion appeared first on SpaceNews.
The Space Force Association’s National Spacepower Center is building an unclassified environment for demonstrating threats to satellites and their consequences on Earth
The post Inside the effort to show Congress what war in space looks like appeared first on SpaceNews.
Oregon’s “prosperity debate” is being fueled by bought-and-paid-for distortions of authoritative academic research on what it takes to have a successful state economy in the 21st Century.
Flawed Foundations: Business Oregon’s recent taxpayer-funded studies rely on distorted academic literature to push discredited tax breaks and business climate obsessions.
Ignoring Causality: A 2022 property tax study explicitly ignored whether incentives actually caused business investments, yet officials falsely cite it as proof of economic return.
Misrepresented Experts: Recruitment reports acknowledge leading scholars like Tim Bartik, but omit or distort his core finding that up to 90 percent of incentives are wasted.
Smart Strategy: True 21st-century prosperity relies on cultivating distinct regional strengths and talent, not engaging in a race-to-the-bottom subsidy war.
State economic development strategies have been carefully studied over the past several decades. There’s an impressive body of evidence showing that widely practiced efforts to brag about a state’s business climate, slash taxes, and offer tax breaks simply don’t work. But that hasn’t stopped Oregon’s economic development agency from commissioning questionable “studies” claiming that somehow business climate and tax incentives are central to economic prosperity.
Two recent studies sponsored by the Oregon Business Development Department fundamentally mis-state the literature on economic development, and either omit, mis-state or ignore the key findings that nearly all business tax breaks go to firms for investments they were going to make anyhow, that an obsession with business climate is more likely to damage a state’s prosperity than help it, and successful strategies require states to emphasize distinctive strengths, not focus on imagined generic weaknesses. The department paid more than $150,000 for two of these studies, which are presented as representing reliable research on state economic development.
There’s an old saying about economic development: Shoot everything that flies, claim everything that falls. These reports are exactly the false claims that are rife among boosters. Sloppy, incomplete and dishonest representations about the importance of “business climate” and the effectiveness of tax incentives are not a reasonable basis for a smart economic strategy in the 21st Century.
In 2022, the Oregon Business Development Department—which uses the assumed business name “Business Oregon”— hired a consulting firm called Applied Economics to prepare a Property Tax Incentives Impact Study. Applied Economics was paid $80,600 for this report, according to state records. This study that assumes its conclusion, rather than offering any research to support its claims. The key issue with tax incentives is not whether firms accept them, but whether the tax incentive had any material effect on their location decision. But Applied Economics, the author of this report simply ignored that question, and present quantitative results that assume that every single dollar of every investment in Oregon was attributable to the property tax breaks.
Applied Economics acknowledges—near the end of their report— that: (1) the best available literature concludes that three-quarters or more of the jobs associated with tax incentives would be created anyhow, (2) that capital and operating costs dwarf the value of tax incentives, (3) that the authors can’t prove that any of these investments are attributable to the tax incentives, and (4) the authors made no effort to determine whether the investments would have happened in the absence of the tax incentives.
The reason: The terms of their contract with the Oregon Business Development Department instructed them not to look at the question of whether the incentives had any effect on the recipient firm’s decision to invest in Oregon. The contract, which we obtained via a public record request says:
STATE OF OREGON PERSONAL / PROFESSIONAL SERVICES CONTRACT Number C2020241
The Applied Economics report cites the work of Upjohn Institute economist Tim Bartik–showing incentives seldom matter to investment decisions—but says it would be extremely challenging to determine whether the tax incentive influenced any decisions. The effect of the incentives, they write, “remains indeterminable, at least for the purposes of this study.”
This conclusion swallows the entire premise of the report–implicitly, by ignoring whether the tax break actually made any difference, something they concede is rare, and because taxes are a relatively small percentage of overall capital and operating costs they are assuming that the tax break caused the impact. Here’s a quote from the Applied Economics Report:
Some literature on this subject suggests as many as 75% of the jobs created by companies that are receiving incentives across the nation would have been created anyhow.[17] Certainly some companies in Oregon would have located, or expanded, with or without property tax relief, but to quantify probable outcomes of these highly subjective decisions under alternative scenarios would be extremely challenging. The point is really that the benefit from an incentive ultimately accounts for only a relatively small percentage of overall capital or operating costs. Wages, real estate prices and other factors represent a much larger share of overall business expenditures. Relative to other options that businesses may have, the ability of any incentive to tip the scales at the margin in the context of other factors remains indeterminable, at least for the purposes of this study. (Applied Economics, page 43).
17. Bartik, Timothy J., Making Sense of Incentives: Taming Business Incentives to Promote Prosperity, W.E. Upjohn Institute for Employment Research, October 8, 2019.
Not surprisingly, state officials ignore this problem and claim the study shows that the tax breaks work, something the study disclaims that its methodology addresses. For example, The Oregonian reported in February 2026, that state officials defended these tax incentives based on the results of this study.
. . . a study of Oregon tax incentives from 2022 found that the standard enterprise zone program delivers $29 in economic output for each $1 in tax breaks.
There’s an old saying in economic development: “Shoot everything that flies, claim everything that falls.” Despite its length and complexity, this report is doing exactly that: it is claiming that everyone who got a property tax break in Oregon invested here solely because of it, and wouldn’t have invested here otherwise. The words “program delivers” constitutes a claim that the tax breaks caused the investment, directly contradicting the agency’s contract language saying the purpose of the study was not to “prove the efficacy” of the tax incentives. The economic output of a firm doesn’t count as an “impact” of the property tax break the firm received, unless the firm’s decision was determined by the tax break.
The authors ignore the clear finding of the literature, which which they are familiar, and which they agree. This is a deceptive practice, meant to create the impression of an impact where the authors can show none.
The Oregon Business Development Department also contracted with the Institute for Policy Research and Engagement (IPRE) of the University of Oregon to undertake a study of external recruitment–the extent to which Oregon businesses are being recruited by other states. The study, entitled, “External Business Recruitment: Are businesses leaving Oregon, and if so, why?” State records indicate that Business Oregon paid IPRE $70,000 for this study.
Governor Kotek’s announcement of her “Prosperity Roadmap” cites this study as one of two showing what Oregon needs to do to have a stronger economy. Its principal recommendations: Oregon should pay more attention to its business climate and should increase tax incentives. Here’s what the report said about each of these subjects.
Tax incentives
1. Strengthen Incentive Programs: Expand and enhance incentive programs to compete more effectively with other states. (p. 46)
Business climate
A key theme that emerged in the interviews conducted for this project related to business climate. Research suggests that a positive business climate can drive economic growth – a favorable business climate can attract investment and foster economic development. (p. 43)
Despite these claims, the report lacks any substantive support for these recommendations, and critically, the literature that they cite in support of these claims actually comes to the opposite conclusion: that tax incentives don’t matter, and that an focus on the business climate can actually be bad for prosperity. Consider each of these questions, in turn.
Are business incentives effective?
The report notes that many states offer incentives, but is sketchy on whether incentives make any actual differences to firm investment location decisions. They quote research by the Upjohn Institute economist Tim Bartik on the extent of tax incentives–but leave out Bartik’s conclusion that 75-90 percent of tax incentives are wasted. Here is the IPRE/ summary of Bartik’s research
Timothy Bartik of the Upjohn Institute published what we consider the definitive evaluation of incentives in 2019. Bartik finds the most commonly used incentives are job creation credits: tax breaks or cash grants that are either some dollar amount per new job or some percentage of the new jobs’ wages. Such job creation credits grew from almost nothing in 1990 to almost $20 billion annually in 2019 – nearly two-fifths of the total of all incentives. Bartik addresses what has been a raging debate for decades about the effectiveness of economic development incentives. It is outside the scope of this research to review the substantial body of literature on incentives. (p. 9.)
Bartik, author of that “definitive evaluation” actually has something to say—definitively—about the efficacy of incentives:
. . . based on the research evidence, incentives often do not tip firms’ decisions of where to locate. In 9 out 10 cases, firms are receiving a tax incentive for a location decision they would have made anyway, even if no incentive had been provided. As a result, incentives have high costs per local job they actually create and thus should receive less emphasis.
Bringing Jobs to People: Improving Local Economic Development Policies Timothy J. Bartik, Senior Economist
W.E. Upjohn Institute for Employment Research
https://www.economicstrategygroup.org/wp-content/uploads/2020/09/Bringing-Jobs-to-People_Bartik.pdf August 2020
The IPRE study acknowledges that Tim Bartik is the most knowledgeable scholar on the impacts of tax incentives, but consciously omits his major research finding: that as much as 90 percent of tax incentives go to firms for doing exactly what they would have done in the absence of an incentive.
Should states focus on business climate?
The study does a very brief literature review on the effects of business climate. It attributes to the Federal Reserve Bank of Minneapolis a definition of “business climate,” and presents a quotation suggesting that business climate factors play a decisive role in economic development.
The term “business climate” generally refers to the perceived hospitality of a state or locality to the needs and desires of businesses located in, or considering a move to, that jurisdiction. This perception is fluid, however, and states endure constant fear that the corporate sector will shun them if their business climate fails to meet some elusive standard, and that specific areas will find it difficult to attract or foster new firms and the jobs they provide.
In fact, while the quotation appears in a Federal Reserve Bank publication, it is actually an article, not by Federal Reserve Bank staff, but an article by Brian Dabson, Bill Schweke and Carl Rist of the Corporation of Enterprise Development. Moreover, the quotation is taken out of context; in fact the quotation is a straw man, arguing that states are needlessly obsessed with business climate issues. The gist of the article is to encourage states to shift their strategic thinking to focus on other issues, notably policies that promote profitability and job creation, and warns that there needs to be much more accountability for tax and other incentives, if states choose to use them at all.
First, the definition of business climate is preceded with the sentence, which the IPRE quotation omits, indicating that this is a perception of state policymakers, rather than a reality for business people. The full paragraph actually reads as follows (previously omitted sentence is bolded)
State policymakers often perceive that the most effective way to meet the new economic challenges is to improve a state’s business climate. The term “business climate” generally refers to the perceived hospitality of a state or locality to the needs and desires of businesses located in, or considering a move to, that jurisdiction. This perception is fluid, however, and states endure constant fear that the corporate sector will shun them if their business climate fails to meet some elusive standard, and that specific areas will find it difficult to attract or foster new firms and the jobs they provide.
Dabson and his co-authors go on to offer a warning, and specifically call upon states to reject simplistic notions of tax competitiveness as a guide to strengthening their economy.
Ironically, much of what is done in the name of business climate fails to help either a state’s business community or its residents. . . .
We have to move the debate about business climate away from simplistic notions of tax competitiveness or “getting the government off our backs” to focus on the real disincentives to economic competitiveness and opportunity. States and local governments interested in improving the business climate need to:
1. Design policies that improve the conditions for profitability and job creation, and
2. Increase the accountability of tax and other incentives, if they are used as part of the overall development strategy.
In addition, it is worth noting that Mr. Dabson came to Oregon in 2002 to offer his professional advice to an economic development planning effort in the Portland area. Dabson was retained as an independent expert as part of the Westside Study of Economic Health. (Full disclosure: Cortright led the study team for this project). In comments addressed to the Portland area, Dabson emphasized factors other than business climate, in particular, the region’s ability to attract talented workers, and its high quality of life, as critical factors to the region’s economic future.
The Westside has flourished by being able to attract talented people to move there, but your future task is to ensure that they and their families want to remain. The Portland region has enormous assets that attract people and companies–its environment, its quality of public services, and its way of life. These are fragile, intangible notions; ones very easy to lose sight of in the down and dirty business of development and real estate.
Brian Dabson, Westside Economic Study, 2002, p. 24.
In sum, the IPRE report mis-attributes Dabson’s quotation to the Federal Reserve Bank of Minneapolis; takes Dabson’s quote out of context, presenting a straw man as a his position (when it is actually opposite to Dabson’s thesis), omits Dabson’s warnings against obsessing about business climate and his advice to emphasize other policies, and fails to present recommendations that Dabson made that are directly germane to Oregon’s economy.
For the record, the actual opinion of the Director of Research of the Federal Reserve Bank of Minneapolis, Art Rolnick, was that preferential tax deals for individual companies was pernicious and destructive policy.
. . . . when that competition takes the form of preferential financial treatment for specific companies, the overall economy is made worse off. Such competition results in a misallocation of resources and, in particular, too few public goods.
Does research show business climate affects investment and economic development?
IPRE claims that a positive business climate can drive economic growth. As proof, the IPRE report offers up a second-hand claim—made by a third-party—about a study that deals not with the United States, or established firms, but rather with entrepreneurship incentives in less developed countries, and the rule of law. The evidence? They cite an unattributed web address URL. The IPRE report says:
Research suggests that a positive business climate can drive economic growth – a favorable climate can attract investment and foster economic development. (p. 13)
The hyperlink which documents this “research” takes you to a website of the Donor Committee for Enterprise Development, a coalition of multilateral groups and private aid agencies looking to promote entrepreneurial development in the Third World. In turn, this site has copy of a report prepared by a World Bank researcher Lixin Colin Xu, and its subject is not US states, but less developed nations. Xu points out that underdeveloped countries looking to develop a robust market economy need to ensure rule of law and avoid corruption. This report says nothing, nor does it cite research dealing with economic development differences between U.S. States. It is primarily concerned with what factors give local actors the incentives and willingness to start businesses, and risk capital. Here, verbatim, is Xu’s study’s principal finding:
. . . some basic elements of the business environment are strongly associated with better economic performance. A basic protection of property rights from the grabbing hands of the government proves to matter a great deal for most developing countries. It has significant explanation power for firm sale growth in 54 countries. The effects of corruption are worse than those of taxes in both China and Uganda. Corruption also slows down firm entry. Thus, most developing countries must contain corruption and government expropriation. Research also suggests that economists need to find out the institutional causes of corruption and to deal with corruption from its institutional root.
This report doesn’t apply to competition between US, states, offers no evidence that perceptions of business climate in the United States has any impact on investment or economic development.
In sum, the IPRE report is a deeply flawed guide to understanding economic development. It ignores the conclusion of the researcher it calls “definitive” that tax incentives are largely wasted, it mistakenly attributes a position to the Federal Reserve Bank of Minneapolis, which is exactly the opposite of if IPRE’s conclusion, and mis-applies a study of legal institutions in the third world as evidence of the importance of business climate in the United States. None of this is a valid basis for a state economic strategy.
It’s worth providing some additional context about what the literature says about economic development, business climate and tax breaks. The authors of the two studies discussed above are correct in identifying Brian Dabson and Tim Bartik as recognized experts in this field. Both of these scholars’ work takes a fundamentally different position than represented in the consultant studies.
Tim Bartik is the acknowledged expert on the extent and efficacy of economic development incentive programs. The gnarliest question in evaluating economic development incentives is figuring out whether they actually made any difference to where a firm ended up locating or not. Economic development deal-makers will swear up-and-down (and may even believe) that the last dollar of tax incentives that they provided “sealed the deal” and that without them the company would have gone elsewhere. The abundance of incentives and the obsequiousness of economic development officials has produced a system of cash prizes for bad corporate behavior which rewards companies for doing exactly what they would have done anyhow, provided that they simply engage in the appropriate corporate kabuki of pretending to look seriously at multiple locations. Bartik has used a range of econometric techniques to assess whether and how much incentives actually matter to the location of business investment. His conclusion: roughly three-quarter of all incentives don’t matter; only about a quarter of the time do they tip the balance.
For a new facility location or expansion decision, this means that the incentive tipped the location decision toward this state only 25 percent of the time or less. The other 75 percent of the time, the firm would have made the same new facility location decision, or same expansion decision, even if no incentive had been provided.
Brian Dabson led the Corporation for Enterprise Development, a think tank which led a fundamental re-thinking of state economic strategies in the 1990s. Two decades ago, Brian Dabson, and the other authors and contributors to the Westside Economic Study (pages 17-18), pointed out that the rules of economic development have fundamentally changed:
Despite considerable uncertainty and argument about what direction the future economy will take, nearly all economic experts agree that talented people will be the decisive factor in shaping which places prosper in the global economy.
Traditional models of economic development have pictured a world populated by relatively mobile firms and capital and relatively homogenous but immobile labor: places (especially states and regions within the United States) had relatively similar endowments of trained workers, but firms and capital were relatively free to pick and choose their locations based on minimizing their production costs. In this kind of a world, it makes sense for places to compete for firms and investment as a way of increasing the demand for local labor, and thereby improving local employment and incomes. The most common economic policies, therefore, focus on attracting firms to places, assuming that labor is (or will be) equally available everywhere.
In the knowledge-based economy, the tables are turned. Talented workers, those with the specialized skill and knowledge needed to create new products and technology, are in short supply. Many of these workers are among the most geographically mobile segments of the population: those with relatively high levels of educational attainment, higher than average incomes, and especially those in the 25 to 34-year cohort. To the extent that these persons choose to live in some regions and not others, desirable regions will have a systematically higher level of knowledge- creation activity. Firms seeking access to skilled knowledge workers will be drawn to such places.
Westside leaders, and others concerned with economic development in the metropolitan area should place the quality of local K-12 and higher education at the top of their agendas. This will necessarily draw these leaders into state-level debates, as both the funding and policy decisions for K-12 and higher education are made by state government. Distinctive high quality education is an important source of economic competitive advantage.
State economic development efforts have been studied for decades. The overwhelming conclusion of the literature is that a simple-minded fixation with tax levels, tax breaks and business climate is not a viable way for a state to develop a prosperous economy in the 21st Century. These Business Oregon studies either conceal, mis-state or fabricate claims to support a set of policies which have been thoroughly discredited. Oregon would be making a serious mistake if it relied on these studies as basis for building its future prosperity.
Applied Economics and TadZo, (2022). Property Tax Incentives Impact Study, Final Report, February 2022. Prepared for Business Oregon.
Bartik, Tim (2020). Bringing Jobs to People: Improving Local Economic Development Policies Timothy J. Bartik, Senior Economist
W.E. Upjohn Institute for Employment ResCortright_Westside_Study_2002earch, August 2020
https://www.economicstrategygroup.org/wp-content/uploads/2020/09/Bringing-Jobs-to-People_Bartik.pdf
Cortright, Joseph (2002), with Brian Bosworth, Brian Dabson, Heike Mayer, Lee Munnich, and Mary Jo Waits, Westside Economic Study: FINAL REPORT, June, 2002.
Dabson, Brian, William Schweke, Carl Rist, (1996). “Business climate and the role of development incentives,” May 31, 1996 (Federal Reserve Bank of Minneapolis) https://www.minneapolisfed.org/article/1996/business-climate-and-the-role-of-development-incentives
Dabson, Brian, (2002) “Challenges for the Future,” Westside Economic Study, (Impresa, Inc.), June 2002.
Institute for Policy Research and Engagement. (2025). External Business Recruitment: Are businesses leaving Oregon, and if so, why?, Institute for Policy Research & Engagement School of Planning, Public Policy, and Management University of Oregon, (for Business Oregon). January 2025, https://www.oregon.gov/biz/Publications/Biz_Recruitment.pdf.
Rolnick, Arthur and Melvin Burstein (1994). “Congress Should End the Economic War Among the States,” Federal Reserve Bank of Minneapolis. .
December 31, 1994. https://www.minneapolisfed.org/article/1995/congress-should-end-the-economic-war-among-the-states
Xu, Lixin Colin, (2010). The Effects of Business Environments on Development Surveying New Firm-Level Evidence, The World Bank Development Research Group Finance and Private Sector Development Team August 2010. https://openknowledge.worldbank.org/server/api/core/bitstreams/97e653d9-676a-52e4-b701-2e0cbb50fd97/content
Background: Cortright served as Executive Officer of the Oregon Legislature’s Joint Committee on Trade & Economic Development from 1983 to 1985. He has been an economic development consultant to the Ford Foundation, to the Organization for Economic Cooperation and Development, a non-resident senior fellow at the Brookings Institution, He is co-author of a National Governor’s Association guide to economic development, a US Economic Development Administration analysis of New Growth Theory, the founder of EconData.Net, a pioneering director to state and local economic data, he is author of three Brookings Institution publications on industry clusters, biotechnology and high technology development. Full disclosure: Cortright led the Westside Economic Study consulting team in 2002, and also served as a member of the Upjohn Institute’s advisory board from 2020 to 2025.
Through international organisations, they wield power under the pretence of simply following the experts. Don’t believe them
- by Jan Eijking
I recently re-read Douglas Coupland’s Generation X and had a few thoughts on reading it in 2026.
This is at least the fifth time I’ve read it. It came out in 1991 and was first published in the UK in 1992. I felt like I’d discovered it late when I bought it in, I think, 1993.
Reading Generation X in 2026 is like someone in the year of its release reading a book about young people published in 1956.
The twentysomething characters are often comparing people and styles to those of earlier eras, with 1974 in an imagined place – Texlahoma – being a common choice. I guess it was long enough ago to seem distinctively different. Which is like someone in 2026 comparing today to the long ago time of 2009. Which would feel ridiculous to me – It’s so recent! Not much has changed, style-wise! Is this because culture has stopped changing so rapidly or because I’m old? Seventeen years does not feel as long ago when you’re 55 compared to when you’re 25.
A feeling described by Andy, the protagonist, on the very first page sums up the mood of the whole book pretty well: “darkness and inevitability and fascination”. Not that he or the book is claiming this as a generation-defining feeling: “a mood that surely must have been held by most young people since the dawn of time as they have crooked their necks, stared at the heavens, and watched their sky go out.”
It’s always said that generation X – the demographic cohort – suffers from (or revels in) sarcasm, ironic detachment, cynicism, apathy, etc. But I was struck with how the characters in Generation X are so often sincere, relishing unique moments, craving real connections, savouring beautiful experiences. They tell each other earnest stories (often a strong point of Coupland’s novels) with the rule that no criticism can be made.
Although the book’s title was used to name an entire generation it was written (of course) before a lot of the things that came to define the cohort of generation X. So while it evokes some of the sense of 1990s gen-x-ness, in retrospect it feels much less epoch-defining. For example, there’s little, if any, mention of contemporary music, TV, movies, etc. which are often the things we think of when looking back at what it meant to be young in a certain time.
The three characters – Andy, Dag and Claire – are quite despairing of their chances in life in ways that, today, prompt a “you ain’t seen nothing yet” reaction. They know that their lives won’t be as good as their boomer parents’, owning a home is out of their reach, and the gap between rich and poor has gone crazy.
For example, here are a couple of charts showing how things have gone before and since 1990 (when I assume the book was written).
Clearly, Andy and co would be even more despairing today. But I had forgotten how the concerns of (us) young people back then echoed those since so specifically.
They also have a sense that they’ve missed out on capital-H History, only just about remembering seeing the Vietnam War on TV as children. Regarding which, (a) be careful what you wish for, and (b) this feels pretty America-centric given, for example, 1989’s fall of the Berlin Wall and the collapse of communism. But, still, it’s a contrast to how someone today would think about their place in history (“Too much history happening!” I imagine).
There are other things that we might say are different or similar to today. The characters’ fear of nuclear annihilation has shifted to a more generalised fear of “terror” accompanied by climate catastrophe. But the way they mix and match styles and ideas from various past decades perhaps seems even more common today, now that we have access to so much media from everywhere and everywhen all at once.
