The MAGA decline; The labor share decline; OPTs and American jobs; AI and Indian outsourcing; Drug users; AI and productivity; Botswana; Interracial Marriage; AI writing
Great post, I had no idea that Indian outsourcing was increasing. I literally would have never guessed that. I guess we can't easily predict what AI will do the economy.
Also, just to add on Botswana. Sadly, Botswana's President Boko is doubling down on natural diamonds. I think this is a tragic and foolish mistake. I spoke more about it here a year ago:
But on to manufacturing, Botswana has tried so many forms of manufacturing and has failed so many times. Botswana is a highly unequal economy that went straight from beef ranching during colonial times to diamond mining and services after colonialism.
Let's just start with its labor market. Diamond revenue funded high public sector wages, which set as a de facto "reservation wage" for young Batswana. Young Batswana prefer waiting for government jobs (sometimes over a year) and rely on family safety nets rather than take a much lower paying private manufacturing job, contributing to Botswana's high youth unemployment, There's also deep skill mismatches. Botswana spends a lot on education and has TONS OF EDUCATED UNEMPLOYED PEOPLE, At the same time, Botswanan manufacturers complain about shortages of practical vocational and technical skills. This World Bank employer survey found that plant operators and skilled tradespeople can't recruit talent, and university educated Botswanans don't want those jobs.
But beyond its labor sector. I'll give you three different industries that show Botswana's manufacturing issues.
Textiles: Botswana tried to take advantage of America's Africa Growth and Opportunity (AGOA) act to build an export-oriented clothing industry. But having duty-free access to selling T-shirts doesn't magically make Botswana competitive at actually producing clothes.
The easiest way to understand Botswana's problem is to look at the textile supply chain:
Botswana basically entered at the visible, tail end of the chain: cutting/sewing the garments. It didn't develop much of the upstream ecosystem supplying the factories. That isn't fatal by itself, plenty of countries build companies at that step, but it's the stage where you compete on labor cost & almost nothing else.
When an American buyer tells a factory "I need 250K polo shirts, three colors, five sizes, delivered in 8 weeks!", the Chinese or Vietnamese cluster will have the fabric mill, dye house, zipper/button supplier, packaging company, machine repair firms, and freight forwarders within the same industrial region. They'll probably deliver the shirts ahead of schedule.
The Botswana garment factory sadly won't even execute well. He'll order the fabric abroad, import the fabric via South Africa (Durban port), import trims and accessories, transport everything hundreds of kilometers inland via truck from Durban South Africa to Botswana, sew the shirts, truck back to Durban, South Africa and then ship to the US. As you can imagine, every stage creates cost, inventory requirements to be financed, and another opportunity for delay. And for the apparel business, speed matters almost as much as wages. Botswana literally couldn't compete. Botswana's dependence on Durban also caused unpredictable delays. The Durban port is subpar container port by global standards.
Also, even if you are thinking "ok Botswana should make its own fabric!". There's another problem. Fabric production needs spinning/weaving/knitting, and fabric needs to be bleached, washed, dyed and finished. Dying and washing are hard for Botswana because of its water shortages (the country is semi-arid), and synthetic fiber production is even more water intensive.
If we compare Botswana to Lesotho (another landlocked, another country in the SACU, another country that routes goods via Durban, another country with no domestic cotton, another country that imports fabric and trims from Asia), then Lesotho executed better DOING EXACTLY the cut-and-sew work Botswana tried to do.
A) Lesotho has abundant water, it is literally the water tower of South Africa. Lesotho has the denim mill in 2004 from Taiwan's Formosa Textiles. Botswana can't do the dying and washing step because it doesn't have Lesotho's water.
B) Its wages are much lower ($1500 USD rather than Botswana's $7500 USD)
Car Assembly:
In the 1990s, Botswana set up factories to make Hyundai vehicles in their capital, backed by the Botswanan Development Corporation. Cars were initially their second largest export after diamonds in the 1990s, allowing itself to sell these cars mainly to South Africa duty-free. But then Nelson Mandela's administration responded with import quotas and tax incentives for cars assembled in South Africa (the Motor Industry Development Programme). Only the first 1K cars per month could enter South Africa under low tariffs, but after 1K it was repportedly slapped with a 100% tariff. The Botswana factories needed to sell at least 2K cars to be successful. As a result, it was uneconomical to set up a plant or to continue to sell in Botswana. The car plant in Botswana died by 2000. The Botswana president at the time, Masire, said that South Africa outright sabotaged Botswana's industrialization.
