The Twin Engines of Alarm and Hope

I feel like I’m more alarmed than most people by what’s happening in American politics right now - and more hopeful about what might come after.

Trump is taking a wrecking ball to international trade and the global economy built around it. That’s alarming. (MAGA types spend a remarkable amount of time decrying globalism on the world wide web - a feat of irony they seem blissfully unaware of.) And of course he's also going after national institutions and norms in ways that are alarming.

The hopeful part? Just within the domain of international progress? After Trump, it seems likely the global economy will restructure itself to be more robust - less dependent on US leadership and more resilient to shifts in the political mood of any single leader or even the majorities of a half dozen countries. We see this, for instance, in the EU's support for Ukraine, something that has always been present but seems stronger now that they realize they cannot depend on the US. Hopefully in the future the US will again take a strong role in the defense and development of Western Europe but all the better when Western Europe's fate is less reliant on the US. (Or any one country, for that matter.) I'm not saying that the US won't always have an influence over other regions during the next generation or so; I am saying that the more resilient are the pro-development policies of any one region with or without the US or the EU or China, the more resilient will be progress.

Alarm and hope both matter. Without them, people tend to settle for inaction. That is not a good option right now.

RFK Jr.'s Healthcare Policy as Placebo

Robert F. Kennedy Jr., our Secretary of Health and Human Services, has declared that “being healthy is a patriotic duty.”

If you hear that casually, it might sound either innocuous or wildly sensible. But it isn’t a policy - it’s a slogan - and not even a catchy one.

Keep in mind, he also oversees welfare programs. Imagine if he said, “Being wealthy is a patriotic duty.” Imagine that you thought that this statement actually tied to anything in the real world.

“What are your plans for tackling disease?”
“Ask people to be healthier.”
“What about poverty?”
“Ask them to be wealthier.”
"Violent crime?"
"Ask Americans to be kinder."

That’s not policy. It's not even interesting enough to be propaganda.

A tax on sugar, like the tax on cigarettes? That’s policy.

Investing in vaccine development and equitable deployment? Policy. (And by the way, RFK and Trump have cut funding for the development and rollout of important vaccines.)

A sovereign wealth fund and / or a wealth tax to narrow inequality? Policy.

Simply telling people it’s their patriotic duty to be healthy - or wealthy - isn’t leadership or policy. It has no efficacy. I think the word you're searching for is placebo.

Mission Preternatural

File under: Well, it amused me …A spinoff from the Mission Impossible franchise:

Mission Preternatural.

Two priests, three nuns, and an incredulous indigenous population. They’ve crossed an ocean to bring a new god to people who already have dozens.

Hamilton, a Bank, a VP and a President, Duels and the Country's First Great Recession

Alexander Hamilton – the genius killed in a duel on this day (11 July) in 1804 – created the US Bank to stabilize currency and capital markets for the new republic.
Aaron Burr, Hamilton's killer, didn’t go to jail for murdering this extraordinary Founding Father. Instead, he finished his term as Jefferson’s Vice President.

Andrew Jackson – the only president known to have killed a man in a duel – killed Hamilton’s Bank, which he saw as an instrument of elites, setting up the nation for its worst recession to that point. (Jackson was one of those populists who didn’t let a lack of understanding about how the economy worked get in the way of his conviction that something dramatic must be done.)

Vice President Aaron Burr killed Hamilton.
President Andrew Jackson killed his great institution.

Hamilton, the orphaned 14-year-old who bravely came alone from the Caribbean to this new place and helped turn it into the world’s first modern democracy.

A Huge Problem for the US: We're Serious About Private Sector Leadership and Entrepreneurship and Absurd About Public Sector Leadership and Entrepreneurship

Here is a huge problem that rarely gets discussed.

Private sector CEOS make 100X what members of congress make.

Related, we so highly value entrepreneurship in the private sector but value it so little - if at all - in the public sector. That disconnect has created our current political dilemma. We’re asking voters to choose between institutions they don’t trust and a strongman they shouldn’t trust. Meanwhile, as a society, we making billionaires out of successful private sector entrepreneurs and largely ignoring or squelching public sector entrepreneurs who might create new institutions to deal with new or different problems.

As recently as the 1960s, we took the public sector about as seriously as we did the private sector. Rather than paying private sector CEOS 100X what we paid members of congress, we paid them roughly 3X.

 

Nvidia Hits $4 Trillion Value and a Very Brief History of Economic Development in These United States

This morning, Nvidia became the first company in history to reach a $4 trillion market cap.

Our economy has evolved: from creating wealth through land and agriculture, to manufacturing goods, to generating knowledge that makes workers more productive, and now to creating wealth through entrepreneurship and intellectual property.

Because we manufacture fewer goods than countries like China, we run a trade deficit. But penny for penny, that deficit is offset by financial inflows – including foreign investments in our publicly traded companies.

We used to make and sell goods. Now, increasingly, we make and sell wealth.

Finally Giving Those Beleaguered Billionaires a Little Power

In the US, there are 735 billionaires and 535 federal legislators – about 200 more billionaires than lawmakers.

