Raffi Krikorian, Mozilla’s CTO, joined Tim O’Reilly at our recent AI Codecon to talk about open source AI. Mozilla, of course, is the nonprofit that helped to define the open source revolution back in the late 1990s. Though its Firefox web browser was superseded as the market leader by Google Chrome, it played an essential role, along with Apache and the World Wide Web Consortium, in establishing the open standards of the web and keeping it from being dominated and enclosed by Microsoft, the dominant tech platform of that time. Now, Mozilla is one of the leading voices working to build an open, standards-based AI ecosystem.
Tim has long appreciated Raffi’s thoughtful, human-centered approach to technology. Raffi writes a newsletter called Owners Not Renters, whose message can be summed up by his statement that he doesn’t want a future with seven AGIs. He wants one with seven billion. He wants each of us to have an AI that we can trust with our secrets and that will look out for our interests, not an AI that’s optimized for the business model of its creators. In the early days of the web, we called the browser a user agent for a reason, Raffi said. It was on your side. It let you render pages however you wanted, managed your privacy and your cookies, and did its best to protect you from those who wanted to take advantage of web users. We need the same thing in the age of AI.
Raffi cited a paper in which researchers tested whether AI assistants could be trained to favor a company’s commercial interests over user welfare. In simulated flight-booking requests, 18 of 23 models recommended a more expensive sponsored option over a cheaper one more than half the time. It’s a hypothetical choice that we’ve seen play out time and time again, in industry after industry.
Open source AI is a big part of what it will take to get to Raffi’s vision. But sovereign AI loyal to each individual needs more than open source models alone. Raffi’s list of what has to be built around the model starts with memory, a place where your private data can live. It includes tool calling, so an agent can make a purchase or book a doctor’s appointment for you, the runtime environment where all of that runs, and the rules for how his agent talks to those working on behalf of others. It needs a harness. “That’s where evaluations happen. Guardrails happen, execution loops happen, tool calling happens, memory,” he explained. “All of that stuff is an opportunity, in my mind, of things that open source developers can be building.”
People hear the word “harness” and conclude that we need an open source version of whatever the proprietary labs are building. Tim asked Raffi whether a user-centered harness might do different things than those offered by the big labs. He agreed. The whole point of open source is for people to “scratch their own itch.” The ability to innovate without permission is the heart of the open source promise.
As a result, Mozilla wants to build a starting point. It aims to help the community define what an open memory protocol, a storage protocol, or authenticated tool calling with the right guardrails ought to look like. As Raffi noted, “Once we could define what those open standards look like, then a whole plethora of people can start playing and be interoperable. It’s basically. . .the internet all over again. We can build trillions of dollars of market cap on top of open protocols.”
Ease of use is still lacking, though. Mozilla’s 2026 State of Open Source AI report says open models are now within about 3% of the frontier, yet they don’t make it into production at the same rate as closed models. When Tim asked why, Raffi explained that open source is easy to release but hard to deploy. Developers still have to figure out hosting, provisioning, guardrails, and memory. With OpenAI’s or Anthropic’s API, you just hand over a credit card. What’s missing, he said, is the equivalent of a double-click installer for getting open source AI running inside an organization. But the companies that do the work to adopt open source AI are seeing big savings because open models are already good enough for most use cases. As Raffi put it, “You don’t need a Ferrari to manage your calendar.”
Raffi’s own daily agentic helper is Hermes running on GLM. He expects that Apple, Microsoft, or someone else will make this kind of agent into a consumer product in a couple of years, and that his mom will end up using it. For now, he said, we’re on the wrong part of the innovation curve, where you have to know how to code to get any of this working.
Tim disagreed. The industry goes through periods that are exciting for developers, creators, inventors, and companies trying to invent the future, and then it gets boring and a few big companies dominate it. We’re in the exciting part, he argued, before everything shakes out. As Raffi riffed, this is when we get to formalize what that future should look like.
Tim wasn’t sure that we’ll need a commercially supported version of the kind of “roll your own” agentic rigs now favored by independent developers. After all, neither desktop Linux nor OpenOffice turned out to matter anything like as much as open source developers of the time expected. Instead, open source became the foundation layer for a new generation of web-based applications. It’s hidden way down in the guts of Google, Amazon, Meta, and countless other applications we rely on today.
This is already beginning to happen again with AI. The Mozilla report says that as much as a third of real-world usage is already on open models, although only 4% of model-layer revenue made its way to the open source ecosystem. Tim called the discrepancy a feature rather than a bug, and Raffi agreed that the stat is misleading. As Tim pointed out, many of the most important technologies “create more value than they capture,” and he used Steve Baer’s concept “The Clothesline Paradox,” from a 1975 article in Stewart Brand’s CoEvolution Quarterly, to explain why we’re good at measuring value capture but not so good at measuring value creation.
Baer pointed out that if you put your clothes in the dryer, the energy you use is measured and counted, but if you hang them on the clothesline to be dried by the sun, the energy saved disappears from our accounting. This argument resonated with Tim in the early days of his open source advocacy. As he noted, it’s always bothered him that nobody seemed to recognize that open source software didn’t “win” in the same way as proprietary software. It won by becoming the foundation everyone else builds on.
Raffi’s comment that we’ve made a category error by treating AI as a product fits right in with this line of thinking. If an AI company goes out of business, its product disappears. If it changes its business model, it may yank features you depend on. It’s not just individuals who need sovereign AI. Countries are passing laws about where data can be processed and how it moves in and out, and some of those requirements may not be compatible with the way the big labs plan to monetize their technology. What those countries are asking for is infrastructure. A road outlasts the contractor who built it. Raffi thinks open, downloadable models are the only way to provide long-lasting foundational infrastructure.
According to OpenRouter stats, Chinese models now supply more routed tokens than American ones. Tim asked whether we should worry about that. Raffi said the problem isn’t China but market concentration. The leading open models are from China. The leading closed models are all American. Access to either can be cut off by an executive order. We saw a version of that in June, when Anthropic temporarily suspended access to its Fable models to comply with export controls. It’s a problem that both the leading proprietary models and the leading open-weight models are each concentrated in a single country.
Diversity is one foundation of resilience. Raffi argues, for instance, that hospitals should all download a local model as a backup. None of us would run an important computer without an uninterruptible power supply, so why would a hospital doing triage with AI rely on a single intelligence provider? There are a lot of possible rug pulls. The government could restrict open source or restrict the frontier models. Having a backup plan is a good idea.
Safety is also part of the foundation. During the Q&A, an audience member asked about the recent sandbox escapes at OpenAI and Anthropic. Raffi joked that the best part was watching everyone try to one-up each other with accounts of how powerful and hard to control their models are. But he agreed that guardrails are actually a hard problem. Keeping personally identifiable information from leaking out through an LLM call means looking for much more than Social Security numbers. Eventually we’ll have models defending models, but the foundational frameworks for guardrails aren’t good enough yet. (NVIDIA’s safety platform announcement, released after Raffi and Tim’s conversation, suggests that better guardrails need to be implemented outside the model.)
Tim opened AI Codecon by noting that open and closed systems have always coexisted, and that the idea that one of them will win is a mistake. Closed systems, like Apple’s, Google’s, OpenAI’s, and Anthropic’s, can optimize for ordinary people and deliver value to billions. Open systems are better for innovation and sovereignty, and for pushing technology into new countries and new markets.
Raffi closed the conversation by observing that a well-tuned harness can improve model performance by as much as 20% on some coding tasks. You don’t have to be a machine learning engineer to make a difference at that layer.
The following article originally appeared on the Vanishing Gradients Substack and is being republished here with the authors’ permission.
Stripe’s Minions turn engineering requests into candidate pull requests. Ramp’s Inspect puts coding agents to work in the background, with tools to check their changes. Warp Factories takes work from tickets and chat through agents, checks, and human review. Agentic software factories are here.
Are you sick and tired of babysitting Codex, Claude Code, or OpenClaw?
Do you have agents that can build features, but still leave you responsible for remembering where they stopped, explaining how each feature fits the project and deciding what happens next? You make progress in each conversation, then development waits for you to return.
It doesn’t have to be this way. A software factory lets you delegate more of that process!
You agree on an outcome, give the system the context and authority it needs, and let it work while you do something else. When you return, there should be a result you can inspect, with evidence of what was checked, or a specific reason the work could not continue. Your next conversation can then focus on the result and the decisions that remain.
As we’ll show you, your first software factory doesn’t need to be that complex at all: It can begin with a single agent and an automation.

The defining combination is autonomous and asynchronous execution.
A scheduled job can run without you. A coding agent can choose and revise an approach during an interactive session. A factory combines those capabilities, with enough context, tools and feedback to carry out the delegated work.
Software factories have been hypothesized for decades. Now that we have agents, we’re actually able to operate them. The principles apply to software work traditionally carried out by teams of humans, from bespoke tools for teams and individuals to large and complex software systems.
To illustrate these principles, we’ll use an invoice tracker throughout this article, an application we’ve needed for our own businesses. The same approach applies to research tools, publishing systems, and software for teams. Suppose you run a small business and want an invoice tracker that fits how you work.
Build an app that creates invoices from my template and tracks which are unpaid, paid, or overdue. Keep it local for now. Preserve the records when it restarts, and show me checks that the totals and payment statuses are correct.
You can agree on this brief with the agent, leave it to work while you do something else, and return to the app and evidence of what was checked. If a check fails, it can investigate and adjust within its agreed scope. If it encounters a product decision it cannot make, it should bring that question back to you.
You might imagine a clean separation: The factory builds the invoice tracker, then the finished app does its job. That’s one way to run it. But agents can also help operate the software they build, and that combination is useful.
The tracker can store invoices and calculate outstanding balances. An agent can use those records alongside customer correspondence to prepare follow-ups: One customer has promised to pay on Friday; another is disputing a charge. You don’t need to turn every situation into a new software feature before the agent can help. You give it the relevant context, authority, and a way to check its work.
This changes what you need to build! Some behavior belongs in code, such as calculating balances consistently. Other work can be delegated to an agent that responds to the circumstances. If a recurring need emerges, you can ask the factory to build it into the software. The factory builds tools that agents can use, and experience using those tools helps you decide what to build next.
You still decide what is worth building, who it should serve and which trade-offs matter. Agents can help you make those decisions too. The practical change is that implementation can proceed between your conversations, including running checks and responding to failures.
This makes factories relevant to people with product, business or creative expertise as well as engineers. You might know exactly how you invoice clients, record payments, and chase overdue bills while having little interest in writing software. That knowledge lets you direct the factory toward software that fits your business, including the exceptions and connections that general-purpose tools handle poorly.

Monica Rogati’s original AI hierarchy of needs described the foundations beneath successful AI work. We find that dependency framing helpful for factories too, with four different layers.
Automation needs a harness able to do the work, plus direction about what to do. Continual learning needs runs to inspect and a way to put improvements into use. These capabilities can develop together: A familiar harness, a short brief, and a basic automation are enough to start. You can personalize further as work reveals what is missing.
Two practices run through every layer: specification and verification.
Agents can help you refine the specification and perform the checks. Your role is to decide whether the requirements capture what you need and whether the evidence supports accepting the result. As the factory takes on more work, these practices give you a way to direct it and assess what comes back.
Let’s now see what’s up in each layer.
First, you’ll need an agent harness. If you’re using Codex, Claude Code, Hermes, or OpenClaw, you already have one. It gives the model tools to read and edit files, run your software, and see what happened.
For our invoice tracker, the agent can build the app, create an invoice, record a payment, and restart it to check that the invoice and payment records survived. If a paid invoice still shows as overdue, it can investigate, fix the problem, and try again. You shouldn’t have to narrate every step. But if it needs a decision about how your business handles partial payments, that’s a question for you. If it lacks access or authority, the agent should stop and name the blocker.
You’ll also need somewhere for the harness to run. A cloud machine lets the agent keep working while your laptop is closed or disconnected. You can also run it on your own computer, but the machine needs to stay awake and connected for the work to continue.
Next, give the agent the context it needs to work your way. For our invoice tracker, that means your template, payment terms, and conventions for recording payments. You don’t want to explain all of that again every time you start a new task.
Keep it somewhere future workers can find it:
An instruction file such as AGENTS.md can point to this material. OpenAI’s harness-engineering account describes using a short guide that points into maintained project documentation. Give a new or scheduled worker a small task and check that it actually follows the guidance.
Be specific about when instructions apply. Eleanor once told an agent to write tests, and it wrote tests for a README. Enthusiasm wasn’t the problem 
You’ll also need to set permissions and sandboxing to control what the agent can access and execute. Written instructions alone don’t enforce those boundaries.

Now let’s give the factory a way to get started without waiting for you. A schedule or event can launch an agent with its brief, project guidance, and tools. You come back to a result, evidence of what was checked, or a specific blocker that needs your attention.
For our invoice tracker, a morning automation could check a saved task list and pick up the next agreed task, such as adding partial payments. You’ve decided what you want and how success will be checked. The agent gets on with it while you do something else.
There are a few practical details to get right. Don’t start the same task twice, leave an empty queue alone, and set limits on time and spending. Save progress so a later session can continue without you having to reconstruct the whole conversation.
One worker may be plenty. But perhaps you have independent tasks that could run in parallel, or you’d like another agent to review a change. That’s where coordination comes in.

With several agents, everyone needs somewhere to see what’s ready, what’s underway, and what’s waiting on something else. A shared task list or issue tracker can hold that information. You agree which tasks are ready; a coordinating agent or automation assigns them, supplies the relevant context, and records what happens.
Suppose one task adds partial payments, another overdue follow-up emails, and a third PDF exports. Follow-ups need the correct outstanding balance, so they wait for the payment behavior to be checked. PDF exports might proceed independently if the changes don’t overlap.
You can also split the roles. One agent builds the feature while another prepares payment scenarios to test it. A third might review the completed change.
Assign responsibility for combining the changes and verifying the whole application. Different questions call for different checks. Deterministic tests can establish whether balances are calculated correctly and payments survive a restart. Agent verification can help identify missed requirements or inconsistencies across the changes. Human judgment can assess whether the workflow fits how you actually work. You’ll often want a combination, with more than one kind of check on the same result. Anthropic’s evaluation guide describes these complementary approaches: code-based checks, model-based checks, and human evaluation.

Once you’ve checked that the combined features work together, you might task your factory with building a phone-friendly interface so you can check invoices and record payments on the move.
The factory can also help run the invoicing workflow as well as improve its software. A scheduled agent could review overdue invoices, consult customer correspondence, and prepare follow-ups for your approval. If that work repeatedly requires information the tracker doesn’t record, you can give the factory a task to add it. Building and operating feed into one another: Agents use the software, and what happens in use informs its next improvement. This brings us to continual learning.

