Category: Current Affairs
My thoughts on pharma pricing for The Free Press
Here is an excerpt:
Begin with a basic fact. Generics account for about 90 percent of all prescriptions, and for those drugs Americans pay less than the OECD (Organization for Economic Cooperation and Development) average. So while Americans do pay much higher prices for many new drugs, most of the time, for drugs like metformin, atorvastatin, and amoxicillin, they are getting a bargain.
Furthermore, high American healthcare expenditures are in line with our penchant for higher consumption spending in other sectors of the economy as well. Compared to Europeans, we also spend more on leisure and just about everything else.
Here is the full piece — don’t be a Supervillain!
The most important decision of the Trump administration?
It is finally getting some publicity. Of course I am referring to the AI training deals with Saudi Arabia and UAE. Here is an overview NYT article, and here is one sentence:
One Trump administration official, who declined to be named because he was not authorized to speak publicly, said that with the G42 deal, American policymakers were making a choice that could mean the most powerful A.I. training facility in 2029 would be in the United Arab Emirates, rather than the United States.
And:
But Trump officials worried that if the United States continued to limit the Emirates’ access to American technology, the Persian Gulf nation would try Chinese alternatives.
Of course Saudi and the UAE have plenty of energy, including oil, solar, and the ability to put up nuclear quickly. We can all agree that it might be better to put these data centers on US territory, but of course the NIMBYs will not let us build at the required speeds. Not doing these deals could mean ceding superintelligence capabilities to China first. Or letting other parties move in and take advantage of the abilities of the Gulf states to build out energy supplies quickly.
In any case, imagine that soon the world’s smartest and wisest philosopher will soon again be in Arabic lands.
We seem to be moving to a world where there will be four major AI powers — adding Saudi and UAE — rather than just two, namely the US and China. But if energy is what is scarce here, perhaps we were headed for additional AI powers anyway, and best for the US to be in on the deal?
Who really will have de facto final rights of control in these deals? Plug pulling abilities? What will the actual balance of power and influence look like? Exactly what role will the US private sector play? Will Saudi and the UAE then have to procure nuclear weapons to guard the highly valuable data centers? Will Saudi and the UAE simply become the most powerful and influential nations in the Middle East and perhaps somewhat beyond?
I don’t have the answers to those questions. If I were president I suppose I would be doing these deals, but it is very difficult to analyze all of the relevant factors. The variance of outcomes is large, and I have very little confidence in anyone’s judgments here, my own included.
Few people are shrieking about this, either positively or negatively, but it could be the series of decisions that settles our final opinion of the second Trump presidency.
Addendum: Dylan Patel, et.al. have more detail, and a defense of the deal.
Manufacturing Went South
Excellent piece by Gary Winslett in the Washington Post. As I pointed out in my piece on Manufacturing and Trade, the US is a manufacturing powerhouse. So why did the rust belt rust? Because manufacturing went South.
The Rust Belt’s manufacturing decline isn’t primarily about jobs going to Mexico. It’s about jobs going to Alabama, South Carolina, Georgia and Tennessee…In 1970, the Rust Belt was responsible for nearly half of all manufacturing exports while the South produced less than a quarter. Today, the roles are reversed, it is the Rust Belt that hosts less than one-fourth of all manufactured exports and the South that exports twice what the Rust Belt does.
Why the move? Better policies:
Economic research suggests that labor conflict drove much of the decline of the Rust Belt. Right-to-work laws in the South, by contrast, created more operational flexibility and attracted capital. The average unionization rate in the Rust Belt is 13.3 percent; in the South, it’s 4.3 percent. Southern states’ political leaders are quite open about how they see right-to-work as foundational to their competitiveness.
But that’s far from the only factor. The South offers cheaper electricity, a critical input for energy-intensive manufacturing. Ten states in the South have industrial electricity rates under 8 cents per kilowatt-hour; zero states in the Rust Belt do. Ohio has some of the country’s most restrictive wind-energy setback regulations. You know who doesn’t? Texas.
Despite the economic growth, Southern states have built so much housing that they kept costs from becoming unaffordable. Last year, both North Carolina and South Carolina each built more than four times as much new housing per capita as Massachusetts, according to U.S. census data. Florida, Georgia, Texas, Tennessee, South Carolina and North Carolina, all built more housing per capita than all of Illinois, Ohio, Michigan, Pennsylvania, California, New York and Massachusetts. That is not just a 2024 dynamic. That is true for every single year going all the way back to 1993. Comparatively low-cost housing makes it easier to attract and retain workers, which further attracts capital, which adds yet more investment and jobs, and the virtuous cycle spins upward.