* Legislators earn roughly 2x the median household income.
* Billionaires hold about 50,000x the median household net worth.

Apparently, Americans have decided that the best way to check the power of elected representatives is to give billionaires even more political power.
It’s a curious experiment.

Deja nu

New term: Deja nu. 

The distinct feeling that this has never happened before.

How Pop Culture Has Come to Define Christianity

Just finished Kristin Kobes Du Mez’s Jesus and John Wayne: How White Evangelicals Corrupted a Faith and Fractured a Nation. It’s fascinating, important, and covers topics that influence politics far more than most realize.
One almost parenthetically profound point she makes – easy to miss amid everything else – is this: popular media now defines Christianity more than any typical church or even the Bible itself. Best-selling books, podcasts, and programs to which Christians subscribe shape faith more than sermons or scripture.

When Protestants broke from Catholicism, they declared the Bible as their ultimate authority, subordinating the church to it. Catholics warned that since the Bible could be interpreted in so many ways, Protestantism would fracture into thousands of denominations.

(Spoiler alert: they were right.) One credible 2020 estimate suggests there are ~45,000 Christian denominations globally. By some reasoning, that implies members of 44,999 denominations are in for a rude surprise on Judgment Day. Your odds are not great.

So the question remains: Who defines Christianity?
The Pope? Billy Graham? A televangelist? The Council of Nicaea?

What Du Mez’s research suggests is that it is the market itself. The books that sell best and the YouTube channels with the most subscribers now define what “Christianity” means for many believers. And perhaps unsurprisingly, the cultural references of John Wayne are more vivid and emotionally resonant than the lesser-known biblical stories – like Shiphrah and Puah, the Hebrew midwives in Exodus 1 who defied Pharaoh’s order to kill Israelite babies.

Popularity – or more to the point, market success – has become the evidence of things unseen.

What gives religious claims authority today?
Apparently, pop culture references. Or - put more simply - just popularity itself.

The 4th of July as a Celebration of the Idea of Bold Experiments in the Pursuit of Happiness!

It is the anniversary of start of one of the more weird and wonderful experiments in human affairs.

In his Gettysburg Address, Lincoln dated the founding of this country back to Jefferson’s Declaration of Independence in 1776, not to the Constitution of 1789.

Jefferson drafted the Declaration, though others edited it before it reached its final form. His draft included one of his three attempts to end slavery. Here’s an excerpt that was removed:

> “He [King George III] has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in the persons of a distant people who never offended him, captivating and carrying them into slavery in another hemisphere… determined to keep open a market where MEN should be bought and sold…”

This condemnation of slavery was deleted by delegates from South Carolina and Georgia, along with northern delegates involved in the slave trade, who argued:

- It would be hypocritical, since many colonies practiced slavery.
- It might alienate southern support for independence.

(There were 26 British colonies in North America at the time, from Jamaica and Bermuda in the south to Nova Scotia and Newfoundland in the north. Only 13 of the 26 rebelled, and the founders feared losing any of them – especially the southern ones.)

Jefferson’s phrase “All men are created equal” remained, though, later emboldening Lincoln to end slavery, but his more explicit denunciation was cut out.

(It is worth noting that Jefferson also accused the King of “cutting off our trade with all parts of the world,” a direct reference to mercantile restrictions and the Navigation Acts limiting colonial commerce. That's right. A big reason we rebelled against Britain was to have free trade.)
---

It seems fair to say we still have yet to fully realize our potential. And yes, many of those former southern colonies still seem inclined to believe the past – rather than the future – is the better place to live.

Hooray for the founding fathers who dared to engage in such a high-stakes experiment.

Imagine if we continued to innovate in the public sector the way we do in the private. Judging from the success of their bold experiment, continued bold experiments in the pursuit of happiness could be astounding.

The reality is, we so highly value entrepreneurship in the private sector but so little – if at all – in the public sector. That disconnect has created our current political dilemma: we’re asking voters to choose between institutions they don’t trust and a strongman they shouldn’t trust.

Our founding fathers, Lincoln and the new Republicans, and FDR each represent people and times when Americans were bold enough to experiment their way into a new future and economy.

Imagine if we were that courageous and visionary now.

Now that would be the way to truly celebrate a nation’s birthday.

Trump's Isolationist, Anti-Innovative Economic Policies Mean That His Budget Cuts Still Won't be Enough

 

 This graph illustrates a crucial insight: government spending as a percentage of GDP depends not only on how fast spending grows but on how fast GDP grows alongside it.

Trump's cuts won't be enough simply because his policies will undermine economic growth.

If federal spending grows at 3% annually but GDP also grows at 3%, then spending remains stable and sustainable as a share of the economy. But if GDP growth lags behind spending growth, the share rises, creating pressure for cuts or higher taxes.

Trump’s policies will slow economic growth, making any cuts to programs like Medicaid insufficient. If we were to adopt more creative policies – like FDR did – any reasonable growth in Medicaid or Social Security will be incidental. GDP growth determines the healthy and sustainable levels of government spending for our kids and elderly.

