Category: Current Affairs
Ken Opalo outlook on Africa 2026
(4) Keeping with the theme of growing during hard times and in difficult contexts, Nigeria is projected to grow by at least 4.3% in 2026, with consumer demand rising by over 7%.
Tinubu’s strong medicine may have nearly killed the patient, but after two painful years Nigerians seem poised to get relief from improving macro conditions. The Naira will remain stable (despite downward pressure on oil prices), with inflation projected to decline to under 14% — down from over 20% in 2025. Also, by now we can conclude that Dangote Refinery’s $20b bet on the Nigerian economy is a success. He appears to be winning the war against the entrenched interests that for decades fed at the trough of crude exports, imports of refined products, and fuel subsidies. The impact of the refinery will be felt in the further stabilization of fuel prices in 2026.
Nigeria’s reform momentum will slow down ahead of the 2027 elections. It’s not yet clear whether the reforms knocked the economy into a growth path, or if the projected growth is just recovery from the initial steep contraction after Tinubu took office.
(5) South Africa, too, will grow in 2026 despite tariff and political pressure from Washington. The GNU is holding; and Pretoria has weathered geopolitical storms (including the rift with Trump’s America) much better than I anticipated.
After years of stagnation, there is an emerging consensus that South Africa will see improvements in its growth rate over the next three years (averaging 1.7%). The reform momentum will continue, including in the power sector and entrenchment of the rule of law. Local elections later this year, including the big one in Johannesburg, will likely put further pressure on the ANC to improve service delivery and overall quality of policymaking.
The whole post is of interest, interesting throughout.
The Molly Cantillon manifesto, A Personal Panopticon
I find this piece significant, and think it is likely to be one of the most important essays of the year:
A few months ago, I started running my life out of Claude Code. Not out of intention to do so, it was just the place where everything met. And it just kept working. Empires are won by conquest. What keeps them standing is something much quieter. Before a king can tax, he must count. Before he can conscript, he must locate. Before he can rule, he must see. Legibility is the precondition for governance…
The first thing Claude solved was product blindness. NOX now runs on a cron job: pulling Amplitude, cross-referencing GitHub, and pointing me to what needs building. It handles A/B testing, generates winning copy, and has turned customer support into a fully autonomous department.
Once I saw this was possible, I chased it everywhere. Email, hitting inbox zero for the first time ever, with auto-drafted replies for everything inbound. Workouts, accommodating horrendously erratic travel schedules. Sleep, built a projector wired to my WHOOP after exactly six hours that wakes me with my favorite phrases. Subscriptions, found and returned $2000 I didn’t know I was paying. The dozen SFMTA citations I’d ignored, the action items I’d procrastinated into oblivion. People are using it to, I discovered, run vending machines, home automation systems, and keep plants alive.
The feeling is hard to name. It is the violent gap between how blind you were and how obvious everything feels now with an observer that reads all the feeds, catches what you’ve unconsciously dropped, notices patterns across domains you’d kept stubbornly separate, and—crucially—tells you what to do about it.
My personal finances are now managed in the terminal. Overnight it picks the locks of brokerages that refuse to talk to each other, pulls congressional and hedge fund disclosures, Polymarket odds, X sentiment, headlines and 10-Ks from my watchlist. Every morning, a brief gets added in ~/𝚝𝚛𝚊𝚍𝚎𝚜. Last month it flagged Rep. Fields buying NFLX shares. Three weeks later, the Warner Bros deal. I don’t always trade, sometimes I argue with the thesis. But I’m never tracking fifteen tabs at 6am anymore.
It feels borderline unfair seeing around corners, being in ten places at once, surveilling yourself with the attention span of a thousand clones.
A panopticon still, but the tower belongs to you.
There is more at the link, or this link, and yes she is related to the 18th century Irish economist Richard Cantillon.
Yes, Western Europe will survive recent waves of migration
Over 1.2mn people came to the EU seeking protection in 2015, many displaced by worsening conflict in Syria. There were bitter political feuds in Brussels over asylum, border and relocation policies. January 2016 set a grim record for the number of migrants dying while attempting to cross the Mediterranean.
Now things have changed, as European Commission president Ursula von der Leyen made clear in December when she took the stage at a conference on migrant smuggling. After a major policy overhaul over the past two years, “Europe is managing migration responsibly,” she said. “The figures speak for themselves.”