Botswana made a glass plant, and the Botswana Development Corporation (BDC) partnered with the Chinese Fengyue Glass manufacturing company. The goal was to use Botswana's local silicia sand deposits to build a large float glass manufacturing facility in Palapye. The government's investment arm, the Botswana Development Corporation spent 500M pula on the venture starting in 2007. The plant was made in 2010 and the project went bankrupt by 2014, and sold off for ~50M pula.
Why did it fail? BDC just chose a terrible technical partner. Apparently Fengyue Glass was a shell company with no experience in glass manufacturing. The cost wasn't even supposed to be 500M Pula, it was supposed to be 309M! So a massive cost overrun.
I could go more in to Botswana's failures to process copper, nickel and iron, Botswana's issues with leather production, or the failures in commercial agro-processing, but I don't want to sound too doomer. On the bright side, Botswana has more tourism.
Ah damn it I knew I had a memory of reading on the diamonds, and I forget it was you Yao!
BTW (and I confess I have a professional interest here), what do you think of possibility on Lobito Corridor extension... (and hooking into Crit min) re the Botswanan political economy
While the mega wave may be receding, what it has left behind is a new generation that has been taught it is normal to be hateful and hurtful. Not to mention validation of hatefulness and hurtfulness to older generations whose voices had been suppressed by growing common decency. Do not expect the Republican Party to abandon these gains. Likewise the rejection of science and expertise. Without outright suppression (as in post-war Germany), these ills will last for more generations.
We need to find an actual cure for addiction. The methods of treatment that we have now simply don’t work well enough to solve the problem, and we should be spending a lot more money on research to fix this.
Even if we don’t find an outright cure, more and better treatment methods would be a major win. Addiction destroys lives, ruins families, hurts our economy, puts a huge burden on law enforcement and social services, and is also a massive drag on foreign policy, especially in Latin America. Research money spent on finding a cure will pay for itself many times over if the effort succeeds.
I think the cited results of the drug use tolerance policies are actually not caused by drug use policies, but rather policies towards homelessness. Permissive policies on drug use are unlikely to attract many drug users for the simple reason that illegal drug use is already de-facto legal in the US as long as you do it on private property and don't piss people off, and the vast majority of drug users have no desire to do drugs in public and bother people anyway.
Homelessness, on the other hand, is not tolerated in most of the country. If you set up a tent on the sidewalk in 99% of the country you will quickly be run off by the police, so homeless people do have a strong incentive to move to where they are tolerated. And cities all over the country have a strong incentive to buy them a one way ticket there.
Of course there is a very strong overlap between homeless and drug use, and in particular they are the rare type of drug user who does do drugs in public places, so this is where the supposed permissive drug laws -> filth and degeneracy link comes from. But this is an illusion. The fact is that it's not the public drug use that is bothering people here, it's the homelessness in general.
The public drug use (and needles laying around) definitely makes it worse, but do you really think the general public would be much happier about the situation if we had dirty homeless people all over the city pitching tents on sidewalks / parks and harassing pedestrians if they just refrained from shooting up in full view of the public? I doubt it. When people complain about these people using drugs it's usually just a complaint about homelessness, but since homelessness and mental illness are seen as more sympathetic than drug use it's a lot more socially acceptable to say "I'm sick of all these damn drug addicts shooting up all over the city" than it is to say "I'm sick of all these filthy poor / crazy people I have to walk by / ride on trains with."
I believe that relaxing laws on drug use if not coupled with relaxed policies on homelessness and public disorder would result in minimal problems visible to the public on a day to day basis. We have already run this experiment with alcohol. That's why drinking is legal, but public intoxication is not (in most of the US). I really don't see why such a policy would not also be effective with other currently illegal drugs.
agreed, I think people have confused to very different topics, public disorder and drug use.