…Immigration helps a lot, as well. More immigrants live in the South than any other region of the country. The region with the fewest immigrants? The Midwest. Immigrants promote growth, makes the workforce more robust, and create the goods and services that support manufacturing.
Right-to-work laws, cheap energy, affordable housing, low-cost land, fast permitting, low taxes, immigration. That’s a powerful combination…
Neither party wants to face these realities. The Republicans are mired in victimology and don’t see that the South’s success is built on exporting and immigration, both of which they are cutting. The Democrats don’t want to acknowledge right to work laws, cheap energy and low taxes.
Both parties prefer simple villains, whether it’s China or greedy corporations. But what’s needed isn’t more warm fuzzies about the way things used to be or globalization scapegoating. It is a clear-eyed approach that understands why companies choose Alabama over Ohio and that embraces the choices made by Southern states. That means leaning into globalization, right-to-work, all-of-the-above energy policy, permitting reform, immigration and low taxes. America’s economic future depends on embracing this reality rather than in indulging in turn-back-the-clock fictions.
Econ 101 is Underrated: Pharma Price Controls
Econ 101 is often dismissed as too simplistic. Yet recent events suggest that Econ 101 is underrated. Take the tariff debate: understanding that a tariff is a tax, that prices represent opportunity costs, that a bilateral trade deficit is largely meaningless, that a so-called trade “deficit” is equally a goods surplus or an investment surplus—these are Econ 101 ideas. Simple but important.
Today’s example is Trump’s Executive Order on pharmaceutical pricing. It builds on the Biden Administration’s Inflation Reduction Act, which I’ve criticized as failing the marshmallow test. Now Trump is trying to go further—threatening antitrust action and even drug delistings unless pharmaceutical firms equalize prices globally. Tyler and I explored exactly this type of policy in our Econ 101 textbook, Modern Principles of Economics.
In our chapter on price discrimination, we first show that pharmaceutical firms will want to charge different prices in different markets depending on the elasticity of demand. In order to do so, they must prevent arbitrage. Hence the opening to that chapter:
After months of investigation, police from Interpol swooped down on an international drug syndicate operating out of Antwerp, Belgium. The syndicate had been smuggling drugs from Kenya, Uganda, and Tanzania into the port of Antwerp for distribution throughout Europe. Smuggling had netted the syndicate millions of dollars in profit. The drug being smuggled? Heroin? Cocaine? No, something more valuable: Combivir. Why was Combivir, the anti-AIDS drug we introduced in Chapter 13 , being illegally smuggled from Africa to Europe when Combivir was manufactured in Europe and could be bought there legally?
The answer is that Combivir was priced at $12.50 per pill in Europe and, much closer to cost, about 50 cents per pill in Africa. Smugglers who bought Combivir in Africa and sold it in Europe could make approximately $12 per pill, and they were smuggling millions of pills. But this raises another question. Why was GlaxoSmithKline (GSK) selling Combivir at a much lower price in Africa than in Europe? Remember from Chapter 13 that GSK owned the patent on Combivir and thus has some market power over pricing. In part, GSK reduced the price of Combivir in Africa for humanitarian reasons, but lowering prices in poor countries can also increase profit. In this chapter, we explain how a firm with market power can use price discrimination—selling the same product at different prices to different customers—to increase profit.
Later in the Thinking and Problem Solving section we ask:
As we saw in this chapter, drug companies often charge much more for the same drug in the United States than in other countries. Congress often considers passing laws to make it easier to import drugs from these low-price countries (it also considers passing laws to make it illegal to import these drugs, but that’s another story).
If one of these laws passes, and it becomes effortless to buy AIDS drugs from Africa or antibiotics from Latin America—drugs that are made by the same companies and have essentially the same quality controls as the drugs here in the United States—how will drug companies change the prices they charge in Latin America and Africa? Why?
That, in essence, is the Trump policy. So what’s the likely outcome? Prices will fall in the U.S. and rise in poorer countries—but not equally. AIDS drugs, for example, save lives in Africa but generate little profit. If firms can’t prevent arbitrage, they’ll raise African prices closer to U.S. levels and lower U.S. prices only modestly.
The result is that importation will end up hurting patients in low-income countries while delivering minimal gains to Americans. Worse, by reducing pharmaceutical profits overall, it weakens incentives to develop new drugs. In fact, in the long-run U.S. consumers are better off when poorer countries pay lower prices—just as airline price discrimination makes more routes viable for both economy and first-class passengers.