Irregular arrivals of migrants to the EU recorded by its border agency Frontex dropped by 25 per cent in the 11 months to November 2024, and have been continuously declining since a recent peak of 380,000 arrivals registered in 2023.
New asylum applications have also decreased by around 26 per cent in the first nine months of last year, according to Eurostat data, as fewer Syrians are applying for protection since the fall of the authoritarian regime of Bashar al-Assad in late 2024.
The Venezuelan stock market
Venezuela’s stock market is now up +73% since President Maduro was captured. Since December 23rd, as President Trump ramped up pressure on Maduro’s government, Venezuela’s stock market is up +148%.
Here is the link and chart. And up seventeen percent in the last day, and now some more on top of that. Note the bolivar is down only a small amount since December 23.
I see the reality as such:
a) Immoral actions were taken, leading up to the removal of Maduro, and immoral measures are likely to continue, both from the United States and from various Venezuelan replacement governments.
b) Trump’s actions have been some mix of unlawful and unconstitutional, to what degree you can debate.
c) In expected value terms, the people of Venezuela are now much better off.
It can and should be debated how much a) and b) should be weighted against c). But to deny c), or even to fail to mention it, is, I think, quite delusional.
Effective Altruists, are you paying attention?
U.S. interventions in the New World, with leader removal
I can think of a few. I am not thinking of ongoing struggles, such as the funding of opposition to the Sandinistas, rather I wish to focus on cases where the key leaders actually were removed. After all, we know that is the case in Venezuela today. Maybe these efforts were rights violations, or unconstitutional, and yes that matters. But how did they fare in utilitarian terms?
Puerto Rico: 1898, a big success.
Mexican-American War: Removed Mexican leaders from what today is the American Southwest. Big utilitarian success, including for the many Mexicans who live there now.
Chile, and the coup against Allende: A utilitarian success, Chile is one of the wealthiest places in Latin America and a stable democracy today.
Grenada: Under Reagan, better than Marxism, not a huge success, but certainly an improvement.
Panama, under the first Bush, or for that matter much earlier to get the Canal built: Both times a big success.
Haiti, under Clinton, and also 1915-1934: Unclear what the counterfactuals should be, still this case has to be considered a terrible failure.
Cuba, 1906-1909: Unclear? Nor do I know enough to assess the counterfactual.
Dominican Republic, 1961-1954, starting with Trujillo. A success, as today the DR is one of the wealthiest countries in Latin America. But the positive developments took a long time.
I do not know enough about the U.S. occupation of the DR 1916-1924 to judge that instance. But not an obvious success?
Can we count the American Revolution itself? The Civil War? Both I would say were successes.
We played partial but perhaps non-decisive roles in regime changes in Ecuador 1963 and Brazil 1964, in any case I consider those results to be unclear. Maybe Nicaragua 1909-1933 counts here as well.
So the utilitarian in you, at least, should be happy about Venezuela, whether or not you should be happy on net.
You should note two things. First, the Latin interventions on the whole have gone much better than the Middle East interventions. Perhaps that is because the region has stronger ties to democracy, and also is closer to the United States, both geographically and culturally. Second, looking only at the successes, often they took a long time and/or were not exactly the exact kinds of successes the intervenors may have sought.
Absher, Grier, and Grier consider CIA activism in Latin America and find poor results. I think much of that is springing from cases where we failed to remove the actual leaders, such as Nicaragua and Cuba. Simply funding a conflict does seem to yield poor returns.
The Venezuela conflict
Comments are open, in case you have intelligent insight or useful facts to add…
AEA: Honoring Milton Friedman
Looks like a good AEA session on Sunday in Philly:
“Honoring Milton Friedman on his 50th Anniversary of Winning the Nobel Prize”
Mark Skousen: “My Friendly Fights with Milton Friedman”
Jeremy Siegel: “Milton Friedman’s contributions to financial markets and the influence of money on the business cycle.”
James K. Galbraith: “Milton Friedman’s Critique of Keynesian Economics and Fiscal Policy: A Response”
Michael Bordo: “The Future of Monetarism After Friedman: What Works, What Doesn’t.”
Judy Shelton: “Milton Friedman and Robert Mundell: Who Won the Nobel Money Duel?”
To be held Sunday Jan. 4, 8-10 am ET at the Philadelphia Marriott Hotel, Grand Ballroom Salon B.
