Brilliant and compelling, however, corporate ownership would give government a more direct say in corporate governance. I am concerned that a broken government, one led by corrupt, power hungry, egomaniacal, greedy politicians focused primarily on their own personal enrighment and prejudices would be the undoing of this approach. Noah, perhaps you can explore this concern and approaches to address it.
Worst of both worlds - no leverage when non-corrupt governments elected and continued ability for the corrupt regimes to exert influence on company policies through non-shareholder measures. The solution would seem to be a Federal Reserve-like body empowered to act as a real public shareholder advocate interested in financial returns AND in opposing corporate policies that are contrary to the public good. The trick will be to find a way to insulate the "AI Fed" from the most currupt Presidents like Trump. (Or we also, like, outlaw obvious Presidential corruption with a package of reforms overturning terrible SCOTUS policies and Constititutional mis-interpretations like "unitary executive" theory. )
This policy advice is a bit too creative. Look for policy with more or a track record.
Human reservations? Data center demand for electricity is an issue, and in some cases, it could make sense to protect local ratepayers from higher electricity prices due to data center demand. But we don't need to reserve LAND! Data centers' land footprint is tiny compared to what's available.
As for a sovereign wealth fund, countries tend to do that as a way of saving a temporary windfall, like in a resource boom. Strategic investments in key companies could sometimes be smart, though both incompetence and corruption are big risks. But why borrow to buy into a stock market that looks overpriced?
Yeah, restricting land for data centers seems silly. The energy and water concerns are pretty massively overblown but LAND concerns? They just don't take that much space. And they are typically built in relatively inexpensive places. Distance DOES increase ping but only slightly. They can easily be built 50-100 miles outside of major population centers.
You are making my point. AWS is part of the largest concentration of data centers in the world, in an expensive suburb of DC.
Dallas/Fort Worth, Chicago, Atlanta, and Phoenix are some other major centers.
Most current data centers are generally near large metros in areas with good Internet and electric infrastructure. Not in inexpensive remote places. They are looking at the latter, but it’s a small percentage thus far.
Oy...who knew Noah wanted to own the means of production just like Trump.
Each according to his needs. Statism, socialism, or communism, take any ism you like.
The problem for me is that the government never delivers. I don’t trust the government. The government of Joe Biden allowed a massive number of immigrants, including people on the terror watch list, which caused a xenophobic response to immigrants.
The government has started wars that has verterns wondering why when we lose and walk away. Incoherent policies that cause inflation, overspending, and massive debt threaten us with a fiscal and monetary crisis.
According to an internet search, 12 homes in Palisades have been issued certificates of occupancy. My mother died in October, and we are selling her home. Homes in her neighborhood are being replaced, so a builder is likely to be your buyer.
According to the buyer we are in escrow with, it will take 18 months to get permits to tear down my mother's house and then get permits to build. The number of boards and panels, both local and state, that must approve each step is enormous.
The problem with Abundance is that nobody wants to give up their say in any project. That is not human behavior. We all laugh at Trump, who thinks his fingers should touch everything from professional golf to the Kennedy Center. Yet the expectation is that locals and the State will give away its power. Not going to happen. I don’t mean to pick on Democrats, but we have to face facts: Democrats love government the more the better. Regulations? We need more.
My issue is that more government leads to more sclerosis.
Should the government own a large amount of shares in companies? NO! Absolutely not. USS wants to close an inefficient steel mill that is losing money. Trump decided that they should keep it open to save jobs. The government, as in Trump, felt the USS should lose money to keep 800 workers working.
Part of capitalism is creative destruction. It is why our economy grows to the benefit of all. Noah assumes there will never be another Trump. A solitcious populist weasel who is an economic idiot. I’m glad he trusts politicians; I don’t. Perhaps he thinks there are no bombastic populists within the Democratic Party. A dubious assertion.
Now we head into George Bush territory, who wanted to voluntarily invest SS funds in broad stock market indices. The Dow was 5000 at the time and today it at 50,000.
I have no issue with the government buying into the broad market, but no way should the government own any controlling amount of individual stocks. In the infrastructure bill, there was like $45 billion set aside to build out rural broadband. Not one penny has been spent. I believe the reason was a whole slew of DEI requirements. How many minority owned businesses do you think are in Silina, Kansas?