The reference pricing envisaged in Trump’s EO focuses on developed countries but Dubois, Gandhi and Vasserman run the numbers in a fully-specified model and reach similar conclusions:
Using our estimates of consumer preferences, marginal costs, and bargaining parameters, we assess the impact of a counterfactual in which US pharmaceutical prices are subject to international reference pricing with respect to Canada or an average of several similar countries….Our results suggest that international reference pricing on its own is unlikely to produce dramatic savings to US consumers. Overall, reference pricing induces a substantial increase in the prices charged in reference countries but only a modest decrease in the prices charged in the US.
It’s also the case that countries that pay less for pharmaceuticals get them later than countries that pay more. Most importantly, such launch delays (and here) tend to reduce life expectancy.
Thus, Econ 101 provides a critical foundation for understanding current debates.
Beyond Econ 101, it’s worth highlighting how internally inconsistent Trump’s policies are. At the same time, as the administration is raising tariffs worldwide, it wants to greatly reduce restrictions on importing pharmaceuticals! The most charitable interpretation (steel-manning) is that the ultimate goal of the Trump approach is to boost industry profits and incentivize R&D by raising prices in other countries. But it’s hard to square that with reducing prices here. Either the investment is worth it or not. Instead of focusing on investment or efficiency, Trump frames everything as grievance and redistribution: other countries are “ripping us off,” so they must be made to pay. But the pie shrinks when you fixate on dividing it instead of growing it. Moreover, Trump’s belligerent approach is unlikely to succeed because, as with tariffs, it invites retaliation. Instead, we should be pursuing IP protections for pharmaceuticals as part of an overall free trade agreement. We did precisely this, for example, in the Australia–United States Free Trade Agreement (AUSFTA) in 2005. That type of bilateralism and negotiation is anathema to Trump, however, who sees the world in zero-sum terms. As a result, the Biden-Trump policies are likely to lead future Americans to have less access to life-saving and life-improving pharmaceuticals.
Addendum: See also many previous MR posts on pharmaceutical regulation including The US has Low Prices for Most Pharmaceuticals, Pharmaceutical Price Controls and the Marshmallow Test, Update on the supervillains and Frank Lichtenberg and the cost of saving lives through pharmaceuticals as well as many others.
The game theory of India and Pakistan
Now that the dust has settled at least temporarily, a few readers have asked me for comment on the recent clash. The events are difficult to understand, in part because of rampant misinformation and also because of genuine continuing uncertainty as to what happened. Nonetheless we do know two things:
1. The two sides whacked each other a fair amount, more than usual.
2. Neither sides resorted to nukes.
So in its simplest terms, we now know/suppose that the threshold for nuclear use is higher than we earlier might have estimated. Since very little was settled, the rational, game-theoretic presumption is that the two countries, in the future, will whack each other some more.
Yet there is a second-order effect. The more they whack each other with non-nuclear means, the more the weaker party (usually Pakistan, in this context) will feel tempted to lower the nuclear threshold, if only stochastically (this can be done, among other ways, by exercising imperfect control over factions in the armed forces). One way to put this point involves the Lucas critique — one instance of whacking never really establishes what the future nuclear threshold will be.
So there is more future whacking, and continuing and perhaps even growing uncertainty about where the nuclear threshold lies.
An institutionally more detailed take is possible, but perhaps this “crude” game-theoretic analysis captures some of the essentials. If you want to enrich the analysis, I would consider the variable “what we learned about the reaction functions of America and China,” although the full stories here are not yet out. The same is true for “what we learned about the possibly non-unitary nature of Pakistani governance.”
Eric Topol invites me to his podcast
You will find it here, along with a transcript. Interesting throughout, here is one excerpt from me:
The AI is your smartest reader. It’s your most sympathetic reader. It will remember what you tell it. So I think humans should sit down and ask, what does the AI need to know? And also, what is it that I know that’s not on the historical record anywhere? That’s not just repetition if I put it down, say on the internet. So there’s no point in writing repetitions anymore because the AI already knows those things. So the value of what you’d call broadly, memoir, biography, anecdote, you could say secrets. It’s now much higher. And the value of repeating basic truths, which by the way, I love as an economist, to be clear, like free trade, tariffs are usually bad, those are basic truths. But just repeating that people will be going to the AI and saying it again won’t make the AI any better. So everything you write or podcast, you should have this point in mind.