Dan Wang 2025 letter
Self-recommending, here is the link, here is one excerpt:
People like to make fun of San Francisco for not drinking; well, that works pretty well for me. I enjoy board games and appreciate that it’s easier to find other players. I like SF house parties, where people take off their shoes at the entrance and enter a space in which speech can be heard over music, which feels so much more civilized than descending into a loud bar in New York. It’s easy to fall into a nerdy conversation almost immediately with someone young and earnest. The Bay Area has converged on Asian-American modes of socializing (though it lacks the emphasis on food). I find it charming that a San Francisco home that is poorly furnished and strewn with pizza boxes could be owned by a billionaire who can’t get around to setting up a bed for his mattress.
And:
One of the things I like about the finance industry is that it might be better at encouraging diverse opinions. Portfolio managers want to be right on average, but everyone is wrong three times a day before breakfast. So they relentlessly seek new information sources; consensus is rare, since there are always contrarians betting against the rest of the market. Tech cares less for dissent. Its movements are more herdlike, in which companies and startups chase one big technology at a time. Startups don’t need dissent; they want workers who can grind until the network effects kick in. VCs don’t like dissent, showing again and again that many have thin skins. That contributes to a culture I think of as Silicon Valley’s soft Leninism. When political winds shift, most people fall in line, most prominently this year as many tech voices embraced the right.
Interesting throughout, plus Dan writes about the most memorable books he read in 2025.
“What we got wrong this year”
This is from The Free Press, and the instructions were to fess up to a mistake made in a piece for The Free Press (not elsewhere). Here is mine:
On October 26 I wrote about President Trump’s $20 billion support package for Argentinian president Javier Milei. At the time I, along with many other economists, thought the bailout was a costly mistake, but so far the decision has been vindicated.
The backstory is that Milei was trying to peg the Argentinian peso artificially high. Such policies usually do not work, even with strong backing from the International Monetary Fund, or in this case the U.S. It felt like the U.S. would lose a lot of money supporting a doomed economic policy. After all, Milton Friedman taught us long ago that floating exchange rates, set by market forces, usually are best.
But Milei stuck to his guns with the peg, an unusual move for a libertarian-oriented reformer, and Trump decided to back him. What happened in the “market test of strength” is that Milei and Trump won. The peg held, and the U.S. government seems not to have suffered any losses from this policy. By December, Argentina announced that it would be softening its currency peg and moving closer to a floating-rate system, as most economists recommend.
Why were the economists—including me—wrong? Maybe we were right ex ante, and Milei and Trump got lucky ex post. An alternative view is that the political symbolism of holding the peg was more important than the economics of the decision, and Milei had insight the economists did not.
When you are not sure why you were wrong, or how wrong you were, that is all the more reason to stay humble.
There are many other answers at the link.
Derek Thompson on 2025
I think this was a really bad year for American politics, a mediocre year for the American economy, and an exceptional year for America.
In 12 months, you’ve got
– the largest decline in murder rate ever recorded
– huge declines in traffic fatalities, drug overdoses, and suicide
– first ever personalized gene editing treatment and breakthroughs in HIV and cancer therapy
– continued advances in GLP1 technology that seems to reduce weight and inflammation and a bunch of other stuff
– declines in teen anxiety and despair
– surge in self-driving car technology*
– all this happened in a period when both the SP500 and inflation adjusted median wages hit record highs
Here is the link, a good record for tech most of all. Except perhaps on the politics.
Top Posts of 2025
Here are the top MR posts of 2025 as measured by page views. Number one post goes to Tyler:
An excellent post that pairs well with another Tyler post, also in the top ten, A median voter theory of right-wing populism which has the punchline:
The right-wing populists are gaining ground in so many countries because the cultural liberals in various parliaments and congresses are extremely reluctant to meet the preferences of their median voters.
Number two was also a Tyler post. Why I think AI take-off is relatively slow, an excellent accounting of AI economic and institutional bottlenecks. This pairs well with another top-ten post in which Tyler announces that AGI is already here. Both posts are correct. An interesting conundrum.
Third and fourth are two of my posts:
3. UCSD Faculty Sound Alarm on Declining Student Skills
4. One-Third of US Families Earn Over $150,000
Next is Tyler’s rundown of non-fiction books. Well worth re-reading.
5. Best non-fiction books of 2025 with one late addition.
Next I was pleased to see my post in which I explain some standard economics but in a deeper, more fundamental way than is usually done: One of my favorite posts of the year:
Why Do Domestic Prices Rise With Tariffs?
