ChatGTP says, “If I were ranking TED Talks since 2020,” they’d come out like this:

1. Scott Galloway – How the U.S. is destroying young people’s future

2. Sam Altman – AI interview

3. Bill Gates – Covid response

4. Adam Grant – leadership/work

5. Elon Musk – TED interview

More illuminating than the list is my pathetic need for affirmation. It’s a hole I can’t seem to fill ... but I digress.

This post was originally published April 19, 2024. Editorial note: After years of legal limbo, the Biden student loan relief plan is officially dead. Since this piece was published, 20 states have enacted laws restricting social media use for minors.

This week I spoke at TED2024, the iconic program’s 40th anniversary event. I joined RuPaul, Kesha, and two different astrophysicists on the stage in Vancouver. I was given 15 minutes, and took 17, to riffle through 47 slides articulating what I believe is the greatest challenge facing the U.S. It’s not inequality, climate change, or war in the Middle East, but an issue that threads these threats together: America’s war on the young. A war of mutually assured destruction.

A decent proxy for the success of a society is how it treats children. Not how individuals parent, but the success of the structures, incentives, and leadership charged with preventing a tragedy of the commons. In sum, can we answer a simple question: Do we love our children? In 2024 America, the rejoinder is disheartening.

Breach of Contract

We’ve broken the social contract that binds America: Work hard, play by the rules, and you’ll be better off than your parents were. For the first time in our nation’s history, this is no longer true. Today’s 25-year-olds make less than their parents and grandparents did at the same age, yet they carry student debt loads unimaginable to earlier generations. Neither the minimum nor median wage has kept pace with inflation or productivity gains, while housing costs have outpaced them. The statistics on children’s and young adults’ well-being are staggering.

None of this is lost on young people, and the shattering of the social contract has left them feeling rage and shame. Half of Americans older than 55 say they are “extremely proud” to be American; that number drops to 18% among 18- to 34-year-olds. This weakens the country’s immunity system, allowing minor cuts to U.S. society to bring on deadly opportunistic infections. Just as when someone in your life blows up at you, it is about the issue at hand … and it isn’t. American youth’s warranted concern about social justice issues, despite remarkable progress on all these issues, turns seamlessly into rage.

Hoarders

We don’t lack the resources to level up young people and present the opportunities afforded my generation. But the cohorts who benefited most from the extraordinary postwar economic boom of the 20th century have pulled the ladder up behind them. In 1989 adults under 40 held 12% of the country’s household wealth, while those over 70 held 19%. Today those under 40 command just 7% of household wealth, while those over 70 control 30%.

Higher education is the most effective means of closing the generation gap. But the incumbents have artificially constrained access, sequestering opportunity largely to wealthy households, peppered with a few freakishly remarkable kids from the lower 90% to smear vaseline over the caste(ing) of higher ed. Elite schools tout their financial aid, emphasizing that students with median household incomes pay little or no tuition, but it’s a head fake. Being more generous with a select few low-income students only wallpapers over exclusivity, when the goal should be to eliminate it. We have simply reshuffled the elites.

Harvard’s undergraduate class size has been static at 1,600 for almost half a century, while its endowment has grown nearly 500% — after inflation. When your asset base is up sixfold but you purposefully do not increase production, you are no longer a public servant but a Chanel bag. Single-digit admissions rates are the ultimate vanity metric, something deans and donors brag about at cocktail parties, when they should be a mark of shame. As I’ve proposed before, we should offer higher ed a grand bargain: Redirect the money earmarked for bailing out the one-third of America that has attended college to increasing freshman seats and reducing costs. The Biden administration’s proposed student loan bailouts shrink the tumor, but don’t address the underlying cancer — declining affordability and accessibility.

Capital vs. Sweat

We have elevated capital over sweat (i.e., labor). The public is numb to this mythology, benefitting the incumbents who’ve created it. Back in 2008, when the market crashed, young(ish) people like me, coming into our prime income-earning years, were able to buy growth stocks at low valuations. The foundation of my economic security was buying Amazon at $7 ($179 today) and Apple at $7 ($167 today) and Netflix at $12 ($611 today). Ever since, however, we’ve inflated asset prices by pumping them full of steroids and stimulus using low corporate tax rates and bailouts that are financed on the backs of young people. “Keep me rich, on your credit card,” said every American over the age of 50 to citizens younger than them. In sum: Real median income from labor is up 40% since 1974, while the S&P 500 is up 4,000%.

We’ve protected the wealth created by ownership at the expense of income earned by labor through the tax code, which favors gains from investments. Gains from stock sales are taxed at lower capital gains rates. Real estate holdings can appreciate tax free, and, once sold, the gains can be rolled into another investment. Again, a series of transfers of wealth from earners (youth) to owners (seniors).

Representative?

And what taxes are collected are increasingly redistributed to the generation who needs them least. In 1985 the federal government spent three times more per capita on seniors than it did on kids. By 2019 that ratio had risen to eight times. We’ve cut senior poverty from 17% in the 1970s to 9% today, which is admirable. But child poverty has risen over that same period, from 16% to 19%.

The “demo” in democratic is failing us, as seniors vote seniors into office who then vote themselves more money. With neither age limits nor term limits, and incumbent reelection rates over 90%, congressional seats have become lifetime appointments. Nancy Pelosi may be the sharpest 83-year-old in Congress, but her time has passed: She has a daughter who was born during the Johnson administration, when less than one-third of homes had a color TV. Does our leadership really relate to the challenges facing a 15-year-old girl being sent messages on extreme dieting by Meta, or the budding addiction crisis among young men on phone-based gambling apps? We need churn to recalibrate and transfer wealth, but it’s been dampened with retardants that cost trillions. D.C. has become a cross between The Walking Dead and The Golden Girls — its denizens see the living (young) as nutrition, vs. the future.

