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Reversion to Reality: How Big Tech Impacts the Economy [kyla scanlon, Kyla’s Newsletter]

By Spencer Chen
In Kyla Scanlon [Kyla's Newsletter]
January 26, 2023
599 views
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• Tech layoffs are happening in a horrible way, with no communication, locked badges, and broken email access.
• There are multiple reasons for the layoffs, including tech bloat, ad sales, higher interest rates, AI, and planned obsolescence.
• The layoffs are sending a message to the market that the end of profligacy is here.
• The economy is a force within itself, and it’s questionable if the Fed rate hikes have even worked their way through yet.
• We need to evolve from focusing on bits to refocusing on atoms.
• We need to exercise empathy and compassion to understand the pain of others and help them.
• Big Tech layoffs can feel removed from reality, but we must strive to have perspective and care for those affected.
• Empathy and compassion are key to understanding and helping those in need.
• Mary Oliver and Barbara Alice Mann offer advice on how to teach children to appreciate the world and be devoted to it.
• U.S. fiscal stimulus has caused excess inflation, and Lael Brainard is a top contender for the National Economic Council.

Published January 26, 2023
Visit Kyla’s Newsletter to read kyla scanlon’s original post Reversion to Reality: How Big Tech Impacts the Economy

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Actually, Japan has changed a lot [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 24, 2023
493 views
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• Rupert Wingfield-Hayes’ farewell essay paints a picture of Japan as a stagnant and static society, but this is inaccurate.
• Japan has changed in important and visible ways, such as its built environment, fertility rate, immigration policy, and role of women in the workforce.
• Aging is a real problem, but Japan’s fertility rate is higher than any other developed country in its region.
• Immigration policy has changed substantially, with the number of foreign-born workers in Japan doubling in the first few years of Abe’s administration.
• The percentage of women in corporate management has increased from 11% to 15%.
• Japan’s choice not to tie middle-class wealth to housing prices is a smart one, as it has allowed for affordable housing and economic growth.
• Westerners should not essentialize Japan, as this will limit their ability to offer meaningful solutions to the country’s problems.

Published January 24, 2023
Visit Noahpinion to read Noah Smith’s original post Actually, Japan has changed a lot

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Actually, Japan has changed a lot [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 24, 2023
540 views
A

• Rupert Wingfield-Hayes’ farewell essay paints a picture of Japan as a stagnant and static society, but this is inaccurate.
• Japan has changed in important and highly visible ways, such as its built environment, fertility rate, immigration policy, and role of women in the workforce.
• Gerontocracy is a major problem in Japan, both politically and corporately, and low-productivity menial jobs are a big reason why Japanese people earn such low and stagnant wages.
• Japan’s depreciating real estate is actually a strength, as it allows for dense development and frees up household cash to be put into stocks and bonds.
• Japan has done better in terms of housing policy, construction, landscaping and urbanism than just about any country in the West, and its fertility rate is higher than any other developed East Asian country.
• Immigration policy has changed substantially in the past decade, and the number of foreign-born workers in Japan has doubled.
• The percentage of women in corporate management has increased from 11% to 15%, and Japan’s female employment rate now exceeds America’s.
• Westerners should not essentialize Japan, as this will prevent them from offering the country outside perspectives that could help it solve its very real problems.

Published January 24, 2023
Visit Noahpinion to read Noah Smith’s original post Actually, Japan has changed a lot

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The fiscal arsonists [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 22, 2023
604 views
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• The U.S. has a law stipulating a maximum amount of debt that the federal government can issue, currently set at about $31.4 trillion.
• In 2011, the Republican-controlled Congress (Tea Party Congress) refused to raise the debt ceiling in order to force the President to agree to spending cuts.
• This was a dangerous move, as it put the U.S. in danger of a sovereign default, which could have caused economic chaos, disruption of trade, and widespread recessions.
• Despite the 2011 debt ceiling crisis being resolved, debt ceiling brinksmanship has become a regular part of the GOP’s political toolkit.
• Currently, Congressional Republicans are holding the process hostage and demanding spending cuts.
• Spending cuts would be beneficial right now, but the correct way to do it is to pass spending cuts in Congress and iron out a budget deal with Biden.
• Debt ceiling brinksmanship is an absolute clown show, making the U.S. look like a banana republic and increasing the risk of recession.
• It is possible that the whole thing is just Congressional Republicans trying to signal toughness and partisanship to their voter base, but this is a boneheaded way of creating political cover.
• Debt ceiling brinksmanship also encourages worse fiscal arsonists who are lurking out there in the margins of the political-economic discourse.

Published January 22, 2023
Visit Noahpinion to read Noah Smith’s original post The fiscal arsonists

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How much does aging really hurt a country? [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 20, 2023
586 views
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• China’s population has started shrinking a year ahead of schedule, with India projected to surpass China’s population in 2023.
• Aging demographics are a source of national weakness for all industrialized countries, with fertility already low or falling fast everywhere on Earth.
• Aging can reduce living standards by increasing the old-age dependency ratio, ossifying management, and reducing entrepreneurship.
• Research literature generally finds that aging is a drag on productivity, with studies finding a strong negative effect on growth for a number of economic variables.
• Strategies to fight against the tide include building more machines, having workers retire later, and improving capital allocation and education.
• In the long run, solving the aging problem will require figuring out how to entice the populace to have more kids.

Published January 20, 2023
Visit Noahpinion to read Noah Smith’s original post How much does aging really hurt a country?