Zephyr Teachout’s op-ed wasn’t fun to read but I admit I did have some fun writing a response
Here’s another issue which makes me mad. The destruction of boarding houses, a perfectly reasonable housing form that reduces homelessness. Or to put it more simply, why is sharing a house illegal? Outrageous.
The War on Roommates: Why Is Sharing a House Illegal?
I am all for American greatness but the approach of the Trump administration is often backwards. I pointed out the big differences between the Sputnik moment and what I called the DeepSeek Moment in two posts.
The Sputnik vs. DeepSeek Moment: Why the Difference? and The Sputnik vs. Deep Seek Moment: The Answers.
I was pleased that David Brooks picked up on my framing in the NYTimes.
Finally my post The Library Burned Slowly sparked a brief spat with Chris Rufo. Rufo’s ability to turn the tools of the left on them is impressive but I haven’t changed my mind that “Bludgeoning your enemies is fun while it lasts but you can’t bludgeon your way to a civilization.”
What were your favorite posts of the year, either at MR or elsewhere?
Canada fact of the day
Since 2015, Canada has tripled its Indigenous spending – paying more than on national defense. Over those same years, Indigenous people have suffered a catastrophic collapse in health and well-being: on average almost a full decade of lost life expectancy.
That is from David Frum.
The Hainan Free Trade Port
Earlier I wrote about China’s Libertarian City, Boao Hope City (officially the Boao Lecheng International Medical Tourism Pilot Zone), China’s first special economic zone for advanced healthcare. Boao Hope City is following the peer approval model I have long argued for:
Daxue: Medical institutions within the zone can import and use pharmaceuticals and medical devices already available in other countries as clinically urgent items before obtaining approval in China. This allows domestic patients to access innovative treatments without the need to travel abroad…. The medical products to be used in the pilot zone must possess a CE mark, an FDA license, or PMDA approval, which respectively indicate that they have been approved in the European Union, the US, and Japan for their safe and effective use.
Boao Hope City is part of the larger Hainan Free Trade Zone. Hainan is a large island off China’s Southern Coast, often called the Hawaii of China. The entire island is being turned into the world’s largest free trade zone. As of Dec. 18, 2025, Hainan now boasts:
- Expanded “Zero-Tariff” Coverage…“zero-tariff” eligible goods expand from about 1,900 to approximately 6,600 tariff lines, increasing coverage from 21% to 74% of total import/export items, encompassing most production equipment and raw materials. This exemption applies to import tariffs, import VAT, and consumption tax, potentially saving enterprises about 20% in tax costs on imported equipment.
- Optimized “Tariff Exemption for Value-added Processing” Policy: One of the most transformative measures, this policy sees significantly relaxed restrictions (e.g., on core business income ratios) and now allows cumulative value-added calculation across upstream and downstream enterprises. This makes it easier for businesses to meet the “over 30% value-added” threshold for tariff exemption when selling finished products into the mainland market. Companies can ship primary products or components to Hainan for substantial processing; if the value-added meets the standard, the final products can enter the mainland market tariff-free.
- “Dual 15%” Tax Incentives as a Long-term Advantage: Encouraged industries registered and substantively operating in the Hainan FTP enjoy a reduced 15% corporate income tax rate. Eligible high-end and in-demand talents benefit from an individual income tax exemption for the portion exceeding 15%, providing long-term, stable fiscal predictability.
- Enhanced Trade and Investment Liberalization/Facilitation: Measures include implementing a negative list for cross-border trade in services, relaxing foreign investment access, adopting a “commitment-based registration system” for business setup, and streamlining procedures. A visa-free policy for nationals of 59 countries is in effect, with further eased entry-exit restrictions for business personnel.
Economic growth
Depending on how you look at it growth in Q3 was very very strong or very strong or just possibly merely strong.
Annual rates: GDP: 4.3% Real final sales to domestic purchasers: 2.9% Average of GDP & GDI: 3.4%
GDI: 2.4%
That is from Jason Furman.
Wyoming has as many Senators as escalators?
There used to be a third set of escalators, in the Cheyenne JCPenney building, but it was lost when JCPenney moved to the Frontier Mall and the escalator was removed when the old building was renovated…
What’s more interesting is the ages of Wyoming’s escalators…
In Casper, the First Interstate Bank building was built in 1958, while the Hilltop Bank opened in December 1979. The escalators were part of the original design of both buildings.
It’s not just that there are only two escalators in Wyoming, there hasn’t been a new one in 44 years.
Here is the article, but maybe there are some very new ones? Via Tommy Smokes.