New Politics for the Next Economy (or, the transition that explains why you're feeling so stressed about American politics)

Feeling stressed about politics and the country? That makes sense. You’re living through a transition into a new America.

As the table shows, the US has already been four Americas: Jefferson’s agricultural economy, Lincoln’s industrial economy, FDR’s full-employment economy and Reagan’s information economy. Each began with a transitional president, and each had its own limit to progress. Now we’re moving into a fifth America, an entrepreneurial economy, where the limit to progress shifts from culture to entrepreneurship. Of all the things that means, here is the most exciting: a shift from institutions using individuals as tools to individuals using institutions as tools.

Land, capital and labor are the classic factors of production, and each limited one of the first three Americas. Less obviously, culture belongs on that list. Culture is a community’s know-how and its values. Do you know how to make steel? Cars? Computer chips? How to edit DNA, make a latte or write a song? What you know how to make shapes your economy. What you value shapes your community: what you praise or criticize, tax or subsidize, make legal or illegal. Romantic ideals or warrior spirit? Great art or science? Turn those dials and you get very different economies, very different communities, and very different kinds of children.

Entrepreneurship is to institutions what invention is to technology: the ability to create, change and improve them. We live better than the great apes because of our technology, but also because of our institutions, which let us do together what none of us could do alone, from raising a barn to launching a spaceship.

Markets have never rewarded institution-building more. The world’s ten richest people, all American men, are together worth about $3 trillion, and most of them built their fortunes on companies they founded. Yet Americans have rarely trusted their institutions less. Gallup has tracked Americans’ confidence in defining institutions such as Congress, churches, big business, the courts and the media since 1979. The share expressing a great deal or quite a lot of confidence has fallen from about half to about a quarter. We value what institutions can do, and we’re frustrated with the ones we have.

That calls for a different kind of politics, one focused less on culture and more on creating and improving our institutions. Picture public-sector entrepreneurship working like Silicon Valley. Most initiatives will start locally, simply because there are far more local governments than state or national ones, but they can start at any level: helping immigrants settle in, launching careers for kids not bound for college, giving parents and preschoolers safe and fun places to play and connect. Many - probably, as happens in Silicon Valley, most - will fail. Some will succeed and stay local, because they fit one community’s culture but not another’s. A few will succeed spectacularly and spread to other cities, states, even the nation. In a country of many cultures, the right scope for a solution isn’t decided in advance. Call it scalable but it's essentially discovered.

The transition into a fifth America, perhaps beginning with the next president in 2029, will be as big a change as Lincoln’s or FDR’s. It will be stressful, but it can be invigorating: the stress of building something, and of institutions finally becoming tools for the people who use them.

Real World Data

She intended to say “real-world data,” but it came out “real weird data.”

And somehow, that stuck. Because the data's most remarkable feature wasn't that it was real. It was that it was weird.

Microsoft Offers Voluntary Buyouts to 60,000 Employees - Shifting Spending Into Capital for AI Buildout

Microsoft has offered voluntary buyouts to roughly 60,000 employees, more than a quarter of its workforce.

Not 60,000 layoffs. No one knows yet how many will accept.

But the announcement is related to AI. Microsoft is investing extraordinary sums in AI infrastructure while seeking to reduce other costs.

What's less clear is whether AI is already making employees redundant or whether Microsoft is simply shifting its investments from people toward computing infrastructure.

Either way, it raises an critical question: Are we witnessing AI replacing work, or capital replacing labor as the preferred investment in creating future value?

That last distinction is particularly significant. AI doesn't have to replace a worker's tasks directly to change the economics of employing that worker. It may change where corporations believe their next dollar of investment will generate the greatest return.

That's potentially a much bigger economic story than the headline suggests.

Like a Dolphin

I feel like a dolphin.
What?
No porpoise.

James Bowman Became JD Vance

At birth he was James Donald Bowman.

Around age 6, he was given the name James David Hamel.

Then, in April of 2013, at 28, he took the name James David Vance

He used "J.D." informally from high school and dropped the periods to "JD" in July 2021 (age 36) when entering politics. And that's how baby James Donald Bowman became your vice president JD Vance.

In a decade he might flip JD to DJ (more Limbaugh than Grandmaster Flash) and claim he doesn't remember Trump or ever working with him. Change his name yet again and claim to be somebody else. I think the term you're searching for is transitioning. 

Democracy and Markets

My old-man political fantasy is simple: No one takes you seriously as a politician if you think markets and their ability to make people rich are evil—or if you think governments and their ability to tax and regulate are evil.

Markets can make people absurdly rich. That's actually very cool.