We have had two idiots as presidents in our recent past. Does Noah really believe that screwball ideas will never find their way into the boardroom? If Trump hasn’t given you pause in allowing the Federal Government to gather even more economic power, I have no hope for you.
The government did not produce any Covid vaccines whatsoever.
Government taking money from someone to subsidize someone else (Obamacare) is not evidence of competent government. It might be good policy, but it’s zero sum. They didn’t produce anything or have any innovative idea. It’s just having men with guns take stuff from people and give it to their voters, literally.
You can love redistribution, I don’t care. At issue is managing corporations.
Finally, I hardly think the US military being a very powerful force is much of a lead-in to more progressive spending priorities. It’s the world’s most expensive military, by far, and uses weapons produced entirely by private companies.
It's weird to not give the government credit because private companies are involved. Program management is a real job, regulatory and quality ensure a vaccine's safety. Does NASA not deserve credit for the Webb space telescope because some private contractors helped build it to NASA specs? And the casual dismissal of Obamacare as "redistribution," is that also saying private health insurance is just redistribution? It seems like you've created a system that gives the government no credit for physical things being built because they lead private contractors, and then turn around and when it is a more government program decide it also is unimportant because it is allocating resources where theyre most needed, not building something physiccal.
Also it is GREAT that the government leverages private industry to get so much done. Why not pay experts to achieve the outcomes you want? If youre not getting what you pay for, end the contract. But if you are, execute.
I responded to a comment saying "government never delivers" and i gave some concrete examples of government delivering, and I respectfully disagree that they were lesser accomplishments. The plot here is how to manage an uncertain future with AI. Perhaps government running corporations iant the right outcome - but I am more optimistic on the competency of the government than you. And thays fine, it is ok to disagree. Have a nice weekend.
But this is about AI? You think we have problems now, just wait. We’ll all be begging the government to step and and save us when the mass layoffs hit.
Of course, but sending out unemployment supplemental income is very different than giving control of companies to a government that hasn’t earned our trust. That can’t build naval vessels, lay fiber-optic cable, or build high-speed rail. When you look at the subject of public corruption, congressmen of modest wealth entering service and leaving multi-millionaires, it is foolish to even consider. But, hey, you want to trust Trump or any politician with our economy, that is your right.
I understand the skepticism, but the government does sometimes deliver. We just ignore our successes. The government gave an incredible covid vaccine within a year of the outbreak. Obamacare teally did improve health care for millions. Afghanistan did hurt when we walked away, but also worth noting the combat mission had ended in 2014. And while Iraq was a dumb war, we did actually win that one. Amtrak service has actually improved significantly and regularly snd repeatedly over the last 20-30 years.
There are lots of problems, but as we are seeing with both DOGE and the DOJ unable to handle its own caseload - there are a lot of core functions the government does really well, and some bigger projects it does excellently too. We just kinda ignore the successes.
Didn't expect to disagree with so much of this, given my broad aligment with Noah's worldview:
1. Zoning for human vs. Ai: this will just reproduce the NIMBY problems of other zoning regimes. All areas will zone for "humans", and there will be a years-long, oft-corrupt process to grant exceptions for data centers.
2. Subsidize hiring: sounds very expensive, and distorting. Do we want companies hiring to change government subsidies (and not because it's what's best for the company?) Huge misallocation of capital issues, and I don't see how it helps with the training issue. The incentive is still going to be to hire people who are already trained. Or is the proposal to only subsidize new graduates or young workers? This seems unfair and politically toxic.
3. Sovereign wealth fund. Sure, but as Noah mentioned, only marginally different than corporate taxes, doesn't seem like a game-changer for the new world of Ai, and a bit of a solution in search of a problem.
Regarding the sovereign wealth fund, the problem is declining labor share of income, which will likely accelerate. As Noah notes, we might expect a wealth fund to be less fragile to administration changes than tax policy.
> Or is the proposal to only subsidize new graduates or young workers? This seems unfair and politically toxic.
We already do this in medicine - the federal government pays hospitals to hire and train new medical school graduates. They're called "interns" and "residents".
US Healthcare isn’t necessarily a space I’d model around.
And more to the point, this feels less unfair because, a. There’s widespread perception that we need doctors, and b. Older docs make bank and have extremely high job security, so no one’s worried about tilting the scales to young ones
There's no shortage of land for more food, more data centers, more wind farms, and more solar farms. All that needs to be done is eliminate (over time) corn for ethanol farming by eliminating the ethanol mandate at the gas pump. That would free up 30 million acres--a lot more food for the table and all the data centers and electric-tech generation you could want.