It's quite possible to be fine with somebody smoking a joint or even doing a line in the privacy of their own house, and not wanting our public areas to be taken over with disorder
Bland AI writing is user error. A well written skill file with relevant knowledge store totally changes the output quality. Most people are just using mid level models like Sonnet without MCPs, Skills, etc.
I had quite a long conversation with Gemini about the Claude section. The telling note came at the end when Claude said, "You’re reading this because a human thought it would be funny to make the slop machine denounce slop. The joke, the framing, the decision to run it — that’s the whole product. I just filled in the words." So LLMs (being both versatile and cooperative) are 'slop machines' when that's what their user asks for. As Gemini said, "Because I don't experience fatigue, no effort is "wasted" on simple queries-utility serves its purpose. But engagement with someone who seeks genuine depth, critical reflection, and layered dialogue is where the true promise of this technology lives. It moves the medium from a fancy search engine to a genuine cognitive sounding board."
Wow! That is some rabbit. Until following your substack I hadn't given much thought to a rabbit as a pet but they appear wonderful. Loved the video at the end.
I'd consider a rabbit as a pet but I think I'm allergic to hay. :/ So I tend to prefer meat-eating animals, such as dogs, cats, and ferrets. Domesticated rats are also really good pets that are a lot more affectionate with humans by default than many other rodents, but their lifespan is only about two years. :(
Rognlie 2015 suggests a quarter of that labor share decline was a housing share rise. Housing is economic capital, but it's not what we usually think of in "labor versus capital". Adjusting for housing share still leaves several percentage points of GDP unexplained, though.
I want to believe there will be a short gasp of DSA and then this populist moment will be over, but I dunno.
If I just judge by reddit, which is of course a highly non-random sample but does align well to "politically interested, slightly above average IQ people in their 20s", this upcoming generation is extremely populist. They were raised wholly in the Trump era, and while they hate him, they see defeating him as being Trump but woke/left/socialist. I have never seen Reddit less interested in nuanced arguments, or data (other than "there's no evidence for your opinion so we'll default to mine" and mining for the study with the headline that supports their position - a lot of faux scientism). I've never seen it more my team vs. your team. I've never seen it more incurious. I've never seen it more illiberal.
Nearly every comment on every topic can be distilled to "we must tax the billionaires more and then we can do anything we want without limits, also something some Epstein/ruling class/oligarchy". People that disagree must be paid shills, or bots. It's all very Trumpy.
That's a lot of reddit talk, but it's not a bad window if you're being following it for 15 years. And I'd add that even in my non random irl sample, it's very in the air. There's just this general sentiment that everyone agrees that, say, data centers are always bad, without any interrogation of why.
I wonder if Loyal's investigational drug to extend healthy lifespan in large dogs would also work in large rabbits; I assume their biology is very similar. This also goes for their drug for senior dogs and senior rabbits. https://loyal.com/products
I suppose for Botswana (lovely country), the question is how to push harder to a diversification (harder to do when landlocked).
Hooking into the critical minerals boom plus having an actually functioning state with decently labor base maybe is a lifeline but medium term getting out of that trap - perhaps it's crit minerals plus leveraging infra plus stability to also be a transformation (processing) hub....
No way! I’m actually quite surprised. I was positive that not long ago I thoroughly read several articles showing that Indian IT outsourcing was rapidly shrinking. We saw TCS and Infosys hitting their first growth plateaus in 40 years with hiring freezes, layoffs, and sneaky downscaling—like switching from salaried positions to pay-per-task models. At the same time, Silicon Valley tech giants were slashing vendor contracts to reallocate that budget toward monthly token subscriptions for their in-house devs.
Guess I’ll need to dig deeper into this topic. It’s not about which conclusion is 'right,' but rather understanding what phase of the AI adoption curve we're actually in. My hunch is that we’re seeing a pattern that will play out across many industries, including Indian outsourcing: an initial shock driven by doubt, stagnation, or decline, followed by adaptation and a secondary wave of expansion.
The interracial marriage chart for newlyweds seems like it may be statistically underpowered if there’s a footnote noting greyed out groups had fewer than 1,000 data points. This suggests other groups may not have had that large of a sample. Also where/how did they even collect these samples?
The chart itself seems poorly presented. I think they should have used a bar chart with multiple bars for each group.
