Big, Fat, Rich Insurance Companies
In my post, Horseshoe Theory: Trump and the Progressive Left, I said:
Trump’s political coalition isn’t policy-driven. It’s built on anger, grievance, and zero-sum thinking. With minor tweaks, there is no reason why such a coalition could not become even more leftist. Consider the grotesque canonization of Luigi Mangione, the (alleged) murderer of UnitedHealthcare CEO Brian Thompson. We already have a proposed CA ballot initiative named the Luigi Mangione Access to Health Care Act, a Luigi Mangione musical and comparisons of Mangione to Jesus. The anger is very Trumpian.
In that light, consider one of Trump’s recent postings:
THE ONLY HEALTHCARE I WILL SUPPORT OR APPROVE IS SENDING THE MONEY DIRECTLY BACK TO THE PEOPLE, WITH NOTHING GOING TO THE BIG, FAT, RICH INSURANCE COMPANIES, WHO HAVE MADE $TRILLIONS, AND RIPPED OFF AMERICA LONG ENOUGH.
I appear on the Odd Lots podcast
Much of it was on AI and also slow take-off, here is the link. Self-recommending…
Best non-fiction books of 2025
The year started off slow, but it ended up being a normally strong time for quality, readable non-fiction. Here is my list, noting that the links lead either to my reviews or to Amazon. These are roughly in the order I read them, not ranked ordinally. Here goes:
Caroline Burt and Richard Partington, Arise, England: Six Kings and the Making of the English State.
Tirthankar Roy and K. Ravi Raman, Kerala: 1956 to the Present.
Agnes Callard, Open Socrates: The Case for a Philosophical Life.
Amy Sall, The African Gaze: Photography, Cinema, and Power.
Michael Krielaars, The Sound of Utopia: Musicians in the Time of Stalin.
David Eltis, Rethinking the Atlantic Slave Trades.
Philip Freeman, In the Brewing Luminous: The Life and Music of Cecil Taylor.
Daniel Dain, A History of Boston. Short review here.
Ezra Klein and Derek Thompson, Abundance.
Ian Leslie, John & Paul: A Love Story in Songs.
Benjamin E. Park, American Zion: A New History of Mormonism
Roger Chickering, The German Empire, 1871-1918.
Donald S. Lopez Jr., Buddhism: A Journey Through History.
Dan Wang, Breakneck: China’s Quest to Engineer the Future.
Keach Hagey, The Optimist: Sam Altman, OpenAI, and the Race to Invent the Future.
Joseph Torigian, The Party’s Interests Come First: The Life of Xi Zhongxun, Father of Xi Jinping.
Rupert Gavin, Amorous or Loving?: The Highly Peculiar Tale of English and the English.
Sam Tanenhaus, Buckley: The Life and Revolution that Changed America.
Erik Penman, Eric Satie Three Piece Suite.
Dwarkesh Patel, and others, The Scaling Era: An Oral History of AI, 2019-2025.
Jeff McMahan, editor, Derek Parfit: His Life and Thought.
Paul McCartney, Wings: The Story of a Band on the Run.
William Easterly, Violent Saviors: The West’s Conquest of the Rest.
Nicholas Walton, Orange Sky, Rising Water: The Remarkable Past and Uncertain Future of the Netherlands.
Ken Belson, Every Day is Sunday:
Tom MacTague, Between the Waves: The Hidden History of a Very British Revolution 1945-2016.
What else? I will give you an update on anything notable I encounter between now and the end of the year. And here is my earlier post on the best fiction of the year.
Eric Hanushek on the import of schooling quality declines
My recent research at Stanford University translates the achievement declines into implications for future economic impacts. Past evidence shows clearly that people who know more earn more. When accounting for the impact of higher achievement historically on salaries, the lifetime earnings of today’s average student will be an estimated 8 percent lower than that of students in 2013. Because long-term economic growth depends on the quality of a nation’s labor force, the achievement declines translate into an average of 6 percent lower gross domestic product for the remainder of the century. The dollar value of this lower growth is over 15 times the total economic costs of the 2008 recession.
Here is the full Op-Ed, noting that Eric compares this decline to the effects of an eight percent income tax surcharge. I have not read through this work, though I suspect these estimates will prove controversial when it comes to causality. In any case, file this under “big if true,” if only in expected value terms.