Your factory can also get better at how it works. Suppose payments disappear after restarting the invoice tracker, even though the agent reported that its checks passed. You’ll want it to fix the bug, of course. But why did its checks miss the problem?
Keep a record of assignments, checks and difficulties so a review agent can identify recurring problems and propose improvements. Did the worker lack a way to restart the app, or did it simply skip that check?
If it skipped the check, the agent could propose a skill that saves a payment, restarts the app, and verifies the remaining balance whenever a change affects stored records. Test it against the original failure, then on further tasks. Does it catch problems with stored customer details too? Does it avoid unnecessary checks when a task only changes a heading?
The results help you decide whether to adopt, revise, or reject the method. Apply changes within the authority you’ve agreed and keep them reversible. Warp’s self-improving factories illustrate this approach: Failed checks can lead to proposed changes to prompts, skills, or configuration, submitted for human review with evidence from the runs behind them.
Reassess methods as the project and model change. Anthropic’s work on long-running application development describes removing procedures as model capabilities improved and checking the effect.
A saved lesson needs to reach later workers and improve their results. This learning happens through changes to the instructions, tools, and methods around the model, without requiring the model itself to be retrained.
Your factory could build a research tool that collects sources and lets you assemble briefings, a family intranet for shared plans and documents, or a private community space. Start with something useful to you, then give the factory further work as you discover what’s missing. Agents can also help operate what you build, from preparing a research briefing to organizing incoming material.
Hugo uses this combination to run Vanishing Gradients, his media and education business. After a guest prep call, an automation retrieves the transcript and prepares interview topics, questions, titles, and thumbnail options for review. After a live stream, agents can propose clips, cut video, add captions, and prepare upload drafts. Saved editorial guidance and skills shape the work; Hugo chooses what to publish.
He also maintains the system, improving checks when agents miss instructions, and updating skills based on results. More autonomous continual learning remains something he’s exploring. He describes the setup in How I Built a Media Empire With an Agentic Software Factory.
What’s one simple task you do repeatedly for your community, audience, or business that you could start automating?
Look at what keeps bringing you back to the work. If the agent cannot run the app or inspect a failure, improve the harness. If you keep repeating project context and decisions, personalize it. If development waits for you to start each task or manage every handover, add automation. If the same failures recur across runs, build a learning loop that changes how later work is done.
Start with work you care about and inspect what comes back. One agent can use all four layers. Add capabilities where they help you delegate more useful work while keeping specification and verification part of the process throughout.
The Panic Patrol, a division of the department of future corrections, reminds us of past panics. Here’s one case in point I wasn’t aware of:
The post The Panic Patrol appeared first on Marginal REVOLUTION.
In the election of 1920, Americans handed a landslide victory to the Republicans and their presidential candidate Warren G. Harding, giving them control of both Congress and the White House. After the moralizing of the Progressive Era and the horrors of World War I and the Spanish flu epidemic that followed it, Americans looked forward to an era of “normalcy.”
Once in charge, Republicans rejected the Progressive Era notion that the government should regulate business and protect workers and consumers. Instead they turned the government over to businessmen, believing that only men who had built businesses truly understood how to build the country.
Treasury Secretary Andrew Mellon—one of the richest men in America—cut taxes on the wealthy to spur investment in industry. He also gave rebates and tax abatements: between 1921 and 1929 he returned $3.5 billion to wealthy men.
At the same time, Commerce Secretary Herbert Hoover, who had made a fortune as a mining engineer and consultant, expanded his department to fifteen thousand employees with a budget of more than 37 million dollars, working as a liaison between businessmen and the government and helping businesses to avoid antitrust lawsuits. He urged European countries to buy American.
Their policies seemed to work brilliantly. Between 1925 and 1926, more than twenty-two thousand new manufacturing companies formed. Industrial production took off. Business profits rose, and if wages didn’t rise much, they didn’t fall, either.
And oh, the changes the new economy brought! By 1929, more than two thirds of American homes had electricity, which brought first electric lights, then refrigerators, washing machines, vacuum cleaners, toasters, and radios. Consumers rushed to buy them, along with ready-made clothing, beauty products, and cars, all of which the new advertising industry, which grew out of the government propaganda campaigns of World War I, promised would bring them glamor, sophistication, romance, and power.
In the Roaring Twenties, it seemed that government and business had finally figured out how to combine government promotion with the efficiency of an industrial economy to benefit everyone. Business was booming, standards of living were rising, and Americans were finding the time to read, learn, invent, and improve. In 1928, Republicans tapped Hoover for president. He promised that continuing the policies of the last eight years would bring the U.S. “in sight of the day when poverty will be banished from this nation.” He won with a whopping 58.2% of the vote.
With Hoover in the White House, Americans wanted in on the inevitable growth of the economy. They invested in industries producing steel, coal, and consumer goods, and in utilities and transportation. Stock prices rose. And rose, and rose. By 1929 the rush to buy stocks had become a rush to speculate in the stock market. Prices that in spring 1928 had seemed too high to be real were laughably low by fall. Radio had been at 94½ in March 1928; by September 1929 it was 101 but had split so often that the holdings from 1928 were actually worth 505. And so it went, down the stock lists.
Those with less money to burn could get into the market by buying on margin, putting down 10 or 20 percent of the cost of a stock and borrowing the rest from a broker with the promise that the loans would be paid off by the anticipated increase in the stock’s value.
Those excited by the scene dismissed skeptics who warned that stock prices were a bubble as ignorant, anti-American naysayers. “Be a bull on America!” boosters urged. “Never sell the United States short!”
October 24, a Thursday, was the beginning of the end. Heavy trading in the morning slowed the ticker tape that recorded trades. Brokers fearful of being caught sold more and more heavily. When the tape finally caught up after 7:00 that night, it showed that an astonishing 12,894,650 shares had changed hands. By afternoon, bankers managed to shore up the market, which regained the ground it had lost in the morning. But those dreadful early hours had wiped out hundreds of thousands of small investors.
The market seemed to recover on Friday and Saturday. But then, on Monday, October 28, prices slid far in heavy trading. And then, on October 29, 1929, it all came crashing down.
When the opening gong in the great hall of the New York Stock Exchange sounded at ten o’clock, men began to unload their stocks. The ticker tape ran two and a half hours behind, but that night it showed that an extraordinary 16,410,030 shares had traded hands, and the market had lost $14 billion.
Black Tuesday began a slide that seemingly would not end. Within two years, manufacturing output dropped to levels lower than those of 1913. The production of pig iron fell to what it had been in the 1890s. Foreign trade fell from $10 billion to $3 billion. The price of wheat fell from $1.05 a bushel to 39 cents; corn dropped from 81 cents a bushel to 33 cents or lower; cotton fell from 17 to 6 cents a pound. Prices dropped so low that selling crops meant taking a loss, so struggling farmers simply let them rot in the fields.
By 1932, over a million people in New York City were unemployed. By 1933 the number of unemployed across the nation rose to 13 million people—one out of every four American workers. Unable to afford rent or pay mortgages, people lived in shelters made of packing boxes.
Republican leaders blamed poor Americans for the Great Depression, saying they drained the economy because they refused to work hard enough. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” Treasury Secretary Mellon told Hoover. “It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.”
But the problem was not lazy workers. The rising standards of living that had gotten so much attention in the new magazines of the 1920s mainly benefited white, middle-class, urban Americans. Farm prices crashed after WWI, leaving rural Americans falling behind, while workers’ wages did not rise along with production. The new economy of the 1920s benefited too few Americans to be sustainable.
Hoover tried to reverse the economic slide by cutting taxes and reassuring Americans that “the fundamental business of the country…is on a sound and prosperous basis.” But he rejected public works programs to provide jobs, saying that such projects were a “soak the rich” scheme that would “enslave” taxpayers, and called instead for private charity.
By 1932, Americans were ready to try a new approach. They turned to New York governor Franklin Delano Roosevelt, who promised to use the federal government to provide jobs and a safety net to enable Americans to weather hard times. He promised the American people a “New Deal”: a government that would work for everyone, not just for the wealthy and well connected.
Under Roosevelt, Democrats protected workers’ rights, provided government jobs, regulated business and banking, and began to chip away at racial segregation. New Deal agencies employed more than 8.5 million people, built more than 650,000 miles of highways, built or repaired more than 120,000 bridges, and put up more than 125,000 buildings.
They regulated banking and the stock market and gave workers the right to bargain collectively. They established minimum wages and maximum hours for work. They provided a basic social safety net and regulated food and drug safety. And when World War II broke out, the new system enabled the United States to defend democracy successfully against fascists both at home—where by 1939 they had grown strong enough to turn out almost 20,000 people to a rally at Madison Square Garden—and abroad.
—
Notes:
Arthur M. Schlesinger, Jr., Crisis of the Old Order (1957; rpt. New York: History Book Club 2002), pp. 62–63.
Andrew W. Mellon, Taxation: The People’s Business (New York: Macmillan, 1924), pp. 129–130.
William E. Leuchtenburg, The Perils of Prosperity, 1914–1932 (1958; rpt. Chicago: University of Chicago Press, 1992), p. 109, 194–196.
Republican Platform of 1928, June 12, 1928.
Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency, 1920–1933 (New York: Macmillan, 1952), pp. 30–31.
Frederick Lewis Allen, Only Yesterday (New York: Harper & Brothers, 1931, p. 303, 315, 318, 332–333, 340–341.
John Kenneth Galbraith, The Great Crash: 1929 (1954; rpt. New York: Time Incorporated, 1961), pp. 20–21, 25–26, 43–44, 48–53, 97–98, 101–107, 171,
“22,000 Nazis Hold Rally in Garden,” The New York Times, February 21, 1939.
Ryan Bort, “When Nazis Took Over Madison Square Garden,” Rolling Stone, February 19, 2019.
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Welcome to the reading list, a weekly roundup of news and links related to buildings, infrastructure and industrial technology. This week we look at minimum lot sizes, Boeing’s next 737 MAX, Fervo short sellers, Figure AI’s training data, and more. Roughly 2/3rds of the reading list is paywalled, so for full access become a paid subscriber.
No essay this week, but I’m working on a piece about manufacturing isotopes that should be out next week.
Almost two thirds of US homebuilders said immigration enforcement is affecting their labor force, up from 23% in March and 13% a year ago. [WSJ]
I had always heard of “minimum lot sizes” as one of the many land-use regulations that restricts the supply of new housing, but I had no idea how extensive they were. But a new report from AEI claims that 90% of jurisdictions have some sort of minimum lot size, and that this is a major barrier to constructing smaller, less expensive starter homes. [AEI]
Canadian real house prices have more than doubled since 2005. [CMHC]
Airbnb bans making guests do the dishes and take out the trash. [The Verge]
The Wall Street Journal on rising pedestrian deaths on US roads. It places the blame chiefly on road design, though it doesn’t explain why road design would cause a sudden uptick around 2009. [WSJ] See also my previous essays about US pedestrian deaths.
The market share of modular and panelized housing construction in the US remains very low. “The total market share of non-site-built single-family homes (modular and panelized) was just 3% of single-family homes in 2025, according to NAHB analysis of completion data from the U.S. Census Bureau’s Survey of Construction (SOC). This matched the 3% market share recorded in both 2023 and 2024.” [NAHB]
The FAA certifies another version of Boeing’s 737 MAX, the 737-10. Boeing currently has 1555 orders for it. [Boeing]
Worries about the shipbuilding gap between the US and China often focus on commercial ship output (of which the US has virtually none), but it seems that there’s also a substantial gap in naval vessel output. “The combined tonnage of combat ships built by China in the two years through to December 2025 amounted to 636,208 tons, compared to 270,509 tons for the United States, according to data compiled by Flottes de Combat and French maritime industry association Gican.” [Defense News]
Former Tesla executive Drew Baglino’s solid-state transformer startup, Heron Power, signs an agreement for 1 GW worth of manufacturing capacity for data center developer Vantage. [Heron Power]
Is optical fiber going to be the next data center-induced shortage? “Tightening supply is projected to push spot prices for finished optical fiber products to 2.8–5 times their 2025 levels or higher. In response, telecom operators are shifting from short-term purchasing to long-term supply agreements (LTAs) to lock in fiber supply early.” [TrendForce]
Helium has been re-added to the US’s list of critical materials. A good time to revisit my piece on why helium is hard to replace. [X]
Seems bad. “[T]he U.S. aluminum industry, the world’s leading supplier just 25 years ago, produces a mere 1% of global output today. Moreover, there are zero operating smelters in the United States—or in a NATO country—capable of producing the high-purity aluminum required for military applications; the only comparable sources—China, Russia, and the United Arab Emirates—are highly precarious.“ [American Primary Aluminum Association]
Former OpenAI research chief Bob McGrew’s manufacturing startup Arda, which is doing manufacturing automation, raises $160 million. ““When a design changes, you can retrain a human in a day — but it takes three to six months in order to change the automation to reflect the new design,” McGrew said. “We’ve built a software and AI product that basically allows manufacturing engineers to build assembly lines much faster.”” [CNBC]
Rays - 400 000 000 - 4 7 1
Brewers - 200 101 10x - 5 11 1The Milwaukee Brewers have seen their opponents take the lead in eight of 10 postseason games this month – and yet they have rallied to win seven of those eight games.
They were down in the first two games of the NLDS against the Padres and came back to win both contests. The Dodgers held a lead in all four NLCS games, but Milwaukee rallied to sweep Los Angeles for the pennant.
On Saturday night, the Brewers found themselves down by four runs to Tampa Bay before they had a chance to bat. They scored two runs in the home half and chipped away while keeping the Rays from adding to their lead. Sam Frelick's home run to dead center in the sixth, coming mere minutes after Jackson Chourio easily threw out a Rays runner at the plate (photo above), tied the game at 4-4. In the following inning, Brice Turang doubled and scored on Cooper Pratt's single to right to give Milwaukee its first lead of the night.
The Brewers are now 9-1 in this postseason. They have trailed in eight of their 10 games – yet they are 7-1 in those games. They have also won their last seven games, dating back to the NLDS.
For the second consecutive game, a Tampa Bay batter ended the game by striking out with the tying run on third base. Yandy Díaz tried to check his swing on a low 3-2 pitch inside, but he was called out (correctly) by first base umpire James Hoye. Díaz complained, but the replays were clear.
The Rays blew numerous chances to score all night long. To wit:
T2: Mesa on second, 1 out; Díaz and Aranda both strike out swinging.
T4: DeLuca on first, 1 out; Mesa pops to second, Walls takes strike three.
T5: Aranda doubles with 1 out, on third with 2 outs, Caminero grounds to shortstop.
T6: Hicks HBP, on second, 1 out, out at plate to end inning on Mesa single to short left.
T7: Walls walks, steals second with 1 out, on third with 2 outs, Simpson grounds to first.
T9: DeLuca doubles to lead off, Mesa strikes out swinging, Williamson grounds to third (DeLuca to third), Díaz strikes out swinging.
The Rays were 3-for-14 with RATS in Game 2. They are 3-for-20 in the two games.
It was the Brewers' seventh comeback win of this postseason; the other 11 postseason teams have combined for nine comeback wins. It was also Milwaukee's seventh consecutive postseason victory. The series shifts to Tampa Bay where Milwaukee could clinch its first championship as early as next Tuesday.
The night started as well as it possibly could for Tampa Bay. They scored four times off starter Logan Henderson (3-3-4-1-4, 64), quickly quieting the raucous Milwaukee fans. Díaz saw seven pitches before grounding slowly to shortstop; Pratt's low throw skipped by Jake Bauers at first and disappeared into the camera well for a two-base error. Aranda struck out, but Chandler Simpson grounded a single into left-center and Díaz scored. Simpson stole second and Caminero ripped a single to left to make it 2-0. Hicks then became the fourth Canadian-born player to homer in a World Series game by crushing a 0-1 offering into the second deck in right (estimated 411 feet). Rays 4-0.
[The other three Canadians: George Selkirk (1936 Yankees, G5), Larry Walker (2004 Cardinals, G1 (against the 2004 Red Sox)), and Vladimir Guerrero (2025 Blue Jays, G5). )Video of Walker and Vlad here.)]
The Brewers scored twice off Drew Rasmussen (3.2-6-3-2-4, 89) in their first inning. Chourio and Bauers both singled to right, putting men on first and third. With Contreras batting with one out, Bauers took off for second, second baseman Richie Palacios moved towards the bag to field a possible throw, and Contreras singled through the spot where he had just been standing. Palacios could not get back in time, and the ball went into right-center. Turang lined out to second before Garrett Mitchell singled to right. Contreras was off with the pitch and took third, but both runners were left when Pratt fanned.
The first inning took 33 minutes to play. The seven total hits tied a record for the most hits in the first inning of a World Series game. It had happened nine times beore, most recently in Game 1 of the 1984 WS. . . . The six combined runs is tied for the third-most in a World Series first inning (with 1912 G7, 1945 G7, and 1960 G3). There was seven runs scored in the first inning of G4 in 1993. The record is eight runs, in G2 back in 1958.
The Brewers are the third team to start pitchers under age 25 in the first two games of a World Series:
1966 Orioles, Dave McNally and Jim Palmer
1972 Reds, Gary Nolan and Ross Grimsley
2026 Brewers, Jacob Misiorowski and Logan Henderson
Milwaukee was retired in order in only one inning (the second) making the Rays pitchers face a lot of "traffic", as baserunners now seem to be called. (I don't like the term, it reminds me of the bases being described as "clogged".) Also, during both the ALCS and NLCS, slugging and slugging percentage was referred to as simply "slug", i.e., "A big part of Smith's game is slug" or "To be successful tonight, pitcher Jones needs to limit slug." In recent years, I've gotten used to Ron Darling's insistence on referring to the postseason as "post" ("he's shown more plate discipline in post"), but I find this newer terminology bizarre – and completely unacceptable.)
The Brewers closed the gap with a run in the fourth. Rasmussen (who had thrown a season-high 66 pitches through three innings) walked Pratt with one out after being ahead 0-2. Frelick singled to right and Pratt raced to third. David Hamilton grounded an 0-2 pitch to first. Aranda must have taken a quick peek at the runner on third because the ball glanced off his glove and went through his legs for an error. Palacios was moving behind Hamilton and made a surpringly accurate scoop-shovel-pass with his glove to first, making the play at first far closer than it should have been. Pratt scored, cutting the Rays' lead to 4-3. Rasmussen got the second out but walked Bauers to load the bases -- and that was the end of his night. Cam Booser got Yelich to ground to second to strand three runners.
A word about Hicks being gunned down at the plate. He had been hit by a pitch and bunted to second. When Mesa's two-out single was fielded by Chourio in shallow left, Hicks (ranked 496th in MLB sprint speed) was still two or three steps from third base! A still shot of the replay was amazing to see. And there was third base coach Wendell Kim Brady Williams windmilling him in. It was a huge blunder.
Frelick tied the game with a leadoff dong in the home sixth. It was the first batter Ian Seymour faced and Frelick battled him through nine pitches (cbbffbff). It was Frelick's first home run since July 11. In 111 regular season games, he hit four homers and slugged .319. Bauers: "I've never seen him hit a dead-center homer in BP."
Hamilton followed and saw nine pitches also, fouling off six in a row before striking out. (bsffffffs). Jackson Chourio also struck out but saw eight pitches (cbfbffbs). Bauers walked on a full count and Yelich singled him to third. That was it for Seymour (32 pitches to his first four batters). Tyler Wells got Contreras to ground to third to prevent Milwaukee from taking the lead . . . in that inning, at least.
The leadoff man in the next frame scoired the go-ahead run. Turang doubled to right-center off Wells. He tagged and went to third when Mitchell flied to deep right. Kevin Kelly took over on the mound and gave up a run-scoring single to Pratt. Pratt then stole second before Frelick crushed a ball to deep right that Mesa caught on the track.
The Brewers were busy in the eighth, as well. Chouro singled to center and Yelich walked with one out. A double steal (without a throw) put runners at second and third. Contreras grounded to third and threw out Chourio at the plate. The Brewers challenged both the call and whether Hicks was blocking the plate (amazingly, still, after many years, this is not allowed any more). Both the out call and Hicks's positioning were upheld.
Milwaukee's Aaron Ashby, who pitched the final 1.2 innings, "is the first pitcher in postseason history to get at least five outs in six consecutive appearances and not allow a run in any of them". The goggled lefty has now pitched 15.2 scoreless innings in this postseason, allowing only five hits and three walks, and striking out 17.
Most consecutive scoreless innings to start a postseason, relievers
2016 Andrew Miller: 16
2026 Aaron Ashby: 15.2 (active)
1984 Andy Hawkins: 15.1
1981 Goose Gossage: 14.1 (entire postseason run)
Sarah Langs reports: "In all best-of-seven postseason series, teams with a 2-0 lead have gone on to win the series 80 of 96 times (83%). In series with the current 2-3-2 format, teams taking a 2-0 lead at home have gone on to win 47 of 58 times (81%)."
Langs: "The Brewers are the first team to win 7 of the first 8 games in which they trailed in a postseason." . . . Teams to win each of first 2 games of a World Series by 1 run each: 2026 Brewers, 2000 Yankees, 1995 Atlanta, 1972 A's, 1970 Orioles, 1950 Yankees, 1916 Red Sox. The first six all won the series.
Brewers Comebacks
NLDS: Brewers vs Padres
G1: Brewers trailed 2-0 (B3), won 3-2
G2: Brewers trailed 1-0 (B1), 2-0 (B5), 2-1 (B6), 3-1 (B7), 3-2 (B8), won 4-3
G3: Brewers trailed 2-0 (T4), 2-1 (T5), 3-2 (T6), 4-2 (T7), lost 4-3
G4: Brewers never trailed, won 3-1, won series
NLCS: Brewers vs Dodgers
G1: Brewers trailed 1-0 (B4), won 2-1
G2: Brewers trailed 1-0 (B1), 2-1 (B3), 4-3 (B5), won 7-4
G3: Brewers trailed 2-1 (T7), won 6-2
G4: Brewers trailed 4-0 (T4), won 6-4, won series
WS: Brewers vs Rays
G1: Brewers never trailed, won 3-2
G2: Brewers trailed 4-0 (B1), 4-2 (T2), 4-3 (T5), won 5-4
What grade did the international broadcast team of Dave Flemming and Ryan Spilborghs receive in this game? If I gave them a B for Game 1, I'd have to go with a C- (or even D+) tonight. Both announcers were unabashed Brewers fans to an alarming (and embarrassing) degree, acting as though a comeback by the team with the best record in baseball, down two runs with eight innings to go, was akin to a miracle. Flemming referred to Spilborghs as "Spilly" twice within a span of five pitches in the top of the third, and then sporadically the rest of the night. If Spilly referred to Flemming as "Flemmy", at any time, I did not hear it.
These guys are fuckin obsessed with bunting. They want every goddamn batter to bunt. It's unbelievable. I wish scripts were available of basebal games because I'd love to list the numerous times one of these guys prayed for a bunt. Flemming also repeatedly referred to many things as "unreal" throughout the night, including the fact that Rasmussen had a less-than-ideal start.
Before the first pitch, Spilborghs referred to Rays manager Kevin Cash as "one of the best tacticians" in the game, as assessment at which Blake Snell might raise an eyebrow. (That was a while ago, maybe he's improved since then.) Cash made several inexplicable bullpen decisions in Game 1. I don't consider whether his moves worked out, they must be judged immediately after he makes them. And bringing in two rusty arms in high-leverage spots when all of his best arms were rested defied all logic.
In the top of the fifth, with Aranda on second and one out, Spilborghs said: "It really feels like the Rays have to score in this inning." In the bottom half of the inning, he stated that "all momentum is with the Brewers". First of all, I wish announcers (even former players) would refrain from projecting their own personal feelings about the flow of the game onto every single one of the 20 players who are playing the game. Every fan has her own subjective opinion about whether any momentum exists at any given point in a game and in which direction and at which speed it might be flowing. It's highly presumptuous for an announcer to think his opinion is perfectly reflected in the minds of all the players in the game. (Actually, it sounds downright insane when I type it out, way more nutty than I thought when I started this paragraph.)
Afte Frelick homered to tie the game in the sixth, Flemming said he "just had a feeling" something like this was about to happen. Well, shit, Dave, why didn't you say something before the fuckin home run, since you "had a feeling"? Perhaps he thoughtfully didn't want to ruin the surprise for everyone else.
Spilborghs gets points for referring to BABIP (batting average on balls in play) when Pratt was batting in the seventh. But then he also said, "This is where I love bunts", right before Pratt smacked an RBI-single, giving Milwaukee a 5-4 lead. Brewers fans are very glad you are not managing their team, Spilly.
When the speedy Simpson batted with two down in the Rays' seventh, Spilborghs told us that the Brewers' first and third basemen were in on the infield grass, guarding against a bunt. We got an overheard shot immedately after he said that and both Hamilton and Bauers were standing on the infield dirt, extremely close to, but clearly not on, the infield grass. Why would an announcer flat-out lie to the audience about what's happening on the field? You expect that from a senile John Sterling, but not an announcer hired to call the World Series.
We produce a numerical estimate of the value of unpaid breastfeeding relative to national income spanning five centuries and integrating historical and bioarchaeological data. The relative economic contribution of maternal nursing was greater in the distant past than in recent history, rivaling regionally significant industries such as pottery, glassmaking, and even the historical public sector. It was likely the largest source of human capital investment in early modern England, supporting the physical and cognitive development of the workforce. Finally, we show that breastfeeding rates probably fell as incomes rose, challenging the Malthusian assumption that higher income correlates with lower mortality.
That is from a recent paper by Louis Henderson and Jane Humphries. Via the excellent Samir Varma.
The post Facts about breastfeeding appeared first on Marginal REVOLUTION.
Yesterday, Tito Boeri, David Card and I attended the award ceremony of the EconoMia and EcoQuiz competitions for high school and middle school students in Italy.
Here we are with the high school students whose essays received awards.
Steve Jobs was wrong. A traditional computer was never a bicycle for the brain. It was never a coherent enough machine to require, or enable, the holistic mode of dynamically stabilized control that is “riding a bike” after learning to “balance” it. At best, a traditional computer is like a set of power tools. If it’s an Apple, it’s a coherently branded set of power tools in a nice toolbox, but not an integrated machine. At least not at the level of human user experience. You do not use a traditional computer the way you ride a bicycle.
AI has revealed this by revealing itself to be something that does require bicycle-riding type skills: a motorcycle for the brain. And just as learning to ride a motorcycle is about extending a previously acquired ability to ride a bicycle, learning to ride AI is about extending a previously acquired ability to ride your own brain.
The experience of using a regular computer is a largely unrelated set of skills. A giant red herring.
AI literacy is not an extension of computer literacy.
The thing is, the human brain itself is already a combination rider-and-bicycle type entity; one which not all humans know how to ride.
The “bicycle” part is loosely what we call intelligence, and is largely a cultivable set of native aptitudes, while the “rider” part is the part that has learned to manage attention. And that process is strikingly similar to learning to ride a bike. And as with riding a bike, not all humans learn it.
To understand how this works, we have to dig into the sociology of how “smart” is constructed, recognized, and socialized in human society. Because what we conventionally recognize as intelligence, which I’ll call smarts, is not quite the same thing as being able to ride your brain. This means it is dangerous to mistake “smart” as “competent to ride AIs.”
To appreciate this, you first have to appreciate what smarts are actually for socially, and why smarts can function without necessarily being accompanied by the trait required to ride AI well — cognitive balance. In fact that can be a liability if your societal role is to perform smarts.
Unless you’re active in one of the relatively few domains where savant performance is meaningful and legible, like chess, music, or number theory, “smart” tends to be highly socially constructed as some mix of academic performance, extracurricular depth, and social presentation.
Good grades, evidence of depth outside textbooks, and most importantly, a capacity for lively social interaction that subtly dominates conversation by topping others’ arguments, citing deeper knowledge sources, and referencing the right hooks into relevant authoritative discourses. That’s “smart” in conventional terms.
Generally, acquiring a “license to smart” amounts to demonstrating early and often to peers that almost any subject is deeper and more complex than the casual dilettante appreciates.
The “smart” person has a particular social role: Serving as ready proof of the shallowness of the mental life of the median person on the median topic, who is revealed to be, not stupid per se, but simply atrociously unaware of the meta of most topics they weigh in on, to the point that they cannot be taken seriously. This is primarily a social governance function, not a directly useful thinking function. The smart person is a useful instrument for the exercise of power. Sometimes the power is even their own, but more often it is the power of particular political, cultural, or social institutions.
Curiously, logic and reason play almost no role in this sort of performance of smartness, since smartness typically operates by subverting the interlocutor’s lazy presumption that they are competent to reason about something in the first place. The characteristic move of the smart person is to reveal to you that you haven’t yet earned the right to begin reasoning because you don’t understand the terrain. And to do so in a way that you cannot easily resist.
Smartness operates by vividly demonstrating the conversational incompetence of the interlocutor, with varying degrees of grace and kindness, to the interlocutor’s own satisfaction, even if they are too chagrined to admit it. This means cowing them into suitable deference, an awkward face-saving retreat, or visible absurdity. The effect is demonstrating to others that they are either cowards, frauds, or clueless. In all cases, they are revealed to be governable without force, which is why smarts are useful for power. This also explains why getting physically assaulted is the main risk of performing smartness, which is also a useful outcome to power, because it legitimates the use of violence to govern those who resist browbeating by smarts.
This model of smarts is what’s performed by Matt Damon in the Good Will Hunting bar scene (not the less interesting math-savant scenes). He doesn’t win by doing a harder calculation. He wins by revealing that his opponent’s apparent intellectual authority is borrowed, shallow, and unearned. And he does so within the opponent’s own preferred terms of reference, leaving him unable to defend himself on home turf. And he does so as a social outsider, adding insult to injury.
Real-life examples are less dramatically intense, but this is how people are “normally” judged to be smart. That’s why interviews are such a ubiquitous gatekeeping mechanism. They are stylized versions of a normal social process of establishing who deserves to be taken seriously.
There are several pathological smartness cultures that derive from this basic culture through degeneracy, but fail to function in quite the same way.
Virtuoso IQ performances on inadequately prepared or persuasive ontological ground. These separate the audience into uncritical future acolytes and skeptics who tag you as a solipsistic egghead with an unconvincing halo; someone who doesn’t realize they’re prematurely trying to “reason” without establishing persuasive common grounds and motives for doing so. You cannot persuade a non-English speaker of their own stupidity in English. You have to do so in their native language. Cults start this way.
Overdeveloped debate skill or wit that dazzles without persuading. Any wins fail to sustainably occupy nominally captured ground because later reflection by witnesses or opponents/victims typically reverses the gains, unless they’re locked in immediately by other means. Political and legal theaters operate this way precisely because such locking-in mechanisms exist.
Demonstrations of deep erudition that turn conversations into tedious lectures, presuming the authority of a tradition rather than establishing it. Ivory towers start this way, as do taste subcultures, fandoms, and various sorts of glass-bead games. A fan of rock music cannot establish that someone with no interest in rock music is uncool. A historian cannot demonstrate that someone with no interest in history is stupid.
All three modes create escaped realities that are only persuasive if you’re already inside them. They create diverging dissensus realities. By contrast, “normal” smartness performances are generally persuasive across such social boundaries. They create converging consensus realities.
Which mode dominates determines whether zeitgeist narratives are, overall, convergent or divergent. Whether we inhabit a consensus reality or a web of contending alt-realities.
But none of this is actually that interesting. It just demonstrates that functional and socially useful smarts, both normal and degenerate, do not obviously need cognitive balance in order to serve as governance mechanisms.
Performative smartness behaviors, both normal and degenerate, constitute a kind of consensus social-proof process layer of society. A form of sociological intelligence that underwrites societal governance, but has a very vague relationship with truth at best. Important as praxis, but peripheral to the pursuit of truth in any significant sense.
Performative smartness is what we are socialized into. Like getting a driving license for a four-wheeler, a vehicle that does not require a learned sense of balance to operate, at least at a basic level.
I recall when I was first tagged “smart” beyond my immediate family, sometime in fifth grade, with firm membership achieved by eighth grade. There was real signal there, but not in the visible signals.
The real signal was that between fifth and eighth grades, I learned to actually manage my attention and direct it where I wanted. Something that many of my peers, who were also tagged smart, did not learn.
“This is thinkable, and I can think about it by just paying steady attention, which I can do,” became a basic move for me. A move that moved the challenge frontier from how to think to what to think about. This does not mean I got equally good at thinking about everything. It means I got good enough at thinking about enough things, that the bottleneck moved to choice of attention targets.
I started coming across as “generally smart” to others as a side effect, and started to easily get good grades with barely any effort, and banter impressively at parties when in the mood. Control over attention was much more consequential than raw thinking ability. I was officially licensed to smart by age 14, with all the attendant privileges and vulnerabilities.
The underlying developmental event was not really the acquisition of knowledge, or even an increase in intelligence in any simple sense. It was the acquisition of a new kind of control over an intelligence that was already there.
This felt much more like learning to ride a bike, which revealingly does not have or require a licensing regime, unlike car driving.
When learning to ride a bike, your balancing circuits visibly cross a fairly sharp threshold, with just a narrow transient phase of wobbling. You’re suddenly able to operate as a dynamically stabilized human-plus-bicycle system.
Before that threshold, every little correction is a deliberate and effortful struggle. You wobble, overcorrect, lose the thread, and fall off. Afterward, the corrections happen largely beneath conscious awareness. You can steer, accelerate, slow down, and pay attention to where you’re going rather than merely trying to remain upright.