Loved this post.... a little afraid of your rabbit. A couple of comments....
On labor share, beyond stock compensation and s-corps, I wonder about the broad-based impact of 401K/HSA plans. The mental model of the question is: there is labor and then there is capital, but the reality is the everyone is on the "spectrum." Do we need new pronouns... Also, Trump accounts will skew this further.
On immigration, you have made the argument for high-skill, but there is also an argument for "low-skill" As an example, in construction/Agriculture, the availability of this seasonal/mobile labor makes certain business models viable.
On Indian outsourcers, they are busily ramping up on AI and helping their clients with transition to AI flows. This is booming right now, and they get to use AI coding agents to raise margins.
On AI and productivity, this reminds me so much of the arguments from economists as innovations such as computers and the internet rolled out.
finally, the intermarriage graphic is fascinating ....
Interesting post. One question I have is about #2 and the human capitalist paper. It talks about the contribution of ISOs to compensation for public companies, but in my experience pubic companies don't use ISOs for highly compensated employees, they use NSOs that appear on W2s, and indeed ISOs have dollar vesting limits that make them unsuitable for compensation at a public company (you can't vest more than $100K per year, which isn't going to go very far compensating Tim Apple). ISOs are used at startup companies, and those are privately held.
Great post, I had no idea that Indian outsourcing was increasing. I literally would have never guessed that. I guess we can't easily predict what AI will do the economy.
Also, just to add on Botswana. Sadly, Botswana's President Boko is doubling down on natural diamonds. I think this is a tragic and foolish mistake. I spoke more about it here a year ago:
https://yawboadu.substack.com/p/guns-germs-and-cobalt-q-and-a-9-insights
But on to manufacturing, Botswana has tried so many forms of manufacturing and has failed so many times. Botswana is a highly unequal economy that went straight from beef ranching during colonial times to diamond mining and services after colonialism.
Let's just start with its labor market. Diamond revenue funded high public sector wages, which set as a de facto "reservation wage" for young Batswana. Young Batswana prefer waiting for government jobs (sometimes over a year) and rely on family safety nets rather than take a much lower paying private manufacturing job, contributing to Botswana's high youth unemployment, There's also deep skill mismatches. Botswana spends a lot on education and has TONS OF EDUCATED UNEMPLOYED PEOPLE, At the same time, Botswanan manufacturers complain about shortages of practical vocational and technical skills. This World Bank employer survey found that plant operators and skilled tradespeople can't recruit talent, and university educated Botswanans don't want those jobs.
https://documents1.worldbank.org/curated/en/857621468012924519/pdf/930480WP0P11940C00Botswana0Note03wc.pdf
But beyond its labor sector. I'll give you three different industries that show Botswana's manufacturing issues.
Textiles: Botswana tried to take advantage of America's Africa Growth and Opportunity (AGOA) act to build an export-oriented clothing industry. But having duty-free access to selling T-shirts doesn't magically make Botswana competitive at actually producing clothes.
The easiest way to understand Botswana's problem is to look at the textile supply chain:
cotton/synthetic fiber --> yarn --> fabric --> dyeing/finishing --> cutting --> sewing --> buttons/zippers/labels --> packaging --> shipping ---> someone buys
Botswana basically entered at the visible, tail end of the chain: cutting/sewing the garments. It didn't develop much of the upstream ecosystem supplying the factories. That isn't fatal by itself, plenty of countries build companies at that step, but it's the stage where you compete on labor cost & almost nothing else.
When an American buyer tells a factory "I need 250K polo shirts, three colors, five sizes, delivered in 8 weeks!", the Chinese or Vietnamese cluster will have the fabric mill, dye house, zipper/button supplier, packaging company, machine repair firms, and freight forwarders within the same industrial region. They'll probably deliver the shirts ahead of schedule.
The Botswana garment factory sadly won't even execute well. He'll order the fabric abroad, import the fabric via South Africa (Durban port), import trims and accessories, transport everything hundreds of kilometers inland via truck from Durban South Africa to Botswana, sew the shirts, truck back to Durban, South Africa and then ship to the US. As you can imagine, every stage creates cost, inventory requirements to be financed, and another opportunity for delay. And for the apparel business, speed matters almost as much as wages. Botswana literally couldn't compete. Botswana's dependence on Durban also caused unpredictable delays. The Durban port is subpar container port by global standards.