Corn for ethanol produces at best about 1 unit of energy for each unit of energy input (and many studies show that it is negative). Solar and wind farms produce between 60 and 100 times as much energy per acre as corn for ethanol.
"All that needs to be done is eliminate (over time) corn for ethanol farming by eliminating the ethanol mandate at the gas pump. That would free up 30 million acres--a lot more food for the table and all the data centers and electric-tech generation you could want."
"Eliminate the mandate" is probably politically impossible. More feasible, if Democrats are elected, is to accelerate the adoption of EVs to the point where corn ethanol withers on the vine.
So you think it would be easier to convince 100 million car owners to switch to electric cars (currently less than a few percent of US cars on the road are electric) than a dozen farm state senators from protecting their wealthy agribusiness interests (it isn’t family farms growing corn for ethanol)?
I do in fact think it is easier for growing numbers of the 100 million car owners to buy EVs when they need a new vehicle than to persuade farm state representatives to switch their positions in opposition to what is definitely in the interest of (some of) their constituents. This is especially true if a future Democratic administration and Congress further incentivizes EV purchase. In maintaining that belief it helps that I also believe that EVs are simply the superior technology (and improving), and will increasingly also be the more economic choice.
Agree with the EV push, but to your original point, we also need to the corn space for the green electricity to power the EVs. While solar on that land is vastly more efficient for producing useful energy than growing corn, it's not necessarily more lucrative for the landowners due to the ethanol mandate / subsidies.
Right. I ran a little thought experiment that calculated that rental of acreage for wind turbines (or solar) would gain a farmer about 75% of the income he could get from corn for ethanol, and with wind, 90% of the land would be available for other uses. But to produce the equivalent energy, only a very small fraction of the land would be needed for the wind and solar farms.
Gee-this is a lot woolier than any other post of yours that I've read. This analysis needs to be gamed more, since I see traps at every assertion here. You've made good arguments about Singapore and other models that seem to have solved most of these problems. However, what about Henry George? I'd like to see your criticisms of Progress and Poverty!
The problem with subsidizing hiring is that it encorages companies to churn workers. Why wouldn't every company sack and rehire each employee every 2 years?
It would also give the employers incentives to keep new workers from leaving in the first two years, causing them to be stuck in jobs when they may have better prospects elsewhere.
What am I missing? Wouldn’t the sort of sovereign wealth fund you describe run the risk of hobbling the government if the stock market tanks? Also, at a time when corporate America has come to value stock price above all else, do we really want our political policy warped by that same approach?
From my 84 year old perspective, these suggestions are quite unsettling. IMO raising Corporate Taxes and using the money to start paying down our DEBT would be a better way to start. Messing with the stock markets would increase financial uncertainty for seniors trying to make their savings last until they pass away. Old people vote.
On the AI front, knowing how to ask the questions is most important. Our education system has not focused on rigor like schooling in other Countries have done. A majority of our recent graduates would have great difficulty jumping into a demanding job. It’s shocking when your parents & teachers have said you’re great to find out a Firm has other opinions. In the before times graduates took whatever work we could find even when we felt it was below our capabilities. I feel compassion for the many recent graduates who can’t find work in their field, but getting a toe into some kind of job or internship is more healthy than playing computer games or watching TikTok.
The best way to reduce the debt is to eliminate social security and Medicare for workers who fall above some level of income. And yes, I would be hit by that, and still believe it should be done. It would have been better if the George W Bush social security plan was enacted, but Congress and both parties are full of incompetent spineless weasels.
I kind of feel like we need an article on why your view on the impact of AI changed so much in two years. I feel like Noah of two years ago would disagree with current Noah! And I don't think it's quite enough to say 'the technology got better faster than I thought', the big point of the comparative advantage argument was that it was robust to very substantial changes in AI capabilities.
I think it's understandable given that the scope and scale and capabilities of the major models have increased as much as they have over that period. It was not the case two years ago that AI had reached the Kurzweilian inflection point -- Gen 1 of AI coding Gen 2 of AI...
The biggest barrier to Congressional action/legislation on any policy proposals is Citizens United. It dilutes every citizen’s vote. Rescinding, via legislation, Citizens United should be the first order of business of a new Congress. Unless, of course, both political parties want to show they’re bought and paid for by concentrated corporate interests.