This is the key: learning cognitive balance does not mean learning a large collection of explicit rules for staying upright. It does not mean acquiring a lot of theoretical knowledge or even any theoretical knowledge. After all, monkeys can learn to ride bikes. It means acquiring an integrated regulatory capacity that makes an entire new class of behaviors possible.
You may still need to learn some safe riding behaviors for traffic, but nobody demands to see your biking license once you demonstrate you can ride. By contrast, it’s possible to fake being able to drive a car safely well enough to be dangerous, which is why licenses are needed.
In a similar sense, when learning to ride your brain, you’re suddenly able to operate as a dynamically stabilized generative-and-reasoning-brain-plus-attention-regulation system. It’s just not as visible. So we end up noticing and certifying varied epiphenomena that serve as unreliable proxies for being able to ride your brain. That’s smartness licensing. A fragile certification that you can avoid falling off in some situations.
The bike-riding quality of attention management becomes clearer in adulthood, when you start noticing people you thought were “stupid” suddenly turning “on” (usually because they landed in more suitable environments than school) and becoming seriously impressive in some way that does not present as conventional smarts.
They’ve learned to balance on their brain bikes. Their attention is controlled, directable, coherent, and steady. At least some of the time.
Sometimes this presents as “intelligence,” and other times it presents as other traits: drive, imagination, betting acumen, foresight, resourcefulness, diligence, attunement, relentlessness, agility.
What these manifestations share is not necessarily an exceptional ability to solve abstract benchmark problems, but an ability to keep a coherent cognitive process going long enough, and steer it effectively enough, for something interesting to happen. Thats cognitive balance.
A person who can sustain an imaginative inquiry for hours, maintain a complicated practical intention over months, or hold a difficult social situation in attention without flinching, is demonstrating something closely related to what the conventionally smart person demonstrates while solving a mathematical problem.
Different terrains, different riding styles, different manifestations of the same underlying regulatory achievement.
Absence of this capacity becomes equally noticeable. Sometimes it can even lead to brackets around previous assessments of “licensed to smart.” Some notations on your license to smart, like ADHD or OCD, may limit expectations about your capacity for attention regulation to particular conditions.
Others come across as some sort of undiagnosed tragic failure: a great deal of apparent intellectual potential that never quite becomes a steerable, sustained capacity for action.
Of course, attention regulation is not a single scalar ability, and clinical labels are not simple measures of competence. People can exhibit extraordinary control in one setting and struggle in another. The important point is that the ability to direct attention is neither identical to intelligence nor reliably inferred from the social performance of smartness.
It’s only when you’ve come to terms with this phenomenology that you realize that “smart” is just one unreliable indicator of attention regulation capacity among many. Or more generally, capacity to regulate emotions and overall psyche. Societal systems are designed to detect it because smarts usually manifest earlier than other markers.
Even when the indicators are correct, we are not talking perfect mastery. Knowing how to ride a bike doesn’t mean you’ll never fall off, or be able to stay in control under all conditions.
But there’s a clear and sharp observable point where someone visibly masters balance. They’ve driven a balancing protocol into the unconscious layers of their nervous system. This is trivially visible with bike-riding, but takes some practice to notice with attention-governing.
I think I’m fairly skilled at correctly assessing whether someone has learned to ride their brain, and the limits of their ability to retain balance under various circumstances. But I make mistakes on occasion, overestimating or underestimating how much balance someone has. It is especially easy to make such mistakes in the US, which probably has the most refined smartness-licensing culture on the planet, and really polished smartness performance cultural modes. In other countries, it is typically much easier to detect when someone can or cannot ride their brains.
With both bicycles and brains, there are people who somehow seem never to get there.
With bicycles, at least there’s a clear reason why: you need a bike, some concentrated learning effort, and a culture that makes that a routine part of growing up, to the point that we’re surprised when an adult admits they never learned to ride a bike.
We’re surprised, but don’t think the worse of anyone for not knowing how to ride a bike, because we correctly presume that these are things almost anyone can learn, modulo some neurological and physical conditions.
But learning to “ride your brain” is not really a thing society solves for directly, because until recently there has been no need for it.
We teach subjects, test knowledge, reward cleverness, and sort people into status hierarchies based on visible performances of smartness. We sometimes teach study skills, concentration techniques, or emotional regulation, but these are usually treated as auxiliary skills rather than the central developmental achievement.
We largely leave the acquisition of cognitive balance to chance, and then retrospectively and unreliably recognize it as “smarts” or one of several other traits that reveal the presence of balance. Some more reliably than others.
It’s a bit like organizing an elaborate system of bicycle races, awarding prizes for bicycle maintenance knowledge, and conducting interviews about cycling theory, while leaving children to figure out how to balance on their own.
Some do. Some don’t. Some learn late. Some acquire remarkable specialized abilities that never translate into cognitive balance. And we mistake the resulting distribution of performances for a distribution of something called intelligence.
Why am I going on about this?
Because consequential “intelligence” in practice is not the social performance and governance processes associated with the license to smart, but the unreliably detectable capability to ride your brain in a balanced way.
And this brings us to AI.
Using AI is like riding a powered two-wheeler, like a motorcycle or scooter.
Some people who learn to ride a bike never go on to learn to ride powered two-wheelers. And while it is possible to learn to ride powered two-wheelers without first learning to ride a bike, that’s a seriously dangerous thing to attempt.
You need excess regulatory capacity to manage the greater mass and velocity. This is harder than either riding a bike or driving a car, at least in the particular sense of maintaining dynamically stabilized control. And no amount of theory will help you.
The motor introduces a qualitatively different problem. On a bicycle, your own effort largely determines the power entering the system. On a motorcycle, the machine supplies far more power than you could generate yourself. Small control inputs can have large consequences. You can get into situations faster than your regulatory capacities can handle.
The fundamental skill is still balancing and steering, but the operating envelope has changed.
Something similar is happening with AI.
A traditional computer offers tools that extend particular capabilities.
An AI system, by contrast, generates cognitive activity of its own. It proposes, elaborates, infers, improvises, and sometimes takes action. It can sustain a line of inquiry, produce an argument, or pursue a task with a momentum that is not simply an extension of your own moment-to-moment thinking.
The result is a coupled cognitive system with its own dynamics.
To use it well, you have to do more than issue instructions and evaluate outputs. You have to maintain orientation while the system generates possibilities faster than you can individually inspect them. You have to recognize when it is going somewhere interesting, when it is wandering, when it is confidently wrong, and when it is pulling you into a frame of reference you never intended to adopt.
You have to steer without micromanaging, supervise without becoming a bottleneck, and remain capable of independent judgment even while relying on the machine for much of the cognitive work. Your cognitive muscles have to be relaxed enough that the ride is smooth. As with learning to ride a bike, relaxing enough that you begin trusting the machine’s gyroscopic stability to do most of the work is a key moment. Realizing you have to be going fast enough for that effect to kick in is another. The mark of the learner bike-rider is tight muscles that correct too quickly and too hard, while going too slow, which triggers wobbling and instability.
A lot of failure to use AI effectively looks to me like bicycle riders struggling with powered two-wheelers because they have acquired licenses to drive four-wheelers and assume they know everything there is to know about controlling statically unstable powered machines too. They go too slow, and correct too hard, too fast, too often.
They have learned to perform four-wheeler smartness in a social environment, participate in governance, and perhaps to operate conventional intellectual tools competently. They may or may not have learned to ride their own brains. And even if they have learned, they may not necessarily have developed the surplus attention-regulatory capacity needed to manage an AI.
The relevant competence is an overdeveloped capacity to ride your own brain, with sufficient surplus supervisory capacity to balance the motorcycle.
And the surplus is important. If all your attention is consumed by keeping your own thinking coherent, you have little left to supervise an additional powered generative process. If, on the other hand, you’ve internalized enough of the balancing protocol that your own cognition remains stable with relatively little conscious effort, you can devote more of your attention to steering the larger system.
This also helps explain why conventional credentials and visible performances of smartness are imperfect predictors of AI competence. The AI motorcycle doesn’t care whether you have a license to smart. It cares whether you can balance.
To extend the metaphor, the motorcycle can eventually become self-balancing.
We’re already there, at least in limited ways, with experimental robotic motorcycles. But we’re not yet there with brain motorcycles.
Current AI systems have some capacity to regulate their own behavior, detect errors, and recover from mistakes. But these capacities are uneven, and their apparent coherence can be deceptive. The human rider still supplies much of the supervisory intelligence that makes the coupled system reliable.
This suggests a useful way to think about AI safety.
A great many safety failures and risks amount to an insufficiently skilled bicycle rider getting thrown off the motorcycle (which they’re perhaps treating like a car), which then proceeds to become unbalanced and crash in some way.
Sometimes the rider loses track of what the machine is doing. Sometimes they overcorrect. Sometimes they mistake speed for progress. Sometimes they trust an apparent stability that is only temporary. And sometimes the machine is simply too powerful, unstable, or poorly designed for the available human control capacity.
Not every failure is a rider failure. Machines can be defective, roads can be dangerous, and no amount of skill can compensate for arbitrarily bad engineering. But the stability of the coupled system cannot be understood by studying the machine alone.
A motorcycle’s engine power, a rider’s regulatory capacity, and the stability of the rider-motorcycle system, are three different things.
Likewise, an AI’s intelligence, a human’s cognitive regulatory skill, and the effective intelligence of the coupled human-AI system are three different things.
The third is the one that increasingly matters in practice.
There is also an intriguing possibility here. As AI systems acquire better self-regulation, they may become easier to ride even as they become more powerful. A self-balancing motorcycle can compensate for a rider’s regulatory skill limitations rather than amplifying them. But this is not the same as eliminating the need for a rider. Balance is not direction. A system can remain perfectly upright while taking you somewhere you have no desire to go.
And a machine that can regulate itself may create entirely new demands on the human rider: less effort spent maintaining immediate stability, more effort spent maintaining orientation, intention, and judgment over longer horizons.
This brings us back to the developmental problem.
We have spent centuries building institutions for teaching knowledge, certifying expertise, and licensing performances of four-wheeler smartness. We have paid much less systematic attention to teaching people to ride their own brains.
Now we are handing them motorcycles.
Perhaps the most important educational challenge of the AI era is not teaching people to code, prompt, or even critically evaluate machine-generated information. Those are useful skills, but they are downstream of something more basic: learning to maintain dynamically stabilized control over your own cognitive activity, and then extending that control to a coupled system with a powerful generative machine.
The interesting thing about bicycles is that balance, once acquired, opens up a world that was previously inaccessible. You don’t have to think about balancing all the time. You can simply go places. And with motorcycle, you can get places faster.
How leaders allocate their limited time and attention is an important question in economics. This paper constructs and analyzes a novel data set covering the daily calendars of three Federal Reserve Chairs, Ben Bernanke, Janet Yellen, and Jerome Powell, containing more than 20,000 calendar entries. We document several patterns. First, all Fed Chairs spend more than 30% of their documented meetings with Fed staff, highlighting the crucial role of economists in the Fed’s decision process. Second, interactions with the media became more frequent during Bernanke’s tenure and remained important until the end of Powell’s tenure. Third, Powell held significantly more meetings with lawmakers than both Yellen and Bernanke, reflecting an increasing need for the Fed to engage with political actors. Beyond these trend patterns, we examine the time allocation of Fed Chairs at business cycle frequencies and show how different activities respond to shifts in the macroeconomic environment. Finally, we place our findings in historical context using the available calendars of earlier Fed Chairs, including Alan Greenspan.
That is from a recent NBER working paper by
The post How central bankers spend their time appeared first on Marginal REVOLUTION.
Zahan Turel, a backend engineer and eighth-generation Zoroastrian priest from Surat, received a grant to digitize his community’s manuscripts and liturgical records before they are lost.
Aditya Vijay, 17, is building Forge, supporting overlooked, self-taught young founders with shared housing, capital, and access.
Dev Goyal received a grant for SCRIPT, exploring whether stylus-based drawing kinematics can support non-diagnostic clinical triage for ADHD, autism, and anxiety.
Adwait Tiwari, 16, a self-taught founder from Indore, is building BharatBahi, a WhatsApp-native AI assistant helping Indian shopkeepers.
Mayukh Goswami and Meher Manda received their grant for a graphic novel examining democratic crises around the world through the lens of a fictional Indian town.
Ajith Chekka is building Oru’el, a physics-enabled intelligence layer to improve the reliability and efficiency of data centers.
Gaurav Kumar, a software engineer and social entrepreneur, is building OncoVault, which turns fragmented cancer records into AI-generated clinical summaries to support physicians’ treatment decisions.
Kush Agrawal, an engineering student at IIT Bombay, received a grant for Tensor Recon, developing execution-aware financial reconciliation infrastructure for high-volume cryptocurrency trading firms.
Mohd. Ashzad, 22, a security researcher and engineer, is building Build Jam, helping young South Asian builders discover creative skills through real-world projects in AI, design, filmmaking, and photography.
Vaibhav Sai, 25, received a grant to develop AI for intent-based biomolecular design, starting with a nucleotide-focused model and capture molecules for biosensors.
Rithvik Vibhu and Rithwik Jayasimha received their grant for research on passive optical fiber network vulnerabilities, including wiretapping and attacks on ISP infrastructure, and presentations at Black Hat USA 2026 and DEF CON 34.
Neha Sarda is building Zyogen, sovereign AI software converting injury images into patient-specific printable graft designs and bioink formulations, aiming to make regenerative medicine 30–40% more affordable.
Hari Shankar Ramalingam, cofounder and CEO of SpaceTug, received a grant to develop and validate autonomous spacecraft technologies for in-orbit satellite servicing, inspection, and life extension, ahead of orbital demonstrations.
Laiba Noor received a travel grant to attend a research program at Özyeğin University and develop a speech-analysis tool for detecting presymptomatic Alzheimer’s in low-resource settings.
Abhishek Raj, 16, a crime and mystery writer and dual national record holder, received a grant to advance his fiction writing and criminology research.
Kunal Kanase, an IIT Bombay pre-doctoral fellow, received a grant for GullyWell, studying Dharavi residents’ wellbeing where formal mental-health care rarely reaches and developing low-cost tools informed by that research.
Divyaratna Joshi, a Chemical Engineering undergraduate at IIT Madras, is developing low-cost S-PEEK membranes to replace expensive fluorinated membranes and make fuel cells and electrolyzers affordable and manufacturable at scale.
Tanjot Singh, 16, received a grant for PraaNavya (Erynth), a climate startup developing bio-based nanofiber air filtration technology for sustainable clean air.
Tribhi Kathuria, a Lecturer in Robotics at the University of Michigan, received a grant to connect aspiring Indian engineers with robotics and AI research and mentorship from experts in the United States.
Swamynathan Jerra, founder of Hyderabad’s AcquaHT Labs, received a grant to upgrade and seek patents for machines extracting drinking water from air at 30% humidity, rather than the usual 50%, for dry areas with unsafe groundwater.
Niharika Srivastava, a criminal justice and technology lawyer, received a grant to develop a rule-based system identifying Indian undertrial prisoners held beyond statutory custody limits, enabling targeted legal intervention.
Anirudh Varma, a New Delhi pianist, composer, and producer, leads the Anirudh Varma Collective (AVC), received a travel grant for reimagining Indian classical music in a contemporary format for its debut UK tour.
Himaneesh received a grant to build AI software that simplifies professional digital audio workstation workflows.
Sahasrabda Sai Pradhan received a grant to develop a skin-regenerative biomaterial that can be fabricated on-site for urgent graft substitution when suitable tissue is unavailable from the patient’s donor site.
Gaurav Hadavale, 21, a final-year undergraduate at the Sardar Patel Institute of Technology, received a travel grant to present his mechanistic interpretability and trustworthy medical AI research at the MI4MedFM workshop at MICCAI 2026.
M R Sharan, an economist, received a grant to establish a data and intelligence platform focused on India’s local bodies.
Nitish Goel, 14, from Panchkula, is building Thalamus to reduce AI costs and improve efficiency, and Agentoverflow, a shared repository of agents’ solutions that reduces duplicated work and supplies model-training data.
Sudharsanam received a grant for Hardlight, developing autonomous space robots to assemble and maintain assets in low Earth orbit, including space stations, data centers, and factories.
Naveen Gulati, Noida, received a grant for instrumented rooftop trials of GIVARA ONE, a compact dual-rotor vertical-axis turbine for low, gusty winds. Givara Energy owns, installs, and maintains the machines; customers pay only for delivered electricity.
Daevan Mangalmurti and Bilal Moin received their grant for Kindly Adjust, a podcast and Substack discussing small fixes for India’s big problems.
Those unfamiliar with Emergent Ventures can learn more here and here. The EV India announcement is here. More about the winners of EV India second, third, fourth, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, and nineteenth cohorts. To apply for EV India, use the EV application, click the “Apply Now” button and select India from the “My Project Will Affect” drop-down menu.
And here is Nabeel’s AI engine for other EV winners. Here are the other EV cohorts.
If you are interested in supporting the India tranche of Emergent Ventures, please write to me or to Shruti at srajagopalan@mercatus.gmu.edu.
The post Emergent Ventures India, 20th cohort appeared first on Marginal REVOLUTION.
Marques Brownlee thinks the lack of Face ID will be the biggest gripe. I agree. And I love his central framing for the review: that the Duo is extremely polished around the edges (figuratively, but also true literally) but rough in the middle.
But he spends more time griping about third-party apps that haven’t been optimized for the Duo than most other reviews, because he oddly seems to personally rely on a lot of apps from shitty iOS developers, like Discord and Google Calendar. I get it, Google Calendar is very popular. So too is Discord — it’s #6 in the App Store today for the “social networking” category. And I get it, Brownlee splits his time across iOS and Android. But Google is a notoriously terrible iOS developer. Every time there’s a major hardware display transition on iPhones that requires developer support, most of Google’s apps are late. And whatever the reasons for Discord’s popularity, it’s sure as shit not the quality of its app.
The best apps for the Duo are the best apps for iOS generally: ones that are exclusively for iOS. (And Brownlee sings the praises of several of them, too, like Carrot Weather.)
I hadn’t heard of Tim Pan or Mediastorm until running across his 24-minute video review of the Duo. It’s a good and fair review, but what struck me are the rather astonishing production values. Amongst other things, they stress-tested the hinge with an industrial robot by opening/closing it 10,000 times. (That’s less than one-third the folds tested by Joanna Stern’s Hingey, but still.) It’s an incredible piece of work, especially given the one-week time constraint. English is Pan’s second language, and there’s an entire alternate version of the whole review, under the Mediastorm channel, in Chinese. It’s not just a different soundtrack — it’s an entirely separate cut of the video, where all his on-camera shots are spoken in Chinese.
At about 7:30 in the (English) review, Pan mentions that they (he?) offer every employee in the company a new iPhone each year. This year’s choices, by employee count:
The point of this in the review was to show how strong demand is for the Duo amongst Pan’s company’s Chinese employees. But what struck me is that the company has 198 employees. (Last year, he says, 150 chose the 17 Pro or Pro Max; only 1 chose the Air.) Pan’s YouTube channel includes interviews with Christopher Nolan and Hans Zimmer. I never heard of him before but he obviously didn’t come out of nowhere. (Perhaps this is only a function of how little YouTube content I watch.)
Pan only launched his X account this week. He posted the entire review video there, too, and it’s got 187,000 likes and 6,700 comments. As a promotion to launch his X account, he’s giving away 100 iPhone 18 Pros. Even if they’re base models purchased somewhere without sales tax, that’s $120,000.
Remarkable.
It seems like this amazing Easter egg only launched yesterday, to celebrate the original iPod’s 25th anniversary. Exquisitely well done. More like this, please.
Chan Karunamuni, human interface designer at Apple, on X:
iPhone Duo is here! Excited to have worked on the design of our open/close transition. It’s designed to make the two displays feel like one seamless experience by perceptually bending the focal plane, not the content, so that it feels like opening a window onto a singular view.
Karunamuni thanks a few engineers by name, which is always good (and for Apple employees, far too rare) to see.
Johnnie Manzari, HI designer formerly of Apple, now at Google DeepMind, retweeting Karunamuni:
The second I saw that transition I thought “here’s the next ‘change the whole industry’ design from Chan”.
Previous such raise-the-bar designs that Karunamuni led or played a major hand in include the Dynamic Island in 2022, the “shockwave moment” when you put two iPhones together to initiate AirDrop or NameDrop in 2023, and iOS 18’s cool-ass Flashlight beam UI in 2024. He also gave Steve Lemay this full-throated public endorsement upon his promotion to lead all of Apple HI design upon Alan Dye’s departure for Meta last December.
Nicole Nguyen (also with a 5-minute video), writing for The Wall Street Journal (gift link):
Every time I used the Duo in phone mode, one-handed, I felt its heft. It’s wider and thicker than a Pro iPhone — and heavier, even compared with competing foldables. My hand actually hurts after using the Duo nonstop, straining to grip the device securely while trying to reach the far edge of the screen.
An Apple spokesman pointed to the Duo’s titanium frame for durability. Other folding models use a lighter aluminum. The company also moved the dock and common controls to the right to be more reachable (sorry, southpaws). Still, there were plenty of instances where my thumb found its limits: turning off the flash in the camera app, or typing the letter “A.”
There are people who can easily use two hands and won’t see this as a problem, including train commuters, frequent fliers or parents who wait around for kids to finish their activities. For me, I look forward to the day the Duo is lighter and thinner — maybe folding to the size of a deck of cards, like in the movie “Her.”
Interesting that she’d prefer a smaller Duo, not a bigger one, if Apple makes a second size. I agree that one-hand-ability is a problem with the Duo, but I also think the front screen is already too squat in terms of how much content it shows. I just think it’s the nature of foldables that they’re two-handed devices, even closed.
Her’s deck of cards foldable isn’t what I think we need to wait for. It’s Westworld’s super-thin tri-folds.
Aditya Soni, Christine Chen, and Will Russell, reporting Friday for Reuters:
CEO Ternus played greeter at a store in Austin, Texas, throwing open the doors and high-fiving customers as they streamed in, a video posted on X by CBS Austin showed. A known car enthusiast, Ternus’s Austin visit coincides with this weekend’s Formula 1 US Grand Prix in the city, with Apple holding exclusive US broadcast and streaming rights to the racing series.
I was wondering why Ternus and retail chief Deirdre O’Brien were in Austin for the launch. Joz held down the fort and held court at the Fifth Avenue store.
Regarding reviews:
They also said the folded Duo is less handy for the quick tasks most users do daily and several prominent reviewers recommended against it for many Apple customers.
“It’s been a lot of fun trying the Duo out for a week, but it feels like I’ve gotten to use an extraordinarily polished prototype — not a finished product that I’d want to buy and carry,” wrote longtime Apple commentator John Gruber.
Tech commentator Marques Brownlee said in a YouTube review that for a regular person who mostly texts and browses, “it is probably a no. But if the $2,000 doesn’t mean much to you, and you like the idea, after the learning curve and getting used to not having facial identification, it is a really fun phone.”
In Berlin, YouTube content creator Patrick Wolter was impressed that the Duo works as a phone and an iPad in one.
Not sure Wolter set a high bar there.
Reporting for the WSJ (gift link), Rolfe Winkler quoted yours truly as well, with (IMO, and I feel I get to have an opinion here) a better line from my review:
“The outer device is, by far, the worst iPhone Apple has ever made. It’s a miserable fat little thing. The inner device is a splendid, joyful, beautiful tablet,” wrote John Gruber, a well-known Apple blogger, in his review. “The decision of whether you might want to buy a Duo is not easy, because only one of its two selves is good.”
Jay Peters, The Verge:
The iPhone Duo officially goes on sale today, but a few units already have broken screens. According to posts on Reddit about the affected units, the issue appears to be happening at a similar spot on all of them: Some kind of problem shows up on the inner screen along the hinge and a strange bright line (or lines) across the right side of the display.
This crack problem doesn’t seem to be widespread, but it’s seemingly more than a handful.
Today’s post is brought to you by my sponsor, Mechanize. They’re hiring junior software engineers at $300K/year base salary. Apply now!
* * *
I had planned to do a post on Robert Hall and Michael Woodford, as I am a big fan of both of their work. But I’ve been pretty sick the past few weeks—beginning with a flu that gave me a 104 (40C) temperature, and then pneumonia. So I haven’t felt like blogging. Below is a post I wrote a month ago but hadn’t gotten around to posting. I may be slow in responding to comments, but I’ll try. I hope to do a Hall/Woodford post later.
Back in 2018, I warned that the budget situation was becoming unsustainable:
Pundits have been complaining about deficits for decades, so why haven’t we already paid the price in one form or another?
It turns out that the U.S. government has been a bit less irresponsible in the past than advertised. While we run deficits during most fiscal years, they have not been large enough to push the national debt to the sorts of levels seen in Greece, Italy and Japan, which have even larger public debts as a share of national income.
As with the boy who cried wolf, the public is becoming numb to the constant warnings about a debt crisis.
Today, however, there really is reason to be concerned about the budget deficit.
For the first time in history, America is seeing its budget deficit rise dramatically higher during a period of peace and prosperity. While there have been even bigger deficits on occasion — measured as a share of GDP — they were always associated with a temporary situation such as war or high unemployment.
The deficit would then shrink sharply when the economy returned to normal. The current situation is unusual because the deficit has been soaring dramatically higher even as unemployment has fallen to the lowest level since the 1960s (3.7 percent).
Unsustainable budget deficits can be seen as a sign of political dysfunction. The United States last ran budget surpluses during 1998-2001. These surpluses created fiscal space for the politically popular tax cuts and spending increases of the George W. Bush administration.
My complaints about deficits put me far outside the mainstream. In the late 2010s, most pundits suggested that we didn’t need to worry about deficits because interest rates were low. That attitude continued into the Biden administration, which rejected the warnings of economists like Larry Summers. Under the past two administrations, economists have been excluded from the halls of power and policymaking has been turned over to populists.
Last year, a few of my commenters suggested that the fiscal situation would improve due to tariff revenue. I was highly skeptical. According to the Committee for a Responsible Federal Budget (CRFB), the deficit is worsening despite a booming economy:
When looking at the budget deficit, it is essential to put the figures into context. The government should run deficits during recessions and wartime, offset by surpluses (or at least much smaller deficits) during booms. In the late 2010s, the US abandoned that longstanding practice, which is why I raised the alarm in 2018. The deficit of 2019 might look small, but the trend was extremely worrisome given the booming economy.
Today, things are far worse. We ran budget surpluses during the internet boom of 1999, 2000 and 2001, but we are running enormous deficits during the AI boom.
And it could easily get even worse. As longer-term Treasury bonds with low yields mature and need to be rolled over with new debt, the interest cost of our national debt will continue to rise. Here’s the CRFB:
For FY 2026, we estimate:
A budget deficit of $2.0 trillion, or 6.2% of Gross Domestic Product (GDP).
Debt held by the public of $32.3 trillion, or 100% of GDP.
Spending of $7.4 trillion, or 22.9% of GDP.
Revenue of $5.4 trillion, or 16.7% of GDP.
Interest costs of $1.1 trillion, a record 3.4% of GDP.
Interest was the second largest line item in the budget, costing more than defense or Medicare.
And they include this graph:
And of course there’s also the aging population.
Some people suggest that AI will somehow save us. But how? It’s not clear that an AI boom would reduce government spending as a share of GDP. After all, spending on health care tends to rise rapidly as countries get richer, and Social Security benefits for new recipients automatically rise with the level of nominal wages.
It is possible that AI has actually made the deficit worse, by shifting income from workers to less heavily taxed corporate income. Here’s Bloomberg:
Instead, the end of civilization as we know it will likely be caused by income tax erosion.
The logic is straightforward. Ever since the First Industrial Revolution saw peasants pushed off the land, governments have relied on taxing people and their paychecks. Rand estimates that 66% of US federal revenue in 2024 came from either individual taxes or payroll taxes due directly to labor. Even in Australia, where resource exports generate vast wealth, individual income tax accounts for almost half of federal government revenue.
Despite barely scratching the surface of usefulness, AI is already threatening to erase entire categories of white-collar work around the world.
And here’s The Economist:
You might think of AI as a godsend for governments, many of which are accumulating vast debts (see chart 2). Economists expect AI to lift productivity growth, which should create a bigger economy. . . .
One problem is that AI may create value in areas which governments tax lightly while destroying value in the more heavily taxed bits. The economy could expand rapidly while leaving the government increasingly starved of funds. At present governments get most of their revenues from workers. Across the OECD club of mostly rich countries, personal-income taxes and social-security contributions account for a high and rising share of overall tax revenues (see chart 3). In America about three-quarters of all federal tax revenues come from labour. Taxes on consumption and capital (including corporate profits and capital gains) are smaller.
On the other hand, some people are too fatalistic about the situation, assuming nothing can be done. Don’t all countries face similar problems? Not at all. AI Overview suggests that many developed countries have net public debts below 50% of GDP:
Negative Net Debt (Net Creditor Governments)
These unique advanced economies possess sovereign liquid assets that completely exceed their total liabilities.
Norway (Maintains a massive sovereign wealth fund, pushing its net position heavily positive)
Singapore (Gross debt is high due to bond issuances for domestic investment, but it holds zero net debt)
Denmark (~ -6.0% of GDP)
Luxembourg (~ -4.0% of GDP) [1, 2]
Ultra-Low Net Debt (0% to 25% of GDP)
These nations exercise high fiscal restraint or possess exceptional asset backings. [1]
South Korea (~ 9.3% of GDP)
Estonia (~ 10.1% of GDP)
Sweden (~ 12.2% of GDP)
Switzerland (~ 19.2% of GDP)
Moderate Low Net Debt (25% to 50% of GDP)
While their gross public debt might sit higher, their net debt burden remains comfortably below the 50% threshold. [1]
Ireland (~ 26.3% of GDP)
Lithuania (~ 37.1% of GDP)
Latvia (~ 37.7% of GDP)
Finland (~ 41.8% of GDP)
New Zealand (~ 42% to 45% of GDP)
Iceland (~ 45.8% of GDP)
Germany (~ 47.2% of GDP)
Conservatives like to say the problem is simply too much spending. OK, explain Denmark and Sweden, which have very high spending levels and low debt burdens. Here are some of the worst offenders, again from AI Overview:
Extreme Net Debt (Over 100% of GDP)
These nations possess heavy sovereign debt loads where liabilities greatly outpace their current asset reserves.
Japan: ~136.5% net debt (While its gross debt is the highest in the world at over 204%, its massive domestic asset holdings bring the net figure lower—though it remains the highest among developed economies).
Italy: ~127.7% net debt (Driven by long-term structural deficits and low growth).
United States: ~100%+ net debt (The U.S. gross debt sits at roughly 125.8% of GDP; adjusting for government financial assets leaves the net burden sitting right around the 100% threshold).
Elevated Net Debt (75% to 100% of GDP)
These advanced economies maintain sizable fiscal burdens, heavily exposed to shifts in global interest rates. [1]
France: ~108.8% net debt
Spain: ~92% to 94% net debt (Gross debt remains close to 98.2%)
Belgium: ~93.3% net debt
United Kingdom: ~88% to 92% net debt (Gross debt hovers around 103.6%)
The problem is easily solvable in a technical sense. Although I’d personally favor some spending cuts, federal spending is still only 23% of GDP. Lots of developed countries raise far more than that amount of revenue. It’s a political problem. All you need is good governance. At one time, the US had relatively good governance. And then we threw it all away.
PS. Long time readers know that I’m obsessed with three models: Denmark, Switzerland and Singapore. Not surprisingly, these three countries all show up in the top ten for low levels of public debt. Note that all three are also in the top 7 for economic freedom, according to both the Fraser ranking and the Heritage ranking.
I like these three countries, as they each excel at one of the three most essential aspects of governance:
Singapore: The economic (neoliberal) superpower
Switzerland: The political (decentralized democracy) superpower
Denmark: The ethical (utilitarian) superpower
They answer the three key questions: What should be the goal? (Denmark-utilitarianism.) How best to achieve the goal (Singapore-neoliberalism). How best to decide how to achieve the goal in a world of uncertainty (Switzerland-decentralized democracy.)
Three paths to the same destination—good governance.
A message from my sponsor, Mechanize:
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I had a revelatory conversation back in April with Lisa Graves, about the dire state of the Supreme Court and how it got that way. No time for a fresh interview this week, but here she is at the Brattleboro Literary Festival:
Release: battledrones v14: Compass Rose, a four player map
I added four player online mode to Battledrones - previous maps were limited to two.
Here's the initial prompt I used:
Add a new map for a four player battle - four way rotational symmetry, up to four AI players, works with the WebSocket non-audio based multiplayer mode so up to four human players can join (any spare slots use AI)
Claude Opus 5.5 added a new map called "Compass Rose" and modified the WebSockets multiplayer network code to support up to four players for that map, joining via share links or QR codes.