Friday assorted links
1. Those semi-new service sector jobs how to get people to leave a cult.
2. What was Alice Munro actually writing about? So often people are writing about themselves.
3. The New Yorker on Paul Collier and Britain.
4. Claims about LLMs and stock returns.
5. Live version of “I Hear a Symphony,” you can skip the thirty second intro.
6. The Harvard endowment’s single biggest public investment is now Bitcoin.
Some second-order effects of unaffordable housing
This is one of the best, most interesting, and most important papers I have seen of late:
Housing affordability has declined sharply in recent decades, leading many younger generations to give up on homeownership. Using a calibrated life-cycle model matched to U.S. data, we project that the cohort born in the 1990s will reach retirement with a homeownership rate roughly 9.6 percentage points lower than that of their parents’ generation. The model also shows that as households’ perceived probability of attaining homeownership falls, they systematically shift their behavior: they consume more relative to their wealth, reduce work effort, and take on riskier investments. We show empirically that renters with relatively low wealth exhibit the same patterns. These responses compound over the life cycle, producing substantially greater wealth dispersion between those who retain hope of homeownership and those who give up. We propose a targeted subsidy that lifts the largest number of young renters above the “giving-up threshold.” This policy yields welfare gains that are 3.2 times those of a uniform transfer and 10.3 times those of a transfer targeted to the bottom 10% of the wealth distribution, while also increasing homeownership rate, raising work effort, and reducing reliance on the social safety net.
That is from Seung Hyeong Lee of Northwestern and Younggeun Yoo of University of Chicago. Via the excellent Kevin Lewis.
Nano Banana Pro does Marginal Revolution
Thursday assorted links
1. Reddit thread on Beatriz Villaroel.
3. Suisun City and California Forever (NYT).
4. The male boom in Orthodox Christianity in the U.S. (NYT).
5. More on Harvard graduate cutbacks.
6. Paul Ekman, RIP. And more here.
7. GPT-5.1 has been released, pretty quietly.
8. Summers will not finish the semester teaching at Harvard.
Confidently Wrong
If you’re going to challenge a scientific consensus, you better know the material. Most of us, most of the time, don’t—so deferring to expert consensus is usually the rational strategy. Pushing against the consensus is fine; it’s often how progress happens. But doing it responsibly requires expertise. Yet in my experience the loudest anti-consensus voices—on vaccines, climate, macroeconomics, whatever—tend to be the least informed.
This isn’t just my anecdotal impression. A paper by Light, Fernbach, Geana, and Sloman shows that opposition to the consensus is positively correlated with knowledge overconfidence. Now you may wonder. Isn’t this circular? If someone claims the consensus view is wrong we can’t just say that proves they don’t know what they are talking about. Indeed. Thus Light, Fernbach, Geana and Sloman do something clever. They ask respondents a series of questions on uncontroversial scientific topics. Questions such as:
1. True or false? The center of the earth is very hot: True
2. True or false? The continents have been moving their location for millions of years and will continue to move. True
3. True or false? The oxygen we breathe comes from plants: True
4. True or false? Antibiotics kills viruses as well as bacteria: False
5. True or false? All insects have eight legs: False
6. True or false? All radioactivity is man made: False
7. True or false? Men and women normally have the same number of chromosomes: True
8. True or false? Lasers work by focusing sound waves: False
9. True or false? Almost all food energy for living organisms comes originally from sunlight: True
10. True or false? Electrons are smaller than atoms: True
The authors then correlate respondents’ scores on the objective (uncontroversial) knowledge with their opposition to the scientific consensus on topics like vaccination, nuclear power, and homeopathy. The result is striking: people who are most opposed to the consensus (7, the far right of the horizontal axis in the figure below) score lower on objective knowledge but express higher subjective confidence. In other words, anti-consensus respondents are the most confidently wrong—the gap between what they know and what they think they know is widest.
In a nice test the authors show that the confidently wrong are not just braggadocios they actually believe they know because they are more willing to bet on the objective knowledge questions and, of course, they lose their shirts. A bet is a tax on bullshit.
The implications matter. The “knowledge deficit” approach (just give people more fact) breaks down when the least-informed are also the most certain they’re experts. The authors suggest leaning on social norms and respected community figures instead. My own experience points to the role of context: in a classroom, the direction of information flow is clearer, and confidently wrong pushback is rarer than on Twitter or the blog. I welcome questions in class—they’re usually great—but they work best when there’s at least a shared premise that the point is to learn.
Hat tip: Cremieux
Google Scholar Labs
Brings AI to Google Scholar, find it here. Via Joshua Gans. And yes this does mean that the academics also are, or at least ought to be, writing for the AIs.
Matt Yglesias on aphantasia
What I tend to approach from the outside are unpleasant experiences. Life is a mix of ups and downs, but I’m not really haunted by sad experiences or disturbing things that I’ve seen. I can tell you about the time I found a dead body in the alley and called the authorities to report it, and my recollection is it was pretty gross, but I certainly don’t have any pictures of that in my iPhone.
