H5N1 Hasn’t Gone Away
Trump dominates the news cycle but it’s important to remember that events continue even when not watched. In particular, we are not winning against H5N1. Here’s a summary of a recent paper in Science:
High-pathogenicity avian influenza subtype H5N1 is now present throughout the US, and possibly beyond. More cattle infections elevate the risk of the virus evolving the capacity to transmit between humans, potentially with high fatality rates. Nguyen et al. show that from a single transmission event from a wild bird to dairy cattle in December 2023, there has been cattle-to-poultry, cattle-to-peridomestic bird, and cattle-to-other mammal transmission. The movement of asymptomatic dairy cattle has facilitated the rapid dissemination of H5N1 from Texas across the US. Evolution within cattle, assessed using deep-sequencing data, has detected low-frequency sequence variants that had previously been associated with mammalian adaptation and transmission efficiency.
Trade sentences to ponder
The IMF puts the hidden cost of trading goods inside the EU at the equivalent of a 45% tariff. For services the figure climbs to 110%, higher than Trump’s “Liberation day” tariffs on Chinese imports—measures many saw as a near-embargo.
These barriers are not direct taxes. Instead, a construction company might find its building materials or plans, though EU-compliant, still need costly national checks. A foreign university looking to set up a campus, or a care home provider wanting to expand, could face major delays getting their staff’s qualifications accepted or dealing with complex local licensing for their buildings.
Here is more from Luis Garicano. The piece is excellent throughout.
Emergent Ventures India, 10th cohort
From Shruti Rajagopalan:
Emergent Ventures India, Cohort 10
Tanish Patare, 15, is a high school student in Mumbai and has won consecutive gold medals in the Science Olympiad Foundation’s National Science Olympiad for the last seven years. He received his grant for general career development.
Shreepoorna Rao, 22, an IIT Madras graduate passionate about aerospace, founded a crypto DeFi aggregator startup in 2021. He has developed patented drone-based robotic arms and medical delivery drones capable of flights up to 300 km carrying 500 g payloads. He received his EV grant to build a UAV with a 5-meter wingspan.
Soni Wadhwa, teaches literature at SRM University, Andhra Pradesh, and curates PG Sindhi Library, a digital archive of post-partition Sindhi literature in India. Her research explores the development of Sindhi literature, within Indian literature more broadly. She contributes regularly to Asian Review of Books, and Digital Orientalist.
Rakshita Deshmukh, is beginning her PhD in Neuroscience at IIT Kanpur, studying the impact of N3 sleep on adaptive decision-making and anxiety using EEG. She received her EV grant to present her research on N3 sleep’s effects on anxiety-induced learning at MIT.
Manoj Ramaiah, 24, received his EV grant to build Ariima DeepTech Circle, a talent cluster connecting postdocs and PhDs with industry, startups, and investors for translational research. Manoj is passionate about the history of science, particularly Asian and Indian, and dedicated to introducing first-generation graduates to startups.
Munna R. Shainy , 24, is a neurotech enthusiast specializing in developmental and affective neuroscience. He received an EV grant to attend the COGNESTIC 2024 Summer School at the University of Cambridge.
Basedcon, by Neil Shroff (26), Shruthi (30), Akash (27) and Yash (25), hosts conferences on unpopular but significant ideas in Indian tech, culture and society. The grant supports global expansion and micro-grants connecting ambitious Indians worldwide.
Nithilan Ravikumar, 17, for general education and career support including participation at the International Physics and Philosophy Olympiads. He actively pursues research in physics, explores the future implications of AI, and holds cybersecurity certifications
Parth Patel, holds a bachelor’s degree in aerospace engineering and is passionate about robotics. He received an EV grant for career development and is currently applying to graduate programs.
Ramya Prakash, 16, to pursue electronics and robotics and for general education and career development.
Tamzid Rahman, 16, is a social entrepreneur dedicated to eliminating child mortality caused by blood shortages in Bangladesh. He received an EV grant to develop and scale BloodLink, a peer-to-peer blood donation app and database.
Varsha Korimath, 16, is a highschooler in Belagavi, Karnataka. She is a National Tinker Champ member and a Pratibha Poshak scholar. She has authored a book, conducted tinkering workshops, and participated in the ATL Tinkerpreneur Bootcamp. She received an EV grant to support her STEM education and general career development.
Rajsuthan Gopinath (21) and Shanjai Raj (19) for building end-to-end legal AI agents through their startup Airstrip AI. Their current project develops an intelligent AI business lawyer democratizing access to legal resources.