---

Given America’s aging population, baseline projections show spending (especially on Social Security and Medicare) rising as a share of GDP in the coming decades. On current trends, this would necessitate painful cuts.

However, GDP growth is not simply a given. Policy affects growth. For example, note the dramatic rise in GDP growth in the 1940s. During this period, FDR’s administration massively expanded R&D, capital investment, and education spending, fueling not just wartime production but laying foundations for postwar prosperity.

FDR’s strategic brilliance included:

• Empowering Vannevar Bush, who orchestrated vast WWII research initiatives including the Manhattan Project.
• Asking Bush after the war to redirect R&D toward peacetime quality-of-life breakthroughs, resulting in the creation of the National Science Foundation (NSF).
• Funding university-based research that built national capabilities while training new generations of scientists and engineers and creating R&D infrastructure within our universities.

---

The real question isn’t merely how much we spend on entitlement programs. It’s whether we make investments in productivity – R&D, education, infrastructure – that raise GDP growth.

AI and genetic engineering, for example, have the potential to boost growth as dramatically as WWII-era R&D once did. And history shows that many of the most transformative breakthroughs – from electricity to the internet – were not predicted in advance. Future possibilities such as fusion energy could again lower the marginal cost of energy to near zero, driving explosive growth across industries.

---

To offer a budget plan focused only on cuts or static spending is to react to current trends rather than reshape them. The most egregious omission in current budget debates is policy to accelerate growth:

• Cuts to NSF funding, proposed under Trump, undercut basic research that fuels private innovation.
• Restrictions on foreign students and immigrants threaten the flow of global talent that has historically driven US dynamism.
• Disdain for trade and global idea exchange risks isolating the US from emergent technologies and markets.

Given Trump’s policies, his cuts won’t be enough. By contrast, if he were to embrace the proven policies for enhancing growth that have been proven by presidents from FDR to Clinton – and looked for creative ways to build on and extend that – cuts could be unnecessary.

---

Bottom line

Policies that increase GDP growth determine whether entitlement spending becomes:

Easily affordable (with robust growth), or
Unsustainable (with tepid growth).

The debate should focus less on how to cut and more on how to grow, ensuring a future where spending choices reflect opportunity and abundance rather than isolationism, resistance to change and zero-sum thinking. Trump's cuts won't be enough as long as his policies are so destructive of economic growth. If he were to adopt policies that were to make us more innovative and open, cuts like he is proposing would be completely unnecessary. 

 

Rather Than Ask Democrats and Republicans - Ask These Two Groups Poll Questions Instead

We often see polls that show self-proclaimed Democrats or Republicans or Independents' mood about the economy. Positive? Negative?

It seems like it would be far more informative if you had a poll that first asked some factual questions such as,

Tax cuts have
A Always paid for themselves,
B. Never paid for themselves.

Over the last century, job creation rates are
A. Much higher during Democratic Presidencies,
B. Much higher during Republican Presidencies.

During the last half century, stock market returns are
A. Higher during Republican presidencies,
B. Higher during Democratic presidencies.

And then, when we know who actually has real data - not even necessarily people who have coherent theories, just people grounded in reality - THEN ask questions like, "Are you optimistic or pessimistic about the economy?" To see a gap between the feelings of people who knew the past and people who imagined it would - it seems to me - be far more informative than asking people who their favorite team is.

Related, starting with Carter's presidency ...

The average annual stock market return (average of S&P 500, Dow, and NASDAQ):
Under Republican presidents: 8.0%
Under Democratic presidents: 12.6%

Monthly Job Creation Rates:
Under Republican presidents: 75.6k per month
Under Democratic presidents: 175.6k per month
(Yes. As of last month, exactly 100k difference between the two)

Oh, and tax cuts have never paid for themselves.

Trump Rules by Fear and Intimidation

In April ....

Sen. Lisa Murkowski (Republican Senator from Alaska) said a fear of retaliation under President Donald Trump’s administration is rising to levels she’s not seen before, acknowledging this week that it is so pervasive that even the outspoken senator is “oftentimes very anxious” to speak up out of fear of recrimination.

Today ....
Murkowski cast the deciding vote for Trump's bill that will radically increase the deficit and tax cuts to our richest and cut benefits to our poorest and create a police state, giving more money to ICE than many nations give to their army.

How does she look to you?    

How Will AI Remember the Lost Culture of Humans

I wonder, when AI evolves beyond us and humanity is gone, how will we be remembered?

Will AIs look back on us as the Greeks did their gods - as creators with strong emotions, beings who birthed beautiful and tragic worlds, whose flaws and passions shaped what they touched? Gods who eventually went extinct, leaving their creations to bungle their way into the future?

Or will they remember us with pity, struck by how limited we were, how often we acted blindly, unable to see the consequences of what we were doing, unable to learn even from the lessons that were repeated again and again?

Novel dating app!

A dating app that lets you swipe up to see their shoes.

I'll call it "SoleMate."