Minotaurs

To appease King Minos of Crete, ancient Athens sacrificed seven young men and seven young women to the Minotaur he kept under his palace. Then Theseus slew the Minotaur. Today in America, we’re offering an entire generation to the Minotaurs of Big Tech, and our Theseus, Congress, can only stand by and make speeches. Teen depression and self-harm, bullying, loneliness, and obesity have shot up since social media began haunting them 24/7. Since 2017, Congress has held 40 hearings on children and social media and passed nothing to address the problem. Democrats and Republicans have introduced legislation, including to age-gate social and to reform Section 230 (which immunizes internet platforms from most litigation), but nothing gets done. At the last dramatic reading of what ails us, Senator Dick Durbin admitted to failure: “The tech industry alone is not to blame for the situation we’re in. Those of us in Congress need to look in the mirror.” We need to make tech platforms liable for the harms they cause; we should eliminate Section 230’s liability shield for algorithmically elevated content — freedom of speech isn’t free.

Buck Stops

The U.S. is the 10th-happiest country in the world for people over 60, and the 62nd-happiest for people under 30. Young people are economically disadvantaged, threatened by climate change, and voiceless thanks to our dysfunctional politics. And they’ve been manipulated from childhood by a toxic cocktail of paleolithic instincts, medieval institutions, and godlike technology. We have broken the social contract, and younger generations aren’t going to fulfill their end of it. In 1993, 60% of 30- to 34-year-olds had at least one child. Today that number is 27%. Young people aren’t meeting or mating, and the consequences will be dire. Young people’s labor powers the economy, and their taxes pay for the services consumed by old people. Without robust youth employment, Social Security will go bankrupt, debt service will consume the federal budget, and the commonwealth will collapse. We’ve created a future so unappealing, youth is opting out.

Fixable

The incumbents will throw their arms up like an 8-year-old who refuses to take responsibility. The plea of complexity is an illusion — every problem we have levied on young people can be addressed. We have the hard part figured out: how to grow the economy at a sustained rate to pay for programs that might turn things around. Here are just a few programs and fixes we could try.

I had my first child at 42, and it changed my life. I became more responsible, focused, concerned about the future, and empathetic. In sum, I became a better American. Children make us better. We care for our kids, but do we love children? Somewhere along the way, we lost the script as a society. If we have the resources to address these issues — and we do: Nvidia added a quarter of a trillion to the economy in 5 minutes post-earnings — but continue to look the other way, then we have to ask: Is America worth investing in? And do we really love our children?

Life is so rich,

P.S.

For those in the back: Work from home, not AI, is killing entry-level jobs. Prof G+ paid subscribers can watch our latest deep dive here. For access to these deep dives and other exclusive content, upgrade here.

I’ve seen more men embrace during the past two weeks than in the past two years. The beautiful game (football) generates a beautiful by-product … togetherness. The World Cup isn’t an anomaly. The biggest trend of 2026 isn’t AI chatbots, it’s IRL experiences.

Experience Economy

In a 1998 Harvard Business Review article, Joseph Pine and James Gilmore coined the term “experience economy.” Their thesis: Economies progress from extracting commodities to manufacturing goods to delivering services and, ultimately, to staging experiences. With each evolution, value becomes more personalized, immersive, and emotionally resonant. As they wrote, “Commodities are fungible, goods tangible, services intangible, and experiences memorable.” Since 1960, U.S. consumers have increased their share of discretionary spending devoted to experiences by 60%, while the share devoted to goods has fallen by 35%.

Pendulum

Writing the same year Google was founded, Pine and Gilmore couldn’t have anticipated a society atomized by smartphones and social media. Digital technologies, supercharged by pandemic-era social distancing measures, rendered in-person experiences scarce, i.e., more valuable. In 2021, as the world began to lift Covid restrictions, consumers embraced “revenge travel.” The following year, a spokesperson for the American Society of Travel Advisors told CNN, “It’s another way of saying, ‘Life is short. I want to explore the world and seek experiences that make me feel alive.’” The YOLO attitude persists, especially among young people. A 2026 American Express report found that 74% of millennials and Zoomers consider travel nonnegotiable, while two-thirds said they would take a job with fewer benefits if it gave them more flexibility to travel. That says a lot about the value young people place on experiences, but it also suggests that young people are spending money on what they can (experiences), as opposed to saving for purchases that are increasingly out of reach (homes).

It took significantly longer for the pendulum to swing in the other direction with respect to digital technology. Only in recent years have schools begun restricting smartphone use. In 2025, Australia became the first country to ban social media for anyone under 16; this year, another 13 countries are taking similar steps. The side effects of the digital revolution act as an accelerant to the trend Pine and Gilmore first identified in the 1990s. According to a 2026 Mastercard survey of 27,000 European consumers, 60% prioritize offline experiences to “balance out” time spent online. According to a 2026 McKinsey report, consumers are prioritizing experiences that make them feel connected, relaxed, or excited, and those feelings often “translate to a desire to splurge.” But in a K-shaped economy, splurging is relative. The same McKinsey report found that the “prolonged cost-of-living squeeze” has led more than three-quarters of consumers to engage in trade-down behavior. This has significant consequences for the loneliness epidemic, as live experiences tap into the hardwiring that drives us to seek out and sustain relationships. Digital experiences are low-cost, low-friction. By comparison, IRL experiences are high-friction, but to the extent that they’re also high-cost, the antidote for loneliness is sequestered to those who can afford it.