Government institutions have rotted away as politically partisan think tanks have increasingly flourished. Why are we surprised that government is perceived as failing?
Something Corporate America wants citizens to ignore or forget is the role government money has played via investments/subsidies in every sector of the economy. Silicon Valley cane via government railroad money, Stanford itself built on proceeds from these railroads, then came Bechtel, Intel, Google, Netscape, et alia. — all find in part by the government. The Big Tech Titans would have you believe they fell to Earth with nothing and pulled themselves up by their bootstraps. Marc Andreessen a product of a state land grant university, Larry Page & Sergy Brin built their first search engine while at Stanford with federal grants from intelligence agencies which wanted a way to follow people on the World Wide Web. Google employees’ complaint about intelligence agency contracts is testimony to how little many Americans, even the best and the brightest, know about what government has contributed to business. The outrage when President Obama publicly stated “You didn’t build that” depended on this ignorance of government’s aid to Corporate America. Big Tech, Big Ag, Big Pharma, etc alia are all made possible by generous government subsidies.
Again, Citizens United is a ball-and-chain on any legislation or regulation opposed by Corporate America.
Want to pass the Genius Act of 2025? Simply buy, via PACs, six Democratic Senators. Repeat and rinse with any legislation Corporate America desires or resists.
It’s surprising to me how many commentators look at AI becoming productive and focus only on the impacts on the USA. The current big labs are all American, though Google actually gets most of its AI chops from DeepMind in the UK, and Chinese are also making fast progress. But the impact on productivity and jobs isn’t a domestic issue, since most people and companies worldwide can sign up for Claude, ChatGPT, Gemini, Grok or any of the Chinese AI services. This means the workforce that will be impacted will be global, as will the productivity boosts. This will have effects on outsourcing, immigration and trade, but if the other countries blame the AI companies how will that change how they deal with America, or China.
Good post, curious tho - if the norm is that workers will have to regularly reinvent themselves, wouldnt it make sense to subsidize or make free community college and vocational training? If you have to refrain every few years, and courses are increasingly cheap to distribute, and the biggest concern with a massive subsidy is shortages (which doesnt seem like it should apply here), why not make vocational training free, or at least very cheap? Not thru loans and grants, but through abundance and paying CCs with accredited job programs
AI will learn in a few months whatever it takes an employee doing retraining in community college would learn in a year. And it would be cheaper and more effective for the workers to use AI to retrain themselves, especially given the quality of instruction at community colleges.
Your summary of the 2009 Progressive roadmap basically just condenses down to “spend money and pretend the rich will pay for it”. How anyone could look at that and think the Progressive agenda is or ever was likely to add any value is beyond me.
Your agenda going forward is not much better. If abundance involves cutting regulation, in what universe is this something that progressives are capable of delivering? (See Dunkelman’s “Why Nothing Works”)
Sure progressives will jump all over the idea of delivering government provision of housing, jobs, food, high speed rail and energy, but the last century or so has shown us all the folly of using government bureaucracies and handouts to replace free enterprise. I live in progressive California . Do you want to know how high our electricity rates, gas prices, day care, housing and grocery bills are? Care to explore how far we can go on our hundred billion dollar bullet train in the middle of nowhere?
As an economist, how do you make sense of this?
If it is abundance we want (and it is), then the logical solution is to toss out anything to do with progressives and find or create candidates/parties that can actually streamline regulatory interference.
The idea of owning a broad based stock market fund is interesting, but wouldn’t this require firms to actually pay dividends, rather than reinvesting profits? Otherwise the government would have to get cash out by reducing their holdings (or are you suggesting they just print money based on ownership?). Again, this doesn’t seem fleshed out. And have you considered the threat of someone like Trump abusing power by threatening to unload shares?
Brilliant and compelling, however, corporate ownership would give government a more direct say in corporate governance. I am concerned that a broken government, one led by corrupt, power hungry, egomaniacal, greedy politicians focused primarily on their own personal enrighment and prejudices would be the undoing of this approach. Noah, perhaps you can explore this concern and approaches to address it.
What if the government is only allowed to purchase non-voting shares. They'd get the dividends but would have no ability to affect the board.