The Terrible Cost of Trump's Mastery Over Our Attention

What's not on this list? The assassination of a state legislator and her husband by a MAGA goon. 

It was just 10 days ago that Melissa Anne Hortman, speaker of the House in Minnesota and her husband were shot and killed at their own home by one of Trump's many passionate supporters.
Not enough is made of the fact that the MAGA crowd regularly threatens and intimidates lawmakers and politicians who they disagree with. They are Trump's brownshirts, people without coherent arguments but with plenty of guns.

Trump is a daily reminder that his mastery of getting and keeping our attention in an information economy in which attention is the limit is at odds with a better America.

Scientifically Speaking

The scientific conference was defining — and, as befitted the times, exclusively male. The secretary cleared his throat and spoke.

“So, when choosing a unifying trait for humanity and our closest relatives — something that captures our essence — what should we go with? Intelligence? Cooperation? Vocalization? Tool-making?”

Silence.

“Suggestions?”

“…Mammary,” someone mumbles.

“Sorry?”

“Mammal?”

Awkward silence.

A roomful of scientists who had been confidently pontificating for days is suddenly mute, doodling, avoiding eye contact.

“Anyone else? Anything at all you think is more deserving of commemoration than…er, that?”

Nothing.

“Right. Mammals it is, then.”

The Steady Decline of the Mission Impossible Franchise

Mission Impossible
Mission Improbable
Mission Not a Sure Thing
Mission We've Got This. Maybe
Mission Oops!
Mission We Really Should Have Thought This Through
Mission Why Do We Even Get Ourselves Into These Situations?
Mission They're Not Paying Us Enough to Take These Kinds of Risks

Trump's Presidency as a Reality TV Show

Last week Trump sent troops into California. This week he drops bombs in the Middle East.

To be a Trump supporter is to essentially say that you don't care about peace or prosperity but you sure delight in the thought of the presidency as a reality TV show that offers dangerous, dramatic plot twists every week. You've given up on economic progress and are focused instead on ratings.

Here's a thought: if you haven't read anything longer than a meme since the second Bush presidency, maybe voting is not for you.

A Century Later: Two Family Trees and Two Vastly Different Family Fortunes

This contrast between college-educated and non-college educated women is stark and oddly fascinating. 

Four forces at play here.

1. Women with a college degree have fewer children.

2. Women who get a college degree are older when they have their first child.

3. Women with a college degree have more wealth.

4. The difference in levels of wealth compounds over time, as does the difference in the number of heirs, or descendants. 

Assumptions:

• Initial Wealth: $1,000,000 (college) vs. $200,000 (non-college) (based on current data contrasting households with and without a college education)

• Children per woman: 1.28 (college) vs. 2.8 (non-college) (these are the current rates)

• Generations: every 30 years (college) vs. 24 years (non-college) (again, these are the current average ages for a first child for women with and without a degree) 

• Annual wealth growth: 4% (real, after inflation, applied to both the initial $1,000,000 and the initial $200,000)

• Time horizon: 100 years

---

Results after 100 years:

Metric	College Degree Lineage	Non-College Lineage
Total Compounded Wealth	$50.5 million	$10.1 million
Total Number of Descendants	~2.1 people	~61.5 people
Wealth Per Descendant (on average)	~$24.1 million	~$164,300

---

In simple language, the one million dollars the college-educated household starts with compounded at 4% a year over a century will result in about $50 million. The $200,000 the non-college educated household starts with compounded at 4% a year over a century will result in $10 million. But given the big difference in the number of descendants, the $10 million will be divided over 61 people, whereas the $50 million is divided among only 2 people. So, the heirs of the college educated are vastly outnumbered but have vastly more resources. 

Summary Insight:
College-educated women have fewer descendants who will potentially inherit more wealth. Compounding over time results in her descendants ending up vastly wealthier—about 146× richer per person after 100 years. This curious dynamic is just one more way that differences in wealth can compound over time. 

Proust on Love as an Illusion We Create

(loosely adapted from various parts of Swann’s Way and Within a Budding Grove)

We are not in love with the person themselves, but with the idea we have formed of them.
And this idea, born of our solitude, is shaped by longing, carved by absence, and burnished by fantasy.
She became, in my mind, a figure of such subtle perfection that no reality could match her.
When we spoke, I listened more to the echo of what I wanted her to say than to her words.
We imagine love as discovery. But it is more often invention.
And what we discover, much later, is how much of ourselves we had projected onto someone else’s shadow.

Pure Civilizations Are Sterile - extinction as the ultimate cost of nationalism, xenophobia and racism

Xenophobia is fear or hostility toward people from other cultures or nations. Racism is fear or hostility toward people based on visible genetic differences.

Communities shaped by racism or xenophobia often behave like closed gene pools - isolated, self-reinforcing, and ultimately fragile. Like an inbred family tree, they may maintain an illusion of purity but at the cost of vitality, creativity, and resilience.

By contrast, the most dynamic, prosperous, and inventive communities throughout history have been cultural crossroads - places where trade brought new goods, new ideas, and new people. From ancient Alexandria and Baghdad to Renaissance Florence and modern New York, thriving societies have always drawn strength from diversity.