Zubin Sharma, a social entrepreneur, founded Project Potential in rural Bihar. His EV grant supports research into innovative talent identification and acceleration strategies for high-poverty regions with limited resources and institutional support, particularly outside India’s tier-1 cities.
Sumuk Hegde, 22, for developing an automated beach-cleaning robot that detects, segregates, and disposes of waste.
Tithi Paul a master’s student in Environmental Pollution Management (Ecotoxicology) at the University of Kaiserslautern-Landau, and develops algorithms using zebrafish fin patterns to assess water safety. She received an EV grant for travel to present her work at international conferences.
Sachin Raghunath Pachorkar is a professor specializing in entrepreneurship and corporate governance. He founded Project Bandhan, generating tribal employment through bamboo crafts, and established Kumbhathon to address logistical challenges of the Nashik Kumbh Mela using technology. He received an EV grant for STEM education initiatives in rural and tribal schools.
Surya Maddula, 17, for developing an open-air active noise cancellation system through his startup Whisperwave.
Those unfamiliar with Emergent Ventures can learn more here and here. The EV India announcement is here. More about the winners of EV India second cohort, third cohort, fourth cohort, fifth cohort, sixth cohort, seventh cohort, eighth cohort, and ninth cohort. To apply for EV India, use the EV application, click the “Apply Now” button and select India from the “My Project Will Affect” drop-down menu.
And here is Nabeel’s AI engine for other EV winners. Here are the other EV cohorts.
If you are interested in supporting the India tranche of Emergent Ventures, please write to me or to Shruti at [email protected].
The Fed will cut its staff
The Federal Reserve has said it will slash its workforce by 10 per cent in the coming years as it seeks to be a “responsible steward of public resources”.
Fed chair Jay Powell said in an internal email seen by the Financial Times that he had directed leadership at the Federal Reserve Board and its network across the US to “find incremental ways to consolidate functions where appropriate, modernise some business practices and ensure that we are right-sized and able to meet our statutory mission”.
He added: “Over the next couple of years, our overall staffing level will decline by about 10 per cent from today.”
The Federal Reserve Board in Washington employs about 3,000 people, while the entire system has 24,000 employees.
Here is the FT article. Not a bad thing in my view.
Friday assorted links
1. The cost disease and AI. And will AI raise health care costs?
2. Nate Soares and Eliezer have a book coming out. Don’t wait for the paperback!
3. The wisdom of Andrew Batson.
4. U.S. overdose deaths continue to drop.
5. Developments with school vouchers (NYT). I worry about this direction.
6. My Free Press livestream with Bari Weiss and Avital Balwit on AI.
7. Stephen Smith profile (NYT).
Why (and How) Young People Should Go Into Debt to Buy Stocks
In 2022, I highlighted Ian Ayres and Barry Nalebuff’s proposal that young people should borrow to invest in the stock market. Why? Most people invest gradually, which leads to a concentration of stock holdings late in life. By borrowing early, young investors can spread market risk more evenly across their lifetime, much like diversifying across assets. Put differently, a young person’s biggest asset is their future labor income. Borrowing to invest reduces overexposure to that single asset, effectively diversifying their portfolio away from specific human capital and toward financial capital.
I supported the idea writing that “I agree with Ayres and Nalebuff that young people should be [at least] 100% in equities” but I didn’t expect people to go beyond this until the idea became standardized in a similar way to home mortgages. I wrote, “It could be standardized, however, with retirement planning products.”
Well, we now have our first product in this category, Basic Capital. Basic Capital is a mortgage for investing in stocks and bonds. You put in $1 and you get $5 of investment. Moreover, you cannot lose more than you put in. How is that possible? The investments are constrained–85% of it goes to bonds and 15% to equity but remember that 15% is on $5 rather than $1 so instead of investing $1 in stocks you are investing $.75 in stocks and $4.25 in bonds. The net result is broader exposure at lower individual risk. Whether it’s a compelling product depends on fees and execution, which seem high, but the underlying idea is innovative, and I’m excited to see how products in this new category evolve.
Addendum: Matt Levine offers further commentary. On the general topic of innovative financial products, see also my previous post on Shiller’s Macro Markets.
Hat tip: Naveen.
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.
“New Information Suggests Senior Pfizer Executives Conspired to Delay COVID-19 Vaccine Clinical Testing to Influence 2020 Election”
Here is one link. And more. And some CNN coverage. One of the few conspiracy theories I believe in.
And hey people, do you know why this, if it is true, is a real crime? Because the vaccines worked and saved many, many lives.
Talk to some vaccine scientists if you are still confused about this one.
Via Kyle.