Worst of both worlds - no leverage when non-corrupt governments elected and continued ability for the corrupt regimes to exert influence on company policies through non-shareholder measures. The solution would seem to be a Federal Reserve-like body empowered to act as a real public shareholder advocate interested in financial returns AND in opposing corporate policies that are contrary to the public good. The trick will be to find a way to insulate the "AI Fed" from the most currupt Presidents like Trump. (Or we also, like, outlaw obvious Presidential corruption with a package of reforms overturning terrible SCOTUS policies and Constititutional mis-interpretations like "unitary executive" theory. )
This policy advice is a bit too creative. Look for policy with more or a track record.
Human reservations? Data center demand for electricity is an issue, and in some cases, it could make sense to protect local ratepayers from higher electricity prices due to data center demand. But we don't need to reserve LAND! Data centers' land footprint is tiny compared to what's available.
As for a sovereign wealth fund, countries tend to do that as a way of saving a temporary windfall, like in a resource boom. Strategic investments in key companies could sometimes be smart, though both incompetence and corruption are big risks. But why borrow to buy into a stock market that looks overpriced?
Yeah, restricting land for data centers seems silly. The energy and water concerns are pretty massively overblown but LAND concerns? They just don't take that much space. And they are typically built in relatively inexpensive places. Distance DOES increase ping but only slightly. They can easily be built 50-100 miles outside of major population centers.
This is incorrect.
Data center demand is expected to double Virginia’s total energy consumption by 2040.
Virginia has the largest concentration of data centers in the world.
https://www.pecva.org/our-work/energy-matters/data-centers-energy-demand/
Most data centers in Virginia are in the DC suburbs, which are not noted for inexpensive land.
Land and electricity use by data centers are currently major political issues in Virginia.
AWS is in VA. The entire internet runs through VA. Extrapolating from that one example is grossly misleading.
You are making my point. AWS is part of the largest concentration of data centers in the world, in an expensive suburb of DC.
Dallas/Fort Worth, Chicago, Atlanta, and Phoenix are some other major centers.
Most current data centers are generally near large metros in areas with good Internet and electric infrastructure. Not in inexpensive remote places. They are looking at the latter, but it’s a small percentage thus far.
Of those last four metropolitan areas, only Chicago has a lack of nearby open land.
If most human work is about to be automated, that implies much higher productivity and ultimately a much higher stock market.
To keep it overpriced?
Oy...who knew Noah wanted to own the means of production just like Trump.
Each according to his needs. Statism, socialism, or communism, take any ism you like.
The problem for me is that the government never delivers. I don’t trust the government. The government of Joe Biden allowed a massive number of immigrants, including people on the terror watch list, which caused a xenophobic response to immigrants.
The government has started wars that has verterns wondering why when we lose and walk away. Incoherent policies that cause inflation, overspending, and massive debt threaten us with a fiscal and monetary crisis.
According to an internet search, 12 homes in Palisades have been issued certificates of occupancy. My mother died in October, and we are selling her home. Homes in her neighborhood are being replaced, so a builder is likely to be your buyer.
According to the buyer we are in escrow with, it will take 18 months to get permits to tear down my mother's house and then get permits to build. The number of boards and panels, both local and state, that must approve each step is enormous.
The problem with Abundance is that nobody wants to give up their say in any project. That is not human behavior. We all laugh at Trump, who thinks his fingers should touch everything from professional golf to the Kennedy Center. Yet the expectation is that locals and the State will give away its power. Not going to happen. I don’t mean to pick on Democrats, but we have to face facts: Democrats love government the more the better. Regulations? We need more.
My issue is that more government leads to more sclerosis.
Should the government own a large amount of shares in companies? NO! Absolutely not. USS wants to close an inefficient steel mill that is losing money. Trump decided that they should keep it open to save jobs. The government, as in Trump, felt the USS should lose money to keep 800 workers working.
Part of capitalism is creative destruction. It is why our economy grows to the benefit of all. Noah assumes there will never be another Trump. A solitcious populist weasel who is an economic idiot. I’m glad he trusts politicians; I don’t. Perhaps he thinks there are no bombastic populists within the Democratic Party. A dubious assertion.
Now we head into George Bush territory, who wanted to voluntarily invest SS funds in broad stock market indices. The Dow was 5000 at the time and today it at 50,000.
I have no issue with the government buying into the broad market, but no way should the government own any controlling amount of individual stocks. In the infrastructure bill, there was like $45 billion set aside to build out rural broadband. Not one penny has been spent. I believe the reason was a whole slew of DEI requirements. How many minority owned businesses do you think are in Silina, Kansas?