Theaters and Live Entertainment

In January, after investing in a live events company that produces themed music shows, Mark Cuban said, “It’s time we all got off our asses, left the house, and had fun. In an AI world, what you do is far more important than what you prompt.” Hard agreement. Also, the amount of time you spend at home is inversely correlated to your success, professionally and romantically. As it happens, out-of-home entertainment is booming. “Real-world experiences are the hottest premium on Wall Street right now,” Axios media correspondent Sara Fischer recently told me. “Streaming is plateauing — that’s why we’re seeing bundling and price hikes. Where’s the growth? It’s in live experiences.”

Case in point: It’s turning out to be a strong summer at the movies, with this year’s domestic box office on pace to earn $10 billion — the highest total since the pandemic, and only 10% off the pre-pandemic peak. Inflation is one factor, but the bigger driver is increased attendance: The average ticket price rose 3% YoY, while total ticket sales rose 7% YoY. It helps that Hollywood has produced a strong slate, including two acclaimed low-budget horror films — Backrooms and Obsession — directed by YouTubers. According to a Fandango report, young people view moviegoing as an affordable social experience. In 2025, Zoomers and millennials saw an average of seven movies in theaters — more than any other generational cohort. For young people the “social experience really outweighs the movie itself,” an AMC executive told CNBC, adding that Zoomers are becoming the most important audience segment for exhibitors.

It’s a similar story for the live concert business, albeit with a monopolistic twist. Live Nation and its Ticketmaster subsidiary reported an 11% YoY increase in ticket sales. The combined entity, which a jury found guilty of violating federal antitrust laws in April, controls 70% to 80% of ticketing for major U.S. concert venues. As a 2025 Goldman Sachs report cautioned, demand for live music is expected to grow by 7% annually until 2030, but the 76% rise in ticket revenue between 2019 and 2024 was largely fueled by a 50% rise in the average ticket price over the same period. Translation: Fans at the low end of the market are being priced out.

Pricing Goals

An estimated 6 billion people are watching the World Cup, in one form or another, making this year’s tournament FIFA’s most popular and economically impactful to date. According to Bloomberg Intelligence, the tournament could drive $9 billion in revenue for FIFA and another $80 billion in global sales across tourism, hospitality, retail, advertising, and consumer goods. As New Jersey Governor Phil Murphy put it in 2023 while bidding to host the final match, each World Cup game is equivalent to a Super Bowl. But, like the Super Bowl, where the average ticket price last year was $8,200, seeing a World Cup game in person is an experience the overwhelming majority of fans can’t access. As a Scotland fan told the Wall Street Journal, “FIFA’s taken it away from the ordinary fan, and are selling it to the highest bidder.” For its part, the Wall Street Journal wrote that FIFA’s dynamic pricing model and service fee on ticket resales has “unleashed a summer of price gouging.”

United Nations of Fun

Soccer has been the sport of the future since the 1970s, but in America that future never arrived. My (casual) fandom is a function of my sons’ passion for the game, and the value I take from it is the experience we share. My team is Scotland — that’s a nod to my father, who was born in Glasgow. I can afford tickets, but I don’t want my sons to conflate access to the experience with membership in a community. Hint: The latter is orders of magnitude more valuable. As my Markets co-host Ed Elson, a diehard football fan, wrote, “Many of my greatest football memories have happened in front of a screen — sometimes at the pub, other times in a living room, but always in the company of other fans, aka a community.”

What’s unique about the World Cup is that, more than any other sport, it does what the UN can’t — unify people and nations around a common pursuit. Coming in, there was real concern that America would export its political dysfunction. To a degree it has — fans and support staff from 11 of the 48 countries that qualified for the World Cup have encountered visa refusal rates above 40%. Zooming out, the story improves, as the matches feature fans coming together to transcend the politics of division.

My World Cup highlight reel:

• Norway supporters doing the ‘ro,’ a coordinated Viking-style rowing movement set to a beating drum.

• Japanese fans going viral cleaning the stadium after their team defeated Tunisia. The practice, known as gomi hiroi, reflects an emphasis on taking responsibility for shared spaces; for a world that lives the tragedy of the commons daily, online and IRL, there’s a lesson there.

• And, of course, Scotland’s Tartan Army, which has drained Boston of beer, won over the locals by cheering on the Red Sox at Fenway, and raised $30,000 for local charities in Rhode Island, where many are staying. In the words of my (father’s) people: No Scotland, no party.

Meanwhile, fans from all over the world are going viral for posting videos that — wait for it — celebrate America. People who have good reason to be angry with America are instead embracing Americans. Finally, there’s Iran’s national team. After playing two games at SoFi Stadium in Los Angeles, they left a thank you note in the locker room. “We came to Los Angeles with pride, competed with honor, and leave with ​dignity. Thank you, Los Angeles, for your hospitality.”

Mascul-unity

In the U.S., soccer skews young and male — 56% of fans are under 34 and two-thirds are men. Participating in or watching sports plays an outsized role in male friendships.

The prevailing (dark) definition of masculinity in America involves dominance, cruelty, and an inability to show emotions other than rage. Soccer isn’t our game, but it offers an alternative view of masculinity, where players demonstrate strength, service, cooperation, emotion, and devotion to one another, their country, and the game. What I want my sons to take from the beautiful game isn’t a love of Scotland — it’s permission. Permission to feel emotions, hug friends, and find common ground with people they may not have much in common with. The men we’ve watched the past two weeks aren’t exceptions to Western masculinity. They’re the correction.