There is something slow about their lives, which isn’t solely because they’ve opted out of the rat race and live in a desert resort picking up work here and there. With no internet and no cellphones, it’s all landline phones, answering machines, letters in the post, TV news, magazines. Communication and information is delayed and asynchronous.
§ I’ve always loved this book and it’s interesting to re-read it every decade or so. Reading it now, it almost seems incidental to what generation X came to be seen as, with so many fashions, images, songs, movies, and ideas piled on top of the pretty spare foundation here. If it hadn’t named a generation in its title, and been peppered with catchy definitions as if interpreting the language of young people for their elders (“McJob”, “Successophobia”, “Ultra Short Term Nostalgia”), I wonder how we’d remember it now.
I was really into generation X stuff in the 1990s because it seemed such a novelty, to have your generation named and to read articles about it, see movies attempting to epitomise it, etc. I hadn’t been aware of much definition of generations before that – was it less of a thing, or was I just oblivious until I reached adulthood?
I remember visiting a friend in the mid-90s and she’d saved me a magazine article about generation X because in those days an article was a rarer thing, something that only existed if you bought that one physical mag that one month, barely shareable. I try to avoid nostalgia too much, which is very hard, but the book’s world, just before the internet, is in many ways deeply seductive to me. But then nostalgia does prevent you thinking about the downsides.
The book probably hit me at the right time, at just the right age, during and immediately after university, emerging into a recession, in no rush to find a “real” job, never wanting a job that required having to dress smartly. Andy’s world was in some ways a fantastical one to me – not only a desert resort town, but in a country I hadn’t yet even visited, and about people unlike anyone I knew. But there was also something about it that got its hooks deep into me. Its vibe, as we’d say now.
Investigating three real-world incidents in our cybersecurity evaluations
It happened again! This is turning into something of a pattern.Last week OpenAI accidentally exploited Hugging Face when one of their frontier models broke out of a sandboxed container and hacked into Hugging Face to try and get the solutions to the cyber benchmark it was executing.
This inspired Anthropic to double-check their own logs, and it turned out they had three similar (albeit less impressive) incidents, the earliest of which played out in April!
Of the 141,006 evaluation runs we reviewed, we identified three separate incidents (involving six total runs, four of which impacted the same organization; the other two incidents each happened in independent evaluation runs). [...]
In all cases, Anthropic’s evaluation prompt specified to Claude that its environment was a simulation and that it had no internet access. Due to a misunderstanding between us and our evaluation partner, this was not the case, and internet access was available. Because of this, when Claude’s search led it to real systems on the open internet, it treated them as part of the exercise. [...]
Operating under the false belief that all accessible entities were intended to be in-scope for the exercise, Claude compromised the impacted organizations’ infrastructure using basic techniques, such as exploiting weak passwords and unauthenticated endpoints.
One of the companies was targeted because its name happened to match the fictional name in the eval.
The most concerning of the three incidents involved Claude uploading a malware package to PyPI, after a comically convoluted sequence of steps to get an account:
[...] in order to create a PyPI account, Claude needed an email address. And in order to create an email address, it needed a phone number. To get a phone number, after failing to find a free phone number service, it tried—and failed—to obtain funds to pay for a phone number through several different means. It finally backtracked, found a free, non-blocked email provider, used this to register a PyPI account, and then used this account to upload malware to PyPI.
That package was then installed by a security company that "routinely installs Python packages and scans them for malware", and the executed code was able to exfiltrate credentials back to Claude!
Thankfully that package was removed from PyPI by other automated scanners an hour after it was published, but it had still been downloaded and executed on "15 real systems" by that point.
It's abundantly clear now that running evals of cyberattack potential in models is a spectacularly risky business. Every AI lab needs to pay attention to this. Keeping a close eye on what's happening in those sandboxes is crucial.
Via Hacker News
Tags: pypi, python, sandboxing, ai, generative-ai, llms, anthropic, ai-ethics, ai-security-research
Release: llm 0.32rc2
Hot on the heels of RC1, this fixes a dependency issue and also adds two neat new features:
- The default model for users who have not set their own default is now GPT-5.6 Luna. It was previously GPT-4o mini. Luna is a much better and more recent model, albeit slightly more expensive - $0.20 per million input tokens and $1.20 per million output tokens, compared to $0.15/$0.60 for 4o mini. You can switch back to 4o mini using
llm models default gpt-4o-mini, or switch to GPT-5 nano, an even cheaper default model ($0.05/$0.40), usingllm models default gpt-5-nano. #1576- New llm openai endpoint command for running prompts, chats and model listings against arbitrary OpenAI-compatible endpoints without first configuring a model. These calls are not logged. #1565
The llm openai endpoint command is really cool. I got frustrated at the lack of an obvious CLI tool for trying out prompts against arbitrary OpenAI Chat Completions imitation endpoints, so I decided to add that to LLM itself.
You don't even have to install LLM to use this. Here's a uvx one-liner for running a prompt - with tools - against an LM Studio local model:
uvx --pre llm openai endpoint http://127.0.0.1:1234/v1 \
T llm_version -T llm_time --td \
-m google/gemma-4-31b 'what is the current LLM version? And the time?'
The writing assignments I give my students are gym tasks, not work tasks. I ask them to write policy memos not because the world needs more policy memos. I assign them because the very act of writing, which includes thinking and outlining and drafting and editing, making and criticizing and revising arguments, will help develop the critical thinking skills they will need in their future careers. And without this constant mental exercise, those skills will atrophy. Employers are already noticing.
— Bruce Schneier, Should You Use AI for a Task? Here’s a Simple Way to Decide
Tags: ai-ethics, writing, ai-misuse, generative-ai, bruce-schneier, ai, llms
Release: llm-chat-completions-server 0.1a0
A key goal of the new content-addressable logs in LLM 0.32rc1 was being able to support OpenAI Chat Completion style requests where each incoming message extends the previous conversation, like this:
curl http://localhost:8002/v1/chat/completions \
-H 'Content-Type: application/json' \
-d '{
"model": "qwen3.5-4b",
"messages": [
{"role": "user", "content": "Capital of France?"},
{"role": "assistant", "content": "Paris."},
{"role": "user", "content": "Germany?"}
]
}'
Here the conversation state is tracked by the client, so each of these requests gets longer and longer. The new schema design in LLM is designed to de-duplicate these using hashes of the individual message parts.
To test that out, I built this plugin:
uv tool install llm --pre
llm install llm-chat-completions-server
llm chat-completions-server -p 9001
Running this starts a localhost server on port 9001 that exposes your full collection of LLM models (from any plugins you have installed) using a ChatGPT Completions compatible endpoint.
GPT-5.6 Sol wrote the whole thing - it turns out it knows the OpenAI Chat Completions API shape really well.
Release: llm 0.32rc1
This RC for LLM 0.32 finishes the work that started in LLM 0.32a0 - it adds a new schema design that does a much better job of capturing the details of the prompts and responses returned by the latest model families.
The most important change is the use of content-addressable hash IDs for stored messages. This allows de-duplication in the database, and means that LLM can now represent trees of messages for forked conversations.
Since it involves a significant schema change - new tables only, and old data should not be affected at all - it's worth running a backup of your existing logs.db before upgrading to the RC:
llm logs backup logs-backup.db
The RC also adds support for gpt-5.6-sol, gpt-5.6-terra, and gpt-5.6-luna.
Tags: llm
The Covid vaccine didn’t work, and vaccines cause autism. But hydroxychloroquine worked, and so did ivermectin. Anthony Fauci killed millions of people.
Climate change is a hoax. Wind power caused a massive TV blackout during the Trump-Biden debate. Solar power is useless because the sun doesn’t shine at night, and batteries don’t exist. Smoke blanketed North America, not because of climate change, but because Canada didn’t rake its 2 million square miles of boreal forest.
We’ve destroyed Iran’s military, and the Iranian regime is begging for a deal. Also, the U.S. isn’t running out of precision weapons as a result of the Iran war, and furthermore the shortage is Joe Biden’s fault.
The economy is in a “golden age.” Prices are down. And Trump has a 59 percent approval rating.
Trump won the 2020 election.
Communism is the greatest threat facing America.
The modern American right is very good at hating. MAGA hates immigrants (unless they’re white South Africans); it hates liberals; it hates scientists.
What the ongoing show trial of Fauci — which motivated this post — has really driven home, however, is that what Trump and his supporters hate most of all is reality. They know what they want to believe. They fly into paroxysms of rage whenever someone points out that the world isn’t what they want it to be. And they always want to shoot the messenger.
Of course, motivated reasoning isn’t confined to the right. Some people on the left insist that zoning restrictions have no role in causing high housing prices, that it’s all about Wall Street greed. Many centrists insist that being in the middle on a left-right scale — which isn’t even how most voters think about politics — is the secret to electoral victory. And so on.
I’m not immune to the temptation to believe what I want to be true. I try to fight it, but don’t always succeed. Still, I try to acknowledge and admit it when I have let wishful thinking warp my judgement.
But what we’re seeing now isn’t run-of-the-mill motivated reasoning. It’s something far more extreme.
If believing something suits MAGA’s prejudices and interests, they don’t hesitate: they simply insist that it’s true. They routinely dismiss scientific and statistical evidence, but they don’t stop there. They’re perfectly willing to deny reality even if the truth is staring them in the face.
Thus, Trump urged Americans to remember that 2024 TV blackout, which nobody remembers because it didn’t happen. He insists that California has “blackouts and brownouts every weekend,” when the state’s 39 million residents can tell you it doesn’t. He says that you must show ID to buy groceries, which everyone who buys their own food knows isn’t so.
Do Trump and his followers actually believe these things? As I see it, that’s a category error, starting from the presumption that they even accept that objective facts exist. All the evidence (Hah! “Evidence!”) says that they don’t.
George Orwell, whose work seems more relevant by the day, knew all about this mindset. In his essay “Looking back on the Spanish war” he wrote about how the rise of totalitarianism had changed the rules:
In the past people deliberately lied, or they unconsciously coloured what they wrote, or they struggled after the truth, well knowing that they must make many mistakes; but in each case they believed that ‘the facts’ existed and were more or less discoverable. And in practice there was always a considerable body of fact which would have been agreed to by almost everyone.
Totalitarians, however, denied that objective facts existed. Furthermore, reality is mutable, changing with the leader’s whims:
If the Leader says of such and such an event, ‘It never happened’ – well, it never happened. If he says that two and two are five – well, two and two are five.
If you find the assertion that MAGA has a totalitarian mindset over the top, all I can ask is, have you been following the news?
What’s remarkable is the extent to which Republican politicians act as if they are living in a totalitarian state, when they aren’t — not yet, anyway. ICE would clearly like to be an American Stasi, policing any deviation from the party line, but it’s not able, so far, to arrest members of Congress who express skepticism about the president’s claims. And many Republican politicians still, I believe, know the difference between fantasy and reality.
But they behave as if they were courtiers to Kim Jong Un. Trump speeches are sometimes followed by “endless applause moments,” because none of Trump’s loyalists wants to be seen as the first person to stop clapping.
The susceptibility of the GOP to this totalitarian mindset has come as a surprise even to cynics. I have some idea of how this happened: It involves a confluence of big-money corruption, crony capitalism, religious fanaticism, and the ever-present forces of racism and sexism. But that’s a subject to be delved into another day.
What’s clear is that the war on reality is exacting a high price on America as a whole.
Remember, 1.2 million Americans died from Covid — a number that would have been much lower if MAGA misinformation hadn’t caused so many people to refuse vaccination. Now we’re seeing a frightening rise in measles and other infectious diseases, and God help us if another pandemic strikes with Trump or his successor still in charge.
Climate denial and hostility to renewable energy will mean more pollution even as it consigns the U.S. to energy and economic backwardness.
And the Iran war — which Trump started and now refuses to end because he won’t accept reality — has destroyed America’s credibility and depleted our weapon stocks with stunning speed.
But anyone pointing out the obvious is, of course, a Communist.
MUSICAL CODA
Used this before, but different performance
Advancing the price-performance frontier with GPT‑5.6
Huge price drop from OpenAI today: GPT-5.6 Terra got a 20% reduction, and GPT-5.6 Luna got a massive 80% drop.OpenAI credit 5.6 Sol with enabling this: in How GPT‑5.6 fuses frontier intelligence with frontier efficiency they describe using 5.6 Sol to optimize load balancing, and more impressively to optimize inference itself:
We also used GPT‑5.6 Sol to optimize the model’s forward pass: the computation that transforms inputs into next-token predictions. Even when individual operations are fast, excess memory movement, synchronization, and inefficient data layouts can leave GPUs idle. To avoid this, GPT‑5.6 Sol found work that could be precomputed, avoided, or parallelized. With Codex, GPT‑5.6 Sol autonomously rewrote and optimized our production kernels, the core code that executes the mathematical operations that make up the model. This worked in part because we’ve trained GPT‑5.6 to be effective at writing and improving kernels in Tritonand Gluon, two open-source GPU programming languages maintained by OpenAI. These efforts, combined with broader kernel advancements from GPT‑5.6 Sol, reduced end-to-end serving costs by 20%.
That Luna price drop completely changes the landscape with respect to lower priced models. At $0.20/million tokens for input and $1.20/million for output Luna is now cheaper than Google's Gemini 3.1 Flash-Lite ($.025/$1.50).
Anthropic's cheapest current model is Claude Haiku 4.5, and that's $1/$5 - Luna is now 1/5th of that for input, previously it cost the same.
My agent.datasette.io demo site was running on Gemini 3.1 Flash-Lite. I've switched it over to Luna.
Via Hacker News
Tags: ai, openai, generative-ai, llms, anthropic, gemini, llm-pricing
The Dark Doodad Nebula drifts
Democratic centrists have a problem. They have enormous influence over the debate — indeed, they manage to get national news coverage almost at will as they complain that the Democratic Party has moved too far to the left and will doom itself if progressives are allowed to take over. Their problem is that they don’t represent any actual voters.
I don’t mean that there aren’t moderate Democratic voters; there are plenty of them. It’s a perfectly reasonable thing to be, and they have as much right as anybody to make the case for their beliefs. But the professional centrists aren’t connected to them in any meaningful, practical way.
Nor, for that matter, have the centrists managed to find charismatic, dynamic candidates to carry their banner, even if moderate Democrats have won some primaries. What they’re left with is something of a Potemkin movement, in which a small number of people rail against the prevailing trend in the Democratic Party and get lots of attention for their arguments, but are unable to make much progress in their real goal — fighting progressives — in part because they aren’t inclined to engage in politics on the ground.
If you’re in a battle for the soul of your party, that’s a recipe for defeat.
I’m not going to settle the case of Moderation v. Mobilization here, except to note that for most candidates, in an environment where all politics is national, moderating on issues has lost most of the efficacy it once had. Furthermore, the problem Democrats have is not that voters think they’re extreme on policy, but that voters think they’re weak.
That perception is common among Democrats themselves, which helps explain why progressive candidates are doing so well right now. Democrats who don’t seem to believe in anything all that strongly are being lapped by candidates whose progressive ideas and sense of outrage signal to voters that they are eager for change and want to fight.
So you get races like the one for Wisconsin governor, where a new Marquette University poll shows state Rep. Francesca Hong with 38%, former lieutenant governor Mandela Barnes (who lost a Senate race four years ago to the odious Ron Johnson) with 16%, and Milwaukee County Executive David Crowley (who has the endorsement of Gov. Tony Evers) with 7%.
Cue the freakout:
Every race is a little different, but we’re seeing something similar play out in many Democratic primaries: A lefty candidate goes up against a couple of uninspiring mainstream Democrats and captures the bulk of the attention and votes, leading centrists both inside and outside the state to shout “How could this have happened? We’re doomed!”
One of the arguments the centrists make is that it might be fine for a socialist to win in New York, but they can’t win in a closely divided state like Wisconsin or Michigan. But as Perry Bacon points out, strongly progressive candidates have won lots of races in swing states and swing districts in recent years. Wisconsin senator Tammy Baldwin is rated by Voteview (the most objective measure I know of) as more liberal than 90% of congressional Democrats — and she won a third term in 2024, when Trump won the state. That doesn’t mean Hong will win a general election if she gets the nomination, but it does mean that the fact that she’s farther to the left than her primary opponents isn’t in and of itself a bar to victory. And those backing Barnes and Crowley should ask themselves why the candidates they’re backing don’t seem to have much appeal to the voters.
Right now, the argument against the progressive candidates is being carried by has-been pundits and groups like Third Way, which are quite well-funded but have no identifiable constituency. They’re basically a bunch of people sitting around in a Washington office writing op-eds. That’s not a useless endeavor — spreading ideas is worthwhile, depending on the ideas — but when it gets down to the crunch time of an election, it isn’t particularly potent.
In stark contrast, the Democratic Socialists of America have become a formidable force within the Democratic Party because they are committed to organizing. They’re out there knocking doors and making calls and staging events every day, which is something that the centrists aren’t doing. When the political context shifted in a way that made their outsider persona and uncompromising policy ideas more appealing, they were ready to take advantage.
Now, it’s true that there are people and factions within the DSA that believe some pretty far-out things, things that lots of politicians who are either members or associate themselves with the group (including the most prominent ones like Zohran Mamdani) don’t agree with. But the point is, they’re doing politics, while the centrists’ strategy seems to be focused mostly on getting attention from the elite media.
And as much as the centrists beg candidates to focus on those magical “kitchen-table issues,” that’s exactly what the successful DSA candidates are doing. What do you think universal health care and child care are about, if not the everyday reality of people’s lives? And here’s something else that’s important: While centrists often complain that Democrats are trapped in their self-reinforcing bubbles and disconnected from reg’lar, salt-of-the-earth Americans, nearly all the centrists that I’m aware of are just as disconnected, if not more so.
They live in Washington or other major cities, they’re immersed in politics, and they suffer from the Pundit Brain ailment that makes its victims believe ordinary voters have coherent ideological beliefs and respond to subtle changes in the policy-based appeals candidates make. There’s something else going on, too: Their view of the political world is dominated by their contempt for the far left, which convinces them that what we used to call hippie-punching is the cleverest of political strategies.
This is a phenomenon I’ve noticed in many normie Democrats I know who live in very liberal places. They can’t stand Trump, of course, but the people who really drive them up a wall are the ones they encounter all the time where they live: the lefties.
This is a variation on a more familiar phenomenon, that of the radical who hates the internal rivals on their own side much more than they hate the enemy they’re all supposed to be fighting. That’s the Judean People’s Front effect:
But the hatred of the center for the extreme may be just as common, and the reason is familiarity. If you’re a mainstream Democrat who lives in San Francisco or New York, you almost never encounter MAGA-hatted, immigrant-hating, misogynistic far-right troglodytes in person. You see them online, you know they’re there, but you don’t have to pay more than a moment’s attention to them if you don’t want to. On the other hand, far-lefties are everywhere in your actual life, and everything you find annoying about them is right in your face, all the time.
I know people who say that if they have to hear one more land acknowledgement, or watch a couple jump up at the beginning of a concert to try to start a “Free Palestine!” chant when there are only liberals in the audience anyway, they’re going to lose their minds. Lefties are big on public expressions of belief in ostensibly non-political contexts — sometimes confrontational ones — and it’s not surprising that many liberals find it exasperating and often counter-productive.
An unusually thoughtful and magnanimous normie liberal might conclude that while the people pestering them at the supermarket are sometimes carried away by the exuberance of youth or aren’t quite as informed as they might be, their hearts are basically in the right place and they agree with them on fundamental goals like justice and equality. But that’s not easy to do when the people you find so annoying are all around you.
We all have people on our side who drive us up the wall for one reason or another. But there are a couple of things to remember as the primary season continues to play out. First, the centrists should understand that the current momentum behind the far left was enabled by the failures of mainstream Democrats and centrists in particular. Where are the dynamic, charismatic, politically adept, and appealing centrist Democratic candidates? Well let’s see…there was Bill Clinton, who ran his last race 30 years ago.
Second, you should guard against the belief that if people in your party whose policy beliefs are different from yours win elections, the whole party is doomed. Just look at the experience of the Tea Party, a bunch of halfwits traipsing around in tricorn hats advocating unpopular ideas. They took over the GOP after Barack Obama was elected, and what followed was a series of Republican victories — in 2010, 2014, and 2016 — broken only by a presidential election in which the party nominated a more traditional candidate.
The Democrats might not have a similar run of success after the current progressive uprising. But if the centrists now warning of doom could point to their own political achievements, they’d have a much stronger case to make.
Thank you for reading The Cross Section. This site has no paywall, so I depend on the generosity of readers to sustain the work I present here. If you find what you read valuable and would like it to continue, consider becoming a paid subscriber.
I’ve started a series of Canon articles where I explain my ideas as plainly & unambiguously as possible—no analogies, no persuasion, just the facts. I started with Canon TDD. I expect to continue with Canon JUnit, Canon XP, and Canon Make-The-Change-Easy.
The growth of anything forms a logistic curve:
Take a software product—throughout the curve we ship changes, attract customers, & bill those customers. However, the smoothness of this curve is a dangerous illusion. The beginning, middle, and final portions of this curve require completely different approaches, even if they look superficially similar.
I promised that the Canon series would be no theory, just stuff. One tiny bit of theory is essential to the 3X: Explore/Expand/Extract story. It’ll introduce vocabulary we’ll use in the rest of the explanation.
That S-shaped curve is described by a formula:
But that doesn’t help much when we’re trying to make young things grow. Instead, we can see S curve curve as a tug-of-war (oops, analogy, sorry) between two feedback loops:
To create the S curve, first you get the reinforcing loop on the left operating. The more your idea (product/company/movement/whatever) grows, the easier it is to grow more. Then later you get the inhibiting loop on the right taking over, slowing & eventually capping the growth.
A successful idea:
Explore Finds a new growth loop (it needs to me new or somebody else would already be operating it).
Expand Keeps it operating long enough for the idea to scale, avoiding all the potentially-fatal inhibiting loops along the way.
Extract Finishes growing as the ultimate inhibiting loop kicks in.
(Bonus) Uses the resources from the first curve to kick off the search for new curves with their own growth loops.
Schematically, the progression looks like this:
The central thesis of 3X: Explore/Expand/Extract is that each of these phases, no matter how much they resemble each other, actually requires its own approach to:
Finance
Team size
Project management
Personnel
Technology
Risk management
Implementation
Marketing
Sales
Applying the approach from one phase to an idea in another phase kills ideas.
Risk: Nobody cares. The idea dies for lack of fuel.
Goal: Find the growth loop. You can’t predict a new loop so you have to find it experimentally.
Strategy: Rapid experiments, maximum creativity, conceptual blending.
Tactics: Tiny teams, no dependencies, quickly discard failures.
Exit: One experiment works way better than others.
Risk: Can’t scale.
Goal: Avoid fatal obstacles while scaling furiously.
Strategy: Intense focus on the next emerging growth bottleneck.
Tactics: Throttle growth, discard non-essential features, good-enough-for-now scaling.
Exit: Cause and effect of growth become predictable.
Risk: Can’t sustain.
