What happened to the world in 2023, and what I wrote about it
"But I think 2024 will be a bit like 1976 — a small resurgence of unrest that makes many people feel like the 2010s never ended."
And for that reason alone, I'm bailing on all public social media in 2024. It's just gonna be far, far too much yelling, screaming, and general anger for me to take. Best to stay out of there.
As someone who has been here since almost the beginning, thank you for three engaging and informative years.
I am sitting here in Taipei and I can’t help but be struck by two things:
1) How much poorer people are individually. Most people live in apartments and they have much less space per person. Not that many people own cars, at least in Taipei. It might just be cultural, but there is much less display of wealth.
2) How much wealthier they are in public goods. The transit infrastructure is truly first world, with clean, reliable, and affordable subways, a HSR line, and an extensive bus system. The roads are pot hole free, sidewalks are clean and schools are very well maintained.
They probably wouldn’t like to be called more socialist than the US but they have made a different trade off than we have.
Also a striking difference from San Francisco is how clean and crime free the city is. People leave stuff in the basket of their bicycles when they go into a shop or cafe. It’s completely safe to walk around alone at night. The only sign at all of disorder was the very rare graffiti and one homeless person I saw.
I talked to some Taiwanese-American young men here and they remarked how much better their standard of living and quality of life was on a teacher’s salary than it was in the US. I have some Taiwanese friends and they all plan to move back some day. I have children in the US, which will probably keep me there, but if I did not, I would consider it too. Learning Chinese would be quite the challenge, though. Taiwan is definitely doing something right.
I'm still struggling to find good explanations for the gap between actual economic performance and public pessimism on the economy in the US. I think the inflation hangover and partisanship (GOP voters think we're in the depression, basically) are the big ones, but also:
- It may be that Millennials are always going to poll as somewhat negative on the economy for the same reason Boomers do on crime and public safety because it's what the country was like during their formative years and they don't update their priors.
- Rent has gone up a lot and mortgage interest rates are a lot higher even than in 2019, especially in a lot of markets that weren't experiencing much of a housing crisis before. This is probably the biggest phantom factor.
- This isn't brought up much, but I suspect that a lot of people in the top two income quintiles actually liked the the pre-2020 slack labor market and ZIRP economy quite a bit more than the one we have now where people like service workers are making big income gains. I would expect right-leaning voters to be pretty shameless about saying this, but a lot of liberals who used to say things like "I'd be happy to pay extra for my Starbucks order if the barista earned what they do in Denmark" didn't really mean it.
- The government demonstrated in 2020 that it was capable of huge welfare state expansion when the shit hit the fan (expanded UI, eviction moratoriums, expanded child tax credit, etc.) that's largely been retracted.
- Vibes are a huge things. I see people repeat falsehoods about the economy (that record poverty rates are a thing, record numbers of people are working second and third jobs when it's actually pretty low relatively) and when people rebuff them they just straight up don't believe it. Dems in general have a big problem with outreach here - it doesn't matter what the facts are, it matters how people feel. If people don't feel you're meeting them there they'll tell you off, and it doesn't really matter WHY they feel how they feel.
In the end I am guessing it's just inflation. People in monetarily stable societies generally have very strong folk-economic beliefs about what things "should" cost that are hard to loosen. Which makes sense - inflation barely existed over a perceptible time frame before 1900 and has only been an intermittent thing in the lucky parts of the world since then.
Thanks for all of your hard work---your success from this blog is very well deserved. :)
"Especially if Trump loses again" I'd say "If and only if Trump loses again". I guess it's still a less than 50 % chance that Trump would carry through on his threats to execute political opponents, but much more than 50% that he will turn the force of the state against then. The guardrails that mostly stopped him last time won't be there in 2025.
“We’ve lived through radical technological change our whole lives, but AI is a different sort of beast entirely. In some ways, it’s almost like magic — a whole new way of controlling the world without necessarily understanding the mechanisms of control.”
Indeed, AI has produced the first major artificial firing of a CEO, followed by a real-world mass resignation, followed by a real-world BoD re-shuffle. I can’t imagine Altman not chafing at having Microsoft as a boss.
Thanks for the round up. I’ve been spreading your blogs like an apostle. Keep up the smarty rants. 👍🏼
Wonderful post for Thanksgiving eve. Has put me in an optimistic and thankful mood.
The relationship between the US and China has waffled between cold and lukewarm since Xi took power in 2012. Xi's goals haven't changed— his mellow vibe at the recent meeting In San Francisco is more designed to seek rapprochement with Western Capital to fix his ailing economy, not really seeking any friendship with United States. I agree with Noah that we should not be fooled by these slight oscillations in a relationship that is sure to be at odds for many years to come.
However, I still think that Cold War 2 is a very bad way to talk about the important tensions between the US, China, Russia, and Iran.
Why voluntarily climb back into that linguistic straitjacket? Why look back to a time when there was a lot more zero-sum thinking? Can't we come up with something better?
I try to answer these questions in my history-focused substack “As Time Goes By." See "It's Hostile, It's Real, but Don't Call It Cold War"
I'm currently working on a brief history of the relationship between the "West and the Rest." Coming soon.
Great Holiday Greeting letter
Noah, at some point could you write about the deficit, the debt, and considerations re raising taxes? I feel like the topic only gets discussed by politicians, and it would be helpful to have the voices of more economists on the issue.
Personally I'm concerned, and I think the math on raising top tax rates is easy - it's just the politics that is hard. But is that the right opinion?
"Its Belt and Road initiative", not "it's".
This is not Noah's fault since he uses ChatGPT to spell-check his essays. I've just backspaced twice to change "it's" to "its", because my phone adds the apostrophe by default.
If AI is so smart, why doesn't it do this? At this point even regular autocorrect should be capable of cleaning it up as soon as you press send.
Also: plurals of proper nouns don't take an apostrophe. ("No more Vietnam's." See what my phone just did?) Autocorrect has destroyed everyone's intuitions on this, I suppose because it's a stochastic parrot and proper nouns take a possessive much more often than a plural. Can Silicon Valley not fix this?
Can’t believe its been near a year since I’ve been following you Noah.
I was a depressed progressive. Climate Change, Racial Politics, the Pandemic...all of it did a proper number on my mental health and well-being.
Reading your writing, your optimism and your analysis on the world has filled me with excitement and anticipation. I have shared your articles to many, many friends and family. You’re a rockstar! Thank you so much for your positivity in this cynical and nihilistic world.
Consistently my favorite Substack. Have been really liking the geopolitical posts, the futurism, and the leftists / tankies content. Also, you changed my mind about solar! Thanks and keep up the great work!
In general I agree your thoughts, but I have to say I don't feel you have listed the one big caveat concerning India. This is their adherence to the cast system and the systematic persecution of Musslims. The present prime minister of India, Mr. Modi and his party, the BJP, have risen to power partially by inciting hatred of Muslims. The Indian police routinely turn their backs on religious riots that result in the deaths of Muslims and the rapes of Muslim women. In California they were able to block the governor from signing a bill outlawing the cast system in California. This is an issue that usually flies under the radar, but is becoming increasently more important. It is true that the cast system was outlawed in India, but it still operates among the Hindu majority - both in India and as well as in America. This is an issue that needs far more attention than it is presently receiving.
Can I add to your list of things to write about and request your Econ 102 thoughts on Thailand and Vietnam?