Governments can tax the rich to mitigate poverty and regulate markets so that getting rich doesn't come at the expense of everyone else. That, too, is very cool.

There is no best possible world that doesn't include both the opportunity to become rich and the commitment to care for the poor.

And one measure of a government's success should be its demonstrated ability to increase the number of rich people while reducing the number of poor people—without treating either wealth or poverty as evidence of virtue or a character flaw.

The goal isn't to make the rich less rich or the poor more virtuous. It's to make prosperity more common and poverty less punishing.

Rampant DEI

The Trump administration is looking for ways to shut down the Lord of the Rings franchise because of its completely out of control Diversity, Equity and Inclusion (DEI) program. Elves, dwarves, Hobbits, orcs, goblins, and trolls don't even complete the list of those employed by the franchise. 
"The whole thing is completely out of control," said Trump's latest blonde-haired press secretary. "It has to stop." After pausing for a breath she continued, "President Trump has also renamed Middle Earth what it has always been named, and that's Middle America." 

Nvidia Chipped Mercedes Benz Won Motor Trend's Prestigious Car of the Year Award for 2027

In an earlier post, I contrasted the huge P/E of Tesla with the more reasonable P/E of Nvidia. That gap has only grown since the post. Nvidia's P/E is just under 27. By contrast, Tesla's P/E is 409, 15x Nvidia's P/E. 
A self-driving car reliant on Nvidia's new chip Thor just won Motor Trend's Prestigious Car of the Year Award for 2027. 

  

Key Details of the 2027 Mercedes-Benz S-Class Winner:
Engine: 4.0-liter twin-turbo flat-plane crank V8 engine producing 553 horsepower.
Starting Price: Around $136,000 for the S 580 model (with broader pricing spanning roughly $114,000 to over $200,000).
Notable Features: Hands-free driving tech reliant on Nvidia's Thor chip, a new operating system, AI assistant, 15 airbags (including heated seatbelts for rear passengers), and high-end leather and wood craftsmanship.

It is not just that Nvidia has potential within the whole AI ecosystem. It has potential to become the self-driving guide for dozens of car manufacturers. If Tesla can have a P/E over 400 for its potential with just its one car brand, think how much potential lies in Nvidia's chip and operating system that could literally be driving dozens of car brands' hundreds of models. 

Per Pragmatism, Philosophy Isn't Passive

In The Metaphysical Club, Louis Menand tells the story of how William James, Oliver Wendell Holmes Jr., Charles Peirce and their friends developed Pragmatism, a distinctly American philosophy. James’s insight was that thinking isn’t a passive mirror of the world but a way of coping with it. We don’t simply discover truth; we make it, by testing ideas against experience to see what works. Put differently, philosophy is not something that sits apart from reality but is in a kind of dialogue with it, at turns shaping and being shaped by it. How we think about reality changes reality ... and that, in turn, changes how we think. Perception, thought, action and reality are entangled with one another.

We often wait to feel entirely certain, perfectly prepared, or fully aligned before we make a choice or take action. But pragmatism reminds us that clarity does not precede action; clarity is a product of action.

Meliorist

I am a meliorist.

A meliorist is a person who believes that the world can be made better through human effort, will, and social action. Max Roser expressed a melioristic position in the mission statement for Our World in Data. He said that all three of these statements are true at the same time: "The world is much better. The world is awful. The world can be much better."

Core Philosophy: A meliorist sits in the middle ground between optimism (the belief that the world is already the best it can be) and pessimism (the belief that the world cannot be improved). [Wikipedia points to the great American William James as the source for this distinction.]

Agency: It asserts that progress is possible, though not guaranteed, and that people have a moral responsibility to fix problems.

Origin: The word comes from the Latin word melior, meaning "better". It first appeared in English during the 1840s and was famously used and popularized by Victorian novelist George Eliot in the 1870s. [Merriam Webster]

Last Economic Numbers Before the Election - Unemployment and Inflation Rates, Stock Market Performance, and Jobs Created

 

Fifty Years of Making the World More Editable

Apple and Genentech were both founded in 1976, fifty years ago.

One helped transform the seemingly specialized technology of computing into something ordinary people could use. The other helped establish an industry built on a remarkable proposition: that genetic information could be manipulated, allowing us to engineer living organisms to produce things nature had never produced in quite that way.

Both companies helped change our understanding of what was normal—and what was possible.

And both emerged from a distinctive culture in California's Bay Area, a place unusually receptive to the idea that the world is more editable, more malleable, than previous generations imagined.

The deeper connection between computing and genetics is information.