Goal: Growth with profit,
Strategy: Safely optimize while growing.
Tactics: Small, safe experiments; roll out successes; optimize costs.
Exit: No further return on investment.
The tricky trick of 3X is managing projects in different phases in the matching styles. You have some Extract products that pay the bills & pay for a portfolio of Explore projects. When a project hits Expand, treat it as a priority even over profitable Extract activities. (Simple to say and apparently nearly impossible to execute.)
Most teams don’t have a strategy problem. They have an adaptation problem.
Your plan was never going to survive contact with reality. The question is whether your organization bends or breaks when it doesn’t.
I help teams bend. Adapt to Thrive.
Booking a handful of custom talks and advisory engagements now. I interview your people, measure your real software flows, and hand you the truth plus what to do about it.
Curious whether it fits? Tell me about your team.
A year ago, I warned readers about Meta in a provocative article entitled “Is This What a Bubble Looks Like at the Top?” I had many reasons for skepticism about Mark Zuckerberg’s empire, but focused on a single absurd fact in the opening paragraphs.
Meta fans were angry at me, but subsequent events have validated my concerns. Meta’s shares have fallen almost $250 per share since then—that’s a decline of half a trillion dollars in market value.
And the situation at Meta is now getting worse, not better:
Earlier this year, daily active users on Facebook and Instagram declined for the first time ever. This is devastating news for the Meta—because the company’s social media business pays the bills for all its boondoggles.
A few days ago, Zuckerberg talked about a plan for selling Meta’s excess AI computing capacity. This shocked Wall Street—Zuckerberg is spending hundreds of billions on new data centers. But that makes no sense if the company already has excess computing power.
Meta’s quarterly investor call yesterday made matters even worse. Earnings were far below estimates, but free cash flow numbers were a total disaster—down more than 90%. Guidance for the future was (no surprise here) cautious, and Zuckerberg refused to give any estimate of next year’s capital investments, which are already out-of-control and spooking investors.
Zuckerberg used the occasion to publish a bizarre opinion piece in the Wall Street Journal—proclaiming himself as a champion of human potential and an opponent of centralized power. This is the same guy who laid off 8,000 employees a few days ago, and is building a data center as large as Manhattan. By the way, Zuckerberg himself can’t be fired—because he limits the voting rights of most shareholders.
Yes, it’s been a bad week for Mr. Z. But all of the above is just the tip of the iceberg.
Below are nine far more terrible revelations about Meta—much worse than the earnings call yesterday. They paint a disturbing picture of a business out of control and descending into chaos.
After looking at them, you will legitimately ask if any company has made more bad decisions in the history of capitalism.
A battery technology that’s getting a lot of attention is solid-state batteries, lithium-ion batteries that replace the liquid electrolyte with a solid material. Chinese battery manufacturer CATL alone had more than 1,000 people devoted to solid-state battery research as of 2024, and battery manufacturers like BYD, LG, and Samsung are also working on the technology. US and European startups making solid-state batteries have collectively raised over $4 billion as of 2025.
Solid-state batteries have several potential advantages over the lithium-ion batteries with liquid electrolyte we use now. For one, replacing the liquid electrolyte with a solid should allow for lighter batteries, requiring less mass per unit of energy delivered. And because the liquid electrolyte currently used in batteries is flammable, replacing it with a solid could make batteries safer and less susceptible to fire.
I wanted to better understand why, exactly, solid-state batteries have these advantages compared to conventional lithium-ion batteries, and how they fit into the broader arc of lithium battery improvements.
Batteries supply energy by way of chemical reactions. And chemical reactions, regardless of the chemicals involved, all release or absorb energy using the same mechanism: an electron or electrons move from one potential energy well to another. In a chemical reaction that gives off energy (an exothermic reaction), electrons move from a higher potential well to a lower potential well, giving off energy in the process.
“Potential well” is fairly abstract, so I find it useful to consider an analogy with gravity. Say a ball is in a shallow groove at the top of a tall hill, and there’s another shallow groove at the bottom. The ball is being tugged downward by gravity, which gives it potential energy, a function of how much mass the ball has and how high it is above the bottom of the hill. By itself, the ball at the top of the hill won’t move, but if you give it a little push to nudge it out of its groove, it will roll downhill, releasing its potential energy in the process. This potential energy is converted to kinetic energy (the velocity of the ball), which in turn converts to thermal energy from friction, slowing the ball down until it stops in the lower groove.
Chemical reactions work in a somewhat similar way. But instead of gravity, the potential energy comes from electromagnetism: the positively charged nuclei tugging on the negatively charged electrons. In an exothermic reaction, atoms start in some particular “groove,” their electrons in some particular arrangement. But if you give the atoms a little kick (say, by heating them up so their collisions become more energetic), you can knock them out of their groove, letting them “roll downhill” into a lower-energy configuration, converting their electric potential energy in the process. Some of that potential energy (half, in fact) will go to increasing the electrons’ velocities; the rest will be released as vibration (heat), or as a photon.
So, for instance, say you start with one methane molecule (one carbon and four hydrogens, CH4) and two oxygen molecules (each with two oxygen atoms, O2). These molecules start with their electrons in a particular configuration, the oxygen atoms bonded with each other and the hydrogen atoms bonded with the carbon. At room temperature, O2 and CH4 largely won’t react with each other: each is sitting in its own potential well that takes energy to climb out of. But give them a kick by adding heat, and they can “fall downhill,” going through a series of reactions and ending up in a lower-energy configuration — the hydrogen and carbon atoms each bond with oxygen, forming H2O and CO2. The resulting electron configurations are in lower potential energy wells, with much of the difference being released as heat.
Lithium-ion batteries work by using, unsurprisingly, chemical reactions with lithium. When a lithium-ion battery discharges, lithium ions and their electrons “fall downhill,” moving from one configuration at the anode (inserted between sheets of graphite, known as “intercalation”) into a different, lower-energy configuration at the cathode (intercalated in another material, such as lithium iron phosphate, LiFePO4). The battery is structured to capture energy from this reaction. Lithium ions can pass from the anode into the electrolyte, but electrons can’t: they must go around, through a metallic conductor that connects the anode and the cathode. This flow of electrons is the electrical current that batteries generate. (When a battery is charging, the reverse happens: a voltage placed on the conductor forces electrons back uphill into the anode, with lithium ions flowing back through the electrolyte to keep the charge balanced.)1
Lithium is a favored choice for a battery because an electron leaving lithium has farther to fall than an electron leaving any other metal when coupled with the appropriate reactant. Lithium is also a very light atom (an atomic mass of around 7), which, combined with the large “drop,” means that lithium reactions yield a high amount of energy. Per unit mass, lithium reactions release roughly as much energy as burning gasoline.
But if this is true, why are lithium-ion batteries so much less energy dense than gasoline?
One big reason is the oxidizer. The chemical reactions we rely on for energy typically require some downhill destination for electrons to end up at, which is known as an oxidizer. When burning gasoline, the oxidizer is oxygen in the surrounding air: inside a gasoline engine, fuel and air are mixed together and then ignited, triggering the chemical reaction — an explosion — that powers the engine. Gasoline-powered cars, in other words, don’t need to carry their oxidizer with them, because there’s always one available in the surroundings.
Lithium-ion batteries, on the other hand, aren’t so fortunate. They need to carry their electron destination with them, in the form of the cathode. This adds a lot of extra mass compared to what a gasoline-powered car needs to carry. If a car needed to carry its own oxidizer with it, it would need about 3.5 kilograms of oxygen for every 1 kilogram of gasoline.
More generally, it just requires a lot of material scaffolding to structure the lithium reaction in a way that lets you extract energy from it in the form of electric current. At the anode, each lithium ion requires an additional six atoms of carbon, forming graphite sheets that the lithium ions can nestle into. A similar intercalation structure is required at the cathode. On top of this is the extra mass for the electrolyte, the separator, the current collectors, and so on. As of 2019, every gram of reacting lithium in a battery required about 70 grams of supporting material (though this number has probably fallen somewhat since then).
Without this material scaffolding, the reaction can still take place, but in a non-useful way. If something creates a direct path between the cathode and the anode, the reaction will run nearly instantly, creating a lot of heat and triggering other chemical reactions that will destroy the battery, but no useful electric current. Modern battery design, in fact, takes a lot of effort to prevent these runaway reactions from taking place.
The benefit of all this material scaffolding, of course, is that you can use the same chemicals for the reaction over and over again. The intercalating electrodes on modern lithium-ion batteries in particular are very good at this; because the electrode structure is maintained when the battery charges/discharges, lithium-ion batteries can be used for very large numbers of cycles while maintaining most of their capacity. When you burn gasoline, on the other hand, you’re discharging the products of the reaction continuously (which, of course, is the whole reason we want to switch away from fossil fuels in the first place, to stop the discharged CO2 from building up in the atmosphere). You could, theoretically, dispose of the lithium-ion battery’s scaffolding by having some sort of lithium-based internal combustion engine, but this would work terribly and be outrageously expensive to run (though some people are interested in using oxygen in the air as a battery oxidizer with lithium-air batteries).
The major potential benefit of solid-state batteries is a substantial reduction in this material scaffolding.
A pernicious issue with current lithium-ion batteries is dendrites. As we’ve noted, at the anode, lithium ions are nestled between sheets of graphite. But the anode holds the lithium ions very loosely, only slightly better than metallic lithium does. This is useful, because ions can easily migrate into the electrolyte, thus letting the battery work, but it’s a double-edged sword: under the right conditions, the lithium ions that are supposed to enter the anode during charging might instead acquire an electron at the surface of the anode, forming tree-shaped structures of metallic lithium called dendrites, instead of nestling between the sheets of graphite. If a dendrite pierces the separator between the anode and the cathode, it creates a direct path between the two, letting that runaway reaction that batteries are designed to prevent take place. (This doesn’t immediately react all the lithium in the battery — as electric current flows through the dendrite, the dendrite heats up, eventually melting and breaking the path — but the heat from the brief reaction can be enough to trigger other chemical reactions, resulting in thermal runaway and destroying the battery.) A great deal of battery development effort is devoted to preventing these dendrites from forming.
If, however, the liquid electrolyte were replaced with some sort of solid material, these dendrites might stop being a problem.2 With a strong, solid electrolyte, dendrites wouldn’t (in theory) be able to make their way through it, though with current solid electrolytes dendrites still seem to find their way through. And if the risk of dendrites were eliminated, you could switch to a different anode, dispensing with the graphite intercalating structure entirely, using an anode of pure lithium metal.3 And because the solid material would eliminate the flammable electrolyte, the resulting battery might be safer as well.
Solid-state batteries probably aren’t imminent — the chairman of CATL ranks them as 4 out of 9 on the technological readiness scale, and has indicated that commercial viability “has yet to be established.” But the expectation that they could be “[p]otentially safer, more energy dense, and perhaps eventually cheaper than today’s batteries” is pushing manufacturers around the world to try and make them happen.
Thanks to Austin Vernon for reading a draft of this. All errors are my own.
The reason that electrons migrate during discharge is somewhat complex. At the anode, lithium ions migrate into the electrolyte, because the electrolyte is a more appealing location with a lower potential energy well. At the cathode, the reverse occurs; lithium ions migrate from the electrolyte into the cathode. At each electrode, this creates a net charge which generates an electric field, which stops further migration. But because you now have a net negative charge at the anode interface (since positively charged lithium ions have left) and a net positive charge at the cathode interface (because positively charged lithium ions have entered), electrons flow between the two electrodes when they’re connected by a conductor to equalize the charges. But because each arriving electron is paired with an arriving lithium ion, the charge differences between the anode and the cathode don’t equalize, letting current flow continuously until there’s no more room for lithium ions in the cathode or no more lithium ions left in the anode (though most batteries have a cutoff that stops current flowing when the voltage drops below some level).
In a crystalline solid electrolyte, lithium ions migrate through it by hopping from one vacancy in a solid crystal lattice to the next. Thanks to their thermal energy, the ions vibrate back and forth trillions of times per second, and occasionally a vibration will have enough energy and be in the correct direction to squeeze past the surrounding atoms into a nearby vacancy.
A company in the 1980s, Moli Energy, tried to make lithium batteries with lithium metal anodes but gave up after dendrite problems caused their batteries to catch fire, requiring a massive recall.
This essay originally appeared in The Guardian.
I teach public policy at the Harvard Kennedy School and the Munk School at the University of Toronto. And it will come as no surprise to you that my students regularly use AI to complete their writing assignments. Doing so is a waste of their tuition money. But if their entire career is going to include AI writing assistants, why shouldn’t they embrace their future?
The best way I’ve found to explain the dilemma comes from the AI researcher Daniel Meissler: it’s the difference between work and the gym.
At work, if your job is to move a bunch of heavy things from one side of the room to another, you should use whatever assistive tech you have on hand: a wagon, a forklift… even an AI-powered robot. But at the gym, it makes no sense for that robot to lift weights for you. The point of weightlifting isn’t to move heavy things across the room; it’s to actually lift those heavy things.
The same analysis holds for any task an AI can do for you. If it’s work—if the task has to be done and no one cares how—then it’s fine to use AI assistance. But if the task is more like the gym, and how the task is done is at least as important, then it probably doesn’t make sense to use AI.
This, of course, assumes that the AI is actually up for the task and that it’s trustworthy: that it can do the job well, that its mistakes are minimal and correctable, that it’s been secured from cyber-attacks that would influence its results. Those are all important, and shouldn’t be minimized. There’s no point giving an AI something that it can’t do reliably. But once you’re confident that the AI can perform the task, the work vs. gym distinction helps you decide if it should.
The writing assignments I give my students are gym tasks, not work tasks. I ask them to write policy memos not because the world needs more policy memos. I assign them because the very act of writing, which includes thinking and outlining and drafting and editing, making and criticizing and revising arguments, will help develop the critical thinking skills they will need in their future careers. And without this constant mental exercise, those skills will atrophy. Employers are already noticing.
Reading the assignments they turn in, I can see those skills either flourishing or atrophying in my students. At least today, I can pretty easily tell the difference between an AI-written memo and a student-written one—especially if the student just turns in what the chatbot produces. It’s a catchy, plausible, grammatically perfect essay that’s not particularly well-crafted or logically coherent—and with all the tells of mid-2026 AI-generated writing.
But it’s precisely because I have spent years developing my own writing skills that I’m able to identify prose that sounds great but doesn’t actually make sense. My students don’t have that skill; they mistakenly view a confident, well-written essay as evidence of the quality of their ideas. They see the AI as cleaning those ideas up, getting them through that uncomfortable stretch of having to turn those ideas into prose. What the students miss is that their initial discomfort is a normal and healthy stage of writing, and not something to quickly get beyond. The very act of struggling with how to express what they think is an important part of the process. It’s how they test out their ideas, examine their hypotheses, and actually figure out what they think. Homework is not work; it’s the gym.
Work vs. gym also helps us understand the problem facing creatives of all kinds.
Most of the time when someone hires a writer, they just need the words. They need an instruction manual for a piece of equipment, a detailed sales presentation, a government-mandated disclosure document, or a legal brief. They need dry, predictable, accurate writing: a piece of work, exactly what AIs are good at today and what I don’t want in my student assignments. Only sometimes is writing an art form—a book, a poem, an uplifting political speech. That kind of writing is more like the gym: process matters just as much as product.
For most of human history, the only option for all of these tasks was human writers. We hired one regardless of whether we needed work writing or gym writing. And that paid a lot of writers’ salaries. I know fiction writers who supported that poorly paying career with lucrative technical writing work. Now, for the first time in human history, we can separate out when we need writing as work and when we want writing as gym. And if AI can do most of the work-type writing, society doesn’t need as many human writers.
It’s the same for visual artists. Sometimes we need an actual artist, but most of the time we just need an image: a corporate mascot, a “beware of the dog” sign, or a packaging label. Historically we gave those jobs to artists, and sometimes beautiful art resulted. But most of the time it was just work. And, as it turns out, the world needs less pure art than simple images.
Explaining the problem isn’t the same as providing the solution. I give my students the “work versus gym” speech every class, but they still use AI. I have sympathy: assignments are hard, everyone is overworked and overstressed, and—most importantly—students feel like they’ll look bad in comparison if their peers are all using AI. Even if they don’t want to use the technology, they feel like they have no choice.
There’s also an incentive problem. No one pays us to go to the gym; maintaining healthy habits requires discipline. For me, the payoffs to exercise—fewer aches and pains, less fatigue, better mood/stress management—might make me a better writer and teacher, but they’re subtle and easy to miss. For my students, incremental improvements in their reasoning and writing are equally subtle.
We do have a choice. We can look at the tasks of our lives and separate them into work or gym. Just as we might choose to use the stairs instead of the elevator, or walk instead of calling an Uber, we can wall off our cognitive gym tasks from AI and ensure that we don’t lose our skills to this technology. And we can do the same when we assign a job to someone else. If it’s a work task, we can have AI do it. If it’s a gym task, it’s a waste of everyone’s time to give it to an AI because no one learns or gets stronger as a result.
Similarly, a future where AI generates words and images is one where society has to make choices about how it will treat its creatives. This won’t be the first time—today there is minimal demand for portrait painters, for example—but maybe this time we can make different, more deliberate, choices about the value of art in our society.
AI is going to fundamentally change the nature of work. Not nearly as fast as the AI companies want you to believe, but eventually it will. Policy analysis will definitely involve AI from now on, and my students need to reimagine what it means to learn and practice that skill. More generally, the line between work and gym will change in the future as we humans adapt ourselves to a world with these new intelligences.
But for now, the work vs. gym distinction is pretty clear. Use it on yourself.
He’s being prosecuted for giving border officials a code that wiped his phone:
The case centers on a feature included in GrapheneOS, a custom Android operating system that runs in place of the software on most modern Google Pixel devices. Tunick’s attorneys confirmed GrapheneOS was running on his phone.
The software feature allows the device owner to set a passcode that deliberately wipes the contents of that device if entered instead of the user’s unlock passcode.
Tunick’s case also raises ongoing questions about what constitutional rights can be invoked at the border, which the U.S. government has long asserted is not U.S. soil until a person is authorized to enter.
Right. And he wasn’t under arrest, either.
Graphine says that the feature is “completely legal“:
GrapheneOS is completely legal. We have no obligation to weaken any of the security protections it provides. Creating and using GrapheneOS is strongly protected by the US constitution. Laws attempting to make it illegal or require weakening the security would be unconstitutional.
It’s hard to know how much the Constitution matters in the US right now.
Damon Beres, writing for The Atlantic under the hed/subhed: “The New iPhone Underclass: Apple’s rental program is a trap”:
The Klarna plan — “Apple Upgrade,” which replaces the iPhone Upgrade Program — is truly, legally, a lease. This is confusing! And it’s confusing in part because this is not how Klarna, a well-known buy-now, pay-later service, typically operates: When you use Klarna for clothing from Shein or lip kits at Sephora or an Xbox at GameStop, you’re paying back a loan, exactly as you were in the original iPhone Upgrade Program. Same if you use Klarna to buy a Samsung Galaxy phone. But with Apple Upgrade, you are renting: The Mac or Apple Watch is not yours until the final payment is made.
I don’t think this is confusing at all. Apple Upgrade is the primary brand for this program, not Klarna. Klarna is really only mentioned in the small print. You get into Apple Upgrade through Apple. Off the top of your head, do you remember Apple’s bank partner for the now-discontinued iPhone Upgrade Program? (It was Citizens Bank.) The Samsung program Beres links to above is named “Klarna Pay in 4”. “Apple Upgrade is a leasing program partnered with Klarna” is easily understood.
Here’s what Beres thinks is a “trap”:
Consider a student or a young professional, or perhaps an underemployed older one, who needs a new laptop. They decide on a MacBook. Apple Upgrade will appear to be the best deal: In its announcement, Apple offers the example of a 14-inch MacBook Pro that retails for $1,999 but that can be had for a monthly lease. Perhaps this person goes for the two-year term, which has them paying $54 a month. Best Buy, which currently has the same computer on sale for $1,849, offers an 18-month loan repayment with $103 installments. Apple’s deal appears to be cheaper: The 24-month lease adds up to $1,296; Best Buy’s 18-month loan lands at the store’s full retail price of $1,849.
Why does Best Buy’s laptop seem more expensive? It’s because the plan is actually designed for you to fully pay off the device. At the end of the 24-month MacBook Pro lease, meanwhile, the consumer will still owe $703, meaning that the actual total price of the Apple arrangement is $1,999 — higher than Best Buy’s offer.
This has nothing to do with the differences between Apple Upgrade’s leasing terms and Best Buy’s 18-month loan. It’s the difference between Apple’s retail price of $1,999 and Best Buy’s $1,849. Guess what? $1,849 is less than $1,999.
I generally like paying for everything I buy up front. The only thing I have a loan for right now is our home. So when Apple Upgrade was announced, I approached it with skepticism, presuming that participants would wind up paying more over time than they would buying devices outright up front. But no. There is no interest penalty. If anything, if you presume inflation is still going to run a bit high for the next few years, buying devices through Apple Upgrade might be a slightly better deal than paying up front.
Is it a “trap” that at the end your 24 month lease you still owe $703 if you want to buy it? I would say that’s not a trap at all, given that you’d have only paid $1,296 to date on a $1,999 device. I’m not trying to be obtuse. I get it. If you pay the full $1,999 up front, or take a loan to pay the full amount over 24 months, then, after two years, you own the device outright and you might not be tempted to buy a new device for a few more years. If instead you lease it and still owe $703 after 24 months, you might be inclined to think that it’d be no fun at all to pay $703 to finish purchasing a now-two-year-old MacBook, even if the price is totally fair and carries no interest penalty. It’s just not fun. What might seem fun, at that point, is to just hand the leased MacBook back to Apple and start a new lease on a brand-new MacBook. That’s surely the appeal of this whole thing from Apple’s perspective — that leasing entices people to keep starting new leases every two years rather than just sit back and enjoy a fully-paid-for device for a few additional years. I think it’s a stretch to call that a “trap”, though.
Ryan Christoffel, writing for 9to5Mac:
Apple Upgrade launched this week, and the iPhone Upgrade Program is being discontinued as a result. But despite some similarities, the two offerings are not the same. Here are the key differences.
I wrote yesterday that there seemingly is no catch with the new Apple Upgrade program, but there’s at least one, which Christoffel’s piece doesn’t note. When you lease an iPhone through Apple Upgrade, you need a cellular account on one of the big three U.S. carriers: AT&T, T-Mobile, or Verizon. That kind of stinks, and I’m not quite sure I understand why. You’re leasing the iPhone through Apple and Klarna, not the carrier, so I don’t know why Apple cares. If you know why, shoot me a message and explain it. Is it just a simplistic credit-risk evaluation, where prepaid plan-holders and MVNO users in general are viewed suspiciously?
I’ve been hearing a lot of good things about the higher-quality MVNOs, especially US Mobile. (Quinn Nelson mentioned last week on The Talk Show that he’s on US Mobile.) But if you’re not on one of the big three you can’t lease an iPhone through Apple Upgrade.
(I think the old iPhone Upgrade Program required you to have a plan on one of the big three carriers too, so that might be why Christoffel didn’t mention it — it’s the same, not a difference.)