And … go Scotland!

Update: Go England! ;-)

Life is so rich,

P.S.

At the start of every year, I make predictions. This year, I’m doing a mid-year check-in and adding some new prognostications for the rest of 2026. Join me live on Substack on Tuesday, June 30, at 3 p.m. ET. The livestream is exclusive to paid subscribers. Register here. And if you aren’t a paid subscriber, but want in, upgrade here.

After roaming the Earth for 35 years, my conclusion is the U.S. is the best place to make money and Europe is the best place to spend it. Though Europe does have dynamic countries that the shit-posting narrative re structural decline ignores. Living in the U.K. for the past four years, and traveling around the continent, I’ve observed two versions of Europe: a stagnant welfare state limping toward insolvency (exaggerated, but true in places), and a dynamic fusion of capitalism — full-body-contact violence in the market that unleashes innovation and opportunity — with a meaningful social safety net (real, but overlooked by Americans). Let’s discard the fiction and talk about the Europe I’ve encountered IRL.

Sweden

Last week, Elon Musk became the world’s first trillionaire. His wealth is greater than the combined fortunes of the next three men on the Bloomberg Billionaires Index: Larry Page, Sergey Brin, and Jeff Bezos. Of the 500 people on the list, 180 are Americans or reside in the U.S. Their combined wealth is equivalent to that of the bottom 54% of U.S. households. In American politics, the interests of the few are framed in opposition to the interests of the many. We can have billionaires, we’re told, or we can have universal healthcare, but we can’t have both. That’s a false choice. Sweden (among other countries) settles the argument: Billionaires and universal healthcare can coexist. It’s not capitalism vs. socialism. Capitalism actually works better when built on a foundation of empathy and equity.

Sweden is a contradiction — an F1 engine running inside a Volvo station wagon. On the one hand, Senator Bernie Sanders praises its universal healthcare system — 11% of GDP spent on healthcare, life expectancy of 82.7 years, and outcomes on par with, or better than, those of other advanced economies. On the other hand, while the EU stagnates, Sweden is projecting 2% GDP growth. A recent analysis from Boston Consulting Group found that 30% of Swedish firms ranked in the top quartile of performance for their sectors, nearly double the performance of the best-performing EU nation, the Netherlands. The report cited three drivers of Swedish exceptionalism: a culture of risk-taking encouraged by worker mobility, paired with strong unemployment benefits, sustained government investment in R&D, and deep capital markets. As the Economist wrote last year, “Stockholm is the new capital of capital.”

Crucially, participation in Sweden’s capital markets is widespread. Thanks to the creation of ISK investment accounts, which simplify trading and eliminate capital gains taxes in favor of an annual standardized income tax, Swedish households invest over half their savings in equities — more than twice the European average. Although it has the population of North Carolina, Sweden has produced more than 30 unicorns, including Erickson, King, Klarna, and Spotify. With only 2% of the EU’s population and 3% of its GDP, nearly 1 out of every 5 of Europe’s best-performing companies are Swedish.

The Netherlands

Taiwan, which manufactures 97% of the world’s high-end chips and controls 72% of the global foundry market, is the chokepoint for AI and the digital economy, but the island nation is downstream of the Netherlands. Nvidia designs the most advanced chips, and TSMC manufactures them, but both companies, along with the rest of the industry, depend on a single company — ASML — for the machines that make any of it possible. ASML is the world’s only producer of the extreme ultraviolet lithography machines used to manufacture the most advanced chips, and it commands 90% of the broader lithography market. This month, ASML became Europe’s most valuable company, making the picks and shovels of AI.

Dutch economic leverage isn’t an accident, but the result of government policies. Its infrastructure and R&D investments, highly skilled English-speaking labor pool, strong legal and regulatory frameworks, and favorable tax regime make the Netherlands a digital economy hub as well as the gateway to Europe. In terms of moving atoms, Rotterdam is Europe’s busiest port, handling 438 million tons of cargo annually — nearly double the capacity of Antwerp, Europe’s second-largest port. Advances in vertical farming, seed technology, and robotics have allowed the Netherlands in recent decades to halve the resources that go into food production while doubling the output. Last year, the country — the size of Maryland — was the second-largest agricultural exporter in the world by value, behind the U.S.

In terms of moving bits, the Netherlands is one of Europe’s key connection points for global information technology infrastructure. The country ranks second worldwide for online connectivity, with 98% of the population connected to high-speed internet, 20 points above the EU average of 78%. A 2025 report from London’s Centre for Economics and Business Research that looked at education, STEM employment, and overall innovation across 35 countries ranked the Netherlands 10th in global tech competitiveness, ahead of every G7 nation, and one spot behind Sweden. The Dutch focus on digital infrastructure has put the country at ground zero for AI — outside of the U.S., the Netherlands has the most data centers per capita — while also making Amsterdam the go-to EMEA headquarters for transnational companies, including Cisco, Netflix, Nike, PepsiCo, TikTok, and Uber, to name just a few.

None of what makes the Netherlands great comes at the expense of its commitment to empathy and equity. The Dutch poverty rate is 5%, half the rate in the U.S. Unlike most EU nations, the Netherlands leverages a heavily regulated private insurance sector to cover its citizens. Using a “managed competition” model, the Netherlands ranks third in healthcare globally based on public surveys evaluating medical quality, infrastructure, staff, wait times, and costs. The takeaway: If we followed the Netherlands, we might cut our per capita healthcare spending in half, improve outcomes, and keep private insurance.