Software code determines what computers do. Genetic information helps determine what living organisms become and how they function. In both cases, changing information can change the behavior of extraordinarily complex systems.

And that suggests something profound: the possibilities available to us depend not merely on the resources we possess, but on how those resources are organized.

Information is central to that organization. Change the information, and we can change what is possible.

Fifty years after Apple and Genentech were founded, AI is extending that insight into another domain: our ability to organize knowledge, work, and institutions.

Perhaps the most consequential discovery of the Information Economy was not simply that we could process information.

It was that more of the world than we had imagined could be rewritten.

Institutions as Tools

A central message of my books The Fourth Economy and New Politics for the Next Economy is a transformation too rarely discussed: the shift from institutions using individuals as tools to individuals using institutions as tools.

Machinery shifted the limit on the value we could create through work from our physical abilities to our cognitive abilities. AI promises another shift—from the limits of our intelligence to the limits of our entrepreneurship.

Increasingly, our success will depend less on what we can do ourselves than on what we can imagine and bring into being: our ability to orchestrate capital, people, technology, and materials into initiatives that excite investors, attract customers, and create products, services, and experiences that enrich lives.

In this economy, realizing one's own potential becomes increasingly entangled with helping others to realize theirs. 

And here is a curious paradox: as individuals become more entrepreneurial, they become more dependent on the quality of their relationships.

Entrepreneurial success requires creating value simultaneously for customers and investors, employees and suppliers. It requires imagining possibilities that others find worth pursuing or at least supporting, building institutions that people want to participate in, and coordinating contributions that no individual could make alone.

Far from celebrating the self-sufficient individual, entrepreneurship reveals just how interdependent we are. The paradox of the Entrepreneurial Economy is that the more capable we become as individuals, the more our success depends on what we can accomplish together.

Ultimately, it is this entanglement—the quality of our relationships and our capacity to create value together—that makes a neighborhood, community, society, or nation rich, vibrant, and successful.

Sam Spade in Trouble

"I don't mind a reasonable amount of trouble," Sam Spade said in the Maltese Falcon.

Which seems, on the face of it, fairly reasonable. 

Trump Ocean - the man is drowning in hubris

This month, Donald Trump proposed renaming either the Atlantic or Pacific Ocean to either "Trump Ocean" or the "Ocean of the Americas" (and also mentioned the "American Ocean"), and he stated that he asked Google CEO Sundar Pichai to update Google Maps with the new name.
And a third of the country still thinks he's great.

Rapid Growth of AI

Anthropic went from roughly $1 billion to $65 billion in run rate in about 18 months. ChatGPT was the fastest-adopted consumer product on record, reaching an estimated 100 million users in about two months.

Nvidia's DSX POD - Radical Acceleration In the Rate of Data Center Creation

Nvidia's Jensen Huang. I don't know any CEO who more consistently identifies and then breaks constraints. It is no coincidence that he's created the world's most valuable company.

This from Yahoo Finance

On October 21, 2026, at its GTC Berlin conference, NVIDIA unveiled DSX POD, a revolutionary modular reference design that packs a complete Vera Rubin AI factory into a structure the size of a standard shipping container. By shifting the complex assembly process to manufacturing facilities, this containerized solution slashes AI data center deployment times at a prepared site from six months to just 14 days.

Zelensky's Grandfather Fought Hitler

Four Jewish brothers went to war against Hitler. Three were killed. The fourth survived, and his grandson, Volodymyr Zelenskyy, is the president of Ukraine, now fighting a war against Putin.

The Divergent Paths of Two Donalds

Americans. We're a slow-witted people but not a no-witted people.

Putin's buddy continues to lose support. The good Donald (Duck)'s approval ratings continue to run at about 80%. The bad Donald (Schmuck)'s, less than half that, at 31%.

Yippie A-I

He pronounced it weirdly. Took a beat to realize what he was saying when he drawled, "Yippie A-I," his sarcastic commentary on how the West was won.

Alberta to Remain Canadian - and the perpetual clash of culture and politics

It looks like Alberta will remain part of Canada. The New York Times reports that, "With just over a third of votes counted, 76 percent of voters chose to remain part of Canada with 23 percent seeking another vote."

With family in British Columbia and business travel all over the US, I have come to believe that BC, Washington, Oregon and California likely have more in common than BC and Alberta or California and Texas. Cultural and political maps don't always align, though, and it is one of the biggest reasons politics can be so contentious.

The AI Population is Already as Large as the Human Population - and rapidly growing

The population of AIs was effectively zero as recently as 2020. The number of AI have already grown to about the same population as humans but will rapidly increase from here.