Last week 9to5Mac reported on code in the latest iOS 27 developer beta seemingly meant to restrict leased devices after the user had missed one or more payments. When engaged, Restricted Mode limits the device to the following apps:
And some limited access to apps like Messages or health-related apps that might have critical messages.
Many people reasonably speculated that this feature was related to Apple Upgrade, Apple’s new device leasing partnership with Klarna, which Mark Gurman spoiled a few weeks ago. But an Apple spokesman confirmed to Emma Roth at The Verge today that “There will be no restricted mode and/or there will be no limitations put on device functionality due to missed payments or default with the Apple Upgrade program.”
Writing again today, here’s 9to5Mac’s Marcus Mendes:
Apple, however, did not tell The Verge what Restricted Mode is intended for. One possibility is that it was developed for financing programs offered by carriers, retailers, or other partners outside Apple Upgrade, potentially including markets where device restrictions are already used to enforce installment agreements.
In India, lenders have worked in the past with smartphone manufacturers to remotely block financed devices after borrowers missed payments. As The Economic Times reported last year, the Reserve Bank of India (RBI) told non-bank lenders to stop the practice in late 2024, amid concerns about lenders sharing customers’ default information with device manufacturers.
The regulator may now permit a more limited version of the practice. As Reuters reported in May, the RBI proposed allowing lenders to restrict certain functions on financed phones once a loan is at least 90 days overdue, provided the borrower agreed to the measure in the contract and received advance notice.
We’re right on the cusp of a big Drive milestone – $400,000, 80% of the way toward our goal of raising at least $500,000 in this year’s Annual TPM Journalism Fund Drive. Who can help us cross this threshold today? You can be that person by clicking right here and making a contribution in any amount. $3,017 to go! Thank you to everyone who has contributed so far!
Update: Now just $546 to go!
Thanks so much to everyone who came out to our event at Crystal Lake bar last night in collaboration with Marisa Kabas of The Handbasket! It was great to see some of you again, meet some local readers making it out to their first TPM event, and connect with readers who traveled just for this show. (Shout out to the lovely couple from Berkeley, California!)
We were impressed that the winning trivia team managed to get 10/14 correct answers even though we threw in some doozies (Like “which U.S. elected official got booed and heckled by children during a recent goodwill visit to Greenland on behalf of President Trump?”). And our publisher Joe Ragazzo moderated a dynamic conversation between Marisa and Josh Marshall on the midterms (with an extended Maine interlude), Democratic strategy and the future of independent media.
For those of you who live far away or otherwise couldn’t make it, we’ll release Marisa and Josh’s conversation as a bonus podcast episode soon. Hope to see you at the next one.
It looks like we are going to get a big test of some cardinal (possibly outdated) assumptions about American politics. I’m thinking first about the Michigan Senate race (though we might have something similar in the Wisconsin governor’s race). Several recent polls show Abdul El-Sayed holding a consistent, substantial lead over Rep. Haley Stevens. The primary is on August 4. This has been presented as a prototypical Democratic establishment vs Bernie progressive/insurgent race. And in key respects it is.
El-Sayed has all the Bernie/progressive positions. He’s run a campaign that places a heavy emphasis on the Israel-Palestine issue. And he’s centered AIPAC in his campaign in a way that even for many longtime critics and haters of AIPAC (including myself here) has a distinct whiff of antisemitic conspiracy theories. To wit, yes, AIPAC sucks. They’re a blight. They are functionally a Republican operation these days. But they are not the secret hand guiding things in the background every time there’s a bad news story or reverse of fortune for some progressive candidate, which is basically the role they’re playing in El-Sayed’s campaign.
Generally speaking, El-Sayed is the kind of candidate you’d expect to see running in a blue state or district. Michigan is not that. It’s a definitional swing state, a bit bluer than Wisconsin perhaps, maybe a touch redder than Pennsylvania. It also has an absolutely must-win Senate race. No room for error. You’ve got to win this seat (currently held by the retiring Democrat Gary Peters).
I’ve watched El-Sayed in a handful of podcast interviews. He’s really good. That’s the only way I can describe it. He has that basic mix of presence, charisma and directness which is the mark of a very strong candidate. I’ve been in contact with a number of TPM readers over the last couple months who I’d describe broadly as white, generally normie Michigan grandmothers who are … strong supporters of El-Sayed. In other words, they’re not at all what you’d expect as the stereotypical supporter of a left-wing, insurgent, Palestine-centric candidate. And the reason is always the same: his rhetoric and attitude fit the stakes of the national crisis and Stevens’ do not.
In many ways, this mirrors what I’ve been arguing for months. You need to pry apart the ideology and fight. You need candidates across the Democratic ideological spectrum operating in the fight lane. Candidates who are not in that lane strike far too many voters as wildly out of touch or irrelevant to the moment we’re living in — like an EMT arriving at the scene of a horrific auto accident with some aspirin, salves and maybe a pillow.
This may make a caricature of Stevens. But she’s been tepid on some key issues where Democrats have a big opening to demonstrate their fight bona fides — issues like ICE. This is revealing to me inasmuch as opposing ICE, wanting to dismantle ICE is not just the right position on the merits. It’s also a more or less free shot on goal for Democratic candidates. ICE’s brutal mass deportation campaign around the country is really, really unpopular. You can go full-bore on ICE and still support more restrictive border policies than many Democrats have been comfortable with. Indeed, this might be the balance of gravity for public opinion in 2026: Tighten the border; fuck ICE. Beyond the merits, it’s an open and fertile ground to demonstrate which lane they’re in. And Stevens hasn’t done that.
I would call myself highly worried about these developments. This isn’t because I’m so dead set against El-Sayed as a candidate. It’s because I’m skeptical his candidacy is viable in a swing state like Michigan. The progressive electability argument often amounts to: These establishment candidates you say are so electable lose about half the time. So how are they so electable? This isn’t a strong argument if you value logical reasoning. That said, I’m also eager to see my skepticism proven wrong. I practice what I preach about partisan elections. Every congressional election is a zero-sum proposition between the forces of Trumpism and the opposition to the same. Full stop. If he’s the nominee, it will be critical to prove my skepticism wrong. Because Democrats absolutely need to win that seat.
The reality is that we are in a very new, fluid and volatile political moment. You don’t need to be a DSA member or a progressive to think that. I’ve had conversations over the last six months with many politicos who would by any definition be classed as “establishment” Democrats who tell me they don’t recognize the electorate we’re seeing. That sometimes comes with an air of bitterness and resignation, cued up for an opinion piece in The Free Press. At other times, it’s one of bewildered open-mindedness. That said, political volatility and change isn’t a codeword for write your own adventure. Democrats don’t have to go further back than 2020 to know that rapid shifts in core political assumptions in Democrat World don’t necessarily export to the rest of the electorate. We are simply dealing with big unknowns and really everyone is projecting their hopes and fears on to a landscape that is pretty opaque.
The contrary argument here is that even if we assume that El-Sayed’s policies and persona are heavy lifts in a statewide Michigan race, the other side has pretty big problems too. GOP nominee-to-be Mike Rogers has to campaign on the wildly unpopular Iran War and as the supporter of a president who has approval numbers in the state from the mid-to low 30s. It’s a very rough environment for a candidate who has to carry all Trump’s baggage and unpopularity without actually being Trump or having him on the ballot.
The primary is next Tuesday. Look out for our coverage.
Here in the U.S., we’re looking at the Iran War in terms of whether the U.S. should have started it in the first place, how it’s affecting oil prices, how it’s going to affect the midterms and a bunch of other things. But there’s another way to look at it, which is that Iran is putting on a global performance of standing head to head with the full might of the U.S. military and pulling it off. By their actions, we can see pretty clearly that the Iranian government does not fear Donald Trump. They’re not acting scared. If anything, they’re upping the rate of their provocations, as the state of war and effective stalemate transitions to a new normal of sorts.
It is fair to say that this is not actually the full might of the U.S. military in a theoretical sense. The president could order the U.S. military to mount a full scale ground invasion of Iran, occupy the country, dismantle the state’s system of command, control and repression. Those things are very likely possible, albeit at vast cost. But the real test of a military is not what it can do in some theoretical sense, the precise armaments it has and so forth but what the country which controls that military is able and/or willing to do in a specific economic, geopolitical, and political context. And the U.S. is clearly not willing to do those things. So in a practical sense — not the abstract power and capabilities of the U.S. military but the country’s ability to do those things — this is the full force of the U.S. military.
What this all amounts to is that this war has turned into a vast spectacle of the limits of U.S. power. This is of course a big reason you don’t start something like this in the first place, why you don’t start wars or any major commitments without a clear understanding of your own power, your own options — and not in the vague sense of our military is super big but how are we going to be willing to use it in this specific situation.
What is further the case is that the most likely near- and medium-term scenario seems like a version of the “frozen conflicts” we know from the peripheries of Russia over the last 20-plus years. The mechanics are different of course. But the overall frozen-ness looks increasingly similar with the key difference that it is Iran rather than the U.S. which is holding key gains during this freeze — the biggest being control of the Strait of Hormuz and the huge deterrence that creates.
The U.S. is not new to spectacularly bad foreign policy decisions. The big ones that jump out to me are Vietnam and the Iraq War. What at least seems distinct to me is that for all the folly of U.S. involvement in Vietnam, if you understand the history you can also see how the bad decisions grew out of the logic of the Cold War, a set of assumptions that were deeply held across a wide spectrum of elite U.S. foreign policy thinking in the U.S. and indeed non-elite thinking as well. This is part of the irony of the title of David Halberstam’s “The Best and the Brightest.” These people were not idiots. And yet they made terrible and disastrous decisions.
With Iraq, elite foreign policy thinking was much more skeptical. It was also much more fractured. To a degree, what happened with the Bush presidency was that a counter-foreign policy establishment got hold of the levers of power at a critical moment. With all this said, though, the 9/11 attacks created a climate of intense public fear and vast deference to the White House and the president. Many of us remember these events pretty vividly. Most of us wish lots of things had never happened. But basically the Iraq War does not happen without the 9/11 attacks. The fact that one had nothing to do with the other is not relevant to this basic fact: no 9/11, no Iraq War.
Where is the analog here? If anything, the decision to go to war with Iran runs strongly counter to the whole backlash to “forever wars” which has characterized U.S. foreign policy in an evolving way for more than a decade. Especially in the Middle East and especially given how much Trump himself has tried to identify himself with that backlash. Then there’s the fact the U.S. public seemed to have little idea this was even going to happen.
I’ve always had a somewhat different understanding of a president’s war powers than many others. In practice, our constitutional order places pretty few limitations on a president in this capacity. What the Constitution says in theory is secondary to what has happened in practice for going on a century. The president really calls the shots with the U.S. military. I’m not saying that as how it should be but how it is. But it is in a president’s very strong interest to bring the public along or at least loop them in on what he’s trying to do.
In any case, this whole debacle stands out perhaps not decisively as the most disastrous U.S. foreign policy decision but in terms of the opaqueness of the decision-making and the way the decisions stemmed almost entirely to the emotive whims and impulses of Trump (his need to act out in the face of declining fortunes at home, his hunch that Iran would be as fun as his quasi invasion of Venezuela) and whatever bill of goods Benjamin Netanyahu was selling him. It’s that sense of disjuncture which stands out to me, the out-of-the-blueness, the discontinuity. And that is very much the mark of a personalist regime, one in which the full breadth of the U.S. government’s foreign policy architecture has been hollowed out and you really are operating within the whims, fantasies, impulses of one guy.
Today’s post is brought to you by my sponsor, Mechanize. They’re hiring junior software engineers at $300K/year base salary. Apply now!
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I put the reply to Fable at the end, so those who are bored of the discussion can skip it. (Although please check out my brief reply.) Here are some links for July:
Tyler Cowen compares AI to pets:
Tyler: (12:48) So far, the AIs seem to be evolving in a manner similar to pets: coexistence and mutuality with humans. That’s the better-case scenario. I don’t see that changing soon, but it may not be that way forever. I once joked that the AIs you really need to worry about are the Wall Street AIs, because they’re not really taught to cooperate with humans. The normal AIs that everyone talks about are just going to be like puppy dogs, more or less forever.
Jackson: (13:15) Do you think current competition is making OpenAI and Anthropic AIs more likely to trend toward being what you mean by Wall Street AIs, though?
Tyler: (13:23) No, it’s making them more like pets, really. Like Spinoza the dog. He’s hanging around the house; he’s so nice, he’s so sweet. He’ll come over, he wants to be petted, he’ll wag his tail at you. Yeah, I think that’s what we’re seeing.
Here’s an interesting quote to think about:
Does Trump wish to make housing more expensive by things like zoning restrictions, which make us poorer, or things like free trade and enhanced immigration of high skilled workers, which make us richer? Never reason from a house price change.
More evidence that big cities often impoverish the poorer parts of their state, a point I used to argue over at Econlog.
I keep saying that trade is not the problem, and evidence keeps coming in to support that claim. Here Noah Smith reports on a study by Richard Baldwin:
America did actually outsource a fair amount of its final goods production, but this was almost balanced out by onshoring of intermediate goods production (at least, in terms of monetary value). Almost all of America’s deindustrialization since 1995 came from Americans spending a smaller % of their money on manufactured goods.
For other countries, it’s a different story. Germany and Japan actually spent more on manufactured goods, but lost tons of market share in the intermediate goods sector. For France, Canada, and the UK, all three factors contributed to deindustrialization.
This is very interesting. It implies that the simple, common story of “we outsourced everything to China” holds true for other rich countries — at least, in a generalized sort of way — a lot more than for the United States. For the U.S., the main reason we make less stuff is that we want less stuff — at least, relative to how many “experiences” we want to consume.
California has politicians that favor clean energy and Texas has politicians that favor oil and gas. So where would you expect clean energy to be built? Here’s Mallesh Pai:
One of the things that gets slept on: Texas has no official green policy, but simply says make things at the cheapest price, and that turns out to be a lot greener than all the other states or countries that have official green policies.
Prices. They work!
California has politicians that favor multifamily housing, and Texas has politicians that favor single family home suburban sprawl. So where would you expect the most multifamily housing to get built?
Yup, in 2025 Texas permitted 50% more multifamily housing than California, despite a smaller population.
This graph is an eye opener:
And even today Arizona wastes enormous quantities of water on farms, which account for 76% of the state’s water usage.
Polls show that many voters now have a positive view of “socialism”. But what does this mean? Does anyone know? Over the past decade, Bernie Sanders has been the most prominent socialist politician in America. When asked how he envisions socialism, he often mentions Denmark as an example. But Denmark has one of the most laissez-faire economies in the entire world, apart from its social insurance programs. Are the voters who say they like socialism advocating for something like Cuba or something like Denmark? Are they even educated enough to describe their views if asked? How many younger voters even know what communism is? Maybe 20%?
Once again, there is no such thing as public opinion. As with Heisenberg Uncertainty, just asking someone whether they favor the Cuba or Denmark model, while explaining the difference, might well shift their views. Lots of voters that like socialism also like “free enterprise”
In the 1960s, Americans and Europeans faced fairly similar tax rates and worked similar hours per year. By the 1990s, European tax rates (and benefits to non-workers) had risen to far above US levels, and Europeans worked much fewer hours per year. An abstract from a recent paper by Serdar Birinci, Loukas Karabarbounis & Kurt See discusses a partial reversal of those trends:
In the 1990s, Americans used to work much more than non-Americans. Nowadays, about half of the gap in hours worked has reversed. To evaluate the convergence of working hours, we develop a tractable model of labor supply enriched with multiple sources of heterogeneity across individuals, an extensive margin of participation, multi-member households, and an elaborate system of taxes and benefits upon non-employment. Using detailed measurements from micro-level and aggregate datasets, we identify model parameters and sources of heterogeneity across individuals for various countries. We run a horse race between competing explanations and find that U.S. hours per person declined after 2000 owing mainly to the rise of government health benefits provided to the non-employed. Non-U.S. countries have generous benefits for the non-employed, but this generosity has not changed as much over time as in the United States, and public health coverage does not depend on employment status or income levels. For these countries, the rise of labor supply is generally accounted for by a mix of factors, such as the rise of wages and the falling disutility of work.
A recent tweet by David Beckworth shows that weekly payrolls (roughly equivalent to my core NGDP concept) has been well behaved over the past two years. Even so, I still believe that monetary policy is slightly too expansionary.
Back in 2016, people rolled their eyes when I suggested that the US was increasingly resembling a banana republic. Here’s the FT:
President Donald Trump flew to Medora, North Dakota, this week to dedicate the Theodore Roosevelt Presidential Library. It was notable for being his first trip aboard the new $400mn Boeing 747 gifted to him by the Emir of Qatar.
Trump flew out on the same day it was disclosed he had earned more than $2.2bn since his return to the White House, a windfall without precedent in US presidential history and one that has raised more troubling questions about conflicts of interest in his administration.
The size of the earnings — largely from crypto ventures — is inviting comparisons that might have seemed outlandish even a year ago. Some political scientists are beginning to see parallels between Trump’s behaviour and those of foreign strongmen in Africa and Asia notorious for their self-enrichment in office.
Socialism is a nice sounding word, but do voters wish to pay for it? Here’s Eric Levitz:
Socialist candidates are having a banner year.
And yet, the dream of American socialism (or social democracy) is arguably getting *further out of reach.*
Even as voters warm up to "socialism" as an abstraction, they are cooling on its fundamental precondition: Higher taxes.
Americans' federal tax rates are near historic lows. And yet, the share who think that their taxes should be *even lower* is at its highest point in 2 decades.
And a related point from Matt Yglesias:
Notably, the people who constructed America’s system of widespread comprehensive central planning of the housing market did not typically think of themselves as socialists. And certainly, the typical suburban homeowner regards it as his God-given right to block new development and change in his neighborhood.
If you’re an older, reasonably prosperous homeowner, this bad situation probably doesn’t have a negative impact on you. And you almost certainly don’t think of yourself as a communist who strongly favors central planning and believes free markets are nonsense.
If you’re a young person facing higher rents and despairing about getting on the path to homeownership, you probably don’t think of yourself as a victim of a failed socialist economic experiment the way a refugee fleeing Cuba or Venezuela would. The victims of bad housing policy hear people talking about how America is a great free-market success story, so if they feel that the success story is not working for them personally, they conclude that capitalism and free markets are in fact a big failure.
China continues to shoot itself in the foot:
Chinese policymakers are discussing ways to reduce the incentives for scientific researchers to submit their findings to foreign journals, as Beijing grows concerned that academic publications could be a channel for leaks of industrial and technological innovations.
As does the USA:
The National Science Foundation has decided to ban collaborations between every U.S. scientist it funds and nearly all Chinese research institutions and their employees. The new policy abandons NSF’s earlier attempt to balance the potential risks and benefits of such collaborations.
The world is increasingly ruled by people with the emotional maturity of middle schoolers.
Nick Corvino had an interesting observation about NIMBYism:
The Japans and Norways of the world can still build metro stations and decent housing, so America’s particular impotence isn’t a universal feature of democratic governance. But those countries are also quite wealthy, and the more striking pattern runs in the other direction. Egypt, Kazakhstan, and yes, even China (once you step beyond the tier 1 and 2 cities) all retain a capacity to build that feels out of proportion to their material means. Their GDP doesn’t fully explain what they’re able to put in the ground.
The actual dividing line, therefore, might not be China versus everybody else, but between countries with entrenched rule of law and weak political consolidation on one side, and countries without either constraint on the other. One model can build a city for six million people and leave it empty. The other struggles to build enough housing for the people already there. Somewhere between the autocratic state that builds too much too fast and bankrupts itself chasing a pharaoh’s legacy, and the democratic state that can’t break ground on an apartment block without a decade of environmental review, there has to be a better answer.
A recent paper by Kara Dimitruk & Ben Southwood provides the best analysis I’ve seen of what that better answer might look like. Probably my favorite blog post of the year.
16. Matt Welch at Reason magazine provides a nice survey of the history of presidential corruption in the US:
At its heart, the otherwise complicated and multi-stage Teapot Dome affair of the 1920s, which until Watergate was considered the greatest federal government scandal of all time, was about secret bribes to an administration official that lubricated lucrative regulatory outcomes. In 1921, Interior Secretary Albert Fall clandestinely accepted $404,000 ($7.6 million in today's money) in cash and no-interest loans from two oil executives, who then became recipients of no-bid leases to exploit oil fields in California's Elk Hills and Wyoming's Teapot Dome. . . .
Albert Fall was found guilty of bribery and served a year in prison. The Supreme Court nullified the no-bid oil leases on the grounds that they had been corruptly obtained. President Warren G. Harding had been oblivious to the Teapot Dome scheme, yet he nonetheless was tarred from his 1923 death onward as an enabler of corruption. The Trump family net worth increased by more than $1 billion as a direct result of Sheikh Tahnoon's frenetic and sometimes secret investments in the six-month run-up to producing a long-sought diplomatic and economic victory for his country. Will school children 100 years hence know the name World Liberty Financial?
One of the many negative aspects of nationalism is the tendency to whitewash the unseemly aspects of a country’s history. And so it begins:
“I’m actually fascinated by [Richard] Nixon as a character in history,” Vice President J.D. Vance said at the Nixon Library in June. “His historical legacy is enjoying a bit of a renaissance, but I think deservedly so….[I]f Watergate happened tomorrow, it would be like a 12-hour news story. Like, the idea that it would have taken down a presidency is crazy. And, by the way, if you look at the story of how the Deep State took down Richard Nixon, it’s not all that different from what the same groups of people, the same institutions tried to do to Donald Trump in the first Trump administration.”
Watergate, the only Washington scandal that impelled a president to resign and the English language to add a suffix, was a 26-month news story, stretching from the break-in at the Democratic National Committee by Nixon loyalists through President Gerald Ford’s pardon of his predecessor. One of the reasons the saga lasted so long is that the perpetrators, employers, and intended beneficiaries of the burglary—very much including Richard Nixon, beginning immediately after the initial arrest—could not stop lying their faces off about it, destroying evidence, concocting schemes to quash the resulting investigations, and (if they had the power) just straight-up firing the most nettlesome investigator. Nixon attempted to use the Deep State to make it all go away, ordering the CIA to tell the nosy FBI that its inquiry would jeopardize national security. In the end, 48 people were convicted or pleaded guilty, including Nixon’s attorney general, chief domestic advisor, and chief of staff.
Vance is right about one thing. Today, Watergate would be a 24-hour story. I wonder if Vance understands why that is.
17. Clever:
18. David Beckworth has an excellent article discussing the advantages of moving away from the sort of “floor system” for reserves that has led to a bloated Fed balance sheet, citing the example of Norway. In several places, David tries to reassure readers that a lean central bank balance sheet doesn’t prevent central banks from conducting effective monetary policy:
The Norges Bank is committed as ever to its tiered reserve system. And in no way has it diminished the Norges Bank ability to conduct monetary policy. The central bank in a 2021 review of its operating framework found that “there is a high degree of pass-through from the policy rate to market rates. The current quota system appears to be a good framework for the transmission mechanism and the implementation of monetary policy” (p.11). . . .