We have had two idiots as presidents in our recent past. Does Noah really believe that screwball ideas will never find their way into the boardroom? If Trump hasn’t given you pause in allowing the Federal Government to gather even more economic power, I have no hope for you.
The government did not produce any Covid vaccines whatsoever.
Government taking money from someone to subsidize someone else (Obamacare) is not evidence of competent government. It might be good policy, but it’s zero sum. They didn’t produce anything or have any innovative idea. It’s just having men with guns take stuff from people and give it to their voters, literally.
You can love redistribution, I don’t care. At issue is managing corporations.
Finally, I hardly think the US military being a very powerful force is much of a lead-in to more progressive spending priorities. It’s the world’s most expensive military, by far, and uses weapons produced entirely by private companies.
It's weird to not give the government credit because private companies are involved. Program management is a real job, regulatory and quality ensure a vaccine's safety. Does NASA not deserve credit for the Webb space telescope because some private contractors helped build it to NASA specs? And the casual dismissal of Obamacare as "redistribution," is that also saying private health insurance is just redistribution? It seems like you've created a system that gives the government no credit for physical things being built because they lead private contractors, and then turn around and when it is a more government program decide it also is unimportant because it is allocating resources where theyre most needed, not building something physiccal.
Also it is GREAT that the government leverages private industry to get so much done. Why not pay experts to achieve the outcomes you want? If youre not getting what you pay for, end the contract. But if you are, execute.
We are talking about government managing corporations. You’ve lost the plot. Government sometimes succeeding as far lesser tasks is what it is
I responded to a comment saying "government never delivers" and i gave some concrete examples of government delivering, and I respectfully disagree that they were lesser accomplishments. The plot here is how to manage an uncertain future with AI. Perhaps government running corporations iant the right outcome - but I am more optimistic on the competency of the government than you. And thays fine, it is ok to disagree. Have a nice weekend.
But this is about AI? You think we have problems now, just wait. We’ll all be begging the government to step and and save us when the mass layoffs hit.
Of course, but sending out unemployment supplemental income is very different than giving control of companies to a government that hasn’t earned our trust. That can’t build naval vessels, lay fiber-optic cable, or build high-speed rail. When you look at the subject of public corruption, congressmen of modest wealth entering service and leaving multi-millionaires, it is foolish to even consider. But, hey, you want to trust Trump or any politician with our economy, that is your right.
I understand the skepticism, but the government does sometimes deliver. We just ignore our successes. The government gave an incredible covid vaccine within a year of the outbreak. Obamacare teally did improve health care for millions. Afghanistan did hurt when we walked away, but also worth noting the combat mission had ended in 2014. And while Iraq was a dumb war, we did actually win that one. Amtrak service has actually improved significantly and regularly snd repeatedly over the last 20-30 years.
There are lots of problems, but as we are seeing with both DOGE and the DOJ unable to handle its own caseload - there are a lot of core functions the government does really well, and some bigger projects it does excellently too. We just kinda ignore the successes.
Well said
Didn't expect to disagree with so much of this, given my broad aligment with Noah's worldview:
1. Zoning for human vs. Ai: this will just reproduce the NIMBY problems of other zoning regimes. All areas will zone for "humans", and there will be a years-long, oft-corrupt process to grant exceptions for data centers.
2. Subsidize hiring: sounds very expensive, and distorting. Do we want companies hiring to change government subsidies (and not because it's what's best for the company?) Huge misallocation of capital issues, and I don't see how it helps with the training issue. The incentive is still going to be to hire people who are already trained. Or is the proposal to only subsidize new graduates or young workers? This seems unfair and politically toxic.
3. Sovereign wealth fund. Sure, but as Noah mentioned, only marginally different than corporate taxes, doesn't seem like a game-changer for the new world of Ai, and a bit of a solution in search of a problem.
Regarding the sovereign wealth fund, the problem is declining labor share of income, which will likely accelerate. As Noah notes, we might expect a wealth fund to be less fragile to administration changes than tax policy.
> Or is the proposal to only subsidize new graduates or young workers? This seems unfair and politically toxic.
We already do this in medicine - the federal government pays hospitals to hire and train new medical school graduates. They're called "interns" and "residents".
US Healthcare isn’t necessarily a space I’d model around.