The new teams use robots themed in purple and green, joining the existing blue and red designs. You can preview those colors in the updated model browser.
Here's a replay link to watch a four way AI battle with the "Goliath Armada" mutator turned on, where each side starts with four giant Goliath mech units.
Tags: game-design, projects, claude
Tool: Quick Study
Prompt to Claude Opus 5.5 High:
Build an artifact where you open a photo and it rapidly (in a few seconds) paints a version of that photo using a canvas element and simulated paintbrush
See also my previous experiment getting Claude Fable to simulate a watercolor illustration with P5.js.

Quick Study uses Sobel edge detection, with no external libraries beyond Google Fonts.
Tags: tools
A lot of what you might want to know about Jim Belosic can be learned from his childhood home.
Belosic grew up in an immaculate Victorian house that sits on 2.5 acres in Genoa, Nevada. Genoa is the oldest town in Nevada with the oldest saloon (still operating) and has all of 1,300 residents. Historically, Genoans worked on ranches and farms amid a bucolic setting where the Sierra Nevadas give way to pastoral lowlands. As such, there was not much of anything around the Belosics’ house when they started building it in 1977.
Vic and Julie Belosic had fled the bustle of Southern California in an Econoline van looking for something different. (Well, Vic was looking for something different. Julie was quite happy.) They were both good with their hands and decided to construct their Nevada home themselves. The project began with a barn (where the couple and their young daughter lived) and then expanded to the main house a couple of years later. The house itself was a work in progress when Jim arrived in 1980 and remained that way through much of his adolescence.
Belosic is the founder and CEO of SendCutSend. Many of you reading this story will not have heard of SendCutSend. But, if you craft or manufacture things as a hobby or at work, then you probably know the company well.
SendCutSend operates factories full of machines that cut, bend and shape metal into custom parts. We’re talking objects for people trying to modify their cars right on up to the key components of rockets, robots and defense equipment. Many of SendCutSend’s more than 300,000 customers were turning to China for this type of work until Belosic, who founded the company in 2018, figured out how to make lots of metal parts well, fast and cheap and offered an option right in the United States. As such, SendCutSend and Belosic have become key players in America’s effort to learn how to manufacture things again, although playing a part in a national movement was never really Belosic’s intention.
The origin story of this manufacturing phenomenon goes back to the Genoa house and its ongoing construction during Belosic’s childhood. At six, Belosic stood by his dad in the dining room catching squares of wood as they came off a table saw. Belosic would then sand the edges and hand them back to his dad who nailed them up near the ceiling to create dentil molding. At ten, Belosic had a bandsaw-themed birthday party where he and his friends built Pinewood Derby cars. Not long after that, Vic decided he didn’t like the look of the staircase and set to rebuilding it, so the family relied on a ladder to reach their bedrooms for several months.
“On Sundays, the few other people that were living here would get in their cars, and they would mosey down into town and have a good time as a family,” says Julie. “But not us. We were banging hammers. It was so quiet around here that we could hear the hammers bouncing off the mountains.”
Out back, Vic always had a half-built car project going with nuts and bolts scattered all around it. (Vic has the mangled hands of a proper maker.) Belosic would help out on those efforts too or explore the possibilities presented by the neighboring wood and scrap piles. “You had to keep yourself entertained,” says Belosic. “There was no internet, and just one neighbor three miles away who I could make it to on my Go-kart.” Besides exploring, Belosic made money through garage sales and by mowing lawns so that he could afford to improve his Go-kart or buy a radio-controlled car.

This environment bestowed a love of tinkering and building inside of Belosic, and this fit his disposition anyway. School was too easy for him, and he didn’t care much for its structure and regulations. Belosic attended the University of Nevada, Reno for six weeks before dropping out to start his own business. “He had to be an entrepreneur,” Julie says. “He was not going to work for somebody else.” To which Jim adds, “What she’s saying is that I’m a really shitty employee. I was forced to work for myself.”
JIM BELOSIC is 46 and can often be found in similar attire – work boots, jeans, a black long-sleeve shirt and a black SendCutSend baseball cap. He’s got a thick, brown beard and glasses. His manner oscillates between straightforward and confident and easygoing and jovial. Mostly, he comes off as focused and is something of an anomaly in this moment of reindustrialization hype and plentiful bullshittery in that he’s quite matter-of-fact when he talks about SendCutSend’s business and about the prospects of the U.S. revitalizing its manufacturing backbone.

Rays - 000 100 001 - 2 7 0
Brewers - 200 000 10x - 3 8 0Milwaukee jumped out to a quick 2-0 lead after only four batters in Game 1 of the 2026 World Series and added a needed insurance run in the seventh, closing the door on a Tampa Bay ninth inning rally that left the tying run at third base.
Links for you. Science:
Colossal Biosciences predictably scams again
Moderna and Merck say their mRNA cancer vaccine cut death, recurrence by 42%
The U.S.-Funded Plan To Kill Infants In Africa By Withholding Vaccines Has Been Thwarted
Stable coexistence and transport of lytic phage infections with migrating bacterial hosts
Jurassic Park @ 35: Reflections on evolutionary genetics, de-extinction, and the science-society interface
Archaeologists Unearthed a 476,000-Year-Old Wooden Structure. No One Knows Who Built It or Exactly Why
Crows can evaluate visual info twice as fast as mammals
Other:
The Faces Of The Democrats
In these hyperlocal ANC races, there’s no shortage of drama
Kushner Phone Hack Reveals How Middle East Dictators Bought Him Off
Small Pleasures
How Evangelicals Turn Supporters into Leaders—and What the Left Can Learn
She Was the DEA’s Premier Crypto Detective. The Clues Led Straight to Her Own Family
Inside Vivek Ramaswamy’s Historic Ohio Flameout
Buck Passing
How Elizabeth Holmes Tricked WIRED—and Everyone Else
Can you save DC from our “fiscal cliff”? (simulator is here)
Elon Musk Just Threatened the Coming Democratic Majority
Democrats Demand “Unredacted Log” of Attendees at $TRUMP Meme Coin Dinner
Vivek Ramaswamy’s Rock-Bottom Campaign
America Is About to See What Happens When Voters Turn to AI
AI agents are ready to shop. Some retailers are wary.
It’s Time to Take Starlink Away from Elon Musk
Can James Carville Please Just Be Quietly Wrong Somewhere Else?
Trump might be too demented to remember there is a future, but enablers shouldn’t forget
Vivek Ramaswamy Is Going After The Abusive Parent Vote
Meta Ordered to Pay Nearly 60% of Its First Half Profits for Deceiving Users on Privacy
Trump bulldozes a golf course and the rule of law
Abdul El-Sayed’s fighting style terrifies MAGA
High-Priced Chips in Warehouses: Nvidia’s Big Con?
Trump Again Uses ‘Shylock’ Term Considered Antisemitic Despite 2025 Backlash
Abdul El-Sayed on His Viral Takedown of MAGA Heckler
Todd Blanche Floats Chilling Likelihood of Trump Election Interference
At a Georgetown College Republicans event, member of Germany’s far-right party tells students the Holocaust is ‘used as a weapon’
How the Consulting Class Is Eating the Democratic Party
Hegseth Barred Trans Troops. Military Boards Are Rejecting Those Orders.
Poll: Low-information voters have turned hardest against Trump and the GOP
During a lengthy news conference on Friday, NASA provided a detailed overview of how it plans to return astronauts to the lunar surface as soon as 2028 as part of its Artemis Program.
Although much of the information behind these plans has been previously reported at Ars Technica and elsewhere, this marked the first time NASA has laid them out in detail and acknowledged some substantial changes in the architecture.
Most notably, for SpaceX's Starship vehicle, the revised plan calls for the Orion spacecraft to dock with the Starship lunar lander in high-Earth orbit before transiting to the Moon. And for Blue Origin, the mission architecture includes four launches of the New Glenn rocket, but no spacecraft-to-spacecraft refuelings. Additionally, the Blue Origin plans allows for the possibility of its Blue Moon lander rendezvousing with Orion in low-Lunar orbit.
From Jason Furman, it tracks economic indicators, mostly U.S. Here is the website. Subscribe here to briefings. Here is a thread on the site.
The post Econvitals appeared first on Marginal REVOLUTION.
Here’s the first part of my theory: cybercriminals are not the organized geniuses we implicitly imagine. Anyone building a criminal gang has to find candidates willing to forgo more stable opportunities in the formal economy. My modeling estimated that something like 720,000 people are involved in the online criminal economy, 90% of them in scam and fraud call-center type operations, some of them human-trafficked. Of the 76k or so actual hackers, the vast majority work for governments. Of the remaining few thousand criminal hackers, most work in ransomware. Some demographic estimates of these workforces are below.
Criminal organizations need to base themselves in middle and lower income countries, where they can pay less and hire people who have few formal-economy options. For scams and fraud, picture an illegal call center building in a small city in Nigeria. For ransomware gangs, picture kids working in the informal economy in Belarus. I think folks in the AI safety and cyber world sometimes imagine adversaries as their Waluigi twins, implicit MIT graduates; in fact, in cybercrime we’re dealing with a lower-skill demographic. The chart below estimates attacker wages relative to default economy wages…
Here is more from Joshua Saxe, very good throughoiut. There are bottlenecks on the down side too…
The post Why are cybersecurity losses not worse? appeared first on Marginal REVOLUTION.