And:
I’ve become fussier about my reading. So I’ll pick up a book and start and then start asking o3 or other models questions about the book. So it’s like I get a customized version of the book I want, but I’m also reading somewhat more fiction. Now, AI might in time become very good at fiction, but we’re not there now. So fiction is more special. It’s becoming more human, and I should read more of it, and I’m doing that.
Recommended.
Elasticities and incidence
President Trump’s budget proposes a significant rethink of federal rental assistance programs, consolidating a number of them — and cutting them by more than $26 billion — next fiscal year. Many experts previously told The New York Times that this could result in low-income Americans losing access to federal housing benefits.
Here is more from the NYT. If you are a YIMBY type, odds are you should favor this, since some of the subsidy gain likely would end up captured by landlords.
Major reforms at the NSF
The National Science Foundation (NSF), already battered by White House directives and staff reductions, is plunging into deeper turmoil. According to sources who requested anonymity for fear of retribution, staff were told today that the agency’s 37 divisions—across all eight NSF directorates—are being abolished and the number of programs within those divisions will be drastically reduced. The current directors and deputy directors will lose their titles and might be reassigned to other positions at the agency or elsewhere in the federal government.
The consolidation appears to be driven in part by President Donald Trump’s proposal to cut the agency’s $9 billion budget by 55% for the 2026 fiscal year that begins on 1 October. NSF’s decision to abolish its divisions could also be part of a larger restructuring of the agency’s grantmaking process that involves adding a new layer of review. NSF watchers fear that a smaller, restructured agency could be more vulnerable to pressure from the White House to fund research that suits its ideological bent.
As soon as this evening, NSF is also expected to send layoff notices to an unspecified number of its 1700-member staff. The remaining staff and programs will be assigned to one of the eight smaller directorates. Staff will receive a memo on Friday “with details to be finalized by the end of the fiscal year,” sources tell Science. The agency is also expected to issue another round of notices tomorrow terminating grants that have already been awarded, sources say. In the past 3 weeks, the agency has pulled the plug on almost 1400 grants worth more than $1 billion.
Here is more information, this story is still developing…
Solve for the electoral energy equilibrium
I know many Democrats have been heartened by recent electoral wins by the Labor Party in Australia and the Liberal Party in Canada, both boosted by anti-Trump sentiment.
But Labor prime minister Anthony Albanese views Australia as an energy-producing country, and while they have taken measures to boost renewables deployment and electric cars, they’re not seeking to curb coal mining or exports. Similarly, Mark Carney went to Alberta to proclaim his desire to make Canada an “energy superpower” that would “recognize that we are home to an abundance of conventional — that means oil and gas — conventional and clean energy resources.” I think that part where he went off script and clarified that by conventional he meant oil and gas is important. The prepared text was sort of doing dog whistle moderation, but he wanted people to hear his message clearly: that, while his strongest interest is in facilitating clean energy deployment, he intends to keep selling the world oil and gas as long as oil and gas are useful.
Everybody knows you’re not winning in Colorado, New Mexico, Pennsylvania, Ohio, Texas, or Alaska on a message of shutting down fossil fuels. But if you’re not winning those states, you don’t have a majority. Instead of the national party adopting a message that’s toxic in those states and then recruiting candidates who try to distance themselves from it, the solution is for the national party to adopt the same kind of messages that work for the center-left in Canada and Australia and Norway.
That is from (partially gated) Matt Yglesias.
Is classical liberalism for losers?
That is the topic of my latest column for The Free Press. Excerpt, starting with the point that the New Right has an obsession with seizing political power:
There are two essential problems with yelling “Rule!”
The first is that your side will not win every election. It’s a reliable assumption that, on average, “the other side,” whoever that may be, is going to win half of the time.
If you build up executive power, or state power more generally, in the service of your ends, the chances are pretty high that those same powers someday will be used against you. Democrats are enraged at Trump’s use of executive orders and executive power more broadly, but that did not begin with Trump. Consider how Barack Obama seized the power to provide legal status to illegal immigrants, or how Joe Biden sought to extinguish all those student loans, without buy-in from Congress. The point is that Trump stepped into a system that had already been transformed, and he is now using it to his own ends.
Or to take another example: Many Democrats hate DOGE, but in fact it is a repurposed version of a 2014 President Obama creation, namely the United States Digital Service, which initially was designed to improve the IT capabilities of the federal government. Ask yourself which Trump initiatives someday will be repurposed in an analogous fashion.