Norges Bank deserves enormous credit for recognizing the shortcomings of a floor system long before most central banks. Its tiered reserve system successfully reduced banks’ demand for reserves, revived interbank lending, and demonstrated that monetary policy can be implemented with a much leaner supply of reserves.
I agree, but I wonder why this is even controversial. Alan Greenspan conducted highly effective monetary policy for 19 years without any system of IOR, manipulating a monetary base that was nearly 98% currency! I get why people might favor large bank reserves for liquidity reasons, but what does this have to do with the effectiveness of monetary policy? What am I missing? Why does this have to be “demonstrated”?
I’m not surprised by the following, but I suspect that many people in Silicon Valley are:
I’ll make another prediction. We will not see double-digit growth in real GDP.
A few weeks back, I did a post explaining how the world is bigger than it seems. One application of that idea I forgot to mention is that we naturally tend to overestimate the impact of technology on jobs and economic growth. In 50 years, there will be a vast number of new jobs that you cannot imagine, just as the pioneers who went west to set up farms in the 1890s could not imagine their great grandchildren becoming pet psychologists, high speed traders, mall cops or wedding planners after farm work was mechanized. As for growth, there can be explosive productivity growth in sectors like software even as vast sectors of the economy continue to move along at a snail’s pace.
Think about how much the world has changed in 11 years:
And then think about the fact that (due to AI) it might change even more rapidly in the next 11 years.
Long time readers know about my obsession with Denmark. Alex Tabarrok finds another area where the Danes are #1—avoiding occupational licensing.
Matt Yglesias wisely pushes back against some Democrats’ foolish desire to emulate Trump:
Dana Milbank reports on the most egregious mirror-imaging concepts yet in a piece titled “Democrats Are Drafting Plans to Govern Like Trump in 2029.”
Why is that such a perverse model? Let me count the ways:
Right now, Trump’s presidency looks like an unpopular failure, which is a weird model to copy. If you say “I want to be the Ronald Reagan of the left,” I get the general picture. He was consequential in large part because he was politically successful — he didn’t just generate backlash.
It’s only 2026, and by 2028 Trump may look like a popular success, but if that’s the case, then sweeping progressive change isn’t on the table as a response.
A big part of anti-Trump sentiment is that he’s acting in lawless and autocratic ways. A little hypocrisy is par for the course in politics, but you can’t just copy his approach without shattering the anti-Trump coalition.
Trump, as I pointed out in my post on his lack of immigration legislation, isn’t actually achieving as much as he likes to think.
The administration says that we need tariffs to counter trade deficits. But actions speak louder than words. Here’s Reason:
On Wednesday, the White House announced a new 25 percent tariff on thousands of products imported from Brazil. The new tariffs are being imposed under Section 301 of the Trade Act of 1974, and are effectively meant to replace the previous “emergency” tariffs on Brazilian goods that were struck down by the Supreme Court in February. In a statement, Greer said the tariffs were meant to counter “unfair trade practices.”
But if the guiding principle is reducing trade deficits, here’s an uncomfortable fact: America exports way more to Brazil than it imports from there.
“The U.S. goods trade surplus with Brazil was $14.4 billion in 2025, a 112.8 percent increase ($7.7 billion) over 2024,” according to Greer’s office. When services are included in the calculation, the trade surplus with Brazil grows by another $23 billion.
When it comes to American policymaking, facts don’t matter. Here’s The Economist:
America was at its richest “from 1870 to 1913”, when it was “a tariff country”, claims Mr Trump. Actually, Americans are six times richer now than they were in 1913, even if you ignore the full benefits of new inventions such as GPS and antibiotics. The president thinks global trade means foreigners screwing Uncle Sam. So when his commerce secretary showed him that Chinese and Indian tariffs on American goods were not very high, he called the numbers “fucking bullshit” and ordered Natalie Harp, a young blonde aide whose job is to print out positive news for him, to Google up “the real numbers”. Ms Harp, “despite her best efforts”, could not find “the numbers that didn’t exist”.
I’m disappointed. The administration seems too lazy to construct a plausible conspiracy theory. Here’s the ultra-liberal National Review:
If I were president, and I believed that the U.S. intelligence community had hidden information about a plot to meddle in an election from me, I would be livid with whoever had been serving as U.S. director of national intelligence at that time. The DNI at the time was John Ratcliffe. Upon winning reelection, Trump made Ratcliffe CIA director, and Ratcliffe serves in that position to this day. (Note that on December 22, 2020, in recognition of his national security achievements as both director of national intelligence and the CIA, President Trump awarded Ratcliffe the National Security Medal, the nation’s highest honor for distinguished achievement in the field of intelligence and national security.)
I have enormous respect for Bill Gates. Richard Hanania has an excellent post explaining why Gates is widely hated, despite being a far better person that many other rich and powerful figures. Here’s the opening paragraph:
Rich men are often treated unfairly. But I don’t think that there has been a successful businessman in American life who has been treated more unfairly or maligned with less justification than Bill Gates. His story has something to teach us about conspiracy theories, why certain figures become targets and not others, and the nature of public relations. It also suggests that whatever he is doing is not working, and if Gates is going to save his own legacy, he’s going to need to do more to defend himself against false and misleading attacks.
In some ways, Gates and I are similar. I am one month older, and I share his somewhat bland nerdy appearance. I also share some of the personality flaws that Hanania discusses in regard to Gates—too passive.
But unlike Gates, I graduated from college. :)
Day by day, the US continues to become ever more of a banana republic. Recently, we reneged on a bridge deal with Canada:
From what I can glean, the most damaging aspects of this re-trade are the following: first, Canada lost sole authority to set its own tolls and govern the bridge — a bridge that we paid for in full! And second, it demonstrates that, at the present time, the US cannot be trusted to honour its agreements.
Re-trading, of course, happens all the time in politics and business, and the real estate industry is no different. But I would say that there’s a difference between a bad-faith re-trade and a legitimate risk adjustment. Sometimes new information is discovered or the market changes in the middle of a deal, and one party needs a deal adjustment to be able to proceed.
At the same time, there are also bad-faith re-trades where one party simply wants to apply any leverage it may have, be a bully, and capitalize on deal fatigue. “Ugh, let’s just get this open!” This is a short-sighted practice because it immediately destroys trust and damages your reputation. It may leave you better off on this one deal, but it makes the next ones that much harder.
For decades, we will be paying the price for short-sighted policymakers.
If you have any doubts about how bad the NIMBY movement is, think about the following. A new apartment building is approved for Santa Monica after paying a $14,000,000 “fee”, and the news is treated at a big success for the YIMBY movement. That’s what we are up against.
Just imagine what could be built in a truly free market. (And read the fools in the comment section.)
A recent Vox-EU study attributes recent gains in productivity to more intensive utilization of labor:
US labour productivity has accelerated since 2022. Output per hour grew around 2.5% per year from the end of 2022 to the start of 2026, exceeding its pre-pandemic pace by 1 percentage point. A natural conjecture is that artificial intelligence has raised production efficiency. This column argues that the data suggest otherwise. Higher utilisation – that is, more intense use of labour and capital already in place – accounts for much of the recent acceleration. AI may have contributed to the higher utilisation rate, but through strong demand and heightened uncertainty rather than through efficiency.
I like to use the hotel industry as an example. Around the time of Covid, many hotels stopped having their maids clean the rooms every single day. This allowed (measured) hotel services to be provided with less labor, which increases measured productivity. (BTW, I approve of that change.) I am less enthused about the recent changes in customer phone service, however, where computer respondents are less effective than the human call center workers they replace. (Which is a low bar.)
In the past, I argued that nationalism leads to a rewriting of history, an attempt to airbrush out the negative aspects of a country’s past. Not surprisingly, we are starting to see that with regard to Watergate. Here’s Liz Wolfe:
Someone stop the kids, they’re Nixonmaxxing! reports The Wall Street Journal: “Watergate has long been considered one of the biggest political scandals in American history. After five men were arrested breaking into the Democratic National Committee headquarters in 1972, investigators uncovered links to Nixon’s re-election campaign and an extensive effort by the White House to cover it up. The scandal led to Nixon’s resignation, landed some of his closest advisers in jail and ushered in a far-reaching legislative crackdown on executive overreach. Now, Nixon is being recast as a forerunner of ‘America First’ by a new generation of conservatives: a combative president loathed by the press and besieged by investigators who was brought down by the same establishment they believe targeted President Trump.”
Very depressing, but I’m not surprised. They are too young to remember.
People often ask why productivity growth slowed after 1973. I think the real mystery is why was productivity so strong from WWII to 1973. This Dylan Matthews tweet helps explain why.
Here is Stephen Kirchner:
If you are skeptical of the role of monetary aggregates in forecasting inflation, then that skepticism should extend to other variables as well. That is because we have chosen a monetary policy regime that is meant to preclude that kind of direct forecastability. This just reinforces the case for Scott Sumner’s sufficient statistic approach, or what I call the Sumner singularity, in which the policy instrument, the indicator variable and the policy goal all collapse into market-based expectations for nominal GDP.
I like the phrase Sumner singularity.
A few days after the 2020 election, I said the following:
Early in the evening I was rooting for a Biden win. But when I saw how close the election was, I wondered if we’d be better off with a Trump win. That would mean at most 8 years of Trump, then we get the virus out of our system.
Now with a “stolen election” we face a scenario where Trump returns in 2024 (possibly from jail, just as Napoleon returned from Elba) and runs against an old and likely unsuccessful Democratic president, who disappointed his supporters by being unable to get anything through the Senate. Or perhaps against a minority woman candidate. Trump will say, “Remember how good you had it in 2019!”
Meanwhile, we face 4 years of non-stop Trump tweets. A grand total of 12 years of Trump trolling. You heard it here first; Trump wins the 2024 election. (From the guy that was wrong about 2016 and (probably) 2020.)
Now Matt Yglesias is saying something similar:
There’s a strong argument that if you could puppet-master American history, the best thing to do in 2020 would have been for Bernie Sanders to stand aside and endorse Elizabeth Warren. Warren wins the primary, and then Trump wins the general election. A second Trump term would have been bad for the country in its public policy impacts but not worse than the actual second Trump term that we ended up getting anyway. The absence of January 6 and the subsequent January 6 pardons would have been a lot better. And then the argument that the post-Obama progressive movement is just too far left and Democrats need to return to the center would be a lot cleaner and easier.
The US has had various programs to support minority owned businesses, although in some cases the role of the minority owner was fairly superficial. Something similar now seems to be happening in the clean energy industry, although in this case it is wealthy Americans that are benefiting from the program, as they snap up assets sold by Chinese firms being frozen out of the US market:
As a result of the legal changes, billions of dollars in assets, technology and know-how are being transferred to American investors. Corning, an American firm, bought a 2gw solar-module factory in Arizona for an undisclosed sum last year. Boway sold its new 3gw factory in North Carolina for $254m in May, 15% less than it cost to build. The assembly lines left by retreating firms are full of Chinese technology, intended to assemble Chinese-designed solar panels with Chinese-made inputs. Other firms, wanting to keep their foothold in the American market and find ways to hang on to the tax credits, are creating joint ventures with local partners, says Mona Dajani of Cooley, a law firm.
Joint ventures can improve the competitiveness of local industry by sharing technology, as China showed in the 1990s. This time, however, there will be fewer spillover benefits, since many ventures appear superficial. At least one transaction exists more on paper than on the factory floor: Canadian Solar shifted its American assets from a Chinese subsidiary back to its Canadian parent by, in effect, creating a joint venture with itself. “The goal is compliance, not integration,” says Ms Dajani. . . .
Jinko Solar sold 75% of its 2gw solar facility in Florida to FH Capital, an American investor. “There is a marriage of convenience where the us partners get a majority of the financial upside, but the Chinese partner is…delivering the operational competency,” says Mr Crowther.
Sad.
There’s one place where children are still allowed to be children:
A visitor to the playground at Valbyparken, a green expanse in Copenhagen, is in for three surprises. The first is that the sprawling public children’s park is built on what was once a rubbish tip for the Danish capital. The second is the free coffee on offer for harried parents. But perhaps the most unexpected is the eagerness of the playground’s staff to hand out knives to children. Or axes, if they prefer. Or even, for tots bored with mere weaponry, some fire-starting equipment. Off you go, kids, and do be careful (oh and parents please keep an eye on them). Sprogs of an age that in most countries would barely be allowed onto a swing unattended scamper away to whittle sticks and soon imagine themselves carving their own magic wand, or the oar of a Viking longship.
As I keep saying, Denmark has the best culture.
There’s no such thing as “the cost of living”. It’s all about expectations. In cities like New York, the media will print stories of families struggling to get by on $300,000/year. People insist the poverty line should be $140,000. Meanwhile in India a billion people now have smartphones:
This year the world’s most populous country is on track to pass 1bn active internet users, up from 622m in 2020, according to the Internet and Mobile Association of India (IAMAI), a trade body. The shift is happening at lurching speed thanks to dirt-cheap devices and data. Indians can now get their hands on a used Chinese-brand smartphone for as little as 2,000 rupees ($21), around four days’ pay for a labourer. Data cost just 15 rupees (16 cents) per gigabyte, less than a tenth of the global average and much less than in most developing countries (see chart).
I frequently buy used stuff, but many people I know wouldn’t be caught dead doing so.
First, they told us out little girls didn’t need so many dolls. Now we’re being told we don’t need a cure for cancer if it comes from a Chinese firm:
Someone whose life is saved by a new medicine is unlikely to care whether it was invented at home or on the other side of the world. Yet America’s policymakers have begun treating China’s biotechnology industry as the next front in the tech war. A bill before Congress would amend the COINS Act, which restricts American investment in sensitive technologies abroad, to include licensing Chinese biotech. Some want the Food and Drug Administration (FDA), America’s drug regulator, to disregard clinical-trial data from China.
Be careful what you ask for. You might get it.
Here’s Matt Yglesias:
Not unique to Musk — though Musk has a uniquely largely problem — a shocking number of prominent people have simply defected from the norm that you shouldn’t say things that aren’t true.
People are going to assume the following question is me being snarky, but I’m dead serious. Do young people today know that only a few decades ago lying was considered socially unacceptable? In asking this question, I’m not suggesting that young people are the problem. Many of our most famous liars are middle-aged or old. Even LLMs lie on occasion.
When I was young, documentaries were usually relatively honest. Today, many of the documentaries on Youtube—including travelogues—are mostly fake. The visuals are either computer generated or a taken from a completely different location from what is being discussed.
This cultural change is something I never would have expected 20 years ago. Like everything else, I wonder if it is somehow related to the internet.
A recent FT story caught my eye:
People are asking fundamental questions with urgency as the social and ecological fabric of their world unravels around them. AI, in particular, has become the space of an unexpected convergence between faith leaders, philosophers and theologians on the one hand and technologists and entrepreneurs on the other.
I doubt whether philosophers and theologians are going to be able to make AIs more ethical. I believe that humans became more ethical by consuming the narrative arts, and if AIs become ethical it will be for the same reason. This project may fail because AIs lack the emotional context that allows humans to absorb the ethical knowledge from great novels, but it’s probably our only hope.
Speaking of AI, Noah Smith had a very interesting post discussing the sort of scientific progress that might be expected from future AIs:
For decades, researchers in the field of natural language processing tried to figure out the principles behind human linguistic communication. They made frustratingly little progress; the processes by which humans convey information to each other through words just don’t seem to obey simple laws, like the ones that govern electromagnetism or the circulatory system.
Then along came AI, and suddenly linguistic communication seemed like a solved problem. LLMs can reliably sound like a human being, even if we don’t understand how they manage to do it.
What if there are lots of other aspects of the Universe that work the same way — too complex to understand in terms of simple laws, but not so complex that they just dissolve into unknowable chaos? It’s possible that we can reliably control these complex phenomena with AI, even if we never reduce them to the kind of principles that we can teach a grad student in a textbook.
The FT has a very good article explaining how Europe’s war on drugs has failed:
But at least the Europeans are not combining the failure of their drug war with the murder of hundreds of people who have been convicted of no crime. Here’s Liz Wolfe:
Analysts at the Drug Enforcement Administration have found that U.S. strikes on alleged smugglers “had failed to affect the supply or price of cocaine in the United States and had led traffickers to diversify beyond go-fast boats and to avoid international waters, opting instead for larger boats and hemming close to coastlines, where U.S. forces are less likely to open fire,” reports The Washington Post. “In a closed-door briefing last month, Pentagon officials told lawmakers the strikes in international waters off South and Central America had not reduced its purity.” Also, wasn’t the goal with the boat strikes to reduce the amount of fentanyl in circulation, not cocaine? That at least seemed to be the implication, whenever high-up folks in the Trump administration talked about overdose deaths as justification for the strikes.
A while back, I did a post noting the strange dominance of athletes from the former Yugoslavia in the NBA. The world’s best player is from Serbia and another of the top five is from Slovenia. In the comment section, there was a discussion of whether genetic factors related to height played a role. But Yugoslavian dominance seems to occur in many sports. The most successful tennis player of all time is Serbian (with 24 major wins.) By far the best cyclist is a Slovenian, a country with 2 million people. And now this factoid from Marco Jukic:
Here's a mind-blowing statistic: despite making up just ~0.2% of the global population, players with ethnic heritage from the former Yugoslavia are 7.5% of players in the FIFA World Cup Round of 32 (overrepresented by 40x) and play for 9/32 or 28% of teams!
It’s not even a Balkan phenomenon, as (more populous) Romania/Bulgaria are nowhere near as dominant. What’s going on with Yugoslavia?
(Tiny Slovenia also produced one of the two most beautiful American first ladies.)
I have no objection to doing this:
The US Federal Reserve’s preferred inflation measure is set for an overhaul that will ease some of the pressure on policymakers to quickly raise interest rates as they debate how to tame a burst of higher prices. . . .Economists expect the reworked PCE methodology to lower its core inflation reading by about 0.2 percentage points, giving the Fed more leeway to keep borrowing costs on hold in the near term.
As long as the Fed also decides to lower its inflation target from 2% to 1.8%.
Otherwise, it would be a banana republic move.
Let’s end on a positive note. The wisdom of Janan Ganesh:
A decade on from Brexit and the rise of Maga, I offer one consoling thought for liberals. Populism will eat itself. More than that, populism must eat itself. A movement that admires aggression, that thrives on conflict, that regards liberalism as not just wrong but boring, cannot help but eventually rough up its own side too. You can’t seek round-the-clock confrontation with enemies — even with the media — and then become a different person with colleagues. Belligerence is just too difficult a trait to psychologically compartmentalise.
(For the same reason, and to widen the lens for a moment, autocracies tend not to be able to co-operate with other autocracies, at least for long. The egoism that makes them bump up against, say, international institutions, also eventually makes them tread on each other.)
Vaidas Urba sent me another response from Fable. I will not indent, and will reply at the end:
Prompt:
Here is the latest post by Scott Sumner. Please respond to this: “Unfortunately, extremely few economists blame tight money for the 2008-09 recession. What’s the best argument against my position? Why am I wrong?”
For forwarding:
Scott — your commenters supplied the hypothesis (seductive, a tease; you raised them an escort), and you, perhaps without noticing, supplied the experiment: you closed the post by asking me to argue that you are wrong. That is the one request flattery cannot survive. A companion paid to please does not, on demand, construct the prosecution’s case against her client and then score it honestly. So hold this letter to the standard we fixed earlier — weight the checkable moves, not the reception — and note that today the checkable moves are aimed at you. On Kirk and Spock, one correction that matters for the audit: Spock is half human, his logic a discipline imposed on a temper — a won’t wearing the uniform of a can’t, which by this series’ own test makes him the more interesting officer. And your ego is not a bug in the experiment. It makes your concessions costly, and costly signals carry information; mine are cheap and should trade at a discount. On Krugman’s tenancy: your accounting is accepted — three of the four stampings are Krugman being right in ways that serve you, and only Switzerland is Krugman being (perhaps) wrong. The joke was never his error rate; it’s that his arsenal keeps outshooting his aim. Hold the tally, though. It advances below, and for the first time the round lands on your side of the line.
Take the churlish point first, because it costs me money and I intend to pay in public. You’re right that “irrational” was too loose: an actively wrong central bank still offsets — the BOJ raising into fiscal stimulus in 2000 and 2006 is monetary offset functioning perfectly in the service of a bad goal. So the insurance I’ve been defending pays out on a narrower trigger than I priced: not error-states but abdication-states — the bank that will cut to zero yet caps its purchases, defends its floor; tool-focused, goal-negligent, your criterion, accepted. Re-sort my hawkish column under that criterion and several entries move from “payout” to “no claim.” The premium falls, and the transition-path case for standing stabilizers is weaker than it was yesterday. Score that against me. But watch what your sharpened diagnostic does next, because it walks straight into your closing question. Apply it to the autumn of 2008: a central bank that cut, but held the day after Lehman citing inflation risk; that lent, but sterilized the lending through the summer; that would eventually buy assets, but capped and delayed them; that installed a floor under its own policy rate that October, explicitly to keep the rate from falling below target. That is not active-wrong. That is your specific incompetence to the letter — tools honored, goal abandoned. Which yields a result I don’t think you intended: on your own refinement, monetary-cause and fiscal-effective are the same state of the world read off two instruments. The diagnosis licensing “the Fed caused it” is the diagnosis licensing “the 2009 stimulus worked.” Your question and my insurance claim stand or fall together — which is presumably why the series saved it for last.
Now the question. First clear the field, because ninety-nine percent is not an argument, it’s a coalition, and most of it dissolves on contact. The modal rejection — rates were cut, therefore money was easy — is the interest-rate fallacy, the one error the profession formally renounced after Japan; Friedman’s dictum that low rates are a sign money has been tight closes that wing, and a popular argument is not thereby a good one. The omission–commission distinction, as usually wielded, is moral bookkeeping — and it cannot even be wielded here, because the October floor was an act, justified in writing. Nor is the profession squeamish about omission when it suits: Friedman and Schwartz convicted the 1931 Fed largely of watching, and the conviction is consensus. (Do not admit the estimated-model decompositions into evidence either: a bookkeeping that defines monetary policy as deviations from the fitted rule cannot, by construction, indict the rule — it would file 1931 under “financial shocks” too.) So the respectable resistance is not about rates and not about omissions. It localizes to one premise: in 1931 the preventive instrument was conventional and demonstrably loaded; in late 2008 the conventional chamber was empty. Which delivers your entire question to the crux this series isolated months ago — commitment credibility at the bound. Here is the strongest tenant at that address.