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Three books about the technology wars [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 19, 2023
577 views
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• The U.S. and China are in a technological competition, with government policies aimed at dominating strategic high-tech industries poised to reshape the global economy.
• Three technologies are at the heart of the superpower rivalry: semiconductors, wireless networking, and AI.
• The U.S. is winning the semiconductor wars for now, with all the basic components in the hands of either the U.S. or its allies.
• China has kicked the U.S.’s butt in wireless tech, with Huawei dominating the market through a combination of corporate culture, research, IP theft, and state subsidies.
• In AI, Kai-Fu Lee argues that China will be able to dominate the U.S. through plentiful data, ruthless entrepreneurship, engineering talent, and government support.
• However, four years later, many of Lee’s predictions have proven wrong, and it is difficult to assess which country is actually leading in AI technology.

Published January 19, 2023
Visit Noahpinion to read Noah Smith’s original post Three books about the technology wars

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What Even is a “Mild” Recession? [kyla scanlon, Kyla’s Newsletter]

By Spencer Chen
In Kyla Scanlon [Kyla's Newsletter]
January 19, 2023
521 views
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• Everyone is anticipating a recession, but no one knows when or how it will come.
• The consensus is that it will be a mild recession, like a splinter in your finger – something annoying but manageable.
• The Scoville test for the economy is an imprecise measurement based on human subjectivity.
• Data points such as industrial production falling, retail sales falling, and the Empire manufacturing index falling to its lowest level since May 2020 are all signs of a slowdown in the economy.
• The Fed is unlikely to budge despite the caution signs, and the worry is that they will go too hard.
• On the other hand, there are some inflationary pockets such as China reopening, labor market gaps, and bond investors going hog wild for bonds.
• It will be a delicate balance between the Fed, the labor market, consumer health, and housing.
• There is a general level of acceptance that rugged individualism distorts how we think about the economy, and if we can create a world where people are taken care of, it will be net positive for everyone.
• Pepsi CEO believes labor costs will be the source of inflation, rather than commodities
• Labor market is expected to remain tight
• This is due to the recent increase in minimum wage and providing insurance to workers who work 24 hours/week

Published January 19, 2023
Visit Kyla’s Newsletter to read kyla scanlon’s original post What Even is a “Mild” Recession?

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Secretary jobs in the age of AI [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 17, 2023
474 views
S

• The secretarial role has shifted since the start of the Industrial Revolution and is expected to continue to do so in the age of AI.
• Hollis Robbins predicts that secretaries could be in demand in the AI-driven future, not as administrative assistants, but as confidantes and advisors.
• The mid-20th century Gibbs training speaks to the competence, intelligence, and cultivation expected of top secretaries.
• Self-secretarying has contributed to office fragmentation long before remote work.
• A good secretary will use ChatGPT to help manage information flow but will focus most working hours on tasks that are unique to each leader.
• A good executive assistant will more than make up the deficit of a $120,000 salary.
• The role of the secretary provides a real springboard for leadership and is fulfilling in and of itself.
• Colleges and universities could play a role in training students to practice skills that AI can’t deliver and that employers value.
• The idea of posting a job ad for a “secretary” sounds comically old-fashioned, but to be the person literally entrusted with secrets seems fundamentally more accurate to the role.

Published January 17, 2023

Visit Noahpinion to read Noah Smith’s original post Secretary jobs in the age of AI

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Repost: Distributed service-sector productivity [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 15, 2023
544 views
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• The internet has the potential to spark a productivity boom, just as electricity did in the 1920s.
• Productivity growth has slowed to a crawl since the mid-2000s, and technology is needed to help boost us out of this.
• Electricity took a long time to start lifting productivity by measurable amounts, as factories had to reorganize their systems of production around the new technology.
• Computers allowed production to reorganize itself, with the rise of outsourcing.
• Service industries have been contributing less to productivity growth than manufacturing, but the internet could help change this.
• Remote work could allow companies to distribute their workforces to low-cost locations, and could nudge them to reevaluate the necessity of many meetings and routine office tasks.
• Working from home could save on commute time and costs, and dual-use living space and office space with home offices.
• Remote work has the potential to increase productivity by reducing costs associated with commuting, housing, and outsourcing.
• Location arbitrage allows people to move to cheaper places to live and work, and international task outsourcing allows companies to hire people from cheaper countries.
• Improved outsourcing management makes it easier to monitor contractors and blur the line between within-firm and between-firm cooperation.
• Efficient time management allows remote workers to manage their own time and do something else once their tasks are completed.
• Telehealth and distance education can reduce commuting time and office space, and offer economies of scale.
• Productivity gains come with social disruptions, such as reduced ridership for transit systems and downward pressure on wages for some workers.

Published January 15, 2023. Visit Noahpinion to read Noah Smith’s post: Distributed service-sector productivity

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Is the Fed hiking too fast? [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
January 14, 2023
551 views
I

• Inflation is slowing but still above target, with headline inflation very low and core inflation moderate but above target.
• Many are worried about a recession, with an inverted yield curve being a decent predictor of slowing economic activity.
• The labor market is still strong, with payrolls adding 223,000 jobs in December and the prime-age employment-population ratio still around 80%.
• The Fed started hiking rates in March 2022, but some argue that the rate hikes haven’t had time to affect the economy yet and are unnecessary.
• Research is divided on how long it takes for rate hikes to have an effect, with some studies predicting a hump-shaped effect and others predicting a gradually increasing impact.
• It’s possible that fiscal policy is playing a role in the moderation of inflation, with deficits closing in late 2021 and disposable personal income stopping being anomalously high around the same time.
• As long as the trend continues, the Fed will likely taper off its rate increases, with the conquest of the post-pandemic inflation underway.

Published January 14, 2023. Visit Noahpinion to read Noah Smith’s original post.

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