And more to the point, this feels less unfair because, a. There’s widespread perception that we need doctors, and b. Older docs make bank and have extremely high job security, so no one’s worried about tilting the scales to young ones
There's no shortage of land for more food, more data centers, more wind farms, and more solar farms. All that needs to be done is eliminate (over time) corn for ethanol farming by eliminating the ethanol mandate at the gas pump. That would free up 30 million acres--a lot more food for the table and all the data centers and electric-tech generation you could want.
Corn for ethanol produces at best about 1 unit of energy for each unit of energy input (and many studies show that it is negative). Solar and wind farms produce between 60 and 100 times as much energy per acre as corn for ethanol.
"All that needs to be done is eliminate (over time) corn for ethanol farming by eliminating the ethanol mandate at the gas pump. That would free up 30 million acres--a lot more food for the table and all the data centers and electric-tech generation you could want."
Exactly right - cannot be said often enough.
"Eliminate the mandate" is probably politically impossible. More feasible, if Democrats are elected, is to accelerate the adoption of EVs to the point where corn ethanol withers on the vine.
So you think it would be easier to convince 100 million car owners to switch to electric cars (currently less than a few percent of US cars on the road are electric) than a dozen farm state senators from protecting their wealthy agribusiness interests (it isn’t family farms growing corn for ethanol)?
I do in fact think it is easier for growing numbers of the 100 million car owners to buy EVs when they need a new vehicle than to persuade farm state representatives to switch their positions in opposition to what is definitely in the interest of (some of) their constituents. This is especially true if a future Democratic administration and Congress further incentivizes EV purchase. In maintaining that belief it helps that I also believe that EVs are simply the superior technology (and improving), and will increasingly also be the more economic choice.
Agree with the EV push, but to your original point, we also need to the corn space for the green electricity to power the EVs. While solar on that land is vastly more efficient for producing useful energy than growing corn, it's not necessarily more lucrative for the landowners due to the ethanol mandate / subsidies.
Right. I ran a little thought experiment that calculated that rental of acreage for wind turbines (or solar) would gain a farmer about 75% of the income he could get from corn for ethanol, and with wind, 90% of the land would be available for other uses. But to produce the equivalent energy, only a very small fraction of the land would be needed for the wind and solar farms.
I’m a bit surprised this issue wasn’t highlighted all throughout the price-of-groceries crisis.
I'm with you on most of this. I'm not so sure on the corporate ownership.
Do you really want the next trump to have a seat on all those corporate boards
Gee-this is a lot woolier than any other post of yours that I've read. This analysis needs to be gamed more, since I see traps at every assertion here. You've made good arguments about Singapore and other models that seem to have solved most of these problems. However, what about Henry George? I'd like to see your criticisms of Progress and Poverty!
The problem with subsidizing hiring is that it encorages companies to churn workers. Why wouldn't every company sack and rehire each employee every 2 years?
It would also give the employers incentives to keep new workers from leaving in the first two years, causing them to be stuck in jobs when they may have better prospects elsewhere.
What am I missing? Wouldn’t the sort of sovereign wealth fund you describe run the risk of hobbling the government if the stock market tanks? Also, at a time when corporate America has come to value stock price above all else, do we really want our political policy warped by that same approach?
“They will try to outbid residential real estate developers, making housing more expensive” why would they do this?
From my 84 year old perspective, these suggestions are quite unsettling. IMO raising Corporate Taxes and using the money to start paying down our DEBT would be a better way to start. Messing with the stock markets would increase financial uncertainty for seniors trying to make their savings last until they pass away. Old people vote.
On the AI front, knowing how to ask the questions is most important. Our education system has not focused on rigor like schooling in other Countries have done. A majority of our recent graduates would have great difficulty jumping into a demanding job. It’s shocking when your parents & teachers have said you’re great to find out a Firm has other opinions. In the before times graduates took whatever work we could find even when we felt it was below our capabilities. I feel compassion for the many recent graduates who can’t find work in their field, but getting a toe into some kind of job or internship is more healthy than playing computer games or watching TikTok.
The best way to reduce the debt is to eliminate social security and Medicare for workers who fall above some level of income. And yes, I would be hit by that, and still believe it should be done. It would have been better if the George W Bush social security plan was enacted, but Congress and both parties are full of incompetent spineless weasels.