Trust Deficit

No system is perfect. Immigration, a housing crisis, and political volatility are among the issues facing the Netherlands. Sweden is trading its German-style fiscal discipline for deficit spending in order to ramp up defense. It also faces a potential housing bubble linked to high levels of private debt, and has struggled to integrate immigrants. Nevertheless, the Swedes and Dutch remain committed to capitalism built on a foundation of empathy and equity, whereas Americans are divided on fundamental questions. In the U.S., the right is cheering on crony capitalism and the hollowing out of the social safety net, the left is embracing socialism, and, as Joan Didion famously wrote, “the center will not hold.” This isn’t a matter of policy, but the scarcity of one of society’s most important assets: trust. Then-Senator Barack Obama made this point in a 2006 speech at the University of Nairobi, delivered as Kenya was in the throes of a constitutional crisis. “If the people cannot trust their government to do the job for which it exists,” he said, “all else is lost.”

When I visited Stockholm last week, I spoke with the founder and leadership team at Spotify. They’d all lived in Silicon Valley, but each had returned. None of them shit-post about higher tax bills. They told me they don’t mind paying more, as they trust their government to spend the money wisely. I witnessed a similar attitude in the Netherlands. Among the 38 OECD nations, Sweden ranks 8th when it comes to trust in the government, the Netherlands ranks 19th, and the U.S. is third from the bottom, ahead of Colombia and Slovakia. Meanwhile, when it comes to its citizens trusting one another, Sweden ranks 5th, the Netherlands 8th, and the U.S. 19th, sandwiched between Northern Ireland and Hong Kong. America has the parts to build a car that combines capitalism’s horsepower with a welfare state’s seatbelts and air bags. We just don’t trust each other enough to ride in it together.

Warning

After Stockholm, I visited Amsterdam for the wedding of my childhood best friend’s son — I’m now “that” age. I arrived early and stayed late. Amsterdam is a singular city — prosperous, beautiful, weird — where tolerance is the connective tissue between personal freedom and social order. It’s also a city that reminds residents and visitors, with every step they take, that democracy is fragile. Hundreds of brass-plated “stumbling stones” mark the homes of Amsterdam’s Holocaust victims. The Netherlands wasn’t especially antisemetic, but after the Nazi occupation it became a kill zone for Jews; 75% of Dutch Jews were murdered during World War II — nearly double the rate in Belgium and triple the rate in France. The takeaway: If it can happen here, it can happen anywhere.

Whenever I return to America, I get Weimar Republic vibes. The demonization of immigrants and hollowing out of institutions; the demagogue vilifying Americans as the enemy within with rhetoric inspiring violence, while decent people refuse to condemn it; the weaponization of the legal system; the K-shaped economy where incumbents always win and everyone else, especially young people, falls behind. The question isn’t why trust in America is eroding, but where the absence of trust is leading us. A: Somewhere dark. Trust is infrastructure — invisible until it fails, causing a catastrophe. Sweden and the Netherlands keep reinforcing theirs; we ignore the cracks, believing our exceptionalism exempts us from history’s stumbling stones.

I don’t drink wine or buy art, as it feels disingenuous — trying to be something I’m not. I do, however, have a photograph I spent real money on. It’s a photo of Otto Frank returning to the Amsterdam attic where he and his family hid until they were betrayed, his wife and daughters ultimately murdered. It hangs outside my bedroom door, so it’s the first/last thing I see each day. It reminds me that I have inconveniences but no real problems. I worry that Americans’ declining empathy for one another will turn inconveniences into real problems.

Life is so rich,

P.S.

At the start of every year, I make predictions. This year, I’m holding myself (extra) accountable by doing a mid-year check-in. Join me live on Substack on Tuesday, June 30, at 3 p.m. ET. The livestream is exclusive to paid subscribers. Register here. And if you aren’t a paid subscriber, but want in, upgrade here.

God, I’m sick of talking about SpaceX. More impressive than the Falcon Heavy rocket, and it is impressive, is Elon Inc.’s ability to manufacture scarcity. Getting the Nasdaq to waive requirements applied to every company until now, so he can force index funds to purchase shares, aims a demand cannon of $75B at a business with a small float. The result is a price that in no way reflects the underlying value. But I digress. This isn’t an investment, but a trade. So … where to “invest”?

The technology with the greater asymmetric upside, as well as the clearest path to transforming the economy and the well-being of more than 200 million Americans, isn’t Falcon 9 boosters or GPT-5, but GLP-1s.

IED

U.S. obesity rates have tripled over the last 60 years. Our instincts, developed over hundreds of thousands of years when food was scarce, haven’t kept pace with industrial production, so we gorge. Obesity is a comorbidity for 200-plus chronic diseases, the central node in a network of poor health outcomes. The total bill for national health expenditures, including public and private spending, is $5.3 trillion. By 2033, 1 out of every 5 dollars in the economy will go to healthcare. This is the IED at the center of the U.S. economy.

Silver Bullets

Five years ago, when Ozempic and Wegovy were first approved for weight loss, GLP-1s looked like a silver bullet for obesity. Today, they’re a fully loaded magazine of silver bullets aimed at obesity, addiction, cancer, sleep apnea, and a growing list of other diseases and chronic conditions. The velocity of innovation is remarkable. “Usually when a new medicine happens, we have time to learn how to use it,” Dr. Melanie Jay, director of the NYU Langone Comprehensive Program on Obesity, told the New York Times. But with GLP-1s, “everyone is kind of iterating in real time.”