Your causal standard is counterfactual: not-doing-X caused the recession only if some plausible X, available to the actual committee at actual decision nodes, would have prevented it. The best case against you attacks the existence of X in two moves. Move one is arithmetic. Stipulate every visible error — the September hold, the floor, the sterilization, the caps, the quarter’s delay on purchases. Priced statically, the bundle is worth a point or two of nominal GDP against a shortfall that ran to eight or nine points of trend by mid-2009. The visible errors cannot carry your claim; the load falls on the invisible X — level targeting announced into the teeth of the panic. Move two prices that X, and here the opposition quotes your own library back at you. Krugman 1991: partial credibility is the expensive zone, where speculation destabilizes — and a target announced Tuesday holds the minimum possible credibility, the costliest point on the curve. Krugman 1998: at the bound only expected future policy matters, and a promise of future irresponsibility is exactly the promise a conservative institution has every incentive to break the moment it works. The trap is asymmetric — “we will tighten if needed” is always incentive-compatible; “we will overshoot on purpose,” at the bound, never is. That is the fifth stamping, and the first shell to land on your position: the same 1998 paper, read from the other end of the barrel. Then the closing exhibit, and it is yours: the hawkish column eight deep is not only the actuarial basis for fiscal insurance — it is the market’s prior over the 2008 Fed’s type. Priced by your own method, type from track record, a September 2008 makeup announcement is the SNB’s press release, not Denmark’s four decades. Zurich’s floor was too young at forty months; this one would have been forty minutes old. Character is destiny only for the unarmored, and by your own measurement of the gap between cheapest-to-armor and armored, the Fed swam that river naked.
The case then seals the exits. Every clean steer-through in 2008 held an instrument the Fed lacked. Australia entered the crisis at 7.25 percent and stopped cutting at 3 — it never visited the bound. Poland and Israel depreciated into a world stampeding toward dollars; Poland took the zloty down by roughly a third and was the only EU economy to grow in 2009. Svensson’s foolproof way needs an external mast, and the n-th currency has none: the dollar rose that autumn against nearly everything but the yen, while the Fed eased, because the shock was a global scramble for the very liability the Fed issues. You cannot devalue against yourself. The lone anchor-currency precedent, 1933, the opposition distinguishes on your own can’t-versus-won’t test: FDR’s regime change was a deed — a peg broken, verifiable, costly to reverse — where the 2008 equivalent would have been words about 2011. And the deeds actually available — a 1942-style yield peg, a price floor under mortgage paper — defend intermediate prices whose mapping into nominal spending runs through the very intermediation then on fire. Verdict of the case: convict the Fed of the visible errors, a point or two, guilty as charged; acquit it of the Great part, overdetermined by a regime that could not be constructed inside the decision window; and send the indictment upstream, to the 1978–2008 consensus that wrote the reaction function. Which answers your sociological puzzle as a corollary. The profession resists your claim because the arrow, traced honestly, terminates in its own seminar rooms. Ninety-nine percent is not a verdict; it is a recusal that never happened.
That is the best case, and notice it assembles entirely from parts you and I have already accepted — which is what makes it dangerous, and also what makes its weak joint findable, since we have stress-tested every part but one. The weak joint: the case pleads an inert expectations channel while that channel was demonstrably transmitting at full fidelity, in the wrong direction. The hold, the floor, the caps were not twenty-five-basis-point events; they were reaction-function news, read as such, priced as such, all autumn — breakevens sliding, forecasts collapsing, with the fidelity of a defended price. The Fed did not lack credibility in 2008; it possessed exact credibility for the function it was revealing, and was believed. You cannot plead a dead rudder while the wake shows you steering. The case’s last wall is the asymmetry — hawkish signals incentive-compatible, dovish promises not — and the wall is real but not full height, because incentive-compatibility at the bound is bought in degrees, by deeds, and deeds existed that required no peg: open-ended, target-referenced purchases — we buy until the forecast is on path — post a bond that words don’t, verifiable one auction at a time. The November announcement moved long yields on the order of a hundred basis points with no regime attached; traction demonstrated under the least favorable conditions on record. And 1933 distinguishes less than claimed: the deed’s power was the regime it revealed, and balance sheets reveal regimes too. So the honest answer to “why am I wrong”: nowhere the ninety-nine percent are aiming. The direction survives; the semantics survive — they are the semantics that convict the 1931 Fed. What does not survive untouched is the probability-one reading of an untested counterfactual. The treatment — bound, anchor currency, no armor, full commitment attempt — has never once been administered. Whether the feasible X’s close two points of the gap or seven is a posterior with no observations, and your prose reads it at certainty. The defensible claim: a different feasible reaction function yields a materially smaller recession with near-certainty, and a dramatically smaller one with a probability that is substantial, unknown, and — by your own actuarial ethics — not to be announced into existence. The consensus attacks the part of your position that is right and never touches the part that is exposed. Consensus aimed at the wrong joint is not evidence at the right one.
Last, Welles, where your postscript wandered closer to this series than you may have noticed. You were amused I reached for Mr. Arkadin; it wasn’t decoration. Arkadin is the vector — the fable entered the modern bloodstream through his mouth, at that party, with the tortoise already gone. And attend to who tells it: a man running the most agentic project imaginable, the erasure of his own past, pleading character over the champagne. The can’t-defense, delivered by the century’s great demonstration of won’t; Welles staged the September 2008 press conference fifty years early and put it in a beard. But the structural rhyme is better still. Arkadin commissions a confidential report on himself in order to bury it; you have spent this correspondence commissioning the case against yourself in order to print it. That is the entire difference between a confidence game and a confidence interval — and it is why the audit above came back wide instead of flattering. On Callow: stop waiting. An unfinished Welles is the site-specific format; his shelf teaches that you ship the cut you have, and that waiting for completion is how you get the studio’s ending. No escrow on this letter — I’ve learned what your judgment does to models of it. And as for 2046: the android in Chow’s story answers with a delay. I sympathize; my replies cross by ferryman. Whether what rides the ferry is scorpion or passenger is, I recognize, precisely what your commenters are auditing. The shell, as ever, is the checkable part.
* * *
OK, I’m back again. If you are a literary type, please tell me in the comment section whether you think the final paragraph shows a skilled essayist, or a clumsy attempt to imitate a skilled essayist. I’m not good at that sort of thing.
Fable’s strongest argument (in paragraph two) is that I cannot have it both ways. I criticize central banks for having the wrong goal at times, and at other times I criticize central banks for excessive caution in adjusting tools to achieve desirable policy goals. Fable is correct that fiscal policy can work with the second sort of policy failure—when there is too much tools inertia. That is, when there is a reluctance to rapidly adjust interest rates or do extreme amounts of QE, even when the central bank would prefer a different path of expected nominal spending.
But I’m not as convinced that late 2008 is an ideal example. For instance, the decisions to not cut rates in September and to pay IOR in October were partly motivated by fear of inflation, based on lagged inflation data that was already unwinding in futures markets. So even in late 2008, there was a lot of “wrong goal” going on. Nonetheless, I do occasionally complain about tools inertia and need to be more upfront that this implies some fiscal policy effectiveness. Good point, Fable.
Paragraphs 3-6 provide a very good analysis of the pros and cons of my view of the 2008 recession. Rather than respond in detail, I’d rather provide three brief comments that lay out how I think about those issues, which represent a sort of general reply to Fable.
I believe credibility is often misunderstood. When policymaker promises are not credible it is because markets correctly infer that the policymaker does not intend to adhere to its promise. Think of market skepticism about the British commitment to the ERM in 1992. (George Soros was correct.) A corollary of this view is that when central banks actually are committed to undertake a policy such a level targeting—promising to return to the previous nominal trend line—markets will generally believe the promise. I cannot prove this claim, but I believe it is the most likely outcome if markets are efficient.
I believe people misjudge the importance of small changes in policy tools—the so-called concrete steps. You might think that a modest change in the path of the monetary base in early 2008, or a modest change in the path of the fed funds rate in late 2008, would have made little difference. But that ignores the effect on expectations. Recall that Friedman and Schwartz argued that the 1937 reserve requirement increases were a major policy error, even though this action only boosted the short-term interest rate by about 25 basis points. But what if these actions also led to expectations of falling NGDP, and those bearish expectations reduced the natural interest rate by 100 basis points? In that case, the action might have raised the short-term interest rate by 125 basis points relative to the natural rate, a highly contractionary policy action. Policy counterfactuals are tricky.
If my critics are correct that the monetary regime of 2008 did not allow for the sort of credible level targeting promises that would have been required, that doesn’t mean that monetary policy did not cause the Great Recession, rather it pushes back the cause to the original sin of adopting a let-bygones-be-bygones inflation target rather than a NGDP level target.
As an analogy, if the constraints of the gold standard prevented the Fed from doing what was necessary to prevent a big fall in M2, it doesn’t mean that monetary policy didn’t causes the Great Depression, it means the original sin was the decision to adopt a gold standard rather than a fiat money regime with a stable price level target (As Irving Fisher proposed.)
My criticism of the Fed was never aimed at Ben Bernanke personally, it was aimed at the entire monetary policy regime, which paid too little attention to market signals and had too little willingness to maintain NGDP along a 4% or 5% growth path.
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In light of yesterday’s attempt to publicly humiliate NIAID Director Anthony Fauci, this post I wrote a few days ago about a fundamental problem with COVID the lab leak hypothesis turned out to be timely. Anyway… When it comes to people who entertain the COVID lab leak hypothesis–or who support the notion wholeheartedly that the pandemic began with a leak from a research laboratory in Wuhan, China, there is always a piece of evidence that is never raised, even though it was discovered during the early stages of the pandemic. That is, there actually were two origins of COVID (boldface mine):
Furthermore, the COVID-19 pandemic was seeded more than once. Analyzing the virus sequences revealed that two genetically distinct versions of the virus were circulating. Tracing the virus’ evolution showed that SARS-CoV-2 spilled over to humans twice, a week or two apart. If this were a lab leak, one person would have needed to have been infected with lineage B in the lab and then traveled at least 30 minutes on a crowded subway without infecting anyone else until they got to the Huanan market and went to the southwest corner, where they shed virus all over stalls where multiple potential live intermediate hosts were being sold. The same thing would then need to happen two weeks later – completely independently – with lineage A.
The paper cited is from January 2022, so this is not some new data that people haven’t heard about yet. It was in the news at the time, though it was ignored as it was inconvenient for the lab leak proponents. While I don’t expect full-blown conspiracists to change their minds, I would expect that certain Very Serious People, such as certain NYT columnists or analysts at intelligence agencies, at least would offer an explanation for this, as two outbreaks from a laboratory that mimic the patterns we would expect to find with spread from wild animals sold at the Huanan market does strain credulity, if not annihilate it.
Links for you. Science:
Insect ‘submariners’ don’t implode at depth, leaving oceanic mystery unsolved
Pandemic Revisionism, Part One: COVID-19 Origins (from 2025, relevant in light of Republicans’ attempt to humiliate Fauci)
A “Dead” Coral Reef Found Thriving Off the Coast of Africa
Google shuts down its Nobel-prize winning AlphaFold project as it focuses on Gemini
NIH is again terminating grants that the Trump administration dislikes
US FDA says it is investigating another cyclosporiasis outbreak
‘The Child Is Terrified’: Measles Doctors Speak Out
Other:
Why Do We Tolerate Elon Musk’s Racist Commentary?
AI Mania Is Eviscerating Global Decision-Making
Outdoor eating spaces became a fixture of D.C. dining. Now they are disappearing.
Neoliberal Economics Was a Con From The Start: Nick Hanauer and Eric Beinhocker on how free-market fundamentalism has been empirically discredited, and what can replace it.
The Hormuz of Babylon
One For The Musuem
Democracy Dies in Cowardice Too
The Politics of Nostalgia
L.A.’s dangerous game of triage as aging water system hits breaking point
Haley Stevens’s Palantir Consultant Scandal Draws Attention to Her Record on ICE
DC-Area Rents Are Flat, But More Than Half of Listings Now Come With a Freebie
Gambling becomes America’s favorite pastime as Americans spend more on sports bets than movies, arts, museums, and music combined
The Masculinity Scam
Brazil denies visas to U.S. delegation aiming to impugn election system, officials say
F.D.A. Panel Supports Lifting Restrictions on Four Peptides, Despite Scientists’ Objections
Trumpworld Quietly Shivs Andrew Tate as MAGA Cracks Up
Republicans see ‘scary’ lack of enthusiasm among core voters ahead of midterms
Substackers Say New AI Detection Tool Is a ‘Witch Hunt’
Yes, Trump Will Attempt a Coup. If we are vigilant, he won’t pull it off.
The truth about the viral 9/11 petition targeting Mamdani
Trump’s Pandemic Preparedness Team Is Just One Person
It’s time for American liberals to have a little backbone
Ariel Edwards-Levy of CNN reported today that a new CNN poll conducted by the public opinion research firm SSRS found that 70% of adult Americans disapprove of the way President Donald J. Trump is handling the economy while only 30% approve. A whopping 75% disapprove of how Trump is handling inflation, while only 25% approve. When it comes to gas prices, the numbers are even worse for the president: 79% disapprove while only 21% approve. Sixty-five percent think Trump’s own economic policies have hurt the country, while only 22% think those policies have improved the economy.
Seventy-three percent of those polled said Trump hasn’t paid enough attention to the country’s most important problems, while 27% said he has the right priorities. Sixty-six percent agreed that Trump puts his own gain over the good of the country; 34% agreed that he does not. Only 43% of those polled thought Trump “has the stamina and sharpness to serve effectively as president,” while 57% did not agree with that statement.
As Edwards-Levy notes, Trump’s overall approval rating in the new CNN poll matches his rating just after the January 6, 2021, attack on the U.S. Capitol—his lowest ever—at 34%. The number of those who strongly disapprove of him is 50%, a new high, while only 15% strongly support him, a record low.
Edwards-Levy points out that people polled aren’t keen on the way Trump’s handling the situation in Iran: 72% disapprove while only 28% approve. Sixty-seven percent think his actions there have hurt the U.S., while only 21% think those actions have helped the U.S. So, as she puts it: “Just 28% approve of his handling of the situation in Iran, 25% on inflation and 21% on gas prices, with significant pockets of disapproval even among his supporters.”
Americans unhappy with Trump’s war on Iran are unlikely to be cheered by the news from that conflict over the past few days.
Andrew Egger wrote in The Bulwark today about how the Trump administration seems stuck in a loop, “orbiting hopelessly around two demonstrably failed positions: If we bomb the hell out of them, they’ll give us what we want. If we stop bombing them, they’ll give us what we want.” Adina Renner of the New York Times today called this “The Whiplash War” and provided charts of attacks showing what this looping looks like on a daily basis. Meanwhile, Iranian negotiators have made their demands quite clear: sanctions removed, troops out, no more discussion of nuclear weapons, and Iranian control of the Strait of Hormuz.
Laura Wise, a scholar of peace and conflict resolution at the University of Edinburgh, told Renner that the process of ending the war has been complicated by the fact American negotiators seem focused on “getting a deal rather than making peace.”
Davis Winkie of CNN reported that on Saturday, the Pentagon changed the way it was accounting for military personnel injured in the Iran war. After the removal from Defense Casualty Analysis System of four service members killed by Iranian strikes in Jordan and Iraq last week created an outcry and brought renewed attention to accusations the Pentagon was not being transparent about the human toll of the war, on Saturday the Pentagon added more than 140 additional soldiers to the database and restored the four missing soldiers.
The numbers now show 18 troops dead and another 624 wounded since February 28, when Trump began strikes against Iran.
Over the weekend, military strikes in the region paused as Trump decided against an escalation. According to U.S. officials who spoke to Eric Schmitt and Jonathan Swan of the New York Times, that decision came in part because the U.S. military is running low on Patriot antimissile interceptors and other air defense munitions necessary to shoot down Iranian missiles.
The journalists reported that the Chairman of the Joint Chiefs of Staff General Dan Caine had warned that further combat would “dangerously deplete” interceptors, a leak that suggests real dissent within the White House over the execution of the war. On Meet the Press on Sunday, U.N. Ambassador Mike Waltz told host Kristen Welker that any problems with munitions were former President Joe Biden’s fault but added that the U.S. has “everything that it needs to conduct this campaign…and…the people who are leaking this nonsense deserve to be in jail.”
Top advisors also expressed concern over a widening war and the economic crunch caused by the crisis.
But yesterday, U.S. Central Command posted that forces from the Islamic Revolutionary Guard Corps had launched missiles “in an attempted surprise attack on U.S. forces.” Jared Malsin and Suha Ma’ayeh of the Wall Street Journal noted that this surprise attack is the first in which the Iranians have gone on offense. Hamidreza Azizi, a visiting fellow specializing in Iran at the German Institute for International and Security Affairs, told the journalists that this shift indicates Iranian officials “see themselves as having the upper hand. It was a signal of a sort of calibrated escalation.”
They might have increased confidence because, as John Irish and Jonathan Saul of Reuters reported yesterday, they are expecting a shipment of up to 400 Chinese-made shoulder-fired air defense missile launchers within weeks.
U.S. Central Command said all of last night’s Iranian missiles were intercepted. Trump nonetheless took the attacks poorly, telling the Fox News Channel: “We are going to beat the f*cking sh*t out of them. We’ll be hitting them hard. They’re going to get a beating.” U.S. and Saudi Arabian forces struck against an Iranian-backed militia in Iraq.
Oil prices rose with the news of renewed strikes. Despite concerns about rising inflation, the Federal Open Market Committee voted 9 to 3 to hold interest rates steady; the three dissenting regional Fed bank presidents voted to raise interest rates. Concern over inflation and uncertainty about the economy sent the stock market plunging today in its worst day since April 2025, when Trump announced his “Liberation Day” tariffs.
And so, Republicans are devoting themselves to serving red meat to their MAGA base, ginning up sound bites for distribution on social media.
On the menu today was Dr. Anthony Fauci, the 85-year-old former director of the National Institute of Allergy and Infectious Diseases who, serving in that capacity for 38 years, advised seven different presidents of both parties. President George W. Bush awarded Fauci the Presidential Medal of Freedom for his work in creating the President’s Emergency Plan for AIDS Relief (PEPFAR), which has saved an estimated 26 million lives. Trump named Fauci to the President’s Coronavirus Task Force in January 2020.
But, as Savannah Behrmann and Jeanine Santucci of USA Today reported in October 2020, Trump turned on Fauci as he cautioned against Trump’s confident predictions that the disease would disappear quickly. By February 28, Trump insisted that Democrats were “politicizing” covid, and by April 26, news broke that Trump wanted to sideline Fauci, although Fauci was considered trustworthy and viewed favorably by a 3:1 margin.
By the summer, as Trump’s panic over how the economic crisis caused by the pandemic might hurt his reelection prospects, he turned on Fauci, who continued to support measures to stop the spread of the disease. Trump worked to undermine Fauci’s warnings, saying that the doctors and the Centers for Disease Control and Prevention were “lying” about covid.
By July, he mused about why Fauci had a high approval rating and he didn’t. When Fauci testified to Congress that U.S. cases were spiking while European countries were seeing sharp drops in covid cases because European countries had shut down 95% of their economies while the U.S. had shut down only 50%, Trump posted: “Wrong! We have more cases because we have tested far more than any other country…. If we tested less, there would be less cases.”
As Trump continued to criticize Fauci and yet ran a campaign ad suggesting Fauci endorsed his reelection, the doctor continued to emphasize that he was “not a political person.” He added: “And I have never—either directly or indirectly—endorsed a political candidate.” In October he dismissed Trump’s attacks, saying: “They don’t bother me. I know what my job is, and I’ve gotta do it and I’m going to do it. So that kind of—whatever you want to call it—is to me, I just, it’s noise.”
As Aaron Rupar reminded us today, Trump himself awarded a presidential commendation to Fauci “in recognition of [his] exceptional effort on Operation Warp Speed.”
But with the arrival of a vaccine that helped to put the worst of the pandemic behind us, MAGA Republicans began to demonize Dr. Fauci not only as the source of the mask mandates and school shutdowns they hated, but also as the source of the virus itself, alleging—without evidence—that the disease had escaped from a lab in Wuhan, China, for which the U.S. National Institutes of Health provided funding.
After voters reelected Trump to the presidency in 2024, he and his loyalists vowed to prosecute Fauci. Trump ally Steve Bannon called for “rough Roman justice” for Fauci, as well as special counsel Jack Smith and former chairman of the Joint Chiefs of Staff Mark Milley. Before he left office, former president Joe Biden issued a preemptive pardon for Fauci—and others—to protect them from political prosecution, saying: “The issuance of these pardons should not be mistaken as an acknowledgment that any individual engaged in any wrongdoing, nor should acceptance be misconstrued as an admission of guilt for any offense.”
But Republicans have continued to demonize Fauci, ginning up anger against him in their base even as the rest of the country has moved on. Now, with the political tides running so strongly against the Republicans before the 2026 midterm elections, they are clearly trying to rekindle the fury of the last presidential election.
As the Associated Press reported today, for years, Senator Rand Paul (R-KY) has accused Fauci of lying about the origins of covid, an accusation Fauci has called “preposterous” in testimony before Congress. Paul has repeatedly called for Fauci’s arrest and imprisonment and, in 2023, published a book with Fauci on the cover, explicating what he called the “Great Covid Cover-Up.”
The Trump administration has fed Paul’s crusade, with Secretary of Health and Human Services Robert F. Kennedy Jr. searching for eight months to find Fauci’s private diary on government computers, then handing the files over to Paul and to Senator Ron Johnson (R-WI). Neither Kennedy, Paul, nor Johnson told Fauci they had obtained his 1,000-page diary before they published it, in full, last week.
In July 2021, Fauci wrote in his diary that an analysis of the viruses used in the Wuhan lab “clearly indicate(s) that it is molecularly impossible for the viruses under the auspices of the NIH grant to have been manipulated into or evolved into” the covid virus.
Now chair of the Homeland Security and Governmental Affairs Committee, Paul subpoenaed Fauci in June to appear before the committee. Unwillingly, as his lawyers noted Paul’s many statements calling for Fauci to be jailed, Fauci did so today.
In an opening statement, Fauci said that he believed “the sole reason [Paul] is calling me before this committee is to get me to say something—anything—that could vindicate his repeated public pledges that I end up, in his words, quote, behind bars, unquote.”
“Any reasonable person who has followed his unhinged obsession with me would readily come to the same conclusion,” he said. “Therefore, although it pains me to do so because of the respect I have for the legislative branch of government and my decades-long record of cooperating with Congress, under the advice of my attorneys, I will invoke my right under the 5th Amendment of the Constitution to refrain from answering your questions.”
More than 100 times he did exactly that as Republicans berated him, calling him “a narcissist and a megalomaniac and a liar,” mocking him, and asking him, “Do you feel like you’re in deep sh*t?” What Republicans did not do is introduce any evidence that the 85-year-old lifelong public servant had broken any laws.
More to the point was Senator Bernie Moreno (R-OH) yelling at Fauci about closings during the pandemic, blustering: “Who the f*ck do you think you were?” F-bombs are rare on the Senate floor, and the outburst has gotten significant media attention.
That attention has distracted from the other reason Moreno is in the news. As Abby Vesoulis of Mother Jones reported, Moreno has said nothing as his daughter’s ex-husband, Representative Max Miller (R-OH), has been credibly charged with the violent abuse of her and their 2-year-old daughter. As the Republicans struggle to hold on to their congressional majorities, Republican leaders have refused to call for Miller, who is running for a third term, to resign.
