Circus Tents, Factories and 2026 Job Creation

Five months into 2026, job creation appears to have returned to normal after an unusually weak 2025. The weak job growth of 2025 likely reflected several factors: uncertainty around tariffs and trade policy, slowing labor force growth from weaker immigration, and higher interest rates. Some of the 2025 tariffs have since been struck down by the courts. Trade uncertainty remains higher than it was in 2024, but 2026 has had less disruption than 2025.

A president changes the economy primarily through policy. War with Iran has increased inflation. Trump's 2025 tariffs lowered job creation. But in 2026 Trump has had less impact on trade policy than he did in 2025, because the courts have ruled that Congress, not the president, has the authority to impose taxes, even in the form of tariffs. That is good for the economy. To the extent that Americans no longer worry that presidential narrative will become actual policy, late night posts can be dismissed as odd but irrelevant.

Within limits, politics can become increasingly theatrical while much of economic life continues according to its own logic. America is at times a place with a circus tent out front, full of spectacle and sentiment, and a factory and office in the back where the actual economic work gets done. The next few years will depend in no small part on whether Congress, the courts, and the voters in November can keep the show in the tent and out of the factory.

Word Cloud for New Politics for the Next Economy

 Book due in 2026 ...

The Impracticality of Measuring Near-Magical Gains in Productivity Already Demonstrated by AI

"Through their artificial intelligence model AlphaFold, Demis Hassabis and his team at DeepMind cracked the code. By analyzing the amino acid sequences of hundreds of millions of proteins, the AI learned the rules of protein folding. Today, rather than spending years in a wet lab, the system can predict the highly accurate 3D structure of a protein in just 10 to 20 seconds."

AI completes this incredibly important task that once took a PhD student years in just seconds.

How do you even measure that kind of productivity gain? How would that even show up in productivity gains or economic value?

To the extent that AI is as transformative as it promises to be, it will - like the industrial revolution - actually elude proper measure. Think about air travel. In 1900, no one could travel by air. By 2000, millions of people regularly did. How do you actually measure productivity gains when they go from, "Doesn't exist" to "Fairly common?"

John Gray on What You Shouldn't Look for In Politics

"One shouldn't look to politics for human salvation. And one shouldn't look to politics for meaning in life. If you do you'll be terribly disappointed. You should look to politics as a way to protect yourself, the people you care about so that you'll be able to find or make a meaning in life." 

- John Gray

Sapphaccino and Greek Literature

Overheard in a Greek cafe.

"My knowledge of Greek literature begins and ends with the Iliad and the Oddity," she said before taking another sip of Sapphaccino, a curious concoction the waiter had suggested as a stimulating drink best shared with that certain someone.

LBJ, Robert Caro and Power

Lyndon Baines Johnson's biographer Robert Caro pushes back against Lord Acton's familiar axiom: "Power tends to corrupt, and absolute power corrupts absolutely." Caro saw something else.

"Power doesn't always corrupt. Power reveals. When a person gets power, you see what was underneath all along. With Johnson, what you see is that as soon as he had it, he passed the first major civil rights legislation since Reconstruction, roughly a century earlier."

Related, LBJ's political career lasted 32 years. In 1937, he was elected to the House of Representatives and his presidency concluded in January of 1969.

Robert Caro has been researching and writing his multi-volume biography of LBJ for 49 years and the fifth and final volume is still in progress.

A half century+ to complete the biography of a career that lasted three decades. 

Optimizing a Life Means Suboptimizing Its Moments

There is a counterintuitive feature of systems optimization. You don't optimize a system by optimizing any one part of it. To optimize a system, you have to sub-optimize its parts. Let me illustrate by talking about a life.

Your life is a product of many things: your physical health, your mental life, your friendships and family, your sense of meaning, your connection to community, your sense of individuality within it,  your sense of legacy, your income and financial security, the pleasures of food and music and books and stories, the tribal urges that find expression in cheering for your team.

Here is the deal. If you optimize any one of these, you will sub-optimize the whole. Do everything you can to be in peak physical condition and you will have little energy left for great literature. Do both while working full-time and your social life will suffer. The hours in your week are zero-sum, and optimizing for any one piece sub-optimizes the rest. Oddly, the way to optimize any system, including and perhaps especially your life, is to sub-optimize every piece of it.

The punchline is familiar: a balanced life means moderation in all things.

Now the part that complicates this.

There is a familiar argument that to accomplish anything significant you need to work eighty hours a week. People point out, correctly, that an eighty-hour week is counterproductive. Long term, this is true. Short term, the original argument is right.

A balanced life is not something achieved in any given instant. You do not split each hour into seven minutes for workout, three minutes for great literature, eight minutes for relationships, four minutes for eating. Even within a day or a week, we focus on one thing at a time. So in any given instant, we are not balanced.

There are times in life when you need to move forward. In those instances you look for the limit or obstacle and you challenge it. You optimize to the part that is the limit, at least until it no longer is.

If you optimize a life but not any one part of it, what does it mean to sub-optimize in a way that is best for your life? It means you have stretches of life that really do optimize for one part and subordinate everything else. If you have children, you do not dedicate the rest of your life to optimizing for them. But in the first few months? First few years? The first decade or two? You often subordinate the other parts of your life to them. Nobody with a newborn is running marathons or throwing big parties or reading great literature. They are sub-optimizing everything to that new life.