Sometimes I see something that causes me to update my views of the world. But when I saw the body, I was already aware, factually, that drug overdose deaths were becoming common in D.C., so I felt that I hadn’t really learned anything new. At the time I was victimized by crime, the amount of violent crime in this city had been on a steady downward trend for a very long time, so it didn’t cause me to change my views at all. Several years later, that downward trend started to reverse and, after a few years of gradual growth, there were some sharp jumps, and then I got worried and started calling for policy changes.
And I think this is a strength of the aphantasic worldview. Something bad happened to me that was statistically anomalous, so I didn’t change my views. When the broader situation changed, I did change my views, even though actually nothing bad happened to me personally. And that’s because the right way to assess crime trends is to try to get a statistically valid view of the situation, not overindex on the happenstance of your life.
Here is the full essay. Here is Hollis Robbins on related issues.
Wednesday assorted links
1. Roon visits DC.
2. The UK is outlawing ticket scalping?
3. How the internet made the far right.
4. NYT on Solvej Balle. And from The New Yorker.
5. Claims about risk and prediction markets.
6. On the dropping non-binary rates.
7. Some art prices, including one golden toilet arbitrage result (NYT).
Cyprus and multiple state sovereignties
I am struck by how many layers of sovereignty there are in Cyprus, sometimes but not always conflicting. There is Greek Cyprus, Turkish Cyprus (the Turkish interpretation), Republic of Cyprus under Turkish occupation (the Greek interpretation), unified Cyprus (recognized by the EU and also many Cypriot citizens, though the Turkish part is exempt from EU laws and obligations, in any case not recognized by Turkey), the EU, and last but not least Britain claims and possesses, as full sovereign, three percent of Cyprus territory, an arrangement contested by no one.
Arguably you could add “Turkey” to that list. The Turkish government does not claim sovereignty over any part of Cyprus, but they put the flag everywhere, they guarantee defense, the currency is the Turkish lira, and they have a de facto veto over major decisions. It is Turkey in everything but name, though there is a passport check when visitors fly in from Istanbul. Keep in mind that the earlier 1974 Turkish invasion deprived what is now Greek Cyprus of its then main cargo port and main airport.
While matters have been peaceful for some while now, I fear these political arrangements limit the ability of Cyprus to exploit scale. The island has only about 1.3 million people, so complications do not help their ability to attract high-productivity investment.
Is the AI sector currently a bubble?
Possibly, but do not jump to that conclusion too quickly, as I argued in my latest Free Press column. Excerpt:
Nvidia is often considered a bellwether AI stock. That’s because much of its revenue comes from selling graphics processing units to power advanced AI systems, meaning that its success gives investors insight into the health of the sector overall. Currently, Nvidia’s stock-price-to-earnings ratio is in the 54 to 55 range, roughly twice the typical market average. That means the market expects great things from this stock. Those projections may or may not be validated, but it’s hard to conclude they’re entirely divorced from reality…
Keep in mind that the tech sector as a whole is still earning more than it is shelling out in capital expenditures. The current AI boom is being financed by earnings more than by new issuance of debt, which makes it less prone to a sudden crash. By one estimate, capital expenditures in Big Tech are about 94 percent of cash flow in 2025. You could imagine that number moving into unstable territory, but so far, the U.S. tech sector is managing to pay its bills without going into debt.
You may recall we are coming off a period when everyone complained that the big tech companies were sitting on trillions of dollars in cash and capital. Now, they are spending it, and complaints are heating up once again. Damned if they do, damned if they don’t.
In fact, what we are seeing right now is a shortage in the AI sector’s capacity to meet demand. Major tech companies are investing in more computing capacity, but they still cannot serve all the customers who want access to AI systems. That augurs well for the future of the sector, even if there are dips and spills along the way.
As usual, we will see, but if you are calling it a bubble after an initial price dip or corporate shake-out, that is exactly the fallacy you are not supposed to be slipping into.
Tuesday assorted links
1. “Underrated reason for this [relative non-politicization] being true is not that econ has more political diversity (though it does) but instead a more *international* faculty than humanities and other social sciences. Like literally 2/3rd. Domestic politics and identity fights necessarily play a smaller role.” From Kevin A. Bryan.
3. Ruxandra on IVF (NYT).
4. And more from Gavin Leech, this time on Chinese AI models.
5. Has there been upward genetic drift for the British?
6. New J.S: Bach music discovered and now recorded. Starts at 15:30. Decent but not great.