Also, even if you are thinking "ok Botswana should make its own fabric!". There's another problem. Fabric production needs spinning/weaving/knitting, and fabric needs to be bleached, washed, dyed and finished. Dying and washing are hard for Botswana because of its water shortages (the country is semi-arid), and synthetic fiber production is even more water intensive.
If we compare Botswana to Lesotho (another landlocked, another country in the SACU, another country that routes goods via Durban, another country with no domestic cotton, another country that imports fabric and trims from Asia), then Lesotho executed better DOING EXACTLY the cut-and-sew work Botswana tried to do.
A) Lesotho has abundant water, it is literally the water tower of South Africa. Lesotho has the denim mill in 2004 from Taiwan's Formosa Textiles. Botswana can't do the dying and washing step because it doesn't have Lesotho's water.
B) Its wages are much lower ($1500 USD rather than Botswana's $7500 USD)
Car Assembly:
In the 1990s, Botswana set up factories to make Hyundai vehicles in their capital, backed by the Botswanan Development Corporation. Cars were initially their second largest export after diamonds in the 1990s, allowing itself to sell these cars mainly to South Africa duty-free. But then Nelson Mandela's administration responded with import quotas and tax incentives for cars assembled in South Africa (the Motor Industry Development Programme). Only the first 1K cars per month could enter South Africa under low tariffs, but after 1K it was repportedly slapped with a 100% tariff. The Botswana factories needed to sell at least 2K cars to be successful. As a result, it was uneconomical to set up a plant or to continue to sell in Botswana. The car plant in Botswana died by 2000. The Botswana president at the time, Masire, said that South Africa outright sabotaged Botswana's industrialization.
https://journals.ub.bw/index.php/bnr/article/view/2000/1271
https://www.tips.org.za/files/botswana_paper.pdf
Glass Manufacturing:
Botswana made a glass plant, and the Botswana Development Corporation (BDC) partnered with the Chinese Fengyue Glass manufacturing company. The goal was to use Botswana's local silicia sand deposits to build a large float glass manufacturing facility in Palapye. The government's investment arm, the Botswana Development Corporation spent 500M pula on the venture starting in 2007. The plant was made in 2010 and the project went bankrupt by 2014, and sold off for ~50M pula.
Why did it fail? BDC just chose a terrible technical partner. Apparently Fengyue Glass was a shell company with no experience in glass manufacturing. The cost wasn't even supposed to be 500M Pula, it was supposed to be 309M! So a massive cost overrun.
https://guardiansun.co.bw/News/ghost-of-doomed-palapye-glass-project-haunts-govt
https://yourbotswana.com/government-considers-resuscitating-failed-fengyue-glass-project/
https://www.glassonline.com/botswana-glass-project-on-course/
.
I could go more in to Botswana's failures to process copper, nickel and iron, Botswana's issues with leather production, or the failures in commercial agro-processing, but I don't want to sound too doomer. On the bright side, Botswana has more tourism.
Ah damn it I knew I had a memory of reading on the diamonds, and I forget it was you Yao!
BTW (and I confess I have a professional interest here), what do you think of possibility on Lobito Corridor extension... (and hooking into Crit min) re the Botswanan political economy
While the mega wave may be receding, what it has left behind is a new generation that has been taught it is normal to be hateful and hurtful. Not to mention validation of hatefulness and hurtfulness to older generations whose voices had been suppressed by growing common decency. Do not expect the Republican Party to abandon these gains. Likewise the rejection of science and expertise. Without outright suppression (as in post-war Germany), these ills will last for more generations.
isn't that the exact same criticism as with the left and the woke?
We need to find an actual cure for addiction. The methods of treatment that we have now simply don’t work well enough to solve the problem, and we should be spending a lot more money on research to fix this.
Even if we don’t find an outright cure, more and better treatment methods would be a major win. Addiction destroys lives, ruins families, hurts our economy, puts a huge burden on law enforcement and social services, and is also a massive drag on foreign policy, especially in Latin America. Research money spent on finding a cure will pay for itself many times over if the effort succeeds.
Is this actually even possible?