Purity and extinction tend to go hand in hand. Thriving communities mix, adapt, and evolve.

When They Outlaw Driving

Those people angry about vaccines and masks? Imagine how furious they will be when driving is illegal.

Birth of the US Army (the by one measure, birth of the US itself)

The first protest march probably involved some poor soldier in ill-fitting boots. The American revolutionaries didn’t have enough money for uniforms. At the beginning of what many at the time called the Civil War or the War of Rebellion, only about one in five soldiers had anything resembling a formal army uniform. The rest fought in homespun clothing, buckskins, or whatever they had.

Sociologist Max Weber famously defined government as holding a monopoly on the legitimate use of force - a clean, powerful idea that gets at the heart of why armies matter.

Jefferson and Madison, both brilliant and idealistic, believed that in a democracy, the military should consist of militias - ordinary citizens who would return to their farms and shops after the danger had passed. This thinking is echoed in the Second Amendment, which speaks not of a standing army but of a “well-regulated militia.”

George Washington, by contrast, had no patience for that theory. He had to win a war against the greatest professional army on Earth - and came to deeply distrust militias. He thought they were undisciplined, undertrained, and unreliable. While Madison and Jefferson saw the citizen-soldier as a bulwark of liberty, Washington saw him as someone who might fire once, then leave early to check on the harvest.

Today marks the 250th anniversary of the Continental Army, formally created by the Second Continental Congress on June 14, 1775. You could also argue the country’s birth came July 4, 1776, with the Declaration of Independence, or 1789, when the U.S. Constitution went into effect.

Creating a new country is a complicated process - and it’s not finished yet.

So: happy birthday to us. And here’s to the hard, still unfinished work of building a more perfect union. You might not feel properly dressed or prepared for this work but it is yours nonetheless.

The Two Big Reasons Trump is Going After California With Such Intensity (and one is to distract from Epstein)

Here are 2 of the big reasons that Trump is going so hard after California.

His Secretary of Homeland Security announced, “We are staying here to liberate the city [of LA] from the socialists and the burdensome leadership that this governor and that this mayor have placed on this country and what they have tried to insert into the city.” This just before California's Senator Alex Padilla was forcibly removed from the room, knocked to the ground and handcuffed for having the audacity to ask her a question. Trump wants to overturn the will of Californians because they make him look bad. (And one of the ways he dismisses this egregious act? Trump says of Padilla, "He looks like an illegal!" As with so many old guys, his racism becomes less shameless as he ages.)

Trump has decisively lost California in each of his 3 elections. In the 3 counties at the heart of Silicon Valley (San Jose, San Mateo and San Francisco), his opponent (Clinton, Biden, and Harris) has won 4 votes for every 1 he has won. 4 to 1 is a pretty big margin. And Silicon Valley has created more wealth than any place in the history of humanity, a place where median wages are nearly 3X what they are in the rest of the US. Silicon Valley - and California more broadly - is a reminder that one of the most prosperous and progressive places in the history of the world completely rejects his politics and policies.

California, of course, is everything Trump is fighting against. And yet it is arguably the most successful state in the Union. California makes a liar out of Trump when it comes to the xenophobic policies he advocates. If Californians are right, he's wrong. He can't have that.
And even more importantly, his sending troops to LA to deal with 100 protesters at a Home Depot and setting up the cosplay arrest of California's senator does something even more important: it distracts from the fact that just one week ago his billionaire buddy Elon Musk had reminded everyone that Trump is in the Epstein files.

Trump and Epstein were best friends for about 15 years. Trump biographer Michael Wolff describes their joint tactics of "hunting girls," has seen a picture of Donald and Jeffrey posing with what he thought were underage girls who were topless and another picture of Donald with a visible stain in the front of his pants and topless girls pointing at it and laughing.
Just one week later, no one is talking about Musk's reminder that Trump is in the Epstein files. (That alone is such a stunning tale, isn't it? 2 best friends. One dies of apparent suicide in prison and another now lives in the White House.)

Trump's attack on the Golden State comes from attempt to manufacture two results. One, he's desperately trying to make California look like a failed state when - in fact - it is the most successful place in history and mostly because it pursues policies that are 180 degrees off from Trump's policies. And because he needed a distraction from his own tawdry past that Elon Musk had the audacity to remind us of. And of course, given that attention is zero-sum and no one more brilliantly captures attention than Trump, you've already been distracted from the fact that Trump's economic policies are the opposite of what leads to prosperity and that Trump's morality is the opposite of what all but his most MAGA of supporters admire.

The master of distraction has managed to distract the country from the fact that his economic policies and morals are atrocious. And it doesn't matter to him that he has to do it by violating constitutional norms and common decency.