I kind of feel like we need an article on why your view on the impact of AI changed so much in two years. I feel like Noah of two years ago would disagree with current Noah! And I don't think it's quite enough to say 'the technology got better faster than I thought', the big point of the comparative advantage argument was that it was robust to very substantial changes in AI capabilities.
I think it's understandable given that the scope and scale and capabilities of the major models have increased as much as they have over that period. It was not the case two years ago that AI had reached the Kurzweilian inflection point -- Gen 1 of AI coding Gen 2 of AI...
The biggest barrier to Congressional action/legislation on any policy proposals is Citizens United. It dilutes every citizen’s vote. Rescinding, via legislation, Citizens United should be the first order of business of a new Congress. Unless, of course, both political parties want to show they’re bought and paid for by concentrated corporate interests.
Government institutions have rotted away as politically partisan think tanks have increasingly flourished. Why are we surprised that government is perceived as failing?
Something Corporate America wants citizens to ignore or forget is the role government money has played via investments/subsidies in every sector of the economy. Silicon Valley cane via government railroad money, Stanford itself built on proceeds from these railroads, then came Bechtel, Intel, Google, Netscape, et alia. — all find in part by the government. The Big Tech Titans would have you believe they fell to Earth with nothing and pulled themselves up by their bootstraps. Marc Andreessen a product of a state land grant university, Larry Page & Sergy Brin built their first search engine while at Stanford with federal grants from intelligence agencies which wanted a way to follow people on the World Wide Web. Google employees’ complaint about intelligence agency contracts is testimony to how little many Americans, even the best and the brightest, know about what government has contributed to business. The outrage when President Obama publicly stated “You didn’t build that” depended on this ignorance of government’s aid to Corporate America. Big Tech, Big Ag, Big Pharma, etc alia are all made possible by generous government subsidies.
Again, Citizens United is a ball-and-chain on any legislation or regulation opposed by Corporate America.
Want to pass the Genius Act of 2025? Simply buy, via PACs, six Democratic Senators. Repeat and rinse with any legislation Corporate America desires or resists.
It’s surprising to me how many commentators look at AI becoming productive and focus only on the impacts on the USA. The current big labs are all American, though Google actually gets most of its AI chops from DeepMind in the UK, and Chinese are also making fast progress. But the impact on productivity and jobs isn’t a domestic issue, since most people and companies worldwide can sign up for Claude, ChatGPT, Gemini, Grok or any of the Chinese AI services. This means the workforce that will be impacted will be global, as will the productivity boosts. This will have effects on outsourcing, immigration and trade, but if the other countries blame the AI companies how will that change how they deal with America, or China.
Good post, curious tho - if the norm is that workers will have to regularly reinvent themselves, wouldnt it make sense to subsidize or make free community college and vocational training? If you have to refrain every few years, and courses are increasingly cheap to distribute, and the biggest concern with a massive subsidy is shortages (which doesnt seem like it should apply here), why not make vocational training free, or at least very cheap? Not thru loans and grants, but through abundance and paying CCs with accredited job programs
AI will learn in a few months whatever it takes an employee doing retraining in community college would learn in a year. And it would be cheaper and more effective for the workers to use AI to retrain themselves, especially given the quality of instruction at community colleges.
Your summary of the 2009 Progressive roadmap basically just condenses down to “spend money and pretend the rich will pay for it”. How anyone could look at that and think the Progressive agenda is or ever was likely to add any value is beyond me.
Your agenda going forward is not much better. If abundance involves cutting regulation, in what universe is this something that progressives are capable of delivering? (See Dunkelman’s “Why Nothing Works”)
Sure progressives will jump all over the idea of delivering government provision of housing, jobs, food, high speed rail and energy, but the last century or so has shown us all the folly of using government bureaucracies and handouts to replace free enterprise. I live in progressive California . Do you want to know how high our electricity rates, gas prices, day care, housing and grocery bills are? Care to explore how far we can go on our hundred billion dollar bullet train in the middle of nowhere?
As an economist, how do you make sense of this?
If it is abundance we want (and it is), then the logical solution is to toss out anything to do with progressives and find or create candidates/parties that can actually streamline regulatory interference.
The idea of owning a broad based stock market fund is interesting, but wouldn’t this require firms to actually pay dividends, rather than reinvesting profits? Otherwise the government would have to get cash out by reducing their holdings (or are you suggesting they just print money based on ownership?). Again, this doesn’t seem fleshed out. And have you considered the threat of someone like Trump abusing power by threatening to unload shares?