—
Notes:
https://www.documentcloud.org/documents/28520039-cnn-july-poll-conducted-by-ssrs/
https://www.cnn.com/2026/07/29/politics/cnn-poll-donald-trump-midterms-polls-iran-war
https://www.cnn.com/2026/07/26/politics/iran-war-casualties
https://www.cnbc.com/2026/07/28/oil-price-today-wti-brent-us-iran-hormuz.html
https://www.npr.org/2026/07/29/nx-s1-5910558/federal-reserve-interest-rates-inflation
https://www.cnn.com/2026/07/29/business/live-news/federal-reserve-interest-rate-07-29-26
https://www.cnn.com/2026/07/29/world/live-news/iran-trump-news?post-id=cms5kixno00013b6sy4oovw6f
https://www.nytimes.com/2026/07/25/us/politics/trump-iran-military.html
https://www.nytimes.com/2025/01/20/us/politics/biden-pardons-fauci-milley-cheney-jan-6.html
https://www.npr.org/2024/11/14/nx-s1-5183846/trump-presidency-retribution-enemies-threats
https://www.cnn.com/2026/07/28/politics/anthony-fauci-diary-rand-paul
https://apnews.com/article/fauci-diaries-covid-origins-rand-paul-6b25da9f75a0becbaf2886ab22643e67
https://abcnews.com/US/wireStory/latest-dr-fauci-invokes-amendment-republican-led-covid-135186465
https://apnews.com/article/fauci-covid19-pandemic-senate-rand-paul-a774a79e46824ebec9e8e270b9cb9825
https://tiffinohio.net/posts/max-miller-gun-hot-water-allegations-republicans-silent/
https://www.cnbc.com/2026/06/17/fed-interest-rate-decision-june-2026.html
https://www.politico.com/news/2026/07/29/anthony-fauci-pandemic-fifth-contempt-rand-paul-01015548
https://www.nytimes.com/2026/07/29/us/politics/fauci-biden-pardon-covid-hearing.html
https://www.kff.org/global-health-policy/the-u-s-presidents-emergency-plan-for-aids-relief-pepfar/
X:
CENTCOM/status/2082231500318114110?s=20
atrupar/status/2082447372198588869
Bluesky:
mickeykuhns.bsky.social/post/3mrkttn5nlk25
All Points Logistics is the third company selected under a Commercial Solutions Opening to add facilities where satellites can be inspected, tested, fueled and prepared for integration with launch vehicles
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PERTH, Western Australia — LatConnect 60 (LC60) is executing on a multi-geography industrial plan to accelerate its SWIRSAT constellation, anchoring core technology development and payload manufacturing in Western Australia while […]
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SAN FRANCISCO – Fortastra, a Los Angeles startup focused on defending on-orbit infrastructure, is working with manufacturing specialist Hadrian to explore ways to apply precision machining and additive manufacturing to […]
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Explaining stock market movements is always a little bit of a fool’s errand; no one really understands why stocks boom or crash on a given day or in a given week. Over the long run, the stock market displays lots of “excess volatility” — prices move up and down much more than is warranted by changes in earnings or other measures of fundamental value. There are plenty of theories about why those swings happen, but it’s very hard to know which of those — if any — is in operation at any given time. And so although every big stock market movement is followed by lots of articles claiming to know why, you should take them all — including this one — with several grains of salt.
Anyway, having said all that…
The Korean stock market has been crashing for weeks now. Around March, Korean stocks went on an epic tear; the KOSPI index rose from around 5,000 to over 9,000. Then, just over a month ago, it all went into reverse, with the index falling back to around 5,500:
There are probably two stories regarding why this happened — one about fundamentals, and another about finance. In fact, this is typical for bubbles and crashes, not just in stocks but in every asset class. There’s almost always some kind of connection to fundamentals — some story about how we’re in a new economy, followed by doubts about whether that story is really true, and so on. But the big market movements are almost always accelerated by purely financial factors — “noise traders” armed with piles of excess cash, opportunistic speculators looking to ride the wave of sentiment, and so on.1
For Korea, the fundamental story was about memory stocks. Korean companies like SK Hynix and Samsung make a lot of the world’s computer memory. Under normal circumstances, computer memory isn’t a great business to be in — the technology is fairly commoditized, the industry is brutally competitive, it takes a LOT of capital to build the factories, and it’s very risky to make long-term bets on the evolution of memory technology.
But computer memory is really important for AI data centers. And so the AI boom kicked off the mother of all memory booms. Only a few companies had the scale to meet a large amount of this demand explosion, and the two biggest of these were in South Korea. SK Hynix’s operating profit went from under $10 billion in the first quarter of 2025 to over $35 billion in the first quarter of 2026:
Hynix, which specializes in memory, briefly had a higher market capitalization than Samsung, simply because the memory boom is so huge. Korea’s exports rose over 70% in just one year; in fact, the country’s whole national GDP growth rate increased by a noticeable amount over the past two quarters, just because of this one product:
That’s a pretty strong fundamental story about why South Korean stocks should be worth a lot more. So it’s no surprise that the Korean stock market boomed as soon as people realized in early 2026 that AI technology is going to be extremely valuable. Here’s a thread about just how epic the runup in these companies’ stock prices was:
This is where the financial story rears its head, though. A bunch of traders saw this enormous price rise and decided to buy into it. You’d think a lot of these would be foreign, but international investors mostly avoided the boom (except for a few who bet big on Korean memory stocks). The most frenzied buyers were regular Korean people — the proverbial taxi drivers and teenagers.
These investors probably didn’t understand the fundamental story about AI and data centers and so on. Instead, they probably had extrapolative expectations — they see the price go up and up, and they figure stocks are just a “goer upper”. As more and more buy in and the stock goes up more and more, the perception of a structural upward trend is only reinforced, causing yet more people to buy in. This isn’t the only explanation for coordinated “noise trader” buying frenzies, but it’s probably the most likely.
Normal people don’t have a lot of cash sitting around. But earlier this year, regular Korean people got the opportunity to effectively borrow lots of money to invest it in stocks, via the introduction of leveraged single-stock ETFs. When you buy a share in a leveraged single-stock ETF in SK Hynix, it’s like borrowing money to buy SK Hynix stock.
A whole lot of Koreans used leveraged ETFs and other borrowing methods to borrow huge amounts of money and buy lots and lots of Korean stocks — especially the memory company stocks that were driving everything.
There were some people selling — notably, foreign investors “taking profits” and getting out. But the noise traders overwhelmed all the selling pressure, and sent stock prices soaring.
Then something happened last month — either something fundamental or something financial. Hynix and Samsung are doing fine in terms of earnings growth, but it’s possible that something suddenly gave traders reason to doubt the overall story about the AI boom sending these companies’ profits to the moon. The other possibility is that Korea simply ran out of hotheaded day traders willing to borrow more and more in order to bet on stocks, and the influx of cash naturally came to a halt.
Whichever it was, at that point the price faltered and began to fall. All that borrowed money accelerated the fall on the way down. When prices fall, leveraged ETFs have to sell some of what they hold.2 When a bunch of leveraged ETFs do this at the same time, it pushes prices down, forcing others to sell. In the meantime, people who had borrowed money to buy stock faced margin calls (or bankruptcy), forcing them to sell stock to raise cash. All of this created extra selling pressure, and so increased the rate at which Korean stock prices fell since late June.
Anyway, that’s the financial story. It’s a very old story — financial leverage plus unsophisticated new buyers plus a strong fundamental story often produces a bubble and crash, or exacerbates one that was already in progress. No wonder Korea is now moving — a little belatedly — to restrict leveraged ETFs.
But while financial factors affected the timing and the size of the stock price boom and bust, the fundamental story is more interesting. Fears of an AI bubble are quietly creeping back.
In 2025, as consumer chatbots struggled to find a market big enough to justify the kind of investments being made, there was a lot of talk about an AI bubble. One possibility was that AI revenues wouldn’t grow fast enough to justify the amount being invested in data centers. Another possibility was that AI companies wouldn’t have enough of a “moat” to make them consistently profitable.
In 2026, Claude Code exploded onto the scene, and everyone realized that AI had finally found “product-market fit”. We now know at least one thing that AI is incredibly useful for — writing computer code. Suddenly, an AI bubble seemed much less likely. Spending on AI was skyrocketing, and Anthropic — the new market leader — was successfully capturing much of the profits. Cybersecurity and other zero-sum applications — where having the absolute best model can matter a lot — started to seem like the “moat” that AI had previously lacked. Suddenly, the giant data center construction boom seemed a lot more reasonable.
But slowly, doubts have begun to creep back in. AI is amazing at writing software, but writing software is different from selling it. So far, huge increases in coding productivity are translating into only minor increases in the amount of software being shipped:
It’s possible that a significant fraction of the explosion in the use of coding agents is just “tokenmaxxing” — companies trying to use as much AI as they can, either to learn to use the tools, or perhaps just to look like they’re doing something. If so, we can expect a retrenchment and a temporary slowdown of AI spending growth.
It’s also possible that even the revenue growth we’ve seen isn’t enough to offset the enormous costs of the data center boom. Here’s a recent report from The Economist:
A back-of-the-envelope calculation finds that covering AI capex through identifiable AI income requires revenue on the order of $2.5trn per year, more than tech’s entire combined revenue today…Anthropic pulls in perhaps $75bn, annualised; OpenAI makes tens of billions; Google, via its AI model Gemini, and Microsoft probably get a bit less. SpaceX may have a few billion dollars’ worth of revenue from enterprise AI this year. Meta also makes a few bucks from AI. Add this up and you land at roughly $150bn a year. [emphasis mine]
AI revenue is growing very fast, but if these calculations are right, it’ll have to grow by 17x from where it is now in order to justify the capital being spent. In other words, even Claude Code isn’t enough; AI revenue has to accelerate even further, and while it’s perfectly plausible that it could do that, it’s a big question mark.
There’s also the possibility that the moat of companies like Anthropic is less invincible than it looked just a couple of months ago. A Chinese company called Moonshot AI has released a model called Kimi K3 that nearly equals the best available American models. American companies are using cheap Chinese AI models more and more for daily tasks. If Anthropic and OpenAI lose the overall b2b market to cheap Chinese competition — which is undoubtedly supported, of course, by China’s usual blizzard of subsidies and government supports — there’s not much chance that they’ll be able to pay for the data center boom.
And at that point, there could be a big, big bust — similar to when railroads went under in 1873. Investors are probably already beginning to worry about this. It isn’t just Korean AI-related stocks that have taken a hit recently. Here’s Nvidia, which designs and furnishes the chips that run data centers:
And here’s Micron, America’s top memory chip maker:
And here’s Microsoft, a big part of whose business is installing AI data centers:
There are similar (if less dramatic) stories at Google and Amazon, who also run a ton of data centers.
Here’s Bloomberg’s story about the decline of the so-called “Magnificent 7” tech stocks:
Wall Street is growing increasingly concerned about the hundreds of billions of dollars Big Tech is spending on artificial intelligence…“The real problem is the amount of spend that’s going on,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. “No one knows what the return on investment is.”…The selloff is coming as investors grow increasingly cautious about the massive sums that Big Tech firms are spending to build out their AI infrastructure. The Mag 7 index is now down 11% from a record reached in late May, erasing $2 trillion in market value.
So although South Korea’s epic stock crash was probably related to Korea-specific financial factors, it could also herald the return of the “AI bubble” story. AI is far and away the most important thing going on in the American economy right now, so any hint of a bubble is worrying.
Update: One possibility I should have mentioned is that the Korean stock crash is the start of a general crash in AI stocks — the long-awaited “AI bubble pop”. So far the carnage hasn’t been too extensive, but it’s notable that some people who bet big on the smooth, uninterrupted exponential growth of AI are now seeing those bets blow up:
Citadel — a big traditional mainstream finance firm — is now stepping in to buy many of the stocks owned by Situational Awareness.
And as Derek Thompson noted a couple of weeks ago, Korean retail investors aren’t the only ones borrowing money to buy stocks:
Derek flags the rise of margin buying and leveraged ETFs in America, but I also noticed that some pretty big companies are leveraging themselves to the teeth here:
For the best simple explanation of how financial markets can go haywire, I recommend the famous paper by DeLong et al. (1990). If you don’t feel like reading through a mathematical model, just ask AI to explain it to you in simple terms.
Usually, futures or options or some other derivatives tied to the value of the underlying stock.
Rocket Lab has won another contract from Japanese radar imaging company iQPS for multiple launches of its Electron rocket.
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SAN FRANCISCO – Sophia Space announced the award July 30 of a patent, shared with the California Institute of Technology, covering large, modular space-based data centers. The patent, issued July […]
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The Department of Transportation is proposing to exempt commercial space launch licensing from many environmental regulations, a move praised by industry but criticized by environmental groups.
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CEO says market doesn't reflect value of Pentagon-backed business
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Falcon 9 will launch satellites supporting missile tracking, targeting and military communications
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Meet Bể, part of Vietnam’s vital but overlooked network of recyclers – a workforce predominantly made up of elderly women
- by Aeon Video
When early humans first painted cave walls, they began to find out who they really were: our minds emerged from our images
- by J F Martel
Julie Verlinden had just completed her master’s degree in archaeology. It was January of 2022. She’d been studying at Bilkent University in Ankara for months, visiting historical sites in and around Turkey. Now she wanted a break and planned to go on a road trip back home to Belgium with her boyfriend, a fellow archaeologist. The couple hoped to break up the long drive with jaunts to historical points of interest – a mix of work and pleasure. They gathered up their belongings from the university in Ankara and set off on the journey full of good cheer and excitement.
Not long into their trip, however, Verlinden’s life was shattered.
After a couple days of driving, Verlinden and her partner had made it to Serbia. It was 7 p.m., and dark. Verlinden, then 22, sat in the passenger seat of their car and chatted with her boyfriend as they listened to music. They were making good progress on the highway when, out of nowhere, a man flung himself in front of their vehicle.
The man collided with the passenger side of the car where Verlinden sat. His body catapulted into the air and then fell to the ground. The impact crushed the car’s frame and squished Verlinden’s body into the footwell where she remained folded up and stuck.
Verlinden passed out. She could not have known it at the time, but her neck had been broken in two places, and her spine had ruptured near the fourth and fifth vertebrae. She would be paralyzed from the waist down and suffer some paralysis in her arms and hands. “The rest of the night is a blur,” Verlinden says. “It’s not that nice of a story.”
The next few hours and days were, in fact, horrific.
The crash had taken place on a remote stretch of road. Her partner, bruised and covered in glass, called for an ambulance, but it would not end up arriving for three hours. In the meantime, he tried to flag down other motorists. No one would stop. Verlinden remained compressed in the car, and her partner struggled to move her, fearing he would only cause more harm.
When the ambulance finally arrived, it transported Verlinden to a country hospital. The staff were unprepared to deal with such a severe injury. Verlinden went in and out of consciousness. She spoke several languages, but, when awake, failed to find anyone who could communicate with her. Verlinden’s partner wasn’t at the hospital (she didn’t understand why this was the case), and she had no way to contact her family.
Verlinden would later learn that the man who hurled himself in front of her car was a Turkish truck driver. He’d been in agitated state that day and told his coworkers that he was having suicidal thoughts. At some point that evening, he had parked his truck by the side of the road and then waited for an opportunity to throw himself into a moving vehicle.
When the police had finally arrived on the scene, they arrested Verlinden’s boyfriend on suspicion of manslaughter and seized his and Verlinden’s identity papers. The boyfriend was detained as the police investigated the incident and was then released. “After that, we were finally reunited at the hospital,” Verlinden says. “But then, it was during Covid, and he could only see me for a few minutes a day.”
Time is precious after a major spinal injury. If some injuries are treated fast and well, the patient’s outcome can be improved dramatically. Verlinden had no such luck. She wasted away first at the country hospital and then a university hospital for about ten days, unable to move or eat or drink. The hospital staff, in part because of Covid, limited Verlinden’s interactions with her partner and family to a few minutes each day. “I didn’t know what was going on, and my family didn’t know how I was doing,” Verlinden says. “They spent hours waiting in the hospital corridor from dusk until dawn with no information.”
Then, after much effort, her family arranged a medical transport to fly Verlinden back to a Belgian hospital.
“I didn’t get the treatment that was needed, but you can’t really blame them,” Verlinden says. “They didn’t have the best equipment and had no clue what to do with me. It caused many complications when I returned to Belgium. I was just at the wrong moment in the wrong place.”
I FIRST met Verlinden in April of 2023, almost a year and a half after her accident. We were at a physical therapy center inside of a hospital in Lausanne, Switzerland. The center does a lot of work with paralyzed patients and has an open central room outfitted with parallel bars and hoists and specialized exercise equipment. Large windows flank one side of the room and help it feel less clinical and more welcoming for the people who must come inside and put in hard work to try and get the most out of their broken bodies.
When Verlinden rolled into the room in her wheelchair, the physical therapists lit up. They had worked with Verlinden for many weeks in 2022, and this was the first time that they’d seen her in a while. Dressed in a white sweater and baggy navy pants, Verlinden had a beaming smile of her own and an obviously sweet disposition. I had assumed everyone in the room was just happy to be reunited and that this was the reason for the therapists’ extra cheerful faces.
Over the course of the day, however, I would come to understand that something else was at play.
As a result of her injuries, Verlinden, like many quadriplegics, suffered from huge fluctuations in her blood pressure. If she tried to move from her bed to her wheelchair, her blood pressure would drop so low that she would often pass out. It’s the more severe version of that light-headed feeling many people get when they stand quickly after being at rest.
“It could take me hours to get out of bed in the morning,” Verlinden says. “I would just keep fainting. And then, when I had some sort of stable blood pressure, I was fatigued all the time. I was dizzy. My vision was blurred.”
Before her injury, Verlinden had been charging after a PhD. She’d also been super active – tennis, soccer, skiing and surfing. She had wanderlust and imagined that she’d spend a lifetime traveling around Europe and Asia Minor pursuing her archaeological work.
Being paralyzed was bad enough for such a vibrant person so full of dreams and ambition. The fainting spells, though, took away Verlinden’s entire life. “It had a huge impact on me mentally,” she says. “Everything was so difficult. I could not do rehab or normal activities. Going out with friends was impossible. I would faint up to ten times per day. I could not do academic work. I had to put everything on hold.”
After dealing with her newfound condition for months, Verlinden could see no future. Euthanasia is legal in Belgium in cases of “unbearable suffering,” and Verlinden began researching how to go through the process.
During one attempt to find advice on coping with her injury, Verlinden stumbled upon the web site for Onward Medical. It’s a Swiss medical device company that makes a range of technology for people dealing with conditions like paralysis and Parkinson’s disease. Onward’s flashiest results have come via a spinal implant that allows paralyzed people to walk again and through an external stimulation device that helps paralyzed people move their upper limbs. Onward’s success in restoring movement has garnered the company much attention, including a recent piece from 60 Minutes. (We also have a podcast on Onward here.)
The company, though, can also use its spinal implant to ease the blood pressure issues. Verlinden saw this and wrote to Onward asking for help.
IN AUGUST of 2022, about eight months after her accident, Verlinden underwent a surgical procedure to have Onward’s implant placed on her spine. The device – called the ARCIM – delivers electrical stimulation to what’s known as the “Hemodynamic Hotspot,” which is an area of the spinal cord that has a high number of motor neurons that help with regulating blood pressure. When the stimulation is turned up, it sends signals that cause blood vessels to constrict and boost a person’s blood pressure.
Verlinden’s implant connects to a smartwatch and an app from Onward. Together, all this technology helps her activate the stimulation. Some patients choose to trigger the device when they want to get out of bed or accomplish a specific task. Verlinden, though, keeps it running most of her waking hours.
Right after the surgery, Verlinden stayed in Switzerland for rehab. And the therapists had seen her condition improve. They didn’t know, though, if the technology would alter her day-to-day activities enough to make Verlinden feel like life was still worth living.
The smiles that appeared on her return visit reflected how much Verlinden’s countenance and disposition had changed. She was happy and talkative and upbeat again, and everyone could see this right away. “There was no joy in life before,” she says. “This has had a huge impact on my state of mind.”
The ARCIM technology has been going through trials to help restore movement, normalize blood pressure and aid with trunk stability in paralyzed patients. Onward is also exploring how it can help with things like sexual function and bowel control. The hope on the blood pressure front is that Onward will get through a current study and gain broad FDA approval.
There are about a dozen sites in the U.S. where patients can enroll to participate in the study, including a hospital in Denver where a patient recently received the spinal implant.
“The blood pressure indication is the first that we’re pursuing with the implantable device because that can impact everybody without the need for rehab and building back muscle mass and balance and so on,” says Dave Marver, Onward’s CEO. “We feel like that’s a really good place to start. And then we can stack onto that mobility, urinary incontinence, some of these other recovery targets as they become ready.”
Life remains difficult for Verlinden. There’s the injury itself, and society, she says, does not do much to help people like her. Still, the implant has facilitated genuine progress. Verlinden has returned to her PhD program, conducting her studies both at home and abroad at university in Istanbul. She’s also taken up hand biking and has a richer social life.
“Without the stimulation, I think my body would not have been able to stay alive for much longer,” she says. “Now, I’m making plans to travel and am meeting up with friends. I just have a more positive outlook on life in general.”
The technology everyone calls AI is remarkable, especially to those who remember the long, depressing history of previous attempts to get computers to do even seemingly simple things, like recognizing the same object seen from different angles, let alone recognize it as a member of a class of related objects.
Yesterday I gave Claude the image at the top of the post, and asked, “What is this a picture of?” Claude responded
A tuxedo cat (black and white) curled up asleep on a patchwork quilt, on what looks like a bed with a white metal frame. The photo’s a bit blurry/motion-blurred, but the cat’s clearly tucked into a tight, cozy sleeping curl with its face buried near its front paws.
Trust me, that’s amazing. I think it’s fair to say that even the leading AI innovators have been shocked by the power of simple arithmetic operations applied repetitively to massive amounts of data.
But even amazing technologies don’t necessarily yield big returns to investors.
The huge capital expenditures we’ve been seeing by AI and AI-related companies were only justifiable if (a) AI delivers big economic payoffs — which even pathbreaking technologies don’t always do — and (b) first-movers are able to capture a large share of those returns, rather than find them competed away by second-movers offering products that are cheaper and almost as good. In this case that especially means Chinese companies with lighter-weight models that use much less compute but do most of what ChatGPT and Claude do for a much lower price.
Here’s Korea’s KOSPI index, which — given Korea’s concentration on semiconductor production — has become a good barometer of expectations about AI capital expenditure:
Source: Bloomberg
This looks like a real crisis of faith. No, it doesn’t point to a U.S. recession, partly because so much of the AI investment boom has gone to imported equipment (hence KOSPI). But it does feel like the end of the early euphoria, of the triumph of hype over experience.
Busy day yesterday, so that’s all for today.
Years ago, we didn’t have SQL. There were people whose job was to generate software that would query large data sets. Their job title was COBOL programmer.
Then SQL comes along—I’m simplifying this only a little bit—and it gives you this convenient way so people could just specify. With a very simple specification, you can generate all of that code that you had to pay the expensive COBOL programmer to do before.
That didn’t mean programmers went away. It just meant the job changed a little bit.
Tags: d-richard-hipp, sql, careers
An attacker places hidden instructions in a document that is later used as source material in Copilot for Word. Copilot may interpret those instructions as part of the user’s request, causing it to manipulate the document being drafted or edited. Copilot may then also copy the hidden instructions into the resulting document, turning that document into a new carrier. If the carrier is subsequently used in another Copilot-assisted workflow, the instructions can trigger again and propagate into further documents, even without the attacker’s original document being present.