If your fundamental beliefs are in individual liberty, responsibility, and toleration, the escalation of state power, across competing administrations, is unlikely to prove your friend over time.
The second problem is that rule by the political right is not necessarily better than rule by the political left, even if you have basic right-leaning sympathies, as I do on a large number of issues, especially in the economic realm. But even on economics, the Trump administration is bringing depredations, such as the very high proposed tariff rates, that we would not have seen under a typical Democratic administration. Circa May 2025, I feel less economically free than I did under the Biden administration.
Such problems are all the more true when a given side wins a series of successive political victories.
Power corrupts; the right is not immune to that truism. For instance, the Republican Party typically has been a vehicle for fiscal conservatives, at least on paper and in rhetoric. Yet under the Republican trifectas of both George W. Bush and the first Trump administration, both spending and debt rose dramatically. When you get to be the one spending the money, it is hard to exercise restraint.
I go on to argue that classical liberalism in fact does win a series of periodic transformative victories, even though at many historical moments it is relatively dormant in influence. It is the way to be a real winner.
Definitely recommended, of real importance.
The new Pope
Has taken a class in real analysis.
This is Vindication???
Joe Nocera has a strange piece in the Free Press arguing that the “godfathers of protectionism” have been vindicated. It begins with a story about how Dani Rodrik couldn’t get a famous economist to endorse his book Has Globalization Gone Too Far? because doing so would arm the barbarians. Well give that reluctant economist a Nobel! because they were obviously correct. Tyler made the same point in his debate with Rodrik. Rodrik had no answer.
The piece is strange because there is little to no connection with any data; just assertion, vibe, and non-sequitur. Most bizarrely but hardly alone was this bit:
In the 1980s, Prestowitz was an official in Ronald Reagan’s Commerce Department, back when Japan, not China, was the trading partner the U.S. most feared. Japanese autos, televisions, washing machines, and all sorts of consumer electronics were flooding into the U.S., forcing American auto makers to close factories and even putting U.S. companies like Zenith out of business. Yet Japan was using tariffs and other less obvious trade barriers to prevent U.S. companies from exporting many of their products to Japan. It was protecting certain key industries from foreign competition.
This was not how the rules of free trade were supposed to work. Prying that market open, forcing Japan to play by the same rules as the U.S., was Prestowitz’s job.
He found it deeply frustrating. “Every time we completed a trade negotiation,” Prestowitz told me, “some economist would turn out a model to show that the deal was going to create X number of American jobs and would reduce the trade deficit by Y. And it never happened.”
Even more galling, he said, “The conventional response among economists was that it didn’t matter.” After all, even if Japan was keeping U.S. products out of its market, America still benefited from low-cost imports. Prestowitz has a vivid memory of a conversation he once had with Herbert Stein, President Richard Nixon’s former chief economist. “The Japanese will sell us cars,” Stein told him with a shrug, “and we’ll sell them poetry.”
Prestowitz also remembers the abuse he took for his views. “I was a Japan-basher, a protectionist, and so on,” he said. Paul Krugman, who was not yet a New York Times columnist but was already an influential economist, called Prestowitz “an intellectual snake-oil salesman” in a book he wrote called Pop Internationalism. The book, published in 1997, consisted of a half-dozen essays, each of which brutally attacked one or another of the handful of people who dared to say that globalization was less than perfect. (He described then-Labor Secretary Robert Reich as “not a serious thinker,” and Lester Thurow, the best-selling author and Massachusetts Institute of Technology economist, as “silly.”)
When I asked Prestowitz recently if he felt vindicated, he admitted that he did, but added that “I also feel a sense of loss that it took us so long to face reality and at such cost.”
Well here is data on GDP per capita in real terms in Japan and the United States since 1990. This is vindication???!
Or how about this:
No one anymore, on the left or the right, denies that globalization has fractured the U.S., both economically and socially. It has hollowed out once-prosperous regions like the furniture-making areas of North Carolina and the auto manufacturing towns of the Midwest.
Well the far left and the far right agree that America has become fractured and hollowed out, the Bernie Sanders-Donald Trump horseshoe. But both are wrong. For the rest of us in the happy middle, consider this–Hickory, North Carolina, once known as the furniture capital of the United States, did face some hard times. But in 2023 Travel and Leisure magazine named Hickory the most beautiful and affordable place to live in the United States! Writing:
Located in the foothills of the Blue Ridge Mountains, Hickory is a family-friendly destination known for its ample hiking trails and Southern charm. Currently ranked as the cheapest place to live in the U.S., Hickory has a median home price of $161,000. This affordable neighbor to the east of Asheville and north of Charlotte is popular with retirees, but it’s also becoming more attractive to young families; a steady stream of residents has been flocking here for its newfound fame as a technological hub for Google and Apple.