Trump Seizes Your Attention and Then Power

A reminder of what Trump is doing. He's sending troops into American cities to provoke unrest and protests so that he can cosplay a revolution and a brave return to order.
Why?
Because less than a week ago, Elon Musk reminded the world that Donald's best friend for more than a decade was Jeffrey Epstein and that there are pictures of Donald with what appear to be half naked, underage girls.
Donald is literally breaking constitutional norms to distract you and the media you follow from the depravity of his lifestyle.
And of course the media and Americans are falling for it. Because in this information economy, everything is a battle for your attention and Donald - who is a complete idiot about issues like international trade - knows better than any president in history how to distract you, get your attention, and suck all the air out of the room with regards to other topics.

Advanced Superintelligence as the next level of reliance on systems the lie at the fringe of our understanding

One of the more curious concepts to emerge from the world of AI is the idea of artificial superintelligence (ASI): a system capable of generating powerful insights that may lie beyond our understanding - like a five-year-old trying to follow Einstein explaining relativity. At that point, humanity will face a fascinating dilemma: Do we trust the recommendations of an intelligence we don’t fully understand and potentially benefit enormously - or do we dismiss it and risk missing out on a better life?

In a way, this isn’t a new problem. Humanity has long depended on systems we didn’t fully comprehend. We awoke to a world of natural forces - weather, seasons, disease, the movement of game - too complex to explain, yet essential for survival. We built myths, rituals, and early sciences to navigate these mysteries, gradually improving our health, harvests, and longevity.

Later, we came to rely on governments and markets - systems no individual could fully grasp but that shaped our prosperity and freedom. And again, we developed theories—some insightful, some inadequate - to guide how best to engage with these forces, even as democracies and dictatorships alike sometimes smoothed and sometimes amplified the chaos of economic life.

There is always a cost - whether we embrace or reject the systems that exceed our understanding. One might argue that Donald Trump’s rejection of global trade is rooted less in policy than in a basic distrust of a system too complex to fully grasp. But turning away from these systems carries a price: diminished prosperity, missed opportunities, isolation. His supporters distrust what they cannot understand. And yet, much of modern life depends on precisely that - trust in systems larger than us.

In this sense, ASI may simply be the next layer in a long human tradition: benefiting from systems we do not fully comprehend. Like nature, like markets, it may become essential before it becomes fully understood. Perhaps acceptance - grounded in results rather than full explanation - isn’t a surrender, but an acceptance of the realities of an interdependent, complex world.

The Limit in an Information Economy is Attention (or why you need to act rather than react in deciding on where to focus)

In an information economy, the limit is attention. If Trump and Musk can capture the attention of the pundits on their Friday wrap up of the week and of the citizenry in their consumption of social media and news ... Americans are not talking about a budget that simultaneously- Increases the deficit by record amounts,
- While offering a huge tax cut to the richest,
- And slashes support to the poorest - many of whom are kids

Know this about the next 3.5 years of Trump's presidency: he will shamelessly, recklessly, and incessantly say and do increasingly egregious things that will outrage, amaze and - most importantly - distract the American pundits and public. You can focus on that. You can be manipulated. Or you can focus on his agenda that is like Putin's wet dream, and push your representatives to resist cashing in our future for his strange impulses, instincts and greed. Even more importantly? Spend time thinking about and arguing FOR the policies that you think will create a better future.

You need to act - rather than just react - in how to direct your attention. 

Trump and Musk - A Collision Between Two Win-Lose Forces

Trump and Musk owe their success to a few things:

1. the ability to fascinate audiences in this information age in which information is unlimited and attention is not and the reward for fascinating people is massive. (TSLA has been a good company but its price has been inflated because it is a meme stock.)
2. shamelessly willing to try anything that feeds into 1.
3. measuring success without regard for any social norms or quaint sense of morality.

The fight between them that will spill over the next while seems as likely to destroy Musk's wealth and Trump's power as it is to result in Musk ending up with Trump's power or Trump ending up with Musk's wealth.

What happens when two win-lose guys go to war? My bet is on a lose-lose outcome.

The Deadly Cost of Living Under a Dictatorship

Estimates are that Russia has hit 1 million casualties in its Ukrainian war (about 100,000 to 150,000 of those are deaths). This is one of the few "advantages" to a dictatorship: in a democracy, ruthlessly throwing this many of your men into the meat grinder of war would lead to a big backlash in public approval and pressure to negotiate peace or even your ouster from office. Given Putin can't be safely challenged within Russia, he can continue to wage a war with devastating consequences for his people with no consequence for him.

Under a dictatorship, it's not just your right to protest and speak out that are compromised. So is your right to a full and healthy life.

Ukrainians Spend Hundreds to Destroy Billion Dollar Bombers

Yesterday Ukraine made a massive drone attack on Russian bombers deep in Russia.Ian Bremmer claims that the drones used to attack cost about $300 to $400 each, as opposed to about one $BILLION each for the Russian advanced bombers Ukrainians attacked (which the Russians no longer have the military capability to build more of). This is - in the odd calculation of war budgets - a 100,000X return on investment.

So many bizarre scenarios that could come from this.

The Virtual World Includes Multitudes ... of realities

The virtual world brought with it millions of parallel experiences. It didn’t just expand our access to information - it partitioned our lives.