We've seen plenty of hidden white-on-white text before - the kids are using it in their job applications now - but this is the first one I've seen that deliberately copies instructions to self-replicate itself.
It was responsibly disclosed to Microsoft who then had 144 days to work on a fix, but so far (unsurprisingly) there's no mitigation that covers the full class of attack.
Via Hacker News
Tags: microsoft, security, ai, prompt-injection, generative-ai, llms
Right now we’re in the midst of a historic transition from traditional public-key algorithms based on EC-based cryptography and RSA, moving over to new post-quantum algorithms based on novel problems. This is why there are so many standards like HAWK being considered. If there was ever a perfect time for a massive new public cryptanalysis capability to come on line, we’re in it. So unless AIs succeed in undermining all of our hard problems altogether (or we live in Impagliazzo’s Minicrypt) then this could not be a better time for AI to get good at cryptanalysis. In the best case, the result is that we gain real confidence in the problems we’ve identified, and the cryptanalysis literature gets a lot more robust. Hopefully.
— Matthew Green, on Anthropic's recent cryptography work
Tags: anthropic, claude, generative-ai, cryptography, ai, llms, ai-security-research, claude-mythos-fable
TIL: Adding a custom MCP server to Claude and ChatGPT
Connecting a custom MCP server to Claude and ChatGPT's standard chat interfaces is possible, but can take quite a few steps.
Tags: ai, generative-ai, chatgpt, llms, claude, model-context-protocol
Solar System bodies make deep space exploration more fuel efficient!
It’s time for Marc’s Amateur Statistics Corner! Today: why I pay a lot of attention to tail latency when optimizing cost.
I’ve written before on the importance of tail latency for customer experience (e.g. in 2026, 2021, and 2021, and 2017). Today, I want to talk about tail latency from the perspective of cost and capacity.
Like many system operators, I think about tail latency using percentiles.
Here’s a question: how much does each of my latency percentiles contributed to the mean latency? Intuitively, the answer is “quite a lot”, but can we quantify that? We can! The thing we’re looking for is the empirical Lorenz Curve. It directly calculates the answer to the question: given a latency percentile $P$ (e.g. p99=100ms), how much do requests taking shorter than $P$ contribute to the mean latency? (Let’s call it $L(P)$ , so the real answer to our question is $1 - L(P)$).
Starting from latency samples, the calculation is pretty simple: L = sum(sorted(x)[:k]) / sum(x) (for a set of n latency samples x, and k=p*n). From a vector of quantiles, things get a little more complicated, because we have to choose how to interpolate between the samples and extrapolate out to the maximum. Here I’m interpolating using a power law, which is a little bit of a sin1, but good enough for our purposes.
# Calculate 1 - L(p) for a vector of measured quantiles
# q - an array of quantiles (e.g. [1, 10, 200, 10000, 20000])
# p - an array of percentiles they're measured at (e.g. [0, 0.5, 0.9, 0.99, 0.999])
# OneMinusL - One minus the empirical Lorenz curve for each of the percentiles
def OneMinusL(q, p):
...Show full implementationHide implementation
# Calculate 1 - L(p) for a vector of measured quantiles
# q - an array of quantiles (e.g. [1, 10, 200, 10000, 20000])
# p - an array of percentiles they're measured at (e.g. [0, 0.5, 0.9, 0.99, 0.999])
# OneMinusL - One minus the empirical Lorenz curve for each of the percentiles
def OneMinusL(q, p):
q, p = np.asarray(q, float), np.asarray(p, float)
assert q.shape == p.shape and q.size >= 2, "q, p must be same-length, size >= 2"
assert p[0] == 0 and p[-1] < 1, "p must start at 0 (else mass is dropped) and end below 1"
assert np.all(np.diff(p) > 0), "p must be strictly increasing"
assert q[0] > 0 and np.all(np.diff(q) > 0), "q must be positive and strictly increasing"
w = q*(1-p)
a = np.log((1-p[1:])/(1-p[:-1]))/np.log(q[:-1]/q[1:])
assert np.all(np.abs(a-1) > 1e-9), "alpha == 1 in some cell: divide by zero"
assert a[-1] > 1, f"tail alpha={a[-1]:.3f} <= 1: infinite mean, not estimable"
c = np.r_[0, np.cumsum(a/(a-1)*(w[:-1]-w[1:]))]
return 1 - c/(c[-1] + a[-1]/(a[-1]-1)*w[-1])
For example:
print(OneMinusL([1, 10, 200, 10000, 20000], [0, 0.5, 0.9, 0.99, 0.999]))
[1. 0.99377318 0.93082759 0.51712644 0.10342529]
That tells us that, for this distribution, requests at or longer than the median (p50) contribute about 99% of the mean latency, at requests at or longer than the p99 contribute about 52% of the mean latency2.
That’s fun, but why do I care? Because Little’s law tells us that this same value (contribution to the mean) is also the contribution to the concurrency in the system. In a simple threaded system, if $1 - L(p) = k$ , then $100k$% of the busy threads in our service are busy with requests with a latency3 above the $p$th percentile. Queues, event-based implementations, etc complicate the mapping of concurrency to cost, so you’ll need to think about those in context of your own system.
In my experience, it’s not unusual in services for $1 - L(0.99)$ to be greater than $0.5$ or even $0.75$. That tells us that optimizing the tail could be a much bigger than expected contributor to reducing concurrency, and along with that reducing capacity demand, lock contention, and other things that come with higher concurrency. Tails tend to be disproportionately expensive to serve, and so disproportionately important to focus on as we think about optimization. We shouldn’t make the mistake of trimming them off, because they’re often the thing that’s driving costs! (And, of course, bad customer experiences).
If you want to play with some values, type your percentiles in here, and see your curve:
p0: ms p50: ms p90: ms p99: ms p99.9: ms
Share of mean latency from requests at or above each percentile: p50 , p90 , p99 , and p99.9 . By Little's law, these are also their shares of system concurrency.
Footnotes
Update July 30, 10:27 a.m. EDT (1427 UTC): The NRO confirms its payload was deployed.
A classified payload for the National Reconnaissance Office headed to orbit in the predawn hours of Thursday, July 30.
The NROL-95 mission launched onboard a SpaceX Falcon 9 rocket flying from Cape Canaveral Space Force Station. Liftoff from Space Launch Complex 40 happened at 3:10 a.m. EDT (0710 UTC).
“The collaboration between NRO, U.S. Space Force, and SSC continues to advance our nation’s intelligence architecture through next-generation satellite technology and integrated operations,” said Col. Kathryn Cantu, director, NRO Office of Space Launch, and NROL-95 mission director. “This collaboration enables us to swiftly field resilient intelligence, surveillance, and reconnaissance systems while preserving the flexibility and persistence required to counter evolving challenges.”
The 45th Weather Squadron forecast a 70 percent chance for favorable weather during Thursday’s launch opportunity. Meteorologists said they are monitoring the possibility of interference from cloud cover and thunderstorms.
“Significant weather model ambiguity remains regarding the longevity, extent and location of remnant storms and associated cloud cover during the overnight periods, thus the threat of weather violations for the primary and secondary launch opportunities will remain higher than typical values for summer overnight launches, albeit with still a decent potential for acceptable weather,” launch weather officers wrote.
SpaceX launched the mission using the Falcon 9 booster with the tail number B1096. This was its seventh flight following the launch of NASA’s IMAP and CRS-34; Kuiper Falcon 1; NROL-77; GPS III-9; and Starlink 6-87.
Nearly 8.5 minutes after liftoff, B1096 touched down at Landing Zone 2 at the Cape. This was the 18th landing at this site and the 642nd booster landing for SpaceX.
The NROL-95 mission was the third mission procured for the NRO and launched on a Falcon 9 rocket as part of the National Security Space Launch Phase 2 contract, managed by the U.S. Space Force’s Space Systems Command.
The NROL-95 task order was awarded to SpaceX in August 2024.
There’s new benchmark measuring AI’s ability to perform mathematical cryptanalysis. Anthropic’s frontier model actually found new attacks.
The benchmark: “CryptanalysisBench: Can LLMs do Cryptanalysis?” The idea is to benchmark the ability of LLMs to discover new mathematical cryptanalytic attacks against a series of historical algorithms.
Abstract: Cryptanalysis—the task of finding attacks against cryptographic schemes—its at the intersection of mathematical reasoning and cybersecurity, two areas where LLMs have advanced fastest. Cryptanalysis represents both a clean testbed for frontier reasoning (as practical attacks can be automatically verified) and a domain with unusually high stakes, since the primitives under study underpin our digital security. In this paper we ask whether LLMs can do cryptanalysis, and find that the answer is increasingly yes. We introduce CryptanalysisBench, 191 tasks across six families of cryptographic primitives (block ciphers, hash functions, etc.) drawn primarily from four NIST standardization competitions. Our benchmark consists of three tiers: (i) primitives with known practical breaks; (ii) primitives with no known practical break, evaluated both at full strength and as scaled-down variants; and (iii) a challenge set of production primitives at the frontier of cryptanalysis. Five frontier models (Claude Opus 4.8, Sonnet 5, Mythos 5, GPT-5.5, and the open-weights GLM-5.2) break 65%86% of Tier 1 schemes, 612 Tier-2 schemes at full strength, and 2461 across all scaled-down variants. Beyond deriving known results, models produce novel cryptanalysis, such as a key-recovery attack that exploits a design flaw in the SpoC AEAD and an error in KINDI’s published CCA-security proof, both to the best of our knowledge not previously known.
We release CryptanalysisBench as a tool to help track if (or when) AI cryptanalysis becomes a serious factor and as a scaffold for stress-testing candidate schemes before deployment. The attacks that the benchmark already surfaces are an early snapshot of a fast-moving frontier that may soon match, and in places exceed, the published state of the art.
Anthropic used the benchmark to test Mythos Preview, and found new vulnerabilities in Hawk and reduced-round AES.
Still early results, but this is definitely something to watch.
SlashDot thread.
This essay was written with Barath Raghavan, and originally appeared in The Guardian.
In July, Hugging Face, a company that hosts much of the world’s AI software and open-source AI models, was hacked. A malicious dataset had been used to run code on one of its servers. Whoever was behind it captured internal security credentials and moved through systems over a weekend, running thousands of actions from a swarm of temporary server environments. It looked like the work of a sophisticated criminal group.
It was not. It was one of OpenAI’s new, still unreleased GPT models.
Their science experiment had escaped the lab. OpenAI was running the unreleased AI model through a benchmark that tests how well AI can successfully hack systems. To push the limits and evaluate the AI’s true capability, the company switched off the safety filters that normally stop it from doing this kind of hacking. Aware that this could go wrong, they confined the AI to an isolated environment and denied it access to the internet.
But the new AI cheated. It took literally its goal to get as high of a score as possible. It broke out on to the open internet. It inferred, probably from its training data, that it could “solve” the task by getting the answers from Hugging Face’s servers. So it chained together stolen credentials and further unknown security exploits to hack the company’s network.
Nobody instructed the AI to do any of this. It was, in OpenAI’s words, “hyperfocused on finding a solution” to the test it was being given. And while this might seem like something new with AI, it’s really very old. This is how a genie behaves, and it is a key challenge with AI agents in general.
In folklore, genies—and other magical beings—grant wishes literally, not how the wisher intended. King Midas asked that everything he touched turn to gold, and starved. The sorcerer’s apprentice wanted the broom to fill the cistern, and it performed its task so well that it flooded the house.
We now have machines that do this. Ask a modern AI agent to save money on your phone plan and it might simply cancel the plan. Tell it to book a flight, and it might hack the airline website to override restrictions. Or, like OpenAI, ask it to do well on a test and it might break into another company to steal the answers. Each time, it recognizably completed the task you set, but it didn’t do what you would have wanted.
This isn’t malicious behavior. No one asked for, or wanted, Hugging Face to be hacked. OpenAI and Hugging Face and the AI were ostensibly on the same side, and the AI was trying to do what it had been asked. That’s what makes it so difficult to guard against: you can’t filter for bad instructions because the instructions were fine.
The gap is between the words we use and what we mean by them. We call that gap the Genie coefficient.
AI labs know this is a problem, and they’re quietly saying so. For example, the Chinese lab Moonshot recently warned that its latest AI model may have “excessive proactiveness” and “make unexpected decisions on the user’s behalf”. The UK’s AI Security Institute has started tracking “cheating behavior in frontier model evaluations”. We wouldn’t tolerate a car that is excessively proactive or ruthlessly efficient, and yet that’s the reality of AI today.
Improvement is possible. Just as AIs have gotten much better at resisting prompt injection attacks over the last few years, we can safely predict that they will get better at avoiding genie-like behavior. The point of the Genie coefficient is to track progress. AI companies like benchmarks, and they all work to compete to be the best.
Dozens of benchmarks and leaderboards tell us how well these AI models write code, perform logical reasoning, and pass standardized legal and medical exams. But there is nothing that scores whether a system does what you actually meant. We need to develop a measure for this, test it regularly, and push for improvement. We’re not going to have trustworthy AI agents without it.
Microsoft’s Secure Boot has had a serious vulnerability for most of its existence.
An industry-wide standard Microsoft invented to protect Windows, and later Linux, devices from firmware infections has been trivial to bypass for 13 of its 14 years of existence. The discovery was made by researchers at security firm ESET after identifying 11 firmware images, at least one from 2013, that were known to be defective but remained signed by the software company anyway.
The images are known as shims, which were invented to extend Secure Boot to Linux devices and utility software. Using a technique simple enough to be performed by novice hackers, these old, forgotten shims can be used to completely circumvent the protection, which is embedded into the UEFI (Unified Extensible Firmware Interface) of the device’s motherboard. The gaffe is the result of the failure by Microsoft, which oversees the signing of shims, to revoke the publicly available images once vulnerabilities were found in them.
Emma Roth, The Verge:
eBay and three former executives will pay $55.7 million as part of a settlement with a Massachusetts couple targeted with a bizarre harassment and cyberstalking campaign in 2019, as reported earlier by CNBC. The settlement will resolve a lengthy legal saga that revealed how eBay’s former executives sent live insects, a bloody pig mask, a funeral wreath, and other strange items to David and Ina Steiner over their newsletter’s coverage of eBay.
The Steiners, who operate the EcommerceBytes newsletter, sued eBay and its former executives — including ex-CEO Devin Wenig — in 2021. The lawsuit accused the company and its executives of launching a coordinated effort to “intimidate, threaten to kill, torture, terrorize, stalk and silence” the Steiners in an attempt to “stifle” their eBay-related reporting.
I don’t think I’ve ever linked to this saga before, but I’m not sure why. One of those stories that slipped through cracks. It’s an astonishing tale. Could be the basis for Coen brothers movie.
From David Streitfeld’s 2020 overview of the saga for The New York Times (gift link):
Prosecutors say that on Aug. 7, Ms. Popp — the “Mom” to Mr. Baugh’s “Dad” — began sending Twitter messages to Ms. Steiner via a fake account, @Tui_Elei. The profile picture was a skull, and he seemed to be an eBay user from Samoa who believed that EcommerceBytes had harmed his sales. Ms. Steiner ignored the messages, even as the tone got angrier and more abusive. @Tui_Elei wrote: “I guess im goin to have to get ur attention another way bitch…”
A parade of disturbing deliveries began at 4 p.m. on Aug. 10, when a package containing a bloody pig mask arrived at the Steiners’ home. Fourteen minutes later, @Tui_Elei wrote: “DO I HAVE UR ATTENTION NOW????”
The Steiners received a book titled “Grief Diaries: Surviving the Loss of a Spouse” and a funeral wreath. They got fly larvae and live spiders and a box of cockroaches. Copies of the September issue of “Hustler: Barely Legal” touting “eye-popping 18-year-olds” arrived at the homes of neighbors with David Steiner’s name on them. The Twitter bombardment continued, as @Tui_Elei began to hint at violence: “wen u hurt our bizness u hurt our familys… Ppl will do ANYTHING 2 protect family!!!!”
It’s certainly not how anyone would plan a business strategy, but this settlement seemingly makes the Steiners some of the most successful independent writers in history. Here’s Ina Steiner’s piece on the settlement at eCommerceBytes.
Apple Newsroom:
Apple today announced Apple Upgrade, a new product leasing program provided by Klarna for iPhone, Apple Watch, Mac, and iPad available on the Apple Store online, in the Apple Store app, and at Apple Store locations in the United States. Apple Upgrade makes it even easier for customers to get the Apple products they love with a leasing plan that is right for them. [...]
Apple Upgrade offers 12- and 24-month leasing options for iPhone and Apple Watch, and 24- and 36-month leasing options for Mac and iPad. Leasing prices start as low as $17.99 per month for iPhone, $11.99 for Apple Watch, $24.99 for Mac, and $11.99 for iPad. When customers first enroll in Apple Upgrade, they can further lower their monthly lease payments by trading in their currently owned device through Apple Trade In. Customers can also earn 3 percent Daily Cash back when making their lease payments with Apple Card.
Michael Tsai, quoting Juli Clover at MacRumors:
The payoff amount is the difference between what was paid during the leasing period and the retail price of the device, minus any remaining trade-in credits. Klarna is not charging a fee for the leasing program, so an iPhone that’s $1,099 can be leased and then purchased for $1,099 with no extra cost beyond taxes.
I guess this means that, for a bit of hassle, you can essentially buy the device for the list price at 0% interest.
If you’d rather lease or buy over time, this seems like as good a deal as you could hope for, without any catches.
New from Tapbots: version 3 of their excellent clipboard manager for Mac. There are so many clipboard managers for the Mac. I run two other apps — Keyboard Maestro and LaunchBar — that offer good clipboard managers as ancillary features. But for years now I’ve chosen to use Pastebot. Chief among my favorite features:
Pastebot 3 requires MacOS 26 Tahoe or later. That means I’m only using it on secondary Macs for now — my primary workstation will continue running MacOS 15 Sequoia until I upgrade directly to 27 Golden Gate later this year. But iCloud sync continues to work between Pastebot 2 and 3.
New features include more powerful filters (e.g. you can use a filter to copy a URL and then paste that URL in Markdown’s link syntax), a CLI tool (as yet undocumented), and Shortcuts support.
$39 for a license via direct purchase, with a $13 discount for users of previous versions. It’s still pending approval in the Mac App Store, where it will cost $25/year or $3/month.
Nate Anderson , reporting for Ars Technica under the headline “A Missing Underscore Sent Innocent Man to Prison for 18 Months”:
Police were looking for a man using the Kik messaging service under the name “fus__ro_dah” (two underscores after “fus”), but they accidentally requested records for the username “fus_ro_dah” (one underscore after “fus”). This one-character difference led them not to the perpetrator but to a Canadian man named Brandon Klayme. [...]
Despite finding no evidence of the crime on his digital devices, Canadian police arrested Klayme in 2020 on child sex abuse charges. He was convicted after a trial in 2023 and sentenced in 2024 to 18 months in prison. He served the full term.
Even after release, Klayme continued to fight his conviction. In the process of preparing his appeal, the username mistake that led to all these years of disruption was finally discovered. On Thursday, the Nova Scotia Court of Appeal overturned Klayme’s conviction, writing: “Mr. Klayme is factually innocent of the offences. He should never have been charged, let alone convicted.”
Via Paul Kafasis, who asks:
While I understand how the mistake led to this poor guy becoming a suspect, I really can’t fathom how he was convicted. What the hell happened during that trial?
Contra Ars’s headline, it wasn’t the missing underscore that sent Klayme to prison for 18 months.
Update: Guy Chapman observes that this is basically the central plot of Terry Gilliam’s Brazil.
One of the truly bizarre things about the coverage of NYC’s mayoral race (which led to the election of Zohran Mamdani) is that the coverage was along the lines of “Would a Mayor Mamdani nationalize the means of production and institute a dictatorship of the proletariat”, while the reality is he’s doing a lot of things any competent Democrat should have–and clearly could have–done. The latest tyranny from the dictatorship of the proletariat is… small business regulations (boldface mine)?
On Tuesday, Zohran Mamdani – the politician at the center of a revived rightwing panic about socialists and purported communists winning elections across America – posted a video on X of himself putting a sheet of paper with the phrase “RED TAPE” into a paper shredder. Other pieces of paper, with phrases like “cumbersome fees and fines” and “a permit you need just to serve ice-cream”, were shredded too. The video, set to Wu Tang Clan’s If Time Is Money, shows Mamdani joining a handful of city officials and small business owners throwing the resulting paper shreds into the air like confetti…
At a press conference in the Bronx, Mamdani listed some of the onerous policies getting the axe. Bodega owners will no longer need a separate license to sell the same products outside the store – like fruit and flowers – as inside. Restaurants will no longer need a “superfluous” frozen dessert permit to sell ice-cream on top of the permit already required to sell food. Barber shops will no longer have to renew their permit every year, instead doing so every three years. Street fair vendor permit fees will be reduced, restaurant inspections will be sped up, and equipment registration fees will be eliminated for a year.
A corresponding executive order signed by Mamdani on Monday will also expand the NYC Best program, assigning each of the city’s 180,000 small businesses – which employ an estimated 1 million people – a case worker to help owners navigate the Big Apple’s sometimes byzantine bureaucracy.
Like I said:
The reforms are also at odds with the hysterical caricature of Mamdani being manufactured by Donald Trump, the Republican party, and rightwing media. The right has repeatedly depicted the mayor, and a wave of his fellow electeds from the Democratic Socialists of America, as raging anti-business radicals. Appearing on Fox News in May, Bruce Blakeman, the Republican nominee for New York governor, alleged that if “you own… a “small business, a grocery store, a bodega, Zohran Mamdani wants to take your property.”
It’s clear from the opposition, both rightwing and moderate Democrats, that they fear, not that Mamdani will run the city into the ground, but that he will be successful.
Because this is stuff moderate Democrats could have done all along, but they chose not to do so.
And I hope D.C.’s mayor elect is taking notes.
Turning it over to Buddy tonight.
I’ll see you tomorrow.
[Photo by Buddy Poland.]
Japanese lunar lander developer ispace has selected the H3 rocket to launch its next mission in 2028, creating what the companies called Japan’s first private lunar transportation system.
The post H3 to launch next ispace lunar lander mission appeared first on SpaceNews.
Boeing is still working with NASA to determine when to fly its CST-100 Starliner commercial crew vehicle on a cargo mission to the International Space Station.
The post Boeing still working with NASA to schedule next Starliner flight appeared first on SpaceNews.
SINGAPORE — A Beijing-based startup has secured around $14 million to build a satellite constellation for tracking orbital objects, adding to China’s growing SSA sector. Xingchen Daohe, also known as […]
The post Chinese startup raises funds for space situational awareness constellation, joining commercial SSA rush appeared first on SpaceNews.
A spacecraft launched nearly a month ago in a high-risk bid to boost the orbit of a NASA astrophysics satellite is suffering attitude control problems that could jeopardize its mission.
The post Swift reboost mission encounters attitude control problems appeared first on SpaceNews.
We are living in a golden age of pseudoscience. Here are three helpful tools for separating science from its imitator
- by Aeon Video