We don’t know if it is possible or not. Research is needed to answer that question.
The way I think of it is that there's both physical and non physical addictions
But for non physical addictions, it can be really hard to delineate between.Hey, this is just really fun, so i'm gonna do it a whole bunch
And hey i've got a big problem
I think the easiest way to tell the difference is.Hey, is this activity negatively impacting the rest of my life
I think the cited results of the drug use tolerance policies are actually not caused by drug use policies, but rather policies towards homelessness. Permissive policies on drug use are unlikely to attract many drug users for the simple reason that illegal drug use is already de-facto legal in the US as long as you do it on private property and don't piss people off, and the vast majority of drug users have no desire to do drugs in public and bother people anyway.
Homelessness, on the other hand, is not tolerated in most of the country. If you set up a tent on the sidewalk in 99% of the country you will quickly be run off by the police, so homeless people do have a strong incentive to move to where they are tolerated. And cities all over the country have a strong incentive to buy them a one way ticket there.
Of course there is a very strong overlap between homeless and drug use, and in particular they are the rare type of drug user who does do drugs in public places, so this is where the supposed permissive drug laws -> filth and degeneracy link comes from. But this is an illusion. The fact is that it's not the public drug use that is bothering people here, it's the homelessness in general.
The public drug use (and needles laying around) definitely makes it worse, but do you really think the general public would be much happier about the situation if we had dirty homeless people all over the city pitching tents on sidewalks / parks and harassing pedestrians if they just refrained from shooting up in full view of the public? I doubt it. When people complain about these people using drugs it's usually just a complaint about homelessness, but since homelessness and mental illness are seen as more sympathetic than drug use it's a lot more socially acceptable to say "I'm sick of all these damn drug addicts shooting up all over the city" than it is to say "I'm sick of all these filthy poor / crazy people I have to walk by / ride on trains with."
I believe that relaxing laws on drug use if not coupled with relaxed policies on homelessness and public disorder would result in minimal problems visible to the public on a day to day basis. We have already run this experiment with alcohol. That's why drinking is legal, but public intoxication is not (in most of the US). I really don't see why such a policy would not also be effective with other currently illegal drugs.
agreed, I think people have confused to very different topics, public disorder and drug use.
It's quite possible to be fine with somebody smoking a joint or even doing a line in the privacy of their own house, and not wanting our public areas to be taken over with disorder
Did you ask Claude to be salty, or was it like that on its own?
It was like that on its own!!
So then maybe AI writing isn’t as bland and anodyne as Claude itself claims it is - some of its jokes were kind of funny.
Yeah I enjoyed it, which was part of the irony 🥰
Bland AI writing is user error. A well written skill file with relevant knowledge store totally changes the output quality. Most people are just using mid level models like Sonnet without MCPs, Skills, etc.
I had quite a long conversation with Gemini about the Claude section. The telling note came at the end when Claude said, "You’re reading this because a human thought it would be funny to make the slop machine denounce slop. The joke, the framing, the decision to run it — that’s the whole product. I just filled in the words." So LLMs (being both versatile and cooperative) are 'slop machines' when that's what their user asks for. As Gemini said, "Because I don't experience fatigue, no effort is "wasted" on simple queries-utility serves its purpose. But engagement with someone who seeks genuine depth, critical reflection, and layered dialogue is where the true promise of this technology lives. It moves the medium from a fancy search engine to a genuine cognitive sounding board."
loved this bit!
Wow! That is some rabbit. Until following your substack I hadn't given much thought to a rabbit as a pet but they appear wonderful. Loved the video at the end.
I'd consider a rabbit as a pet but I think I'm allergic to hay. :/ So I tend to prefer meat-eating animals, such as dogs, cats, and ferrets. Domesticated rats are also really good pets that are a lot more affectionate with humans by default than many other rodents, but their lifespan is only about two years. :(
Rognlie 2015 suggests a quarter of that labor share decline was a housing share rise. Housing is economic capital, but it's not what we usually think of in "labor versus capital". Adjusting for housing share still leaves several percentage points of GDP unexplained, though.
I want to believe there will be a short gasp of DSA and then this populist moment will be over, but I dunno.