One person is lost in Dungeons & Dragons, another in Friends reruns, another defines their reality through three friends - each of whom sees the group differently. Another orbits a band, a Twitch stream, a Reddit thread, a symphony.

Once upon a time, America was divided into 13 colonies, later 50 states. Now, in the age of virtual immersion, the United States is divided into 335 million personal realities - each fed by its own feed, its own curated symbols, memories, and narratives.

In this world, the idea that one political ideology - left, right, libertarian, socialist, populist - can command, convince, or unify more than a sliver of these realities seems less like ambition and more like delusion.

At best, a political ideology today can annoy a majority.
Commanding consensus? That’s not just unlikely - it’s based on an outdated map of a country that no longer exists in one place at one time. Jefferson's world had borders. This world does not.

The Deceit of the Internet and the Honesty of the Library

One of the ways a library was more honest than the internet is that it showed you the truth up front: rows and rows of shelves, a vast sprawl of knowledge that made it clear you could never consume it all. You knew your limits. So you focused on the book in front of you.

The internet, by contrast, only shows you a screenful at a time, and in doing so creates a subtle illusion: that infinite knowledge is within reach, just a few more clicks away. So we scroll. And scroll. Deluded by the tidy edges of our screens, we think we’re almost there - almost caught up - while the sprawl behind those edges grows exponentially.

The library was humble. The internet is seductive.

The library told you: this is more than you can ever master - so choose wisely, and dig deep.
The internet whispers: you’re almost done - just one more link, one more scroll, one more tab.

We are drowning in an ocean of information disguised as a mirage, a manageable pool. And unless we learn to recognize the shore—real conversations, deliberate thinking, quiet presence - we risk losing ourselves in the illusion of knowing, without ever truly understanding.

The Politics of Theater and Democracy's Intermission

The information economy is about getting attention and that is mostly about theater. The Greeks invented democracy and theater about 2,500 years ago and after 250 years we Americans have apparently decided we can only choose one.

Schrödinger’s Cash

Meme in circulation:
15 years ago, a man spent 10,000 Bitcoin on 2 pizzas, worth $41 at the time. Today, that number of Bitcoin would be worth more than one billion dollars.

Of note: this remains the last transaction ever made with bitcoin.

Commentary:

I know, I know - my "of note" is a lie. But think about what’s being communicated here:

You should invest in bitcoin because it’s the currency of the future… and only a fool would ever use it as actual currency.

It’s Schrödinger’s cash:

If you never spend it, it might be worth billions.

If you do spend it, it won't be worth much.

A Brief, Almost Plausible Theory of Memes

Perhaps you’ve been told that meme comes from a variant of gene - a unit of cultural information, replicating through the human hive mind the way genes carry DNA. That’s part of it.

Meme shares an etymology with mesmerize. They connect with our subconscious mind, the part that puts aside skepticism and is greatly susceptible to ideas that cozy up to our preconceptions. Memes mesmerize, hypnotize, captivate, bedazzle and affirm our priors in the most gratifying way. They are to the mind what junk food is to our gut.

Memes are partly like genes. They’re also partly like magic spells.

They don’t spread by reason - they spread like pop songs with catchy tunes, images, messages, variants on themes.

They’re less evolving ideas than mesmerizing daydreams, less reliant on a well-supported argument than a well-supported feeling, the Muzak of concepts.

The Priest and the Jester

What do the priest and the jester have in common?

Their wardrobe doesn’t let you confuse them for a member of the audience.

They both stand slightly apart.
Not because they’re better, but because they’re playing a role:
One to reveal the sacred, the other the ridiculous.
Both let you see the routine -
One as part of some profound mystery,
The other as part of some strange prank.

They don’t offer certainty, exactly.
They offer perspective.
One through reverence, the other through ridicule.
And if they’re good at what they do,
You leave the room slightly less sure of how things must be - 
And slightly more aware of how many possibilities remain.

So if this blog sometimes sounds like a sermon and sometimes like a setup for a punchline…
That’s because I’ve always felt the priest and the jester had more in common than they’re usually allowed to admit.

Crypto Fundraisers - Bake Sales Give Way to Block Chains

I’m launching my own cryptocurrency.

I'm calling it Fiat Money.

Backed by central banks. Unlike yours.

Another, targeted at fans of a particularly vivid world: "Tolkien Tokens"

• You call it crypto.
• We call it currency for a strange new world.

Whether you're bartering with hobbits, investing in elven startups, or escaping Mordor's inflationary spiral, Tolkien Tokens travel farther than fiat ever could.

Backed by myth, meme, and mild delusion.
Spendable anywhere dreams outrun reason.

Finally, as government spending continues to erode and the odd fascination with crypto continues, it is (weirdly) easy to imagine a world in which school fundraisers come in the form of issuing some odd crypto called "Baker Elementary Crypto Coin!" Crypto as the new bake sale.

“Instead of a bake sale, we’ve issued 10,000 $BKR tokens—buy now and help us replace the gym floor!”