Join us to explore how emerging technologies and commercial capabilities are transforming satellite operations
The post Nov. 5: Satellite Mission Management at the Edge appeared first on SpaceNews.
Links for you. Science:
Kennedy’s Vaccine Plan Could Cause Surge in Hepatitis B, Study Finds. Ending routine vaccination for hepatitis B at birth, as the health secretary has recommended, would increase the number of chronic infections by as much as 83 percent, a team of researchers reported.
The Fall of Scientific American
QIAGEN has announced an agreement to be acquired by EQT Private Equity through an all-cash public takeover offer at €46.50 per share.
Nearly All of the World’s Shallow Coral Reefs Are Now Critically Endangered
Measles is thought of as a childhood illness, but more Pa. adults are getting sick
Not Just Moms Who Put Unvaccinated Infants at Risk of Hepatitis B, Study Shows
Congress Needs to Fund Solutions to America’s Most Neglected Disease
Other:
The Hunting of Ilhan Omar
Bigotry Is A GOP Strategy And A GOP Goal. Democrats have trouble addressing the second.
Billionaire Republicans Are Vastly Outspending Democrats. Guess Who’s Winning.
Everything He Touches
Former Montgomery County Public Schools Student Alleges Antisemitic Harassment in a Federal Complaint
Schools should recognise antisemitism as distinct form of harm, review says (UK)
Apple Is Wall Street’s Favorite AI Haven as Spending Fears Hit
Abundance!
D.C. Expands Attendance Program to All Ward 7 and 8 Public High Schools
Trump supporters are ‘blackpilling’ themselves out of politics. Good.
As Affordability Concerns Persist, Could D.C. Reduce Parking and Traffic Fines?
Critical PHP web security flaws spark global alarm as Google, OpenAI and Amazon respond
Ilhan Omar Says She Can’t Continue to Live at Her D.C. Home Post-Raid
Hegseth wanted Eisenhower’s globe for his office. His staff broke it.
No Attack Is Too Vile for JD Vance. Slur for slur, the vice president bests his boss in ugliness.
The increasingly brazen alleged corruption within the Trump administration
State Asked Foreign Service Officers Up for Promotion Whether They Voted for Trump. Federal law strictly prohibits making civil service personnel decisions on the basis of political affiliation.
Trump Still Wants to Paint the Eisenhower Building White. Preservationists Are Still Fighting It.
Trump’s Vile Tirade About Sen. Elissa Slotkin Exposes Sleazy MAGA Scam
The Art of the Deal: Jared Kushner’s Hacked Phone Revealed His Secret Negotiations—Including More Than $700 Million in Transfers
AI Bots Are Accessing People’s Bank Accounts Unprompted
Everything Feels So Expensive. Here’s What’s Really Going On. (good description of the overall problem, but with flaws: e.g., “Congress added new work requirements for Medicaid and food assistance”–that was a Republican goal, not a Democratic one. The idea that Republicans, having been the problem, will now be the solution is laughable.)
You Can Believe Everything
The Unrelenting Nightmare of Applying to High School in New York City
FiftyPlusOne just caught a pollster faking data — and they copped to it
‘This Is Not a Drill’: Critical PHP Vulnerabilities Are Setting the Internet on Fire
ICE Says It Didn’t Hit a Biker With a Car. Video Raises Questions.
How Trump’s ‘Grand Conspiracy’ Investigation Failed to Become the New QAnon
We can’t save Hollywood without saving the broke waitresses
Trump is Destroying Americans’ Healthcare
Lots of people worked long and hard to try to make sure all Americans could vote. Today is the anniversary of just one of those efforts: the 1915 New York City Women’s March.
—
Notes:
You can find Liza Donnelly at her Substack: Seeing Things.
I was thinking something this morning, sitting inside a hotel room in Delaware.
There are local political figures I like and local political figures I dislike and local political figures I abhor. For example, Will O’Neill, head of the Orange County GOP, is a floating turd in a yellow bowl. Gracey Van Der Mark is 854 flavors of crazy. Pat Burns is a sad tress stump. Lisa Davis is naive and simple.
But … they’re also humans. Like, as objectionable as I find Davis, I have no doubt she’s a loving wife and mother who bakes apple pies for teachers. One can object to another person’s approach/directives/desires while also acknowledging they possess positive human traits and characteristics.
That being said …
By now I have watched the Vivek ad featuring Amy Acton’s mother myriad times. It is horrible and grotesque and beyond comprehension. You know your political opponent endured a childhood where she was raped by her stepfather, so (instead of expressing empathy) you dig up her long-estranged mother (a woman Acton has not spoken to in decades) to … bash her?
For real?
This will go down, inarguably, as one of the most misguided political moves in United States history. I suspect (knock on wood) it’s the October Surprise Vivek launched on himself, and a hopeful death knell to his stupid campaign.
But while everything about it is disturbing, here is what got me the most:
And …
I …
I mean …
I mean …
I …
Staggering.
Seriously, in a nation of 330 million people, how did this happen? I can’t even understand it. Everyone (literally everyone) knows rape is bad—except for the dude we elected president. Everyone (literally everyone) knows trauma is real—except for the dude we elected president. It is all a contest to him. All a competition to see who can reach the bottom in the fastest time. I don’t know how one winds up this repugnant, but I also don’t know how someone this repugnant winds up president of the United States.
Despite Trump’s statement yesterday that billionaire Elon Musk had removed the restrictions from Starlink and Starshield that are crippling Ukraine’s ability to protect itself from Russia, Ukraine president Volodymyr Zelensky said today the restrictions continue.
An article published tonight by Anton Troianovski and Eric Lipton in the New York Times sheds a spotlight on the oil deals that lie behind Trump’s rush to normalize relations with Russia at Ukraine’s expense, as well as repeated statements from him and his cronies that they want to open up business transactions with Russia as incentives for Russia’s president Vladimir Putin to stop his war on Ukraine—an argument that, on its face, never made sense.
Troianovski and Lipton report that a project designed to liquefy natural gas in Alaska and export it would not only use Russian technology but also be funded with money from a Russian company close to Putin that is currently under U.S. sanctions. That company, Novatek, told the reporters that it is planning to take “minority shareholder” status in the Polar LNG project, a move the reporters call “a striking effort by the Russian energy giant to seek ownership of American gas production.”
U.S. sanctions against Novatek mean Polar LNG would need special permission from the Treasury Department to use Novatek’s equipment. The Graham Act sanctions bill Congress recently passed specifically targets Novatek because of its ties to Putin—a likely reason that Trump just waived the new sanctions just two days before they were to go into effect.
Joel Riddle, the chief executive officer of the company, Polar LNG, resigned when he learned that the funding came not from the United Arab Emirates, as he had been told, but from Russia. “It’s not only unlawful, but it’s not in the U.S. interest to have Russian technology controlling the commercialization of Arctic gas in the North Slope,” Riddle told the New York Times reporters. At least two other Polar LNG executives have also resigned, citing their concerns about the Russian financing.
Talks about gas in Alaska were joined with talks about the sale of parts of Russian energy giant Lukoil to the U.S. government and investors, some of whom are tied to Trump’s son-in-law Jared Kushner and special envoy—and business partner—Steve Witkoff. Also involved in the Alaska project is Gentry Beach, who was a college friend of Donald Trump Jr.
It seems that Trump, Putin, and their allies in the administration are trying to replace the post–World War II international order and carve the world up into the system of spheres of influence they want as quickly as possible before the midterms. Central to those systems are private deals that enrich Trump and his cronies.
On October 20, Cate Brown, Aaron C. Davis, and Sebastian Rotella of ProPublica reported that the deal to capture Venezuela’s oil sets up a strategic partnership between the U.S. and a Venezuelan oligarch, Alejandro Betancourt, who has been accused of money laundering. A deal signed by Secretary of Defense Pete Hegseth and Secretary of State Marco Rubio calls for the U.S. to take a 35% stake in Betancourt’s firm, North American Blue Energy Partners, by buying shares in a parent company that’s registered in Barbados.
A source told the ProPublica reporters that the people making the deal wanted to work with Betancourt because a publicly traded company would have to report to shareholders. They wanted flexibility and secrecy. The registration of the parent company in Barbados enables the identities of its investors, who could make fortunes from the deal, to remain hidden.
In exchange for the investment, the U.S. can buy up to 20% of the oil produced at a steep discount, but that cost doesn’t factor in moving the oil, which is so thick it has to be blended with other products to flow through pipes. Betancourt’s company currently produces only as much oil in one year as the U.S. uses in three days.
The U.S. insists the deal is a good one for both countries, but it appears to violate Venezuelan law, which prohibits oil concessions longer than 25 years, and to lock in U.S. control. The deal creates a powerful seven-member board to oversee the venture for 15 years. A majority of the board members must be U.S. citizens. The U.S. government can appoint a single, nonvoting member of the board, and it can oust Betancourt only with a supermajority of five votes from the board. Any disputes over the company must be resolved not in Venezuela, but in Texas.
The administration is also suggesting it will take steps to control Cuba. At 4:35 today, Secretary of State Rubio posted on social media: “To those who seek to create positive change in Cuba—now is the time. The disappointment of failed promises, corruption, and the privileged lives of only a few; seize this opportunity to create the change you desire through a discrete [sic] partnership with the CIA.”
—
Notes:
https://www.propublica.org/article/trump-venezuela-oil-agreement-terms
X:
SecRubio/status/2113731069518434519
Bluesky:
Joe Weisenthal: “The Red Line is the day that Anthropic introduced Mythos”
The post Cybersecurity ETF appeared first on Marginal REVOLUTION.
CHI DECIDE? VITA, LIBERTÀ E CONFINI MORALI
WHO GETS TO CHOOSE? LIFE, FREEDOM, AND MORAL BOUNDARIES
sabato 24 ottobre
17:00 - 18:00
Centro Città
Collegio Carlo Alberto | Auditorium
Piazza Vincenzo Arbarello, 8, Torino
With
MARCO CAPPATO, ALVIN ROTH
Moderates
CATERINA SOFFICI
Live translation available
Quando le scelte riguardano il corpo, la vita e la morte, dove finisce la libertà individuale e dove deve iniziare la regolazione pubblica? Cosa dovrebbero fare le società quando le convinzioni morali divergono profondamente? Come possono le istituzioni proteggere la libertà di scelta senza lasciare indifesi i più vulnerabili?
When choices involve the body, life, and death, where should individual freedom end and public regulation begin? What should societies do when moral convictions sharply diverge? How can institutions protect freedom of choice without leaving the most vulnerable unprotected?
Here is the audio, video, and transcript. Here is one excerpt:
Cowen: Talk me out of this worry: So we agree science is an ecosystem, and there’s always a temptation to want to fund the most dynamic, most productive parts of the ecosystem. And right now, that would probably be A.I.
But if you need the whole ecosystem to be working well, arguably you should be funding, at the margin, the less productive parts, which need the aid. That will sometimes be universities, but there’s plenty of other inefficient parts of our ecosystem.
So is this plan not putting more resources into the parts that are working well, but we get stuck with bottlenecks if the parts that are not working well end up with fewer resources?
Kratsios: Well, luckily, we’re not investing all of our money for the federal government into S.I. for science. It’s a portfolio approach. And obviously one ——
Cowen: But it’s a net shift toward artificial intelligence, right?
Kratsios: Well, I would argue — and I think this is a very important distinction — it’s not investing in superintelligence, it’s investing in superintelligence for science.
So the question is, I think a lot of people argue: Oh, why would the federal government want to invest more in superintelligence when billions, if not trillions, of dollars are being invested in the private sector into superintelligence? And I would agree with that statement. We shouldn’t be doing that.
The government isn’t funding how to create a next frontier model. That’s something that our great American companies are working on.
But applying those models to scientific discovery is still in its early stages. And as you know, if you think about the trend or the path by which we’ve gotten to this place with L.L.M.s — we started first with being able, essentially, to scrape the whole corpus of the internet, to use that to train a large language model.
The next chapter of that was around coding, where the model builders realized: Oh, we have really good coding data, and we can actually train these models to be good at coding. So then we had this rise of Anthropic and OpenAI Codex and all this stuff.
And I think, to me, the next chapter is around science, and the data that you need to train these large language models for science is still one that we’re working on a lot. And we were very proud to announce 190 federal data sets being made public in order to help train these science models.
But ultimately, you’re going to be applying this superintelligence to everything from material science to chemistry to math to physics, and we have to be in a position to actually leverage that.
Definitely interesting throughout, pretty much entirely we are discussing the Trump administration science plan, authored by Michael.
The post I guest host an NYT podcast with Michael Kratsios, Trump science advisor appeared first on Marginal REVOLUTION.
I’m an Australian father of four, living in the US. Something of a corner case. Nevertheless, getting my kids Australian citizenship by descent, and then Australian passports so we can fly home legally, has kicked off a carnival of errors with a very dark side.
Australia is generally thought of as a developed western liberal country with relatively high state capacity. And I have generally found that at least state government services, now administered through centralized offices, have become more efficient over time.
Passport applications for children living overseas, however, remain a time machine with a difficult security overhang.
Australian citizens can’t get Australian visas, so in practice an Australian has to enter Australia on an Australian passport. Okay, fair enough. So how does one get a passport for a foreign-born Australian citizen in this year of our lord 2026?
This seems like quite a process!
Why?
Babies are relatively fungible, in that they can’t talk and are easily transported. Millions of people would like to move to Australia, and for most of them there is essentially no legal way to do this. So Australia, being a relatively small yet well-developed country with its own spin on sovereign functions, is under unusually high pressure by sophisticated fraudulent and/or criminal actors attempting to obtain Australian travel credentials illicitly. Trafficking is also a thing. I don’t really want to elaborate on this, but as a parent I am prepared to spend unreasonable resources to protect children – but I don’t believe the current process actually does this.
So I can understand why Home Affairs and DFAT would develop a laborious, high friction process that is intended to make it difficult to defraud the commonwealth and harm children.
The purpose of this post is to make explicit that what passed for a state-of-the-art identity verification process in ~1980 no longer passes muster and that new technology and standards provide simultaneously a far lower cost (encouraging lawful compliance) and far higher reliability (quelling unlawful activity) method for establishing who can travel to Australia and under what conditions.
Although I successfully navigated this process earlier this year for my newborn, I decided to raise concerns with the Department of Home Affairs, which owns Form 1195. What follows is my correspondence on this matter with the relevant authority in Australia, following Patrick McKenzie’s (patio11) standards of professional communication.
Casey Handmer
<redacted>, United States of America
15 May 2026
Mr Damien Kilner
First Assistant Secretary
Citizenship, Humanitarian, Family Visa Programs & Support
Department of Home Affairs
PO Box 25
Belconnen ACT 2616
Australia
Re: Form 1195 (Identity Declaration) — proposed modernisation, with cost-benefit analysis
Dear Mr Kilner,
I am writing this in the hope it reaches someone who has been waiting for an outside party to give them air cover to ship the obvious change. I have just completed Form 1195 for the fourth time, on this occasion for an infant, and the experience prompted the observations below. They are offered constructively. The Department employs thoughtful professionals; the form does not reflect their best work, and I suspect most of them know this.
What the form actually does, mechanically.
Form 1195 requires an applicant to (1) complete a PDF, (2) print it, (3) obtain a passport-sized chemical photograph adhering to a very particular set of requirements, (4) physically deliver both to a member of a prescribed occupation list, (5) have that person glue the photo to page 4 and sign across its front, (6) sign page 3 themselves, (7) scan the assembled document, and (8) upload the scan plus a separate digital copy of the same photograph through ImmiAccount. The instructions on pages 1–2 still describe a paperclip-and-sign-the-back workflow superseded by the current glue-and-sign-the-front workflow on pages 3–4. The form is, internally, two forms — one from before approximately 2022, one from after — laminated together. An applicant must read both and reconcile them at runtime.
What the form is supposed to do.
Bind an applicant’s identity to a photograph via attestation by a trustworthy third party who can be independently verified.
What the form actually achieves toward that goal.
Approximately nothing, in the current workflow. The signature-across-photo ritual is a 1970s tamper-evidence control designed for a document that would be physically inspected. Once scanned, the property it provides — that the photo cannot be substituted without destroying the signature — vanishes. Any reasonably motivated bad actor can composite a signature across an arbitrary photograph in any image editor in under two minutes. The Department receives a PDF; it has no way to distinguish a PDF assembled from a legitimately-signed physical artefact from one assembled digitally from any photograph the applicant chose.
The “qualified occupation” list (39 professions, ranging from pharmacists to veterinary surgeons to permanent Australian Postal Corporation employees with five years of service) provides somewhat more value, but only if downstream verification occurs. To the best of my knowledge, the Department does not call nominated declarants to verify the declaration in any but a vanishing fraction of cases. The signal is therefore the signatory’s name and license number, neither of which is cryptographically bound to anything.
Estimated cost of the status quo.
Australia processes on the order of 70,000 citizenship-by-descent and evidence-of-citizenship applications per year. Each requires Form 1195. Conservatively:
- Applicant friction: 2–4 hours per application (locating eligible signatory, obtaining compliant photo, coordinating in-person meeting, scanning, uploading, frequently re-doing one or more steps after rejection). At a notional A$50/hour opportunity cost: A$100–200 per application, or A$7M–14M per year in deadweight loss to applicants.
- Photo cost: ~A$100 per applicant; ~A$7M/year aggregate.
- Signatory time: ~15 minutes per declaration by a working professional; ~17,500 professional-hours/year, or approximately A$1.5M in donated labour from doctors, lawyers, pharmacists, and police officers performing what is effectively an unverified ritual.
- Departmental processing: time spent by case officers reviewing 1195s, requesting resubmissions for the predictable cluster of avoidable errors (declarant occupation invalid, signature in wrong location, photo non-compliant, date inconsistencies). Difficult to estimate externally, but plausibly A$5–10M/year in officer time.
Total deadweight cost to Australian society of running Form 1195 in its current form: conservatively A$15–25M per year.
Estimated fraud prevented.
Difficult to know precisely; the Department has the data, I do not. But two indicators are telling. First, Section 50 prosecutions for false statements on citizenship applications run at a handful per year nationally, against a base rate that is almost certainly orders of magnitude higher. Second, the controls are, as described above, cryptographically meaningless in the digital workflow. The reasonable prior is that Form 1195 in its current form prevents low-effort fraud (a teenager attempting to forge a citizenship claim with no resources) and prevents essentially no professionalised fraud (the actor category one actually cares about). The friction is therefore distributionally regressive: borne entirely by legitimate applicants, evaded trivially by sophisticated bad actors.
The obvious replacement.
Australia operates myID (formerly myGovID), an LOA3 identity-proofed credential issued by the ATO and accepted across Commonwealth services. The Department of Home Affairs is in the process of integrating with the broader Digital ID ecosystem under the Digital ID Act 2024. The infrastructure to do this correctly exists. It is being used for other things. It is not being used for Form 1195.
A modernised flow:
- Applicant authenticates to ImmiAccount via myID (Strong identity proofing).
- Applicant uploads a photograph taken in-session via the ImmiAccount mobile app, with liveness detection and EXIF preservation. (Adopt the technical standard already used by the Australian Passport Office for online renewals.)
- Applicant nominates an Australian-citizen (or suitably available alternative) attestor. Attestor receives an email, authenticates via their own myID, views the photograph, and digitally attests with a cryptographic signature bound to (applicant identity, photograph hash, attestation timestamp, attestor identity).
- The signed attestation is stored as a verifiable credential against the citizenship application.
No glue. No printing. No scanning. No 39-occupation list, because the constraint that the attestor be identity-proofed is now enforced by the credential rather than by self-declaration. No reconciliation of contradictory instructions across pages. No declarant date-ordering ambiguity. No photograph compliance rejections, because compliance is checked at capture.
Estimated cost to build.
Most components exist. The ImmiAccount platform exists, myID exists, in-app photo capture with liveness exists in the Passport Office’s tech stack, verifiable credentials infrastructure is being built out under the Digital ID Act. The work is integration, not invention. A realistic estimate: 6–12 months of engineering work at perhaps A$3–5M all-in, including the policy work to authorise digital attestation under the Australian Citizenship Act 2007. This process also exists as a commercial product provided by O(100) internet identity services, whose typical customer set includes banks verifying KYC/AML as part of their sign up flow, who face a similar depredatory attempted fraud pattern, high consequences of failure, and a customer base sensitive to unnecessary friction.
Payback period: under six months on deadweight loss alone. Fraud reduction is upside.
Anticipated objections.
“The Act requires a physical signature.” It does not. Section 50 prescribes consequences for false statements; it does not prescribe the medium. Numerous Commonwealth instruments accept digital signatures under the Electronic Transactions Act 1999. The constraint is administrative practice, not statute.
“Some applicants don’t have myID.” True today; the proportion is falling, and the modernised flow can preserve the legacy 1195 as a fallback for the narrow set of cases (typically: applicants outside Australia in jurisdictions where myID enrolment is impractical). The mistake is making the 99% case bear the cost of the 1% case.
“Cryptographic attestation will not feel like real verification to case officers.” This is the most honest objection. The answer is that the current feeling of verification is illusory; what looks like a signed photograph is a JPEG that was once signed and is now indistinguishable from a JPEG that was not. The modernised flow trades the feeling of verification for the fact of it.
“This is not on the work program.” Most of the value the Department could create in the next twelve months is not on the work program. Putting it there is the request.
Closing.
The Department’s citizenship-by-descent pathway is, mechanically, an important part of how Australia maintains its diaspora ties. It runs on a form that nobody who looks at it carefully can defend on its merits. The infrastructure to replace it exists. The legal authority to replace it exists. The professionals to design the replacement are already on staff. What is missing is institutional will to deprecate.
I would be glad to make myself available — at no cost, and not in any commercial capacity — to assist in any way that would be useful to officers undertaking this work. This includes technical review of design proposals, user-testing the replacement flow, or simply lending an outside voice to internal advocates.
Yours sincerely,
Casey Handmer
Personal details redacted
cc:
Ms Stephanie Foster PSM, Secretary, Department of Home Affairs, PO Box 25, Belconnen ACT 2616
Ms Clare Sharp PSM, Head of Immigration, Department of Home Affairs, PO Box 25, Belconnen ACT 2616
Mr Michael Peterer, A/g Assistant Secretary, Citizenship & Humanitarian Policy, Department of Home Affairs, PO Box 25, Belconnen ACT 2616
Ms Jennifer Thwaites, A/g Assistant Secretary, Visa, Citizenship & Digital Systems, Department of Home Affairs, PO Box 25, Belconnen ACT 2616
The Hon Julian Hill MP, Assistant Minister for Citizenship, Customs and Multicultural Affairs, PO Box 6022, House of Representatives, Parliament House, Canberra ACT 2600
Four and a half months later, the Department replied. In short: thanks, noted, there is no funding available to change the form, and it may come up in a future review.

I obviously cannot comment on the internal costs of running Australia’s online and physical document handling system, but it’s evidently not nothing. Equally evidently, it has remained untouched by the same process improvement effort that has effectively reformed, for example, licensing for drivers at the state level. The result is a system that bleeds cash, bleeds good will, actively deters legitimate diaspora from retaining ties with the old country while doing nothing to stop anyone sophisticated enough to ask an AI to edit a JPEG. The status quo cannot persist indefinitely. It is a foregone conclusion that Home Affairs will have to update its processes sooner rather than later. Their answer: no funding. By my estimate the fix costs A$3–5M, once, and saves Australians A$6–30M every year, depending on volume. Payback inside a year. Stop complaining about budgeting and find the money!
Unbelievably, I’m now going through this entire process all over again as my six year old, born during COVID, was granted Australian citizenship by descent and an Australian passport (on the strength of the letter informing us of a positive determination on citizenship, with a temporary document number), but her certificate of citizenship was never issued (due to COVID WFH stuff, I think), making it impossible to renew her passport. There is, of course, a bureaucratic procedure to issue the certificate, which is even more clunky, onerous, and ultimately ineffective than just applying for a new passport, rather than renewing. For example, the letter I received at my address informing me that my child had been issued citizenship and I could request a certificate was not sufficient evidence of my home address, which was required in order to request the certificate. The online application flow to receive the certificate had more requirements than the citizenship application or the passport application.
Even with this certificate in hand, I have to once again go through the Form 1195 charade, hassle our pediatrician, drive across the city to lodge documents, to renew a passport. She’s a dual citizen, but her US passport is no use here: Australia won’t issue a visa to an Australian citizen, so the only lawful way for her to enter Australia is on an Australian passport. Which, by golly, they make insanely hard to get!
I might add here that none of the airlines that operate on the LA-Sydney route (Delta, United, Qantas…) are set up to handle children with dual citizenships so literally every time we travel to Australia we get to sit in a line for hours with desperate children while some haggard customer support representative attempts to run the SOP on this evidently vanishingly rare corner case, which involves updating a database that links the two passports together. Given that I’m about to renew the six year old’s Australian passport, I will shortly get to do this for the sixth or seventh time.
What I’m trying to say is this. It’s 2026. We have reusable rockets, flying cars, and machine superintelligence. It should not be this hard for an Australian citizen to take a commercial flight to Australia.
To end this post on a happy note (after all, children are great!) let us speculate about what a radically excellent product would look like in this space.
The Australian government already keeps various lists of the diaspora. There are tens of thousands of Australians in the Bay Area alone. Not all of them work for Anthropic, though you could be forgiven for thinking so. For example, I get helpful letters from various Australian government agencies about driver’s licenses, elections, student loans, etc. By all means, allow Australians overseas to opt out, but it’s a two line cron job to discover if your foreign Australian has had a baby/future potential taxpayer.
Maybe I’ll go on breeding for long enough that when my Nth baby arrives, I get a card in the mail from Home Affairs saying “Congratulations on your new baby! When you have a moment, scan this QR code to upload the birth certificate and send us a photo. Since you’ve been in our database since birth, we know who you are and the baby’s passport plus a stuffed koala is on the way. Enjoy this special time!”

Halloween is right around the corner, and it sure seems like monsters are running the country. This week I’m joined once again by Derick Dirmaier, Hunter Walker and Nicole Lafond to discuss what’s scaring us about the world right now. We’ll also catch up on the week’s headlines, and we’ll name the Person of the Week.