If you write a dissertation or a symphony, build a business, pursue a gold medal, you will go through something similar. You will sub-optimize to that one thing for a few months or years. New parents do not put in forty hours a week for the newborn. It would die in the other eighty-eight. A similar but less dramatic version of this happens with any ambitious venture. Balance suggests you never dive in. Success suggests you do.

You may keep diving into things across your whole life. More realistically, the dives are separated by six months to six years of "la de dah," days when not much happens. (The perfect storm of incredible opportunity for which you are perfectly suited at exactly the right time of life happens once, twice, maybe three or four times in a lifetime. Know when that happens and dive into it.) You throw yourself into things that produce sub-optimization elsewhere. You are immoderately out of balance at every stage, and the end result is a full life that is balanced because it lets you experience life whole over the course of a whole life, but never in any one instant.

A life takes a lifetime. If you are interested in a legacy of any kind, you do not even optimize for a window as small as a lifetime. But that is the stuff of another post.

The Simple Trade Agreement that Helped Transform Two Countries Into a Shared Economy

After WWII, Europe transitioned from a model based on conquest and extraction to one based on trade and interdependence. You need coal and iron to make steel.

France’s steel industry relied heavily on the coal-rich Ruhr Valley in Germany, while Germany's heavy industry relied on the iron ore found in the Lorraine region of France.

Because neither country could effectively produce steel or build a modern, post-war industry without the resources of the other, they decided to merge their economic and production interests. It was a forced interdependence, almost like an arranged marriage.

The agreement to dependably formalize that trade, known as the the European Coal and Steel Community (ECSC), created in 1951, evolved into the EU. As it turns out, iron and coal are not the only exports / imports that go into creating a modern economy and the trade agreement that began with these simple but essential ingredients for modernity expanded to include thousands of other products and materials.

The two world wars were devastating for France and Germany.

France in WWI lost roughly 25% of all their men aged 18–30.
Germany in WWI lost about 13% to 15% of its entire mobilized military. In WWII, the destruction of the German military was even more complete; some historical estimates show that over 30% of all German males born between 1915 and 1924 were killed or went missing.

The arrangement made for trade and interdependence hasn't just made them far more prosperous, it has made France and Germany far more able to turn young men into old men rather than corpses. The last half of the twentieth century has seemed to support the notion that greater economic interdependence has made trading partners more peaceful and prosperous. 

Kyiv's 1,544th Birthday

Today, the city of Kyiv - Ukraine's capital - has turned 1,544 years old [per Olga Nesterova].

I suppose such a thing could change your perspective about how long you could hold out against a Russian invasion.

A New Kind of Hairdo

The barber was confused.

"You'd like a dome cut?" 

"No. Palindrome. I want my beard and hair cut and groomed to similar lengths so that I look the same coming or going." 

"So not a palin dome?" 

"I don't even know what that is." 

"Nor do I," sighed the barber. "Nor do I."

Harari and the Claim That The Whole of Human History is About Cooperation

 "The whole of human history is about, How do you get more people to cooperate and to trust each other? And you cannot do that only with brute force."

- Yuval Noah Harari on Ezra Klein podcast

Bull Market

Bullish and bull shit (excuse my language) sound quite similar in the conversation about market projections.

How You Ask Someone to Dance

The way my two and half year old granddaughter asked me to join her dancing. 

"Do you want to be dizzy like me?"

Scientific Ambiguity

The difference between them? Bob read a lot of science fiction. Carl read a lot of science nonfiction. Bob thought the difference between those two was mostly fictional. Carl thought the difference was real.

If Nvidia Were Priced Like a Few Other Tech Stocks

Nvidia is the world's most valuable company. If it were priced like comparable stocks, it would be worth even more.

As of this writing - Monday, 25 May 2026, the day the market is closed - NVDA price is $215.33.

If it were priced at the same forward as ...

Microsoft, with a Forward P/E of 21.6, it would be priced at $235.00,

Alphabet (GOOG), with a Forward P/E of 26.6, it would be priced at $289,

Amazon, with a forward P/E of 30, it would be priced at $324.

Nvidia price has gone up so much so quickly that it might just be lagging its real price. Which seems worth considering. 

A Very Simple Explanation for the Rise of Right-Wing, Populist Parties Across the West in Recent Decades

Until roughly the era of Reagan and Thatcher (the 1980s), the simplest predictor of whether you were rich, middle class, or poor was which country you lived in. The gaps between nations were enormous, and the gaps within the wealthy nations were relatively compressed. Globalization changed this. As trade and capital flowed more freely, the gaps between countries narrowed while the gaps within countries widened. The income disparities that had once shown up mainly between nations increasingly showed up within them. A class of relative losers emerged in the wealthy democracies, workers whose incomes stagnated even as the global economy grew.

This economic shift created the conditions for political backlash, but it did not by itself determine the form the backlash would take. The dissatisfaction could have been channeled toward redistribution, which is the traditional left-wing response to inequality. Instead, in most of the wealthy democracies, it was channeled toward nationalism and opposition to immigration, which are right-wing responses. The rightward direction was shaped by additional factors: the convergence of mainstream parties on support for globalization, which left the dissatisfied without mainstream representation; the shift of left-wing parties toward the educated professional class, which left the working class politically homeless; and the cultural dimension of the dissatisfaction, which the right addressed directly and the left, committed to cosmopolitan values, could not. The economic foundation produced the dissatisfaction. The political and cultural context determined that the dissatisfaction would find right-wing rather than left-wing expression.

On a Scale from Is This a Great Country to Or What?

11 years ago. Back when there was still reasonable doubt.