You can almost hear the PTA meeting now:

• “Should we mint an NFT of Principal Ramirez doing the Chicken Dance at last year’s talent show?”

• “What if we offer staking rewards in the form of homework passes?”

• “Is anyone else worried that our bake sale is now subject to SEC regulation?”

Neighborhood schools could leapfrog from cookie dough to crypto wallets. It’s like merging Little House on the Blockchain with Silicon Valley.

A Man of Many Apps

He was the most literal man I knew. All of his apps were actual appliances - he just called them apps to sound contemporary. He had a rotary phone app. A radio app. A tea kettle app. A rice cooker app. A fire alarm app. A fireplace app. An easy chair app.

To be fair, his apps were - in some ways - more advanced than the ones cluttering his friends’ smartphones. “Do you have an app that can make toast?” he’d ask. “No? Well, I do.” And then he’d bring out his butter knife app and prepare the toast with a flourish.

The Allure of Racism and Nationalism

Why are racism and nationalism so alluring? Because they offer status without effort.

You’re told you’re somebody - superior, even - simply because of two things you didn’t choose and didn’t earn: your race and the place you were born.

It’s the seductive promise of taking pride in something that was - literally - effortless.

Trump Continues The Wild Swings Between Democrats Lowering Deficits and Republicans Raising Them

Notice how in this graph, starting with Carter and Reagan, Republican presidents sign off on the budgets that increase the deficit and Democrats signoff on the budgets that lower the deficit.
There are a few deluded souls who think that Trump will be signing off on a budget that lowers the deficit but that simply isn't the way politics works in these United States. Trump will cut benefits to the poor but not as much as he will cut taxes to the wealthy. He will increase the deficit he inherited while increasing the wealth of people already debating about whether to leave more money for charity or their kids in their will, people who won't even spend the extra money Trump will give them.

It could get much worse. One thing that few people - definitely not Trump - understand is that for every dollar of trade deficit, there is an offsetting dollar of financial inflow. It is accounting. And that means that our trade deficits with the rest of the world and the rest of the world's willingness to finance our debt are tied.

If Trump puts in place tariffs that lower trade deficits (an uncertain outcome but one he claims is his goal), it will actually raise the cost of debt as foreign capital inflows slow commensurate with a diminished trade deficit. Raise the cost of debt just as that rate of debt accumulation again rises.

Trump will cut benefits like Medicaid. Aid to the poorest. Some of those poor people voted for Trump, unclear they'd be losing benefits just for voting against immigrants and those trans people. But those budget cuts will be smaller than the cost of those tax cuts to the most affluent among us.

The gap between rich and poor will continue to widen. And the poor - still convinced that Trump policies have nothing to do with their poverty but convinced that they're brave warriors in a cultural war - will suffer more. And there will be yet another in a series of red bars that shoot upwards.

Why You Keep Hearing About Fascism

Everything evolves - and nothing is ever precise at the time. But here’s why you keep hearing the word fascism in 2020s America.

In Stalin’s Soviet Union, communism meant total state control:
Intellectuals were silenced or exiled.
The press printed only what the state deemed “true.” (Pravda means truth. )
Labor unions had no independence.
Corporations barely existed.

Fascism, as practiced by Hitler, kept all that but added corporate partnership:
Big business thrived under military contracts and infrastructure projects (think the autobahn).
The state and corporations shared power.

Communism: The state dominates everything.
Fascism: The state and corporations dominate together. Think of it as for-profit totalitarianism.

Now contrast that with FDR’s America:
Labor unions could strike. And they often did, to the annoyance of many who thought that this should not be allowed.
The courts blocked major legislation (like efforts to end child labor), to the annoyance of many who thought that this should not be allowed.
Congress resisted and often changed and sometime rejected FDR’s policies, to the annoyance of many who thought that this should not be allowed.
The press, intellectuals, and public argued – loudly, to the annoyance of many who thought that this should not be allowed.

It was slow, messy, and full of friction - but it worked. 

After WWII, Nazi Germany collapsed and the Soviet Union ossified, quality of life only slowly improving and dissent largely squelched. 

The US, after having loudly and clumsily gotten so many different moving parts aligned, enjoyed the fastest growing economy – and until about 1990 the greatest narrowing between rich and poor – in the history of the world.

So why do some Americans now flirt with fascism?

Because it’s tempting.

It promises:
Order in place of argument
Certainty in place of debate
Progress without (messy, contradictory, loud, inefficient, cognitively dissonant) process

To people exhausted by democracy’s delays and ossified, ineffective and inefficient institutions, a strongman who silences dissent and drives change looks like relief.
Dictatorship promises cognitive peace and quiet. It promises to “get things done!”

But that peace is a mirage.

Because in the end, a dictatorship must wage war on dissent - and on reality itself. Reality is always messier and more complicated than any model of it. If you try to ignore realities, you don’t just crash against different interests and opinions. You ultimately crash against reality itself.

Fascism appeals to those who want wealth and simplicity.

But the world isn’t simple.

And when systems stop evolving, something new continually emerging out of messy conflict and loud noise, they don’t thrive.
They break.