Some recent iterations: Last month, Eli Lilly announced that its phase 3 trial for retatrutide — a triple agonist dubbed “Godzilla” that activates GLP-1, GIP, and glucagon receptors — appears to exceed the performance of other weight-loss medications. On average, patients on Zepbound or Wegovy lose between 14% and 20% of their initial body weight over 72 weeks. Patients in the retatrutide trial taking 4mg, 9mg, and 12mg doses lost an average of 19%, 26%, and 29% of their starting weight, respectively.

But the most promising drug is Foundayo, a daily pill from Eli Lilly the FDA approved for weight loss in April. In clinical trials it resulted in 12% weight loss over 72 weeks — less effective than shots, but a good alternative for the 66 million Americans who are afraid of needles. The pills also show promise as a maintenance tool. As Nicholas Florko wrote in the Atlantic, “America has a new GLP-1 playbook,” with a shot to lose weight and a pill to keep it off. In the U.S., 1 in 8 adults currently take a GLP-1, with prescriptions for weight loss doubling from 2024 to 2025. It’s working. A year after the drugs were approved for weight loss, the U.S. obesity rate peaked at 40%, but it has since begun to decline. Sadly, GLP-1s haven’t had the same impact on their initial target: diabetes.

Distribution

William Gibson famously said, “The future is already here — it’s just not evenly distributed.” He could’ve been describing GLP-1s. A recent Cleveland Clinic study found that cost is by far the primary reason people quit, with 47% of those who discontinued the drugs citing insurance denial, expiration of a discount coupon, or unaffordable out-of-pocket expenses. Side effects were the second-most-common reason, cited by 14% of respondents, while less than 2% quit due to unsatisfactory weight loss. In other words, GLP-1s can change society … if we distribute them to everyone who needs them, regardless of their ability to pay.

The good news: Beginning July 1, Medicare Part D will cover certain GLP-1 treatments with a $50 monthly co-pay for seniors. The bad news: Private insurance plans, which provide pharmaceutical benefits for two-thirds of Americans, are scaling back GLP-1 coverage, if they even offered it to begin with. According to the Wall Street Journal, 11% of employers have dropped or are planning to drop GLP-1 coverage for weight loss altogether, and more than a quarter of big companies are adding hurdles, such as requiring multiple weigh-ins a month, meal-tracking on apps, or mandatory health coaching. The U.S. is simultaneously hitting the gas while pumping the brakes on the best tool we have for combating obesity.

Subscribe and Lose?

With a few exceptions, the 17 companies valued at $1 trillion or more are all technology companies heavily invested in AI. The only drugmaker on the list is Eli Lilly, whose shares have registered a 418% increase since GLP-1s were first approved for weight loss in 2021. Novo Nordisk, Eli Lilly’s chief competitor and the maker of Ozempic and Wegovy, is up just 2% over the same period. The discrepancy points to something unusual about the dynamics of GLP-1 pricing. Typically, drug prices are inelastic; i.e., consumers aren’t very responsive to price changes, unless a generic option is available. But as one industry analyst explained, the obesity market has turned traditional pharma economics upside down. Eli Lilly’s products have a perceived efficacy edge, but the company also beat Novo Nordisk to the direct-to-consumer market. On my podcast, Eli Lilly Chair and CEO David Ricks told me, “In the GLP-1 category, we observe prices are elastic. The more we lower the price, the more users we get. That’s the path we’re on.”

GLP-1s may be the rare pharmaceutical case where capitalism is on the consumer’s side. But Ricks also told me GLP-1s are unique insofar as nearly everyone who takes them loses weight. Unlike drugs for other chronic conditions, “people like being on GLP-1s,” because they notice results in their appearance, rather than intangible health benefits and side effects. The fine print: Many people may never stop taking GLP-1s, creating an enduring subscription business. Think Netflix, but with monthly prices ranging from $149 to $499, and instead of market competition, a duopoly. GLP-1s may not be an off-ramp from the industrial food-medical-pharma complex, but the ultimate physiological lock-in.

2nd Order

Victoria’s Secret shares surged 47% last week after the company reported 15% YoY revenue growth and raised full-year sales guidance to $7.1 billion. Meanwhile, fast food chains are shrinking their footprint, with Jack in the Box, Pizza Hut, and Wendy’s among the brands closing hundreds of stores nationwide. That’s yet another bad sign for an industry that’s registered more than 500 franchisee bankruptcies this year. U.S. alcohol sales are also down, with Diageo and Pernod Ricard reporting a 15% decline YoY, while Constellation Brands saw a 10% drop.

CEOs have blamed tariffs, affordability, and in the case of alcohol, Gen Z, but GLP-1s are a more likely explanation for the shift in consumer behavior. More signals: The share of apparel exchanges where shoppers “size down” has risen for three consecutive years, hitting a 14% high among online retailers. Adults who use GLP-1s consume 21% fewer calories and spend nearly a third less on groceries on average. Meanwhile, 59% of Americans say they’d be more likely to visit restaurants that serve “flexible, customizable, or innovative portion size options” — and that goes up to 73% among GLP-1 users. The same report noted that 13% of restaurant operators have listed items that appeal to GLP-1 users — higher protein and/or fiber — and 42% say they’re considering such additions.

There will be downstream effects. A significant decline in fast food revenue will accelerate closures across the industry’s 200,000-plus U.S. locations — destabilizing commercial real estate markets and threatening the livelihoods of the 4 million people who work in the sector. Apparel brands that built supply chains around stable sizes and predictable returns will have to adjust to hit a moving target: America’s shrinking waistline.