Covid sentences to ponder
Tim Vanable: I wonder about the tenability of ascribing a policy like extended school closures to a “laptop class.” Support for school reopenings did not fall neatly along educational lines. The parents most reluctant to send their kids back to school in blue cities in the spring of 2021 were black and Hispanic, research has consistently found, not white. And the most organized opposition to school reopenings, as you know, came from teachers’ unions, who can hardly be considered stormtroopers of the managerial elite.
Thursday assorted links
1. One version of the AI teddy bear?
2. It seems the FDA and NIH will phase out animal experimentation?
3. Apple to support brain implant control of its devices.
4. Second Voice, a new Zohar Atkins Substack.
5. “Half of Africa’s surface water is packed into one country: the DRC” o3 supports the claim.
6. Hadza fact of the day: “Although few participants were wholly self-interested, most did not seek equitable distributions. Instead, most participants tolerated inequality when it benefited them but were intolerant of inequality when it benefited others.”
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.
Early evidence on human + Ai in accounting
Here is part of the abstract:
Using a multi-method approach, we first identify heterogeneous adoption patterns, perceived benefits, and key concerns through panel survey data from 277 accountants. We then formalize these survey-based insights using a stylized theoretical model to generate corroborating predictions. Finally, partnering with a technology firm that provides AI-based accounting software, we analyze unique field data from 79 small-and mid-sized firms, covering hundreds of thousands of transactions. We document significant productivity gains among AI adopters, including a 55% increase in weekly client support and a reallocation of approximately 8.5% of accountant time from routine data entry toward high-value tasks such as business communication and quality assurance. AI usage further corresponds to improved financial reporting quality, evidenced by a 12% increase in general ledger granularity and a 7.5-day reduction in monthly close time.
By Jung Ho Choi and Chloe Xie, via the excellent Kevin Lewis.
Noah on cultural stagnation
Fast-forward to the 2020s, and the artistic community has been largely disintermediated. If you want to be a successful commercial creator, the way to get started now is not first to struggle to prove yourself in the closed and cosseted artistic community — it’s to simply throw your work up online and see if it goes viral. If it does, you’re in.
This means that any creator whose goal is to sell out can do so without spending years making art that impresses artists. Of course, some creators still just intrinsically want to impress other artists. But if the money-motivated creators have left the community, there are just fewer people in that community left to impress. It becomes more and more niche and hipster. And there are fewer crossovers from the art world to mass culture, because the people left in the art world are the ones who don’t really care if they get famous and rich.
…But that’s the basic principle — if you want more novelty, I think you’ve got to make the artists work for each other more. How you do that, in a world where technology has made artists irrelevant as gatekeepers, is not something I have a concrete answer for. We may simply be in for a long period of artistic stagnation in America.
To sum up, I sort of believe that cultural stagnation is real, but I also think the root of the problem is probably technological — and therefore very hard to expunge.
Here is the full essay. One question is how much stagnation we have, and I will not address that at this moment. Another is what is the source of that degree of stagnation. I am perhaps more inclined to blame the current quality of audience taste today. In the past, audience taste often did very well, for instance in supporting the Beatles or Motown, or many earlier Hollywood movies, even when critical or artistic taste was mixed. Mozart too was popular with his audiences. Still Noah’s hypothesis is an interesting one.
Addendum: Alex and I wrote a paper on closely related issues, An Economic Theory of Avant-Garde and Popular Art.
My honorary degree at Francisco Marroquin
I am greatly honored to have received an honorary professorship in social science at the Universidad Francisco Marroquin, in Guatemala City (there are branches in Panama and Madrid as well).
The Guatemala City branch is an excellent, highly selective school with about 3,000 students. It is also explicitly classical liberal in orientation. One interesting feature of the place is that it has kept this emphasis since its founding in 1971, a rarity for non-profits, which often suffer from mission drift or Conquest’s Second Law. You even can see an Atlas Shrugged sculpture attached to one of the main buildings. Many rooms and university services are named after classical liberal heroes, for instance Michael Polanyi. If a photo is taken, instead of saying “cheese,” people say “Mises.”
The students have excellent English and are very attentive. The graduation ceremony I attended was beautiful and heartfelt, not ironic and I did not see people looking down at their phones.
The on-campus museum of Guatemalan textiles is first-rate and very well presented. Their campus is perhaps the single nicest spot in Guatemala City.
Might it be the best university in Central America?
If you ever have the chance to visit or teach at Marroquin, I definitely recommend it. I very much thank my hosts for a wonderful few days. They even arranged genuine and truly tasty chicken tamales for me.