One year of Noahpinion

What happened to the world in 2021, and what I wrote about it

I would count this Substack as a modest success so far. With an email list of 36,000 and 3350 subscribers, it’s not one of the most widely read blogs out there, but I’d say it’s doing OK. That’s thanks to you, of course; I really hope you’ve enjoyed it as much as I have so far, and I’m grateful to all of you for giving me the opportunity to be an independent writer.

Here’s a short subscriber feedback survey, if you’d like to leave me some feedback! I included questions about favorite and least favorite topics, interview requests, how often you’d like me to post, and so on.

Subscriber feedback survey

A couple updates on what’s coming next. I’m going to add a blogroll soon, and try to document the burgeoning new blogosphere. I’m also thinking of doing webinars on Zoom every month or every 2 weeks, for subscribers only, where you can ask me anything or talk about anything I’ve written. (You can tell me in the survey if you think this is something that would interest you.)

Anyway, I thought this would be a good opportunity to review the major throughlines of the past year, and what I’ve written about them. From the wild 2020 election to the epochal changes in China to the realization that we’re in the middle of a technological revolution, it has been a wild, exciting, terrifying year.

Techno-optimism

Ultimately, I believe that the fate of humanity depends on our ability to discover new things about our Universe and create new capabilities. And in terms of technology, the 2020s certainly started with a bang. Whereas in the previous four decades most really impactful innovation had been in the IT industry, there’s a remarkable confluence of technological revolutions coming together right now in a variety of areas. mRNA vaccines are the most obvious example, but they’re just one part of a bigger wave of biotech (which I’m going to write about soon). Solar and batteries are causing an energy revolution, both in how we produce energy and how we store and transport it, that promises to go far beyond simply saving the planet from climate change. Space is red-hot again after decades of stagnation, with SpaceX making launches cheap, StarLink promising to connect the world, and space weaponry threatening to transform warfare. Speaking of warfare, drones are already winning wars against traditional militaries. On the cheerier side of things, lab-grown meat might finally save humanity from the need to imprison and slaughter animals en masse.

It’s a heady time to be a human being. The shape of human life, already changed almost unrecognizably by the Industrial Revolution and the Information Revolution, looks set to change again, and it’ll be incredibly hard (but incredibly exciting) just to keep track of it all.

Bidenomics

When I started this blog a year ago, Biden had just won the election, and I was excited about the possibility that he would be a transformational President like Reagan or FDR. I saw the outline of a coherent economic program that could transform the country — radically increased government investment, combined with a simpler, more effective welfare state based on cash benefits. At first, this agenda seemed to be powering ahead, with a big Covid relief bill and a bipartisan deal on infrastructure. In recent months, however, I’ve begun to temper that initial optimism; thanks to the Democrats’ typical disunity, Americans’ new attitude of stinginess, and a stubborn burst of inflation, Biden’s third big bill might shrink in size til it’s decidedly less than transformative. But even the shrunken-down bill is focused on the key elements: Climate change and housing. That’s good news, and it means that the administration is still thinking along the right lines.

Inflation

No one really expected inflation to come back, and then it did. Thanks to supply chain snarls and the burst of Covid relief spending, demand has been pushed up while supply has slumped, leading to months of surprising price increases. This has led to the return of all the usual hysteria — websites hawking fake inflation numbers, quack theories that support attacking inflation with price controls and other direct government intervention in markets, and so on. But the general concern inflation has created is perfectly justified, since wages are having a hard time keeping up with prices. But the answer isn’t fiscal austerity; yes, too much deficit spending could theoretically send inflation to the moon, but Biden’s spending plans are just way too small to make a difference. Instead, it’s a job for the Fed, which has to retain its hawkish credibility in order to prevent 7% inflation from becoming 20% inflation. So expect more tapering, followed by some modest rate hikes if inflation persists.

Big changes in China

The U.S. economy is certainly important, but the most important changes are probably happening over in China. That country has been the world’s main growth engine for decades now. But its amazing run might finally be over, as it faces a perfect storm of economic headwinds. Xi Jinping is cracking down on tech and other out-of-favor industries, seeking to transform China’s economy and society into one oriented toward international competition and military might. At the same time, China’s long-running habit of papering over economic turbulence by pumping more money into ever-less-efficient real estate projects appears to be coming to an end, with a shakeout in the sector that began with Evergrande. And all this is against a backdrop of abrupt demographic decline. It’s time to start asking whether Xi Jinping, who has made himself China’s absolute ruler, is not so competent at managing this transition.

The march of authoritarianism

China’s economy may be slowing, but it’s military power and its international belligerence are growing, threatening to spark the first great-power war in 70 years. But China’s new aggressiveness and human rights abuses are only one facet of a general rise in authoritarianism across the world. Donald Trump’s election denial and the coup attempt of 1/6 signal that America may be too divided and unstable to play the role of Arsenal of Democracy that it played in the 20th century; in fact, the whole Trump Era, and America’s general turn against immigration, are a bad sign, as is growing cultural illiberalism among overzealous progressive activists. Meanwhile, India, Brazil, and a number of other countries have been electing authoritarian populist leaders of their own. And on top of all that, there are the looming questions of A) whether surveillance technologies have made it easier for authoritarians to control their populations, and B) whether social media inherently makes countries unstable and invites authoritarian rulers.

It’s a heady, exciting time to be alive, but it’s also a terrifying time in many ways.

The rise and rise of crypto

I haven’t written as much about finance as I should, but this is an exciting time, because crypto is basically reinventing finance from the ground up. A lot of that will be reinventing the wheel, and relearning why the web of regulations that we’ve built up over the last two centuries was there in the first place. That has already made a few people incredibly rich, and is diverting talent from other parts of the tech industry. But the process has probably just begun. I expect the crypto industry to soon resolve its main challenge — the energy-intensive nature of the proof-of-work algorithm — and start diverging from traditional finance in surprising, confusing, and exciting ways.

Changes in the economics profession

My old blog was largely about narrating the changes in the economics profession, and I’ve tried to carry that theme through to this Substack as well. The most important story here isn’t the humbling of macroeconomics after the financial crisis of 2008, but the rise of empirical economics and the morphing of econ into something more closely resembling a science. The 2020 Nobel canonized the shift, but it has been underway for a good long while, transforming our understanding of issues like the minimum wage, immigration’s effect on labor markets, and unconditional cash benefits. Some fields like climate economics are still playing catch-up, and macroeconomics, with its limited data availability, will be the toughest nut to crack. But econ has definitely left behind its old identity as the philosophical defender of free markets, and entered an age in which evidence gets to tell us what works and what doesn’t. Thanks to this shift, many of econ’s critics are now badly out of date.

Looking ahead to 2022

Many of these same narratives will carry over into 2022. But I expect to add some new ones too. The increasing political and ideological triumph of the pro-housing YIMBY movement is a very positive phenomenon that deserves more attention than I gave it this year. Biotech, space, and crypto are all technology spaces that I plan to write about more. As we move into the 2022 midterms, culture wars are going to take the fore, and I’ll continue trying to think about how progressives can appeal to the center while also staying true to their ideals.

I’m sure that won’t be all, but as for the rest, we’ll just have to see. Stay tuned, and enjoy another year of Noahpinion.

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