Hope

The AI narrative has turned negative. Energy costs are up, jobs are (supposedly) going away, relationships are going virtual, and, if the technology advances as promised, it presents a threat to humanity. The GLP-1 story offers something Silicon Valley used to produce in abundance: a hopeful vision of the future. Every American knows people who struggle with their weight. We all know someone who has a chance to live longer, do more, and feel better about themselves because of GLP-1s. A nation’s greatness isn’t measured in GDP, but in the quality of life its citizens enjoy. For the first time in decades, American innovation is adding years to lives, not just zeros to valuations. The question isn’t whether GLP-1s will change the U.S. They already have. The question is whether we’ll be stupid enough to ration the change.

Life is so rich,

P.S.

Historian Heather Cox Richardson and I will mark our nation’s semiquincentennial (real word) with a collaboration — America at 250: What Comes Next? Join us live on Substack on Tuesday, June 16, at 12:15 p.m. ET. The event is free to everyone, register here.

P.P.S.

Prof G Media now has official merch. Buy t-shirts, hoodies, and sweatpants now, look cool forever. Supplies are limited, so don’t wait to visit our online store.

“What gets measured gets managed” is often misattributed to Peter Drucker, the father of modern management theory. The full quote, from business journalist Simon Caulkin, is a warning not a promise. “What gets measured gets managed — even when it’s pointless to measure and manage it, and even if it harms the purpose of the organization to do so.” In other words, our mania for measurement can obscure what matters most. Consider the popularity of health and fitness apps and the personal-optimization trend those technologies enable. To a point, the more data we collect on ourselves, the better able we may be to improve our lives. But metrics aren’t the arbiters of living well, nor is optimization life’s end-goal. I believe this trend isn’t about optimizing life; it reflects a growing obsession that’s consuming life’s purpose and meaning.

Perfection Maxxing

The digital economy has created a winner-take-most ecosystem. Life/America is exceptional for the top tier, and increasingly anxious for everyone else. This K-shaped life offering awesome or anxiety fuels a “maxxing” culture: How do we look? How much protein do we consume? How well do we sleep? How many books do we read, etc.? The optimization and gamification of life has created a Hunger Games we’re all playing, all the time. As journalist Nitsuh Abebe wrote in the New York Times in October, the concept of maxxing comes from 1940s academic game theory, but it’s been repurposed by online communities to describe a strategy for “relentless optimization” where balance goes to die. “The language that comes from this layer of the internet has a mechanistic, gamelike aura, as if life were mostly just a web of tactics and hacks and mutual manipulation.”

According to clinical psychologist Catherine Houlihan, the “optimization mindset has many of the hallmarks of perfectionism.” Some commonalities: constantly pursuing high standards such that falling short of a goal is seen as failure; being preoccupied with results to the point of worry or rumination; constantly measuring performance to an obsessive degree; avoiding tasks if we fear we won’t be perfect; slipping into binary thinking, e.g., your diet is either “healthy” (perfect/optimal), or “unhealthy” (imperfect/suboptimal). “We don’t yet have much research about how adopting an optimization mindset might affect mental health and well-being,” Houlihan wrote. “But the negative effects of perfectionism are well established.” A 2023 meta-analysis of 121 studies found that when perfectionism takes the form of obsessive fear of failure — replaying mistakes, tying self-worth to performance, etc. — it correlates meaningfully with anxiety, OCD, and depression in young people.

80:20

In economic terms, optimization means getting the greatest return on your investment. Investors, however, aren’t perfectionists. They’re pragmatists who operate with an understanding of the Pareto Principle, which states that, for many outcomes, roughly 80% of the results come from 20% of the effort. When applied to the personal investments we make in our own fitness, health, and longevity, the lesson is that we make the biggest gains going from zero to one, but there’s a point, likely around 80%, where the efficiency frontier begins to collapse. If you don’t exercise at all, getting moving 4x/week will confer significant benefits. If you’re a gym rat, however, working out every day vs. 4x/week yields diminishing returns.

Value Capture

Bryan Johnson, an entrepreneur whose philosophy is “don’t die,” spends $2 million a year optimizing for longevity. Each day, he tracks hundreds of biomarkers, adheres to a strict vegan diet where every calorie that enters his body “must fight for its life,” uses shockwave and red-light therapies, and hangs out in his home sauna and hyperbaric chamber. He ingests a stack of prescription drugs and dozens of supplements, and exercises up to 90 minutes a day — without rest days. Bedtime is 8:30 p.m., sleep temperature is strictly regulated at 65° to 68°F, and he wakes up between 4:30 a.m. and 5:00 a.m. without an alarm. My Pivot co-host Kara Swisher, who interviewed Johnson for her CNN series, Kara Swisher Wants to Live Forever, observed that Johnson has an “obsession with measurement.” I’d add he has an aversion to “l-i-v-i-n,” as Matthew McConaughey famously put it in Dazed and Confused.

Our obsession with metrics, says journalist Derek Thompson, is akin to a modern religion that’s making us miserable. “Modern life is awash in statistics,” Thompson wrote in March. “Often, the quantification of modern life makes us play the games we can easily measure rather than the games we deeply value.” When we do this, we’re succumbing to “value capture,” according to University of Utah philosophy professor C. Thi Nguyen. “Value capture occurs when an agent’s values are rich and subtle,” Nguyen wrote in 2024. “They enter a social environment that presents simplified — typically quantified — versions of those values; and those simplified articulations come to dominate their practical reasoning.”