If I just judge by reddit, which is of course a highly non-random sample but does align well to "politically interested, slightly above average IQ people in their 20s", this upcoming generation is extremely populist. They were raised wholly in the Trump era, and while they hate him, they see defeating him as being Trump but woke/left/socialist. I have never seen Reddit less interested in nuanced arguments, or data (other than "there's no evidence for your opinion so we'll default to mine" and mining for the study with the headline that supports their position - a lot of faux scientism). I've never seen it more my team vs. your team. I've never seen it more incurious. I've never seen it more illiberal.
Nearly every comment on every topic can be distilled to "we must tax the billionaires more and then we can do anything we want without limits, also something some Epstein/ruling class/oligarchy". People that disagree must be paid shills, or bots. It's all very Trumpy.
That's a lot of reddit talk, but it's not a bad window if you're being following it for 15 years. And I'd add that even in my non random irl sample, it's very in the air. There's just this general sentiment that everyone agrees that, say, data centers are always bad, without any interrogation of why.
I wonder if Loyal's investigational drug to extend healthy lifespan in large dogs would also work in large rabbits; I assume their biology is very similar. This also goes for their drug for senior dogs and senior rabbits. https://loyal.com/products
It might offer a marginal improvement, but Loyal has bigger and better things in the pipeline! 🥰
Another great roundup. The details on labor % and the diamond market were particularly interesting and enlightening.
I suppose for Botswana (lovely country), the question is how to push harder to a diversification (harder to do when landlocked).
Hooking into the critical minerals boom plus having an actually functioning state with decently labor base maybe is a lifeline but medium term getting out of that trap - perhaps it's crit minerals plus leveraging infra plus stability to also be a transformation (processing) hub....
And to answer myself: seems there is a plausible hook by Botswana on the Lobito corridor development and extension.
No way! I’m actually quite surprised. I was positive that not long ago I thoroughly read several articles showing that Indian IT outsourcing was rapidly shrinking. We saw TCS and Infosys hitting their first growth plateaus in 40 years with hiring freezes, layoffs, and sneaky downscaling—like switching from salaried positions to pay-per-task models. At the same time, Silicon Valley tech giants were slashing vendor contracts to reallocate that budget toward monthly token subscriptions for their in-house devs.
Guess I’ll need to dig deeper into this topic. It’s not about which conclusion is 'right,' but rather understanding what phase of the AI adoption curve we're actually in. My hunch is that we’re seeing a pattern that will play out across many industries, including Indian outsourcing: an initial shock driven by doubt, stagnation, or decline, followed by adaptation and a secondary wave of expansion.
The interracial marriage chart for newlyweds seems like it may be statistically underpowered if there’s a footnote noting greyed out groups had fewer than 1,000 data points. This suggests other groups may not have had that large of a sample. Also where/how did they even collect these samples?
The chart itself seems poorly presented. I think they should have used a bar chart with multiple bars for each group.
Loved this post.... a little afraid of your rabbit. A couple of comments....
On labor share, beyond stock compensation and s-corps, I wonder about the broad-based impact of 401K/HSA plans. The mental model of the question is: there is labor and then there is capital, but the reality is the everyone is on the "spectrum." Do we need new pronouns... Also, Trump accounts will skew this further.
On immigration, you have made the argument for high-skill, but there is also an argument for "low-skill" As an example, in construction/Agriculture, the availability of this seasonal/mobile labor makes certain business models viable.
On Indian outsourcers, they are busily ramping up on AI and helping their clients with transition to AI flows. This is booming right now, and they get to use AI coding agents to raise margins.
On AI and productivity, this reminds me so much of the arguments from economists as innovations such as computers and the internet rolled out.
finally, the intermarriage graphic is fascinating ....
So I read this just after Krugman article - third in a series - he seems to see a big shift to tax on labour from capital and is arguing for change.
Interesting post. One question I have is about #2 and the human capitalist paper. It talks about the contribution of ISOs to compensation for public companies, but in my experience pubic companies don't use ISOs for highly compensated employees, they use NSOs that appear on W2s, and indeed ISOs have dollar vesting limits that make them unsuitable for compensation at a public company (you can't vest more than $100K per year, which isn't going to go very far compensating Tim Apple). ISOs are used at startup companies, and those are privately held.