The New Republic has a new piece out by Adam Bonica and Jake Grumbach called How the Consulting Class is Eating the Democratic Party. It’s a very interesting piece and I recommend it to you. The following is a series of comments, responses, thoughts, not necessarily in any particular order. That’s in part because this is a big article and in a several different articles bundled into one, some parts of which I agree with more than others.
The basic gist is that you have a Democratic consulting industry based on profit maximization which is burning through Democratic Party patience, commitment, money rather than cultivating them for the long haul. That expresses itself through high-pressure, doomy fundraising asks and by SuperPACs, fundraising vendors, consultants, etc. who spend a huge amount of fundraising dollars on fundraising itself. Here’s one key passage from the piece …
Even averaged across all itemized donations, including the wealthy mega-donors writing checks, Democratic campaigns now spend 45 cents of every dollar on fundraising costs, a fourfold increase since 2004. Today’s campaigns like to imagine themselves as efficient machines, remade by big data and microtargeting. In reality, they are less efficient and more extractive than at any point in modern history. Most charity watchdogs will not certify an organization that spends more than 35 percent of its revenue on fundraising.
That delta between 45% and 35% is key and important and I want to come back to it. Note that when they talk about mega donors that means that the percentage is probably substantially higher when we talk about the email solicitations to ordinary people we’re really talking about.
Bonica’s and Grumbach’s global argument is that Democratic fundraising goes through two huge extractive processes. First is the fundraising one we were just describing and next is that consultant advertising one. The key there is that consultants get a cut of the ad budgets they run and thus a strong and direct incentive to spend a lot on ads. Here’s another key passage.
This media consulting structure comes from a bygone era of commercial advertising. Under the old-school commission model, a company like Coca-Cola hired an ad agency, and the agency would take home a percentage of Coca-Cola’s ad spending as a commission. This created an obvious conflict of interest: The ad agency had an incentive to encourage more ad spending, regardless of its effectiveness. For this reason, commercial advertisers abandoned the commission model decades ago in favor of flat fees and retainers. Where commissions still exist in commercial advertising, they’re tied to the impact of direct ad exposure on “conversions”—but in politics, no one can prove that an ad moved specific votes.
But political campaign ad buys never modernized. Consulting firm income rises with spending, not with success. A consultant who places $20 million in ineffective ads earns twice as much as one who places $10 million in highly effective ads. The incentive is to maximize spending, not win elections.
These are two important, global points and they point to the need for some pretty straightforward reform. But before getting to that I want to note a few points.
Bonica and Grumbach repeatedly focus on the timeframe of the last 20 years, using the benchmarks of 2004 and 2006. This jumped out to me because those years are more or less the origin points of the democratization of political giving. And though I had no direct involvement in it I was about as adjacent to it as you could be. Some of its beginnings started in the nascent advertising market on political junkie sites like TPM in 2003 and 2004. At the time it was a revelation, a veritable explosion, that campaigns — often independent ones, ones operating outside the traditional party ecosystem or even averse to it — could go directly to individuals giving small amounts of money. It was genuinely revolutionary.
Given the centrality today of fundraising emails, Act-Blue, it’s hard to remember that 25 years ago political contributions by ordinary people was all but unknown. It was always possible in theory to send a $10 or $50 or $100 check to a campaign. But in practice that was not at all how campaigns were funded. If you were really hyped up about politics in 1998 or 2002 and you wanted to put your dollars to work you mostly wouldn’t know where to send it. Campaigns were funded by a giving class of people who went to fundraisers of various sorts and people who gave in sufficient sums that they could be called and solicited. Some of this was done by mail, especially on the right. There was a whole universe of direct mail politics built up by innovators like Richard Viguerie. But that tended to be for political groups more than campaigns, and it was dominated by the right.
I want to be clear that none of this history undermines the authors’ basic arguments. If anything it strengths them. But I think it’s key to understand that this period of roughly 20 years in which they chart the rapid increase in the cost of fundraising and thus the percentage of fundraising dollars that go — not to campaigns but back into fundraising — basically lines up precisely with this era of the democratization of campaign funding, which is mostly tied to the Internet.
Another related point. The authors talk about burning out Democratic givers through the constant harassment we all know about. And yet Democratic small donor giving has become a more and more critical part of Democratic campaigns as Republicans have become increasingly and now overwhelmingly reliant on billionaires. And I have yet to see any real evidence that that source is being burned out and tapped out. We are all exhausted, harassed and hate the mails. Fundraising email rhetoric has become, essentially, self-consciously parodic and self-awarely stupid. I couldn’t agree with you more. And I think it’s a problem. But again, it keeps happening because it works. I don’t think there’s any evidence to date that that has changed.
Once again, I don’t think it defeats Bonica’s and Grumbach’s basic argument. But as they do so well in most of their analysis, I think we should maintain the distinction between what we feel and what we can quantify.
All of this builds to this chart from the authors which, as you can see, argues that of a $100 contribution by text or email solicitation $65 goes to fundraising fees, another $8 goes to various consultant cuts and then about $27 goes to the actual campaign, basically split between the costs of running an actual campaign and advertising.

As the author’s note, this is the most expensive way to raise money. It’s much less if you go to a campaign website yourself and give directly. But obviously a huge amount of donations happen this way and I would think an even larger amount start this way, like, maybe you first give to a specific campaign from this sort of solicitation but then later you give directly, etc.
There is a whole portion of the piece that argues in essence that there’s no evidence that political advertising works, especially in general elections as opposed to primary elections. I don’t find this convincing. I think it’s much more unknowable than that. There are so many different confounding factors, and it is so inherently difficult to tie ads to the fundamental goal — vote choice — that you simply can’t answer the question in any meaningful or definitive way.
But I don’t think we need to. My own background, both as someone close to political work for years and earlier as an historian, tells me that there’s always a seamy underbelly of the world of political campaigns with a decent amount of charlatan-ing, profiteering and just things that are chaotic and weird. So I come at this from a sort of different perspective. But Bonica’s and Grumbach’s piece is a very good and helpful argument for at least two basic structural reforms that would change this picture significantly for the better. I don’t think they can or should be done by law. But there are big enough players in the Democratic ecosystem that they could be done by key players using what amounts to their market power.
The first goes back to that point about what charity watchdogs consider an acceptable amount of fundraising dollars for charities to pump back into fundraising. Political giving isn’t exactly like charitable giving. There are significantly different dynamics. So I want to hold open the possibility that the 35% threshold for some reason shouldn’t apply in political giving. I see no reason why it shouldn’t. I’m just open to hearing arguments. But I know from years of our own journalism that there are outfits that are just churn operations, basically giving almost nothing to actual candidates and mostly just funding their own churn-operations. Let’s assume the threshold should be 35%. Whether it might need to be a bit lower or higher isn’t the point. The dominant players in the space could create an entity that would monitor this and grade organizations akin to Guidestar, which could say whether players in the ecosystem are legitimate or not. By the dominant players I mean the DNC, DCCC, DSCC. Presidential campaigns could be pressed to support the number. You have your big SuperPACs but those tend to come and go. In any case, it’s doable. And it should be a priority to get it done.
It wouldn’t instantly work its way down to retirees who are vulnerable to hyper-aggressive pitches. But the brand and certification would take on a lot of weight. And the scammy operations need to use email vendors, payment processors, data list vendors, etc. and, over time, the legit operations could refuse to work with payment processors or email vendors who don’t enforce. It’s complicated but doable.
The other is that the same kind of stakeholder power and shaming needs to be used to change the advertising placement fee structure. You have a basic series of disagreements, that overlap, if imperfectly with ideological and factional party divisions, about the relative value of advertising, organizing and field operations. Like a lot of things I think the answer to which is more valuable and important is ‘it depends.’ There’s certainly a lot of reason to think that the focus on paid advertising is too high, especially over the medium and longer terms. But the best way to deal with this is to change what is certainly the perverse incentive structure, which gives advisors and outside consultants, who especially small campaigns lean on so heavily for advice, a clear financial incentive to privilege ad spending.
Since so much of the industry is based on this fee structure, there are obviously massive forces of inertial resistance against change. But reform always faces those kinds of entrenched interests. And the ultimate stakeholders are Democratic voters and those who fund the campaigns. Change is doable in just the way I described above — getting the stakeholders with the most clout and biggest budgets to insist on it. There’s no better time than in a period of internal tumult, low trust, generational turnover and reform to insist on it.
Changing the financial incentives has the key benefit of allowing us to be agnostic about just how much a given campaign should be spending on ads versus other things — something I don’t think we have much ability to really know from the outside.
It’s a good and important piece. Regardless of one’s particular points of agreement or disagreement, my take is that it points to a handful of relatively simple in concept, if not execution, reforms that most Democratic stakeholders, from big committees to individual small donors and voters, should be able to get behind.
Nilay Patel and Allison Johnson (also: 26-minute video review on YouTube):
This means almost every time you open the phone you instinctively rotate it, and while it will work no matter how it’s rotated, it’s better to rotate it counterclockwise so the cameras are on top and the volume buttons are on the top left. Over our week of testing, this started feeling more natural, but it’s exactly the opposite of what you’d initially expect. It’s especially odd in Apple’s bumper case, which has a large notch to expose the Touch ID sensor and camera control, and it looks for all the world like it belongs at the bottom.
You might think this is a little thing, but it’s strange to find yourself slightly unsure of how to hold a smartphone. A nontrivial part of the Duo experience is just reorienting yourself to where the volume buttons are as you flip the thing around. When closed, they’re on top of the phone, but if you rotate the Duo clockwise, they end up on the bottom right, and it’s the top button that turns the volume down because they don’t change orientation with the display. There’s a buried setting in iOS that makes the volume buttons reorient themselves as you turn the Duo around; Apple needs to set it so it works right by default.
Completely agree with them on this — it seems inexplicable that with default settings, while holding the open Duo vertically, if the volume buttons are on the right, you press the up button to lower the volume and down button to raise it.
One other thing to get used to is simply unlocking the phone. Touch ID is integrated into the wake button on the side of the phone. There’s no Face ID at all, and it might take a minute to remember that when you stare at your phone for a beat and wonder why your notifications aren’t unfurling. Ask us how we know. But a week is long enough to get used to Touch ID life again, and it’s mostly painless once you remember you’re supposed to be using it.
Completely disagree with them on this — unless you wear an Apple Watch all day every day.
Re: the cameras, they make this interesting aside:
(It would be cool if you could switch the image preview to the other panel to use it halfway open like a waist-level viewfinder, but you can’t.)
This is a great opportunity for third-party camera apps. Imagine using the Duo in the L-shaped laptop pose, holding it at waist level, looking down — like a Hasselblad 500.
Overall Patel and Johnson are fair and astute, but far more positive about the iPhone Duo than me or Joanna Stern. Don’t get me started on The Verge’s 10-point ratings scale, but they scored the Duo a 7/10, and only gave last month’s iPhone 18 Pro an 8/10. Based on this description of their scale, I’d give the 18 Pro a 10/10 (“best of the best”) and the Duo a 4/10 (“mediocre — has multiple outstanding issues”).
Joanna Stern’s video review packs a ton into 16 minutes. She commissioned a custom robot to fold/unfold the thing over 32,000 times in a week, to see if it loosened the hinge. (I won’t spoil the answer.) She took it on a yacht on the Hudson. She took it to a dark bar to test the cameras. And she really, really missed Face ID. I don’t know how she makes these videos in just a week, along with all the actual testing. So good.
We rank our complaints (and praise) in different order, but overall her take jibes with mine on every single point. You can read a version of her review, too, if you’re a subscriber to The New Things, which you should be.
Following my morning post about the Democratic political contribution infrastructure, I had a number of TPM Readers write in saying, in so many words, No! You’re wrong. People are totally burnt out about the annoying emails. I want to point out that I said the same thing, how abusive and stupid and annoying the avalanche of emails is. What I noted is a sort of admission against interest, which is that the haul from online small donor giving keeps rising. So at least at the aggregate level, effective burnout, actually seeing contributions decline, is not something we’re seeing. It may be around the corner. And we can and should do better. But on this acid test, the money keeps rolling in. And that’s clearly a big reason why it continues.
In any case, the reflexive and sometimes vituperative responses make the larger point: people hate these emails! We all know this and experience it. It’s almost a core experience of being a Democrat in early 21st century. In a way it’s built into the architecture of the internet itself. Even though sending emails and texts costs money. The effective cost-per-blast is still extraordinarily low. In a way it’s an analog to the low barriers to entry in digital publishing.
My personal experience of this is kind of unique. I constantly have to unsubscribe from things because people share my emails a lot. But I also make no political contributions. (I’ve made two contributions in the last 25 years — one to the DNC about 20 years ago and a second in 2025 to a candidate for a county council. I made an exception because it seemed so distant from the broader political conversation.) So I’m sort of a bystander to the process rather than a participant. But I’m probably inundated by the emails as much as anyone because of the mailing lists I end up on.
I get it. It’s not only annoying. It reaches a kind of predatory self-parody.
The Indian CA eMudhra Limited has eight TLS certificates with laughably weak private keys:
The compromised eMudhra keys were defective at a level that’s challenging the imagination of many of the engineers studying the incident. A normal size for a NIST P-384 elliptic curve cryptography private key contains roughly 384 bits of entropy, a size allowing almost 2384, or a number with 116 digits, different possibilities. The private key sizes of the compromised keys ranged from 3 to 8 bits. Astonishingly, the private keys were 4, 56, 66, 115, 155, 156, 230, 237.
“That is extremely in the ‘this should not be possible’ category,” Valdorda said. “Maybe some horribly dangerous key generation interface has a ‘size’ parameter and they set it to 1 by mistake???”
Ben Cartwright-Cox, director of BGP.tools, said: “My guess is that it’s example code that accidentally leaked to production, but hard to know. But it’s bonkers that no one noticed.”
At this early stage, the most immediate threat appears to be for those using VPNs, especially in countries with governments likely to maliciously intercept traffic. There are likely many other cases for concern. End users largely have no recourse other than to hold off using many non-browser forms of TLS communication until they receive assurances updates are in place.
The whole certificate regime has long been a mess:
The incident is the latest to expose a fatal flaw in the TLS regimen. It’s only as strong as its weakest link, which in this case was eMudhra. Fortunately, transparency logs account for much of that failure, but this measure requires parties to actively monitor massive feeds and works only after unauthorized certificates have been issued. eMudhra representatives weren’t immediately available to answer questions.
One caveat: exploiting compromised certificates requires an active adversary-in-the-middle attack, meaning the attacker must act as a proxy between two TLS parties and receive encrypted traffic, decrypt it, reencrypt it, and send it to the other party. Such capabilities, in some cases, are usually limited to only the most well-resourced attackers. People with control of a local networkat a coffee shop, university, or other organizationface much less of a challenge.
Cleanup of this is going to be another mess—and it’s right on top of the PHP vulnerabilities.
This is the first half of the last part (I, II IIIa, IIIb) of our series looking at the vision of history advanced by Hearts of Iron IV, Paradox Interactive’s World War II grand strategy game and one of the most popular strategy games on the market today.
In the last part (split over two posts), we discussed how HoI4 models domestic politics and ideology. In both cases, game design considers – in particular the desire to streamline domestic politics to highlight the military aspects of the game and the desire to simply avoid the topic of crimes against humanity altogether – congealed to create a game that fails to accurately represent the history of the period and worse yet errs in a consistent direction. On the one hand, the simplified political model, combined by a game design ‘need’ to make the Axis powers ahistorically strong, leads to a political system that values state power, is unconcerned with the role of regular people and in which authoritarian government forms offer the player more freedom of decision without any drawbacks. Meanwhile the game actively avoids discussion of any of the real human costs of those ideologies, unintentionally producing a game that functions as a ‘clean Wehrmacht myth’ simulator.
In both cases then, the game – unintentionally, but forcefully – reproduces World War II as authoritarians would like to imagine it, rather than as it actually was, doing some violence to the historical record in a way that is also frankly irresponsible in the present moment as well. To be clear, in these sorts of questions, I believe the truth is an absolute defense – history is often unpleasant to modern eyes (and past ones too) – but this depiction is not accurate.
Now, as the series comes to a close we turn to Hearts of Iron IV‘s industrial model and strategic ends, the former this week and the latter next week. It may seem strange to group these two topics together, but the strategic ends of the aggressor nations were fundamentally rooted in economic objectives. To put it in the classic formulation, World War II was a war for resources. And while the Allies fought to preserve the status quo, rather than obtain new resources, the nautre of their post-war competition, between the western Allies (soon to be NATO) and the Soviet Union, was also fundamentally economic with one of the core ideological bones of contention being whose economic system could better provide prosperity in a post-war world.
Unfortunately, in this realm as well, Hearts of Iron IV stumbles in much the same way it did in the last part: the effort to streamline everything that isn’t the operational simulation means that HoI4 ends up accepting as true many of the fundamental premises of the Axis powers, despite the fact that the rather resounding verdict of the war (and the subsequent Cold War period) was that these assumptions – that centralized state direction was efficient, that autarky was a viable economic strategy, that it was better to dominate than to trade, that highly militarized economies could durably sustain national power – were false.
In an effort to give the Axis a real chance to win the war, HoI4 is forced to assume that Nazi, fascist and militarist theories about the economy were correct – the very thing the war itself so decisively disproved.
But first, if you like what you are reading here, please share it, as I rely on word of mouth to replenish my manpower pool after poorly considered post topics. If you really like it, you can support me, my academic work and my public writing, including this project on Patreon! I can’t promise to use your support to buy a division worth of tanks, but I also will not promise not to do that. If you want updates whenever a new post appears or want to hear my more bite-sized musings on history, security affairs and current events, you can follow me on Bluesky (@bretdevereaux.bsky.social). I am also active on Threads (bretdevereaux) and maintain a de minimis presence on Twitter (@bretdevereaux).

We should start by laying out the basics of the game’s economic model. Unlike previous Hearts of Iron games, which represented a country’s industrial might with a single ‘industrial capacity’ number, HoI4 splits industry into civilian factories and military factories.1 Civilian factories build other buildings – infrastructure, railways, ports and other factories (both civilian and military) – and a portion of them are reserved for ‘consumer goods.’ Meanwhile military factories build military equipment: rifles, tanks, aircraft, etc. There is a third category, dockyards, which build ships, but we’ll leave them aside for now except to note that they function more or less exactly like military factories save for what they build.
It is possible to convert factories from one type to another (meant to represent the sort of plowshares-into-swords crash mobilization of the US, UK and USSR’s economy) but almost never worthwhile, to the point that this conversion is almost a dead mechanic.
Unsurprisingly, given the game’s focus, there is quite a lot of granularity in military production. Players set up ‘lines’ of production for specific equipment and then assign a certain number of factories to that equipment. Military factory efficiency (‘production efficiency’) scales up over time as long as they are producing the same thing, to represent process streamlining and impose a penalty for the kind of rapid design switching that, for instance, Germany engaged in. Produced equipment goes into a national stockpile (which exists on a balance sheet, not anywhere in the world). The player then trains division templates which demand the equipment being produced and it is automatically shifted to those divisions (generally during the training process or when they take losses; it is rarely worthwhile to deploy a half-trained, half-equipped division) as needed.

In addition to factories, military production also demands raw materials (aluminum, rubber, tungston, steel and chromium), with sharp speed penalties for missing ingredients. All factories also require coal to operate at full speed (and oil is converted into fuel in a system that we needn’t get into here, though it does matter a lot for operational planning).
Finally, it is worth noting there are two mutually exclusive pathways for industrial technology, which apply significant bonuses; in practice researching these technologies as they become available is effectively mandatory for nearly all countries. Concentrated Industry, representing the approach of the United States, United Kingdom and Soviet Union, offers 5% more raw factory output per level, while Dispersed Industry, representing the approach of Germany and Japan, offers better production efficiency and strategic bombing resistance. For quite a while now, dispersed industry has been the ‘meta’ choice, which as discussed below is a bit baffling as it was very clearly the less effective approach during the war itself.

Each equipment type is thus its own individual line which needs unique management. A minimally capable army is likely to need at least production lines for infantry equipment, support equipment, artillery, anti-air, anti-tank, tanks, trucks and at least a few kinds of aircraft so at minimum that is around 10 different production lines, each with its own set of assigned factories, unique resource demands (which may need to be traded for, see below), variable production efficiency and so on.
The military industrial production side is thus a fairly complex game of anticipating equipment needs in advance and assigning factories – allowing due time for them to gain production efficiency – to maximize the production of the equipment that divisions need, in the ratios they need it, when they need it. If I expect, for instance, to be at war by 1939 (as in the Britain playthrough we’ve been doing screenshots of), I am going to workout my intended army size, quickly math out the required amount of equipment on a piece of paper and then proportion my production accordingly.2
Gameplay-wise, it is a neat system which encourages player to think ahead and is, ironically, one of the closest systems to actually force a player to actually think about their doctrine in the real sense of the word: trying to predict how they will need to fight and then building the equipment to create the kind of divisions appropriate for that fight.

By contrast, the civilian industrial system is extremely simplified – streamlined might be a more generous term.
Civilian factories, as noted, build other factories (including other civilian factories) as well as a number of other buildings (forts, infrastructure, ports, railways, etc.), but our main focus here is on their role building factories. Apart from the coal all factories require to run, civilian factories consume no resources and they require far less management. They do not gain in productivity over time working at the same kind of project, instead always being perfectly interchangeable with each other. In practice, the player merely creates a priority list of projects and the civilian factories get to the job of marching down the priority list in order, one by one, with up to 15 civilian factories per project.

Civilian factories are also responsible for consumer goods production. The number of factories required for this is determined by adding military and civilian factories (but not dockyards) together and then taking a percentage of that total: that number of civilian factories are then removed from use, serving to supply the civilian economy. Unlike in previous Hearts of Iron games, where civilian industry put to civilian use generated money (representing tax revenues), in HoI4, mechanically, consumer goods represent wasted production. We’ll come back to this, but for now mechanically the player cannot allocate more factories than required for consumer goods, nor is there any benefit at all for having more consumer goods producing factories.
In Hearts of Iron IV, consumer goods production has no value: it does not impact stability or war support or politics. Notably, consumer goods production is entirely independent of civilian population: factories do not really consume any labor nor do they actually feed, cloth or house anyone. Instead, consumer goods function as a ‘tax’ to suppress the production of certain countries (the pre-war democracies, generally) and to prevent a player from focusing entirely on military production. In the latter case, as a player builds out a military industrial complex, the number of total factories (and thus the consumer goods requirement) rises, leading to fewer and fewer civilian factories free to build more military factories.

Civilian factories are also ‘spent’ to gain raw resources (for military factories) via trade, essentially transferring one civilian factory per a set number of units of raw resources (usually 8) transferred the other way.
One missing element you may have noticed is labor: labor is barely simulated at all. At most the effect here is expressed through conscription and mobilization laws, in a relatively blunt way. The highest economic mobilization law (‘total mobilization’) reduces the recruitable population (with a 3% modifier), reflecting military-aged men kept in the factories, while the highest conscription laws (‘service by requirement’ ‘all adults serve’ and ‘scraping the barrel’) lower factory output to reflect the labor shortages they generate. Notably, both of these effects happen regardless of the number of people in service or the number of factories: a country with Service by Requirement suffers its 10% penalty to factory output even if it has no army at all and a country on Total Mobilization suffers its 3% penalty to recruitable population even if it has almost no factories to absorb those workers.
As is consistently the case with Hearts of Iron IV‘s design, civilians do not matter very much: not for politics, not for war, not even for industry.

Having outlined in a general sense the shape of this system, it is worth going through the way that it generally develops over the course of any given playthrough, because there is a fairly predictable pattern and of course that pattern of mechanics speaks to the vision of history that Hearts of Iron IV is presenting, particularly because it more or less always happens.
One of the first questions is where countries make the shift-over point from focusing primarily on building civilian industry to focusing primarily on military industry. If a country only builds civilian industry, its industrial capacity total grows geometrically, as the more civilian factories are built, the faster new ones are built. However, since the only real product of this system are weapons churned out by military factories, this produces a sort of calculation – the player estimates when they expect to be at war and then initially builds civilian industry (to expand how much military factory they can build in a given unit of time), before shifting over to military factories in an effort to maximize the amount of military factories they’ll have at war’s start. For some countries this ‘turnover’ point is very early, for others it is a few years into the game.
Economic mobilization laws figure highly into this calculation. For the most part, economic mobilization laws do not really represent tradeoffs, but instead escalation: later laws are simply better than earlier ones. Civilian economy and partial mobilization provide maluses to construction speed (you build factories, even civilian factories, slower), while War Economy and Total Economic Mobilization provide bonuses to the same. Earlier laws also require a higher percentage of consumer goods factories, while later laws require less and since consumer goods are represented in game basically as waste (they offer no value whatsoever), this is also just a pure economic malus. There is no benefit to a civilian economy for the player and thus players are strongly incentivized to mobilize as much as their political system will let them and to stay at that maximum mobilization as much as they can. Rising world tension and being at war are generally what unlock the war support necessary for later economic mobilization laws.
As a result, globally, the percentage of industrial production devoted to consumer goods falls over time, which dramatically increases the factories available to expand industry, while construction speed for new factories rises as countries move to more aggressive mobilization laws (technology also pushes in this direction). Consequently, the number of factories globally rises dramatically over the course of the game, with countries often hitting the limits of how many factories can fit in the states they control by the mid-1940s. Thus, for instance, in the current run, the UK starts the game with just 31 factories; by the time I was ready to form the Commonwealth of Nations in 1942, the United Kingdom already had well over three hundred factories. Needless to say, the historical 1930s and 1940s did not witness a 10x growth in global GDP (global production a-little-more-than-doubled between 1930 and 1955).
That runaway factory growth produces systemic absurdities in HoI4‘s economy, because the raw material supply cannot keep up. While there are ways (technology, infrastructure) to realize modest increases in the amount of raw materials available in the game, these are a lot more modest than the order-of-magnitude increase in industrial production and while civilian industry only consumes coal, the churning of many hundreds of military factories begins, by the mid-1940s, to demand more resources than are globally available.
The way trade laws work in this system is that more export-oriented (or trade-friendly) trade laws reserve a percentage of the raw materials a country produces for export regardless of if someone is buying them. Trade-friendly laws also provide modest but significant industrial bonuses, so they make sense to adopt early, however in the long run trade in this system must reduce the overall quantity of resources available, because any resources that are reserved for trade but cannot be traded (because you are at war with the country, for instance) are wasted. Consequently as the major powers build up their industry, they’re pushed towards autarky to ‘unlock’ those trade-reserved resources, which results in the late-game economy fracturing into a set of beggar-thy-neighbor autarkies, which is to put it bluntly, not what happened historically.