Doesn’t sound hollowed out to me.
The godfathers of protectionism haven’t been vindicated—but if they want to claim credit for President Trump’s tariff binge they’re welcome to it.
Addendum: Hat tip to Scott Lincicome on Hickory and do read Jeremy Horpedahl for details on the distribution of wages. Did you know, for example, that median weekly earnings for full time workers who graduated high school but are without a college degree are at an all time high? Switched earlier current for constant $2021 dollars in graph.
My excellent Conversation with Jack Clark
This was great fun and I learned a lot, here is the audio, video, and transcript. Here is part of the episode summary:
Jack and Tyler explore which parts of the economy AGI will affect last, where AI will encounter the strongest legal obstacles, the prospect of AI teddy bears, what AI means for the economics of journalism, how competitive the LLM sector will become, why he’s relatively bearish on AI-fueled economic growth, how AI will change American cities, what we’ll do with abundant compute, how the law should handle autonomous AI agents, whether we’re entering the age of manager nerds, AI consciousness, when we’ll be able to speak directly to dolphins, AI and national sovereignty, how the UK and Singapore might position themselves as AI hubs, what Clark hopes to learn next, and much more.
An excerpt:
COWEN: Say 10 years out, what’s your best estimate of the economic growth rate in the United States?
CLARK: The economic growth rate now is on the order of 1 percent to 2 percent.
COWEN: There’s a chance at the moment, we’re entering a recession, but at average, 2.2 percent, so let’s say it’s 2.2.
CLARK: I think my bear case on all of this is 3 percent, and my bull case is something like 5 percent. I think that you probably hear higher numbers from lots of other people.
COWEN: 20 and 30, I hear all the time. To me, it’s absurd.
CLARK: The reason that my numbers are more conservative is, I think that we will enter into a world where there will be an incredibly fast-moving, high-growth part of the economy, but it is a relatively small part of the economy. It may be growing its share over time, but it’s growing from a small base. Then there are large parts of the economy, like healthcare or other things, which are naturally slow-moving, and may be slow in adoption of this.
I think that the things that would make me wrong are if AI systems could meaningfully unlock productive capacity in the physical world at a really surprisingly high compounding growth rate, automating and building factories and things like this.
Even then, I’m skeptical because every time the AI community has tried to cross the chasm from the digital world to the real world, they’ve run into 10,000 problems that they thought were paper cuts but, in sum, add up to you losing all the blood in your body. I think we’ve seen this with self-driving cars, where very, very promising growth rate, and then an incredibly grinding slow pace at getting it to scale.
I just read a paper two days ago about trying to train human-like hands on industrial robots. Using reinforcement learning doesn’t work. The best they had was a 60 percent success rate. If I have my baby, and I give her a robot butler that has a 60 percent accuracy rate at holding things, including the baby, I’m not buying the butler. Or my wife is incredibly unhappy that I bought it and makes me send it back.
As a community, we tend to underestimate that. I may be proved to be an unrealistic pessimist here. I think that’s what many of my colleagues would say, but I think we overestimate the ease with which we get into a physical world.
COWEN: As I said in print, my best estimate is, we get half a percentage point of growth a year. Five percent would be my upper bound. What’s your scenario where there’s no growth improvement? If it’s not yours, say there’s a smart person somewhere in Anthropic — you don’t agree with them, but what would they say?
Interesting throughout, definitely recommended.
Betting markets in everything
Polymarket, on the chances of a nuclear weapon being used in 2025. Currently at 17. Here is further analysis from o3.
China missing facts of the day
Not long ago, anyone could comb through a wide range of official data from China. Then it started to disappear.
Land sales measures, foreign investment data and unemployment indicators have gone dark in recent years. Data on cremations and a business confidence index have been cut off. Even official soy sauce production reports are gone.
In all, Chinese officials have stopped publishing hundreds of data points once used by researchers and investors, according to a Wall Street Journal analysis.
In most cases, Chinese authorities haven’t given any reason for ending or withholding data. But the missing numbers have come as the world’s second biggest economy has stumbled under the weight of excessive debt, a crumbling real-estate market and other troubles—spurring heavy-handed efforts by authorities to control the narrative.
Here is more from the WSJ, “model this.” Via B.