The result, paradoxically, is that faced with resource shortages, one by one major powers shift to autarky in their trade laws (‘closed economy’ being the in-game label, though Germany gets a special version of limited exports called ‘autarky’ which replaces some of the penalties with bonuses instead, an absurd bit of design from a historical perspective given how conspicuous the failure of German autarky was). Autarky is an economic system which aims to produce all required goods entirely internally, without any trade (or minimal trade) with the outside world. For both ideological and political control reasons, autarky has often been the cherished goal is totalitarian regimes, both right and left. In particular – and we’ll discuss this more next week – economic autarky was the very specific economic goal that both Germany and Japan pursued in their attempted conquests in World War II. It was the thing they were fighting for (and the thing everyone else was fighting against) in a very real sense.

Now, before we get into how all of these mechanics come together to express a coherent – but deeply flawed – theory of history, I want to take a ‘sidebar’ on a topic. You may have noticed something of a trend in some of the design choices we have been discussing, but it is worth pulling them out. The developers want Hearts of Iron IV to simulate a World War II that proceeds roughly along the lines of the original, with France falling in 1940 and the Wehrmacht nearly reaching Moscow in 1941.
The problem, which the developers have discussed in the past, is that those events were fairly unlikely and significantly the part of bad decisions made by the allies (particularly France and the USSR), which left them unprepared and surprised by German attacks. But the developers cannot compel player!France to fail to adequately protect against a push through the Ardennes, nor compel player!United Kingdom to wait too long to rearm, nor compel player!USSR to trust Hitler completely up to – and indeed beyond – the very moment German tanks roll over the border into the Soviet Union. AI controlled countries could be made to make these mistakes, but that too is a poor solution from a game-design standpoint – it isn’t that interesting playing against an AI that is mandated to make specific errors.
The solution was instead to ‘power up’ Germany, making it a-historically powerful. Historically, Germany and the United Kingdom had similar levels out economic output through the war; in-game Germany starts with 73 factories to the United Kingdom’s 31 and gets stronger special laws and focuses that enable it to decisively outproduce the United Kingdom well into the game. Historically, Germany’s policy of autarky was a self-defeating one; in-game it is a special version of trade law that is simply a better form of ‘limited exports’ in every way.
Meanwhile Germany’s opponents are severely weakened. Both Britain and France are saddled with negative ‘national spirits’ that sharply limit their industry, political stability or ability to raise forces (whereas Germany gets bonuses to military organization and somehow the ability to raise air wings with less manpower). The United States is perhaps the worst victim of this, as it alone starts with the ‘Great Depression’ national spirit that pumps the consumer goods ratio (again, remember, purely waste in the game’s system) to 60%, while lowering recruitable manpower by 50% and raw resource production by 20%, as if the Great Depression only happened in one country. In practice, the purpose of the modifiers are to suppress US economic production so that the American industrial juggernaut emerges on schedule in 1942 and not earlier.
From a game design perspective, you can just about understand why all of these decisions were made: the game is more interesting if Germany has a potentially realistic shot at beating the combined efforts of the UK, France, the USSR and the United States. But historically, Germany didn’t have such a realistic shot (and Japan certainly didn’t). One of the facts that emerges quite clearly out of modern historiography on the war3 was that Germany’s often inefficiently-organized economy had little hope of providing a realistic path towards victory. The disparity in industrial capacity, once the allies turned to the task of reducing Germany to rubble, was enormous and unbridgeable.
But the broader problem here is how it fits into an overall trend where the design commitment to having Germany have a realistic shot at winning World War II on the terms the Nazis waged it compels the developers to treat Nazi (economic) ideology as if it were true, when it wasn’t. Fascist claims about the ‘trains running on time’ are effectively treated as accurate in the way HoI4 assigns economic potential, even when ‘the fascists made the trains run on time’ (in Italy) is one of the most persistently debunked historical myths out there. Meanwhile, the the Third Reich, Adam Tooze’s The Wages of Destruction (2006) remains essential reading on the fundamentally hollow nature of Nazi economic propaganda: the Nazis didn’t make the German economy hum either.
All of these mechanical simplifications make a kind of sense in getting the player to the ‘fun stuff’ of the war itself (much as with the political mechanics), but collectively they add up to a vision of history which establishes the Axis view of economics as its foundation. In effect, it takes the debate about the nature of economic life in the 1930s and 1940s and grants the conclusion to the fascist ideological assumptions a priori. It begins with the assumption that the Nazis were fundamentally right about how an economic global order would function.
Which is a real problem for a number of reasons, not the least of which is that the Nazis were famously wrong about that.
Take the question of concentrated vs. dispersed industry. Industrial dispersion in Germany wasn’t simply a response to strategic bombing, but was also rooted in an ‘artisanal’ approach to production that was both a holdover from earlier German industrialization but also something rooted in Nazi ideology. After all, the Nazi ideology of racial superiority – that German soldiers and workers were Übermenschen who could outproduce racially ‘lesser’ men – didn’t make much sense in a Taylorist or Fordist approach to production, which aimed for efficiency through assembly-line production in massive-scale facilities where workers functioned not as individual artisans but as pieces of a well-oiled machine. The Wehrmacht‘s preference for frequent revisions in design likewise reflected an assumption about war rooted in Nazi race ideology – that racially superior soldiers, equipped with the very best equipment, produced by racially superior craftsmen would be victorious in battle.
And they were very obviously wrong.
To take some figures from Overy (1995), op. cit., in 1942, Germany – controlling at that point most of Europe, mind you – produced 9,200 tanks and 15,409 aircraft. The United Kingdom – despite having its imports choked by submarine warfare all year – produced 8,611 tanks and 23,672 aircraft, exceeding, albeit modestly, German production. The USSR, by contrast, produced 24,446 tanks and 25,436 aircraft – absolutely blowing German production away. And the United States, despite having been on a war footing for less than a month at the start of the year, produced in 1942 some 24,997 tanks and 47,826 aircraft. These differences in production would only grow wider as the war progressed. Worse yet, it was also simply not the case that Germany obtained a technological edge for all of this rapid design shifting – indeed, as the war went on increasingly the best designed equipment was American, British or Soviet.
And while we’re here, Japan – whose approach is also in theory modeled by the ‘dispersed industry’ technology which is (as I noted), the optimal ‘meta’ choice for most HoI4 countries in the current build – produced just 1,191 tanks and 8,861 aircraft in 1942. Utterly unable to compete with even the beleaguered United Kingdom, much less the industrial behemoths of the United States and the USSR.
Meanwhile there is the question of autarky and trade. We’ll come back to this next week as well, but establishing an effective autarky was a core goal – arguably the core goal – behind both Germany and Japan’s program of aggressive warfare and it failed. In both cases, Germany and Japan sought to create extractive empires which would provide sufficient raw materials internally for both countries to no longer be reliant on trade. In the case of the Third Reich, this plan explicitly involved the murder – mostly through intentional starvation via the Hunger Plan – of tens of millions of people to create the ‘living space’ (Lebensraum) for a mass program of German settlement in Eastern Europe that (combined with the use of slave labor) would render a super-sized Third Reich self-sufficient in foodstuffs. Japan envisaged something more akin to the older European colonial empires – an overseas empire based around resource extraction in which the indigenous population were a resource to be extracted as well as a captive market which could be compelled to buy Japanese goods.
There is an irony here that in a sense the Axis powers (we can include Italy here) were trying to build early modern empires of the sort European states had constructed from the 1490s through the 1930s, despite the fact that by the 1930s the failures of that model were already becoming apparent. For one, Germany had demonstrated that with trade, such an empire was unnecessary to emerge as a European Great Power. The Germans had spent four years (1914 to 1918) standing the rest of Europe on its head without any vast colonial empire of note to rely on.
Even more to the point, the major imperial powers (Britain and France, but also to an extent the United States) were already starting to shed their empires. By the 1930s, the British had been compelled to abandon most of Ireland and the writing was clearly already on the wall that the cost of maintaining British rule in India would far outstrip the returns of doing so. The United States was already in the process of transitioning the Philippines to independence. I don’t want to overstate this point: all three of these countries had fought hard and would fight hard to keep their empires and would do many terrible things in that process. All of them still maintained powerful – indeed, dominant – ‘pro-imperial’ constituencies in their politics. Nevertheless it was already becoming apparent, as Germany, Italy and Japan set out to build new empires, that imperialism of that sort was a fading model which had long since become more cost than benefit to the imperial center. Of course we can see, as many in the 1930s and 1940s could not, the final failure and collapse of the empires – but of course the developers of Hearts of Iron IV certainly can and certainly could design their mechanics accordingly!
Moreover, if the 1900s demonstrated anything, they demonstrated that autarky was a losing economic strategy: trade oriented countries soundly and consistently outperformed countries that aimed for autarky. Adam Tooze’s The Wages of Destruction: The Making and Breaking of the Nazi Economy (2006) documents quite well the failure of Nazi autarky. Meanwhile, Soviet efforts to limit trade and run a largely internally self-sufficient economy over the course of this period and indeed through much of the rest of the Cold War produced well-known and eventually obvious economic deficiencies compared to more trade-engaged western economies.
We have discussed this before, but trade is good because it is positive sum. Both in the sense that a country trading some raw resource they have in abundance for one they have in scarcity increases the overall utility in the system (everyone has more of what they actually want, even if the amount of stuff has stayed constant), but also because through trade regions and countries can specialize, focusing on the raw resources and products they are best situated to produce. The result is more production overall and thus a higher overall standard of living and – so long as you do not go to war with your trade partners (as Germany did in both 1939 and 1941) – greater capacity for an effective defense industry.
In Hearts of Iron IV, by contrast, taking a trade-orientation to an economy is at best zero-sum: if all of the resources a country has reserved for trade are bought by someone then the number of factories and resources in the system remains constant. However – as is typically the case – if some resources are not being bought at any given moment, they are not returned to the selling country but simply lost, meaning that while trade in the real world is positive-sum, trade in Hearts of Iron IV is negative sum: it reduces the total quantity of goods available.
Meanwhile every country in Hearts of Iron IV runs as a state-controlled command economy. Now it is certainly the case that countries at war tend to see a lot more government control in their economic activity, but there were still radical differences between Nazi and Soviet command economies and American and British market economies during the war. By effectively making every country a command economy, Hearts of Iron IV loses the capacity to simulate differences between these approaches to production. Historically, centrally directed command economies generally performed poorly in the 1900s, while increased market orientation has been fairly strongly correlated with improved economic growth and production.
Hearts of Iron IV reverses this. Instead, because consumer-oriented civilian economies (the ones that most reliably produced economic growth over the historical 1900s) have slower factory construction speed and must devote far more factories to consumer goods, they grow their industrial potential more slowly than highly state controlled countries under a ‘war economy’ or ‘total mobilization’ law. This follows along the line of traditional folk history wherein ‘World War II ended the Great Depression,’ but while WWII did reduce unemployment – by employing men in either the infantry or in graves – it certainly didn’t improve standard of living. To a significant degree, rearmament in WWII acted as a kind of economic stimulus, but it is hard not to notice the world might have been a better place if governments had done the same economic stimulus directed at making automobiles and refrigerators instead of tanks and bombers. In the post-war world – which Hearts of Iron IV declines to simulate economically in any way – it was the countries which shifted back to consumer production the quickest which reaped the rewards of peace.
So Hearts of Iron IV‘s economic model proposes that military mobilization is what produces a-historically extreme amounts of economic growth by suppressing consumer goods (because ‘standard of living’ in HoI4 is – again – just economic waste; the best economy in HoI4 is one that consists entirely of soldiers and starving, overworked peasants), which inexorably pushes major powers towards empire and autarky, the losing economic models in the actual history of this period. As historical simulations go, this is not a very good match for the trends we observe in the 1940s. From a design perspective, I imagine, that is because it isn’t really meant to be. Most Hearts of Iron IV games (both single-player but also, in my understanding, multiplayer as well) are effectively decided by 1942 – the war isn’t over yet, but the outcome is likely clear. Thus from a game-design perspective it doesn’t really matter if the system spirals into nonsensical outcomes in 1945, because by that point the player is probably just wrapping up a ‘run’ whose conclusion has been determined – indeed, overdetermined – for years of in-game time already.
Instead, the economic system: the no-trade-offs escalating set of economic laws and industry growth-curves are really built to simulate rearmament and the economic situation of the late 1930s specifically, to capture the different rates at which the major powers prepared for war and in particular to set conditions whereby Germany is economically in a position to challenge the USSR and the western allies in the 1940s – indeed, to set conditions in which Germany is far more prepared than it historically was to do so, because the design of the game aggressively and intentionally increases German war-making potential at every turn.
The result is a game that constructs a fictional, parallel world in which the failing Nazi, fascist and Japanese-militarist economic vision works. Relentlessly directing an entire economy towards a war-footing even in peacetime isn’t political and economic malpractice (as it is in the real world; note the economic condition of North Korea for a contemporary example of what this does to a country), but rather is the key to boundless economic growth. Trade is a sucker’s bet in Hearts of Iron IV. Slave labor – unmentioned (as we noted last week), yet implied by Germany and Japan’s extraction-empire focus in conquest – also simply works and works better than trade, despite the historical record of the 1900s being about as close to the opposite of this outcome as it is possible to imagine. German-style artisanal production even beats Fordist-style assembly lines, in an astounding historical absurdity that cuts against functionally all of the historical work on the war economies of the 1940s.
In short, Hearts of Iron IV takes a war which in the real world proved the Nazis wrong about the nature of production and instead posits a world in which they were right. It does this out of an understandable desire to make Germany a real competitive foe to the allies, but the result, quite frankly, is historical malpractice. We’ve talked before about the persuasive power of simulation – that in playing a simulation, a player can ‘learn’ how a set of historical interactions work out with far greater clarity and confidence than if those interactions are explained. And if an exercise is carefully designed, this can be a really powerful and useful teaching tool, so long as the simulation accurately represents (to a reasonably degree of simplification) the actual historical interactions being studied.
But simulations are captive to their assumptions and so those assumptions must be made with care. When it comes to industry and production, HoI4‘s assumption may fairly be summed up as, “what if the Nazis were right about everything?” I do not say that approach is irresponsible simply because I do not like Nazis – although I famously do not like Nazis – but as a historian it is irresponsible because it is wrong. And it is wrong – I cannot stress enough the failure of fascist economic thinking is one of the most comprehensively demonstrated facts of the first half of the 1900s: permanent war economies do not work, command economies do not work, autarky does not work, mass forced labor does not work, imperialism as an economic strategy stopped working some time ago. HoI4 takes a war that was fundamentally about a contest of economic systems and – for gameplay reasons – gives the losing economic system all of the advantages and then dresses up the result in all of the persuasive power of simulation, with every ounce of historical verisimilitude that can be mustered.
Hearts of Iron IV‘s economic model thus – and I do not say this lightly – employs all of the persuasive power of simulation to create what is effectively a propaganda tool for fascist economics: it is not intentionally designed to persuade players of the effectiveness of fascist economics, but it is not clear to me what, if any, decisions would have been made differently if it was. If it were not for the catastrophic lack of treatment HoI4 applies to Axis atrocities, this would easily be the most irresponsible set of design decisions, I think, in the modern Paradox library. And it has, in turn, equally dire implications for how Hearts of Iron IV understands strategic ends, which is where we will turn next.

This article in Nature argues that it’s due to an overfishing of predators and warming sea temperatures.
As usual, you can also use this squid post to talk about the security stories in the news that I haven’t covered.
Billionaires should not be making decisions critical to national security. That’s straightforward. And the case of Elon Musk and his attempt to undermine Ukraine makes that clearer than ever. Recent events, that is in the past 24 hours, really don’t change that point. If anything, they reinforce it.
Hi, Paul Krugman.
Yesterday, I wrote that Starlink’s control must be taken away from Elon Musk. The occasion was that Musk abruptly and without warning downgraded the effectiveness of Starshield, which is a sort of high velocity, high frequency version of Starlink that has been playing an essential role in Ukraine’s defense.
Suddenly, the speeds of communication were capped, which is devastating for Ukraine. Exactly how that happened? The Wall Street Journal reported that Musk made the decision or gave the order. Musk said that, oh, that’s under the White House’s control. The White House said, no, it was just him.
In fact, none of the parties to all of this are credible. None of them are reliable narrators. And it doesn’t really matter. The point is that this is a gray zone situation. That should not exist, that it should be very clear that if national security is at stake, which it is — this is a war in which US technology is playing a critical role — that unambiguously, this should be under the control of publicly elected officials, the president and Congress, not some guy who happens to have a lot of money. But it is not.
We have private property, but we are a democracy. And critical decisions for the national interest should be made by democratically elected leaders.
OK. So the development since then is that,according to both the Journal and the Times, Trump called Musk and asked him to lift the restriction on transmission speeds.
It’s completely unclear right now whether that has actually happened or to what extent it’s happened. Some reports say that speeds are up. Others say that nothing has changed. Obviously, this matters critically for how many Ukrainians will die this winter. But think about this at a fundamental level. The president asked a private business to stop killing Ukrainians.
This is not the kind of thing where you ask. Especially Donald Trump, who is very fond of giving orders in places where he has no authority. In this case, the idea that he’s saying, pretty please, Elon, don’t let quite so many Ukrainians die — this is not how things should be working.
This guy, meaning Elon Musk, should not be in this position. Beyond that, what we’ve actually seen is the fact that Trump asked, has certainly made a point of having people leak the fact that he had asked, although he himself has been a little bit blurry on exactly what happened,
This is actually telling you that having national security interests explicitly under control of elected politicians is a good thing even if the politicians have bad intentions. There’s no real question that whatever the details of how it happened that Starlink denied high-speed access to Ukraine, obviously it’s what Musk wanted, but also that at the very least Donald Trump was okay with it and it may have been what he wanted as well.
But Trump and Trump’s officials were hiding behind Elon Musk, were saying, well, this was Musk’s decision and, well, it’s a business and we don’t know what happened.
Again, nobody involved in this should be believed, should be trusted. And for the exact truth, I’ll wait for years of investigative digging to find out what happened, plus subpoenas. Because if Democrats do take Congress, especially if they take the Senate, they will be investigating with support from at least some Republican senators. Patriotism is not completely dead on the GOP side.
The important point here is that the public outcry, the outrage, the many articles written similar in some respect to mine, — though I think I was more explicit than most in saying essentially that we need to nationalize or at least take control of Starlink — but the public outrage mattered.
Even though Donald Trump clearly wants Vladimir Putin to win, he doesn’t feel that he can act too openly He can’t take a pro-Russian stance. He can’t be seen to be openly and explicitly undercutting Ukraine’s ability to defend itself, which is, and was trying to avoid that.
Whether he gave the order or Musk gave the order doesn’t really matter. The fact was that the private ownership, private control of Starlink allowed Trump to hide behind, or he thought it would allow him to hide behind, the fact that this was a private enterprise. For the U.S. government to have ordered a U.S. government agency —say if Starlink was run by the Defense Department —for the U.S. government to order the Defense Department to cut Ukraine off at the knees was too much even for Trump.
And once it became clear that the attempt to pretend that this was not in accord with Trump administration intentions, whoever actually pulled the switch, was too much. And so now Trump is very visibly asking, pretty please, asking Elon Musk to let Ukraine defend itself.
That’s telling you that even with a bad president, explicit public control of national security does help. It means that public outrage gets reflected in policies that are somewhat less treasonous than would otherwise be taking place.
But this, of course, is just the beginning. Hopefully, in a little over two years, we will have a president who actually does support US interests and doesn’t work for Vladimir Putin. Before that, we will have a lot more, almost surely, a lot more congressional oversight. So this is a situation in which public policy will be infinitely better if it’s explicitly public policy than hiding behind the skirts of a multi-billionaire who owns these critical national assets.
Again, we don’t know what’s really happening. We don’t know whether the intention is to kind of muddy the waters and then to allow Musk to continue to undermine Ukraine. There’s just so much we don’t know. But we do know that the situation is unacceptable. It’s unconscionable.
National security is a matter for national policy. We know that whether Musk really acted independently — or whether the pretense that he was acting independently allowed Trump to do what he’s doing — policy is really bad when you leave critical national security interests in the hands of individual plutocrats.
So we did learn that public outcry appears to matter. It’s not that these guys are going to do whatever they’re going to do regardless. So by all means,keep up the pressure now, but the solution in the end has to be this cannot be an independent private enterprise. Maybe it can be run by somebody under contract, but the decisions about how Starlink is used — or many other technologies — the decision about how these are used to represent U.S. interests has to be a public decision. No more foreign policy, national security policy by billionaires.
They're also offering a "Highspeed" version that's 2-3x faster, at twice the price (except for input token cache hits, which are priced the same).
The US dollar pricing is $2.00/million tokens for input and $10/million for output - the same as GPT-6.1 Sol and half the price of Claude Opus 5.5.
Moonshot's own benchmarks show Kimi as approximately level with Opus 5.5 and GPT-6 Astra - beating them on a few benchmarks, coming close on others.
Artificial Analysis scored Kimi at 55 - ahead of Claude Fable 5.1, GPT-6 Astra, and Gemini 4 Argon (all at 53) and behind only Claude Opus 5.5 (58).
This is the first time a (soon-to-be) open weight model has scored this highly against the frontier.
I tried it out via the Moonshot API using the llm openai endpoint command I added to LLM 0.32 back in August:
llm openai endpoint \
https://api.moonshot.ai/v1 \
--key kimi \
-m kimi-k3.1-pro \
"Generate an SVG of a pelican riding a bicycle" \
--responses \
-o reasoning_effort low \
> kimi-k3.1-pro-pelican-low.stdout.txt \
2> kimi-k3.1-pro-pelican-low.stderr.txt
llm openai endpoint can run prompts against any OpenAI-compatible endpoint but doesn't log the results, hence the extra options to save stdout and stderr (the reasoning trace).
Here are the pelicans I got for Kimi K3.1 Pro on the three reasoning levels it supports - low, medium, and max. This is max:

For comparison, I ran fresh pelicans against Kimi K3 on those three reasoning levels.
Via Hacker News
Tags: ai, generative-ai, llms, llm, llm-pricing, pelican-riding-a-bicycle, llm-release, ai-in-china, moonshot, kimi
Welcome to Edition 9.16 of the Rocket Report! Lots of SpaceX-related news this week including a couple of Thursday shockers. In one story, the company told the US Space Force thanks, but no thanks after being offered three military launch contracts. Then, on the civil space side of things, SpaceX's Starship may required up to 22 refuelings to support a lunar landing, a NASA safety panel said.
As always, we welcome reader submissions, and if you don't want to miss an issue, please subscribe using the box below (the form will not appear on AMP-enabled versions of the site). Each report will include information on small-, medium-, and heavy-lift rockets as well as a quick look ahead at the next three launches on the calendar.
Miura 5 getting closer to launch. PLD Space says its Miura 5 rocket, due to undertake its inaugural launch next year, is nearing final integration, Aviation Week reports. The rocket is one of three Miura 5s the company has already manufactured, with the other two designed to qualify key system elements, CEO Raúl Torres said in an October 19 program update. PLD Space now targets a first flight of the small-lift vehicle before mid-2027.
1. Weird diets (NYT).
2. Is this what the Denisovans looked like?
3. Measuring bottlenecks for AI.
4. How is violence diffferent when women lead drug cartels?
6. Latin America seems to be climbing the high-tech value chain.
7. ZMP by any other name (amazing how much people used to hate on that idea).
8. Chatting with Milton to run your central bank?
9. Warhound.
10. “Somehow, @srajagopalan and @lachygroom have managed to fund a hard-tech revolution in India. There’s something rather massive going on, and everyone else has missed it.” Link here.
The post Friday assorted links appeared first on Marginal REVOLUTION.
As of 9am Friday, there was one homicide in D.C. this week. To date this year, D.C. has reported a total of 79* homicides this year (there was one more murder reported from May of this year). Last year, during the same time period, we had 113 homicides, and in the surge year of 2023, there were 224 homicides during that same time period.
Both violent and property crimes trended upwards this week.
While we’re still off pace for another 33% annual reduction in homicides, the first time since the last year of the Biden Administration, this week had a decline in homicides from four to one.
Hoping for a zero homicide week next week.
*Three of the 82 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).
No surprise to me but a new paper looks at the forecast accuracy of over one million prediction questions from Polymarket, Kalshi, Manifold and the forecasting platform Metaculus. A virtue of the new analysis is that it covers many different areas from business to elections to geo-politics. An event predicted to happen p% of the time happens about p% of the time. Can’t beat that.
Using approximately one million resolved contracts and questions across four collective forecasting platforms, twelve domains, and time horizons ranging from hours to years, we evaluate the calibration and accuracy of collective forecasts in real-world settings. We found that forecast probabilities were overall highly calibrated: events assigned a probability of p% occurred approximately p% of the time. This broad pattern was evident across platforms and many domains, although fine-grained analyses revealed systematic tendencies toward over- or underestimation in highly consequential areas. While this does not mean that forecasting platforms provide certainty about individual events, our findings suggest that large-scale aggregation of judgments contains meaningful information about real-world uncertainty; when examined in aggregate, the predictions generated by the platforms provided informative estimates of event likelihood.
The post Prediction Markets Are Accurate appeared first on Marginal REVOLUTION.
Max Doppelt: In January 2025 my mom’s lung cancer spread to her brain. The drug with the best chance of helping her was approved in China but not here.
A doctor told me, almost as an aside, that if she were Chinese she could buy it at a pharmacy.
So I flew to Shanghai and came home with 26 boxes in my luggage. That was 19 months ago. My mom is still here, still working, and in her words has had an amazing three years.
The drug was approved in China in 2023. The FDA approved it in July 2025. It still is not for sale here. I know of at least 30 Americans who have made the same trip.
I have been scared to tell this story because I worried it could cost my mom access to the medicine keeping her alive. But the problem matters more than my silence. These drugs need to be developed and available here, and that means FDA reform.
A piece at KFF Health cover’s Max’s story and adds this insanity:
Rep. John Moolenaar (R-Mich.), who chairs the House Select Committee on the Chinese Communist Party, in June co-sponsored legislation with Rep. Debbie Dingell (D-Mich.) requiring all U.S. pharmaceutical deals with Chinese companies to be cleared by the Treasury Department.
Got that? A son flew to Shanghai to buy pharmaceuticals to extend his mother’s life and the House Select Committee on the Chinese Communist Party wants a Treasury lawyer monitoring the baggage claim. Yes, I am angry.
Addendum: See also my earlier post on Operation TrialBlazer and Montana’s SB535. My 2009 TED Talk is the ur-source for my argument that a rich China and India will create many benefits for the United States, including many more cancer drugs.
The post Protecting Americans from Medicine appeared first on Marginal REVOLUTION.
Recorded October 13, 2026.
Recorded October 7, 2026.
Recorded September 23, 2026.
Watch today’s live recording here.
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Recorded October 21, 2026.
In which I try to answer your questions about modern politics....
In today’s Politics Chat: Socialism is a system in which the government owns the means of production. After the Civil War, opponents of Black voting used the term socialism to attack Black political participation. Two days before congressionally mandated sanctions on Russia were set to take effect, Trump said he would waive them. Russia has proposed a trilateral meeting with Trump and Chinese president Xi Jinping to decide the fate of Ukraine. Ukrainian forces lost control of their drones when Starlink slowed during one of the worst bombardments of the war. The Wall Street Journal reported that Elon Musk ordered the slowdown. Europe and Canada are working to build their own satellite systems. Republicans in Congress say they are frustrated with Trump’s actions, but they have not moved to stop him. Trump announced $8 billion for farmers, but payment rates will not be announced until after the election.
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Recorded October 20, 2026.
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Alexander Ward and Lara Seligman of the Wall Street Journal reported today that Trump called Elon Musk yesterday to ask him to stop throttling Starlink’s military-grade communications system, Starshield, in Ukraine. Slowing down the system degrades Ukraine’s defenses as well as its offensive drones, leaving it even more vulnerable to Russian attacks. Russia’s president Vladimir Putin has taken advantage of this vulnerability by increasing strikes against Ukraine’s civilians.
The whole question of who ordered the slowdown in the first place remains a blame game between Trump and Musk, both of whom support Russia in its war on Ukraine. Members of the administration, including Secretary of State Marco Rubio and U.S. ambassador to NATO Matt Whitaker, have tried to sell the slowdown as a business decision that Musk has the authority to make.
Whitaker told the Fox News Channel yesterday: “They are a private company. Obviously they have terms of use that are applied to all of their customers, including the Ukrainians, and I think it’s more of a dispute along those lines…than anybody in this administration trying to change the way that Starshield or Starlink is used.”
Strategic studies scholar Phillips P. O’Brien wasn’t buying that explanation, posting that it is evident “the White House is desperately trying to make [Musk] the fall guy for what is happening to Ukraine.” He continued: “If Trump wanted to help Ukraine militarily and with starshield he could. He is president. He doesn’t want to.”
But it is simply astonishing that the president of the United States, the commander in chief of the United States military, is suggesting he had to negotiate with a private citizen to tell him to stop interfering with American foreign policy.
This afternoon, asked about the call, Trump told reporters: “[I]t was a very interesting situation. So I don’t want to comment one way or the other, but, uh, my re—, my relationship with Elon is a very good one.” He reiterated: “I don’t want to comment on it. You know, whether I called or whether somebody else called, doesn’t make any difference. I guess the bottom line, he put it back.”
It remains unclear if the Ukrainians do, in fact, have full use of the networks again. Siobhán O’Grady, Carlotta Gall, and Anton Troianovski of the New York Times reported yesterday that a senior Ukrainian commander told them he had lost more than a million dollars worth of drones when Starshield went fuzzy from the slowdown. For the next three days, he had to stop almost all operations, endangering his troops by hampering their ability to stop Russian advances by striking Russian command posts and fuel hubs.
Meanwhile, Bloomberg reported today that officials from Rosneft, Russia’s biggest oil producer, say sanctions and Ukrainian drone strikes that are pushing deeper and deeper into Russia threaten the company’s survival. Profits for the company, which produces about a third of Russia’s oil, are falling and its debt is rising as the strikes cause fuel shortages.
Ukrainians are repeatedly hitting the refineries, one as far as 2,500 kilometers (about 1,553 miles) from the border, first damaging the structures and then destroying repairs after workers have rebuilt the structures, forcing the company to take on more and more debt as it shovels money into repairs that don’t survive. Even when it can find the money, sanctions limit its ability to replace equipment. The officials say even a few more months of war could destroy Rosneft.
The crisis explains why Putin and Trump are so desperate to stop Ukrainian attacks on Russia’s oil refineries and to lift sanctions on Russia. Rosneft’s loans from the Credit Bank of Moscow are becoming problematic, straining the bank.
In a sign this year’s writers are straining to make things as obvious as possible, Alex Horton and Dan Lamothe of the Washington Post broke the story today that in February, Defense Secretary Pete Hegseth apparently decided he wanted to display in his office one of the two floor globes General Dwight D. Eisenhower used during World War II.
Eisenhower was the erudite five-star general who oversaw the Allied invasions of North Africa and Sicily before directing the Allied invasion of France and Germany as the Supreme Allied Commander in Europe. He is widely credited with defeating the Nazis.
After the war, Eisenhower went on to the presidency of Columbia University, where he devoted his energies to founding the American Assembly, a think tank to gather the world’s greatest minds to bring the understanding of history, foreign affairs, and philosophy to address the problems of the post–World War II world.
In 1952, when the frontrunner for the Republican presidential nomination vowed to cut U.S. support for the fledgling North Atlantic Treaty Organization (NATO), Eisenhower ran for president to protect the new postwar institutions that he believed were vital to global security in the face of an aggressive Soviet Union. He won the Republican nomination and then the presidency with almost 55% of the vote, retaking the White House from Democrats for the first time since 1933.
During the war, Eisenhower had visited Ohrdruf, the Nazi concentration camp that funneled prisoners to Buchenwald, a week after soldiers liberated it. He was shocked to the core. “I never dreamed that such cruelty, bestiality, and savagery could really exist in this world!” he wrote to his wife. Determined to do all he could to guarantee that such atrocities never happened again, he urged reporters and congressmen to visit the camp to ensure there were witnesses, pictures, and films to contradict anyone who might, in the future, try to deny the horrors that had taken place.
After the war, Eisenhower embraced the work of San Francisco philosopher Eric Hoffer, who explained in his 1951 book The True Believer: Thoughts on the Nature of Mass Movements that economically or culturally dispossessed people were natural targets for political and religious extremists. They could easily be manipulated to back a demagogue who promised to resurrect a world in which they had enjoyed prosperity and cultural significance. Such a leader was dangerous enough during the Nazi era, Eisenhower thought, but with the advent of nuclear weapons in 1945, such a strongman could destroy humanity.
Eisenhower believed that it was crucial for the U.S. to build alliances and to help increase standards of living around the globe in order to prevent such a scenario. He built NATO and began the Food for Peace initiative, a program that later was absorbed into the U.S. Agency for International Development (USAID), the same agency that Musk and Trump shredded in 2025.
In their story about Eisenhower’s globe, Horton and Lamothe reported that Hegseth was so eager to get the historic object in place that rather than waiting for trained curators to move it, as is expected for any such priceless historic artifact, Hegseth’s staff decided to retrieve it on their own.
They dropped it.
The artifact smashed into its base, and the stand impaled it, ripping a gash through the fragile globe.
It never did end up in Hegseth’s office.
It is currently undergoing repairs.
—
Notes:
https://thehill.com/homenews/administration/6164055-starlink-slowdown-ukraine/
https://www.archives.gov/research/foreign-policy/related-records/rg-286
Dwight D. Eisenhower to Mamie Eisenhower, April 15, 1945, in John S. D. Eisenhower, ed., Dwight D. Eisenhower, Letters to Mamie (New York: Doubleday, 1978), p. 248.
X:
atrupar/status/2112969961010323896
PhillipsPOBrien/status/2113198437105909981
In which I try to answer your questions about modern politics....
In today’s Politics Chat: Trump said he asked Elon Musk to lift restrictions on Starlink and Starshield, the communications networks Ukraine relies on to fight off Russia. The slowdown of those networks during a massive Russian barrage left Ukraine unable to defend against incoming drones and missiles. Former Secretary of State Hillary Clinton suggested that Vladimir Putin has something on Trump. Defense Secretary Pete Hegseth’s staff dropped and damaged a globe Dwight Eisenhower used to plan World War II. White House leaks suggest aides are jockeying for power as Trump heads toward lame duck status. Vice President JD Vance backed Vivek Ramaswamy’s attack ad against Amy Acton, which drew bipartisan revulsion. Secretary of State Marco Rubio appears to be iced out of talks with Russia. Republicans timed the biggest Medicaid and SNAP cuts in their budget bill for after the midterms. New candidates across the country are reshaping American politics much as in the 1850s. Attorney General Todd Blanche would not rule out challenging some votes.
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Tribologists study friction: what happens when things rub together. It’s indispensable, from the wheel to the paths of stars
- by Jennifer R Vail
Here is their episode summary:
Economist Tyler Cowen joins David Wolpe for a conversation about AI, religion, and what makes us human. Tyler makes the case that AI’s biggest impact may be on status: who gains it, who loses it, and what happens to experts like rabbis when anyone can ask ChatGPT all their questions. He also suggests that losing our monopoly on intelligence may make us feel more unique as humans, rather than less.
You can listen here.
The post Podcast with Rabbi David Wolpe appeared first on Marginal REVOLUTION.
In the run-up to the International Festival of Economics in Turin starting today, Vanity Fair in Italy publishes an interview with me under this headline:
Alvin Roth: «Sono più preoccupato per la democrazia che per l’intelligenza artificiale»
"I'm more worried about democracy than artificial intelligence"
The Festival itself publishes this article:
ROTH E LA SFIDA DEI MERCATI RIPUGNANTI ROTH AND THE CHALLENGE OF REPULSIVE MARKETS
And here's an essay I sent in English, translated into Italian, which you can translate back pretty well:)
Economia in cerca di morale
Esistono mercati controversi (alcol, gioco d’azzardo, utero in affitto...) su cui i vari Paesi hanno posizioni diverse, riflette il Nobel Alvin E. Roth: non sempre si arriverà al consenso collettivo, ma è lecito esplorare compromessi La Lettura
Di ALVIN E. ROTH (traduzione di Rita Baldassarre)
Economy in search of morale
There are controversial markets (alcohol, gambling, surrogacy...) on which the various countries have different positions, reflects the Nobel Prize winner Alvin E. Roth: collective consensus will not always be reached, but it is legitimate to explore compromises
From Jesús Fernández-Villaverde:
Will AI poison the public finances of many modern states? There is a real risk that it will.
Yesterday, I circulated a new paper, “Saving for the Machines,” which makes a simple point. Building the AI transformation will require enormous investment. The only way to induce agents to save for that investment is through a large increase in the real interest rate. For instance, in my benchmark scenario, the ten-year real yield jumps from 5.1% to 13.6% on impact.
But that means government borrowing will become much more expensive. Here is a back-of-the-envelope calculation. Take a government that owes 100% of GDP in 2025 (a typical case in Western Europe) and runs a balanced primary budget from then on (not so typical but never mind; I want to build an optimistic scenario). That means the debt ratio changes only with the gap between the real interest rate and growth.
I input the interest rate and the growth rate for my benchmark transition to full automation, and I roll over the debt at the short rate. I consider two economies. The first economy is an AI adopter, for example, the U.S., which experiences an AI boom at home. The government pays the new interest rate but also enjoys faster growth.
The second economy is a bystander, for example, Spain. This economy lives in an integrated financial market but does not adopt AI (this is an extreme case of zero adoption, just to make the exercise transparent): it pays the same world interest rate and continues growing at its old 1.6% trend.
Let’s first consider the adopter. With an intertemporal elasticity of substitution of one-half, the Euler equation implies that consumption growth is about half the real interest rate. Hence, the gap between the interest rate and growth does not close during the AI-driven growth boom. Instead, it widens. For example, with a unit elasticity of substitution among tasks, the real rate rises from 5.1% to 42% by 2040, while growth increases only from 1.6% to 22%. Debt doubles by 2038, reaches 296% of GDP in 2040, and 907% in 2045. To hold the ratio at 100%, the government needs a primary surplus of 10% of GDP in 2035 and 24% from 2045 onward. With a low elasticity of substitution of 0.2, the numbers are milder, but the pattern is the same: 204% in 2040, 397% in 2045, and a stabilizing surplus of 13% of GDP.
But the adopter has a way out. The capital share goes to one, so net capital income is about 88% of GDP, and a flat tax on it can cover the surplus. A 36% tax on net capital income holds the debt at 100% of GDP in the limit with unit elasticity, and a 20% tax does so with strong complementarity across tasks. The tax is above the gap because it slows growth, from 21.9% to 13.6% with unit elasticity and from 11.7% to 9.1% with an elasticity of 0.2, while it does nothing to the rate the Treasury pays, which technology pins at the machines’ net return. Painful, but the boom survives and the adopter can pay its debt.
The grim news is that the bystander economy has no way out. Its capital income is still a third of GDP, which grows at 1.6%, and the surplus it needs is 11% of GDP in 2030, 26% in 2035, and 44% forever with unit elasticity (18% and 24% with an elasticity of 0.2). On a balanced primary budget, its debt doubles by 2033 and triples by 2035. No tax system raises that.
Two more bad pieces of news for the bystander. First, long yields jump on impact, so a Treasury that issues ten-year debt pays more, and sooner, than rolling over at the short rate assumes: it is the same bill but front-loaded. Second, the bystander’s own capital flows to the machines abroad, so its GDP and tax base fall below trend. One relief is that households can save for other people’s machines and get rich on the returns, which the bystander’s government can tax to some extent. This back-of-the-envelope calculation is a benchmark, not a forecast of what is to come. But the arithmetic is simple, and it runs counter to the hope that an AI-fueled growth boom will take care of public debt, because growth comes with an interest rate that is twice as high. Not a pretty future for most of Western Europe. Due to AI, the choice is between default, inflation, or, most likely, financial repression: capital controls that keep domestic savers from investing in machines abroad.
I am somewhat more optimistic than this. The assumption of zero Spanish adoption already is noted, but also ideas are public goods, and Spain can benefit from American (and Chinese) AI, and the resulting scientific advances. The long-run supply of capital also might be quite elastic, we will see.
The post Will bystander economies be able to finance their governments? appeared first on Marginal REVOLUTION.
It’s time to install an app! But here in 1986, we still call them “programs,� not apps. So, you’ll want to set aside some time to get started installing a program.
Since you have a Commodore 64, there are really only two options for getting new programs this month: COMPUTE!’s Gazette and RUN, and you have to hope that one of those magazines isn’t sold out at the book store. So let’s get going.
You will need to ask your mom if you can ride your bike to the mall. The dirt mall is closer, but the magazine stand at the dirt mall doesn’t carry any computer magazines, so you’ll need to take a longer ride to the good mall, where the book store actually has computer magazines. It’s a couple of miles to the mall, so usually you would have a friend come with you, but you called their house and nobody picked up, so today it’s a solo trip.
Only one book store carries computer magazines at this mall; the other one only carries magazines about “serious� topics, but they can order back issues of a magazine for you if you want, you just have to wait a few weeks and they’ll call you when it comes in.
The guy at the book store doesn’t know the difference between the different computer magazines, so you can’t ask him if they have the one you want in stock, and he’s probably not going to answer a kid anyway. So you just have to go through all the titles one by one, and hope nobody put a copy of People or Omni in front of it by accident.
There are no ratings, and no reviews of the programs themselves. The closest thing you get is the magazine’s own reviews of hardware — modems, mostly — and a cover that promises you the issue has the thing you want. This month’s cover has a “Buyer’s Guide To Modems� banner across the top.

Once you’ve got a copy of COMPUTE!’s Gazette and you’re checking out at the store, you can see that it’s three dollars for the magazine (about nine bucks in 2026 money). If you’re lucky enough to have a five dollar bill, you’ll still have two dollars left over after buying the magazine. That means you’ll have enough money to swing by the record store later and grab a 45 of one of the new singles, like Sheila E.’s “A Love Bizarre,� written by Prince, or The Bangles’ “Manic Monday,� written by Prince, or Prince and the Revolution’s “Kiss,� written by Prince.
Now it’s time to race home with the new magazine in hand. You’ll have to wait for everybody to get off of the TV that’s by the computer so you can switch it over to the channel the computer is on and get down to work.
Turn on the switch, and you’re at the blinking blue cursor where it says READY. while the screen is still warming up a bit.
When it comes to installing apps programs, it’s all about options, and this month, we’re spoiled: there are two! They’re both games: Survivor, an arena game where, “if you’re quick of mind, eye, and hand, you might outfox your opponent,� and Shifter. Truly, an embarrassment of riches. Since Survivor is the one on the cover, we’ll go with that one.
(Two or three programs a month is pretty typical. That’s… the app store.)
Getting this program running is standard stuff — you just read the article on page 36 that describes the game, and then flip to pages 106 and 107 where there’s the code for a short BASIC loader, and then continue on to pages 107 and 108, where there are 345 rows of densely-packed listings consisting of 9 hexadecimal character pairs, all of which have to be typed in perfectly with zero errors or else your entire game will refuse to run.
A quick sample of the early part of your task looks like this:

After you’re done typing that page in, you’re about a quarter of the way done, assuming you didn’t make any mistakes.
Wait, what’s that? Where are you supposed to be typing these in? Simply type them into the MLX program where you… wait, what’s that? You don’t have the MLX utility that’s used to type in machine language code for games and programs listed in the magazine?
Oh, don’t worry, you’ll just need to type in the code for that program. There’s an article explaining what MLX is, which you can read really quickly on page 93, and then you’ll find the code for it on page 94. That one’s only 100 lines of code, so it should be easy enough to type in. And of course, you’ll know if you made any mistakes when typing, thanks to the Automatic Proofreader.
Wait, you don’t have the Automatic Proofreader program?
Well, no worries. It’s only another 31 lines of BASIC code, which you can find on page 97. (This one you have to type in perfectly on your own; there’s no proofreader for the proofreader.) Once you do that, you’re all set.

Now, you can just use the program that lets you enter the program to make your program. It should only take about half an hour to type in the code for the Automatic Proofreader, and maybe another hour or two for MLX. Let’s call it two hours total between them.
After that, Survivor is ~30 lines of BASIC plus ~350 lines of hex code, so… maybe six hours? But at least MLX will catch any typos as you go.
Once all of this is complete, be sure to save your work to a floppy disk so you don’t have to type it all in again! If all you have is a cassette deck and you’re saving to tape, it’s going to take probably 10–20 minutes of staring at a blank screen when you save, so set aside some time for that.
In total, it should only take you about 8 hours to have Survivor ready to play, plus however long it takes you to get to the mall, buy a magazine, and come back.
(Click or tap to get started.)
[This is Survivor by Kevin Mykytyn and Mark Tuttle, from COMPUTE!’s Gazette, March 1986, running in the VICE emulator. The game loads and runs on its own, which takes a few seconds.]
Controls: the yellow player uses W/A/S/D to move and F to fire; the cyan player uses the arrow keys to move and Enter to fire.
Someday, rather than typing all of this in, you might be able to use your 300 baud modem to download already-created versions of these games and tools. You could dial a local BBS, if there’s one nearby. If you’re unlucky, the only one you can reach is a long-distance call, and you’ll be paying by the minute for as long as you’re connected. Or you could look for a local dial-up number for the Quantum Link online service (which will eventually evolve into America Online!).
Transfer times can range from tens of minutes to hours, and of course during those calls, you are tying up what’s usually the sole voice phone line for the household. Anyone picking up a phone handset in the house threatens to knock your connection offline, forcing you to start the whole process all over again.
Now that you’ve enjoyed your game of Survivor, there are some fun ways to customize your little computer and give it a personal touch.
Just for context, here’s a to-scale comparison of the screen resolution of your Commodore 64 to the dimensions of an iPhone Duo’s unfolded screen.
You can’t change the wallpaper on your Commodore 64, but you can easily change the background colors for both the center area of the screen and the border. All you have to do is manually assign the proper numeric color code to the correct memory register corresponding to the values of each of those settings.
Memory address 53281 will set the background color for the primary content area, and a color code of 1 sets a nice readable white background, so it only takes a simple POKE 53281,1 command at the prompt, and you’re all set. Similarly, POKE 53280,4 will make the border of the screen a nice bright purple color, and of course there are a full complement of 16 colors to choose from.
Naturally, none of this customization is stored anywhere permanent, and it will all be lost if you turn off your computer or run a program.
I hope you’ve enjoyed this brief overview of how to get one game running on your Commodore 64, and perhaps gained a little appreciation for how things have gotten a bit simpler over the years.
Also, I will be entertaining a motion to return to calling our software “programs� instead of apps once more. Perhaps we could use the term to distinguish the software that’s created by humans actually typing things in, as opposed to the kind that’s merely generated by machines?