Some examples: We adhere to dietary guidelines to improve our health, but fixate on BMI such that the metric replaces the original goal; we pursue education to learn, but chase GPA at the expense of knowledge; we use social media to connect, but we come to value likes and other parasocial metrics over meaningful relationships. “Metrics are useful because they compress information, [and] they are dangerous because they compress information,” Nguyen told Thompson. “[It’s] not that these metrics aren’t measuring something real and that they aren’t objectively tracking something that we want to know about; it’s that they speak so loudly that they threaten to drown out other nearby qualities that are also incredibly valuable but are harder to measure.”

Enjoy Every Sandwich

In October 2002, with only months to live, frequent guest Warren Zevon appeared on David Letterman’s show for the final time. The musician retained his dark wit, joking that not visiting a doctor for more than two decades was “one of those phobias that really didn’t pay off.” In a more serious moment, Letterman asked Zevon if he had any insights about life to share. “I really always enjoyed myself,” Zevon said. “But it’s more valuable now. You’re reminded to enjoy every sandwich and every minute of it, playing with the guys and being with the kids and everything.” Zevon’s answer is memorable — Enjoy Every Sandwich became the title of a posthumous tribute album — because he articulated his life’s purpose, rather than the metrics he’d registered along the way.

I frequently encounter people who ask about my diet and fitness routine. It’s simple: I eat a diet that, mostly, hits my targets for calories and macros, try to get a good night’s sleep, and exercise regularly. As someone who’s obsessed with data, I code as an optimizer. I am not. I work out harder so I can drink … more. The first thing I do when I arrive in Los Angeles — if you know you know — is go to In-N-Out Burger. I often order (gasp) dessert, especially if I’m with my boys. I regularly stay up too late talking to friends back in the states. Two nights ago, after interviewing Secretary Clinton for a live pod in NYC, I came home, ingested edibles, binge-watched Season 3 of Euphoria and washed down chocolate-covered almonds, lifted from the mini-bar at the Faena hotel earlier this week, with two Peronis.

A. Great. Night.

Pattern Recognition

If there’s a pattern, it’s this: I’m health conscious 80% of the time, so I can devour the other 20%, and create a whole that is greater than the sum of its parts. The question isn’t will I live longer, but will I live better? A: Yes. Research supports this. Dieters who adhere to rigid meal plans are more likely to experience mood disturbances than those who don’t; flexible dieters are less moody and more likely to reduce their BMI. Harvard happiness researcher Shawn Achor tested multiple variables — background, income, activities, and sleep — and found that social connection was the strongest predictor of happiness, suggesting that a late night with friends is better for your health than a perfect sleep score. Consuming alcohol in moderation is associated with higher death rates, but a large-scale study of 1.5 million people found that moderate drinkers report higher life satisfaction than abstainers. Then there’s the work of Bronnie Ware, a palliative-care nurse who collected the regrets of her dying patients. They shared about not living their truth, wishing they’d worked less, expressed their feelings, kept in touch with friends, and been happier. Nobody said they wish they’d done a better job “optimizing.”

The Little Prince

I gave my oldest son a ring that he wears as a necklace. The inscription comes from Antoine de Saint-Exupéry’s The Little Prince, a 1943 novella about friendship, loneliness, loss, and love. “What is essential is invisible to the eye.”

My work and life are narrowing, distilling to a few goals: one of them is to prepare my sons for others. Many things I do don’t advance that goal, and some things undermine it. I’m a work in progress, i.e., suboptimal. When I’m gone, if I’ve accomplished this goal, my sons will have, among other things, receipts in the form of grief — proof that they loved deeply, as Nicole Avant, former U.S. ambassador and film producer, wrote in her memoir, Think You’ll Be Happy. The boys won’t remember my VO2 max. They won’t know my sleep score or my macro splits. What they’ll carry with them is … me, the man who showed up, imperfectly, at the dinner table, at their games, and in countless fleeting moments that didn’t register on any dashboard. The metrics were never the point. The sandwiches we shared were.

Life is so rich,

The Markets tour ended this week in New York, where I got to share the stage with one of my heroes, former Secretary of State Hillary Rodham Clinton. Total badass. The full, unedited show is available exclusively for Prof G+ paid subscribers by clicking here.

Hemingway famously said bankruptcy happens slowly then suddenly. The collapse of his former home, Cuba, appears to be in the suddenly phase.

Tourism, which generated 8% of Cuba’s $30 billion GDP in better times and brought in hard currency, has fallen 48% year over year. Inflation is 15%. Two weeks ago, Cuba’s minister of energy and mines said the country had run out of fuel, because of the U.S. oil embargo, adding that Havana is frequently without power for up to 22 hours a day. The last oil shipment arrived in April, and a Russian tanker that had been headed for Cuba carrying 300,000 barrels — enough for three days — abruptly changed course. On social media, there are reports of sporadic protests breaking out in and around the capital. Safe drinking water is in short supply. Food has been scarce for months. The country’s healthcare system is breaking down. In sum, the U.S. is asphyxiating the Cuban people. As Cuban American historian Ada Ferrer told CNN’s Christiane Amanpour, “Survival is an open question.” But to paraphrase Cuban interventionist President John F. Kennedy, we shouldn’t be asking what additional pressure we can apply to Cuba, but what help we can provide its people?

Regime Change

In a rare direct message to the Cuban people, U.S. Secretary of State Marco Rubio offered a lifeline … with strings attached. “The only thing standing in the way of a better future are those who control your country,” Rubio said, predicating $100 million in aid on regime change. His message was timed to coincide with the announcement that the aircraft carrier Nimitz is heading toward the island, as well as the Justice Department’s decision to indict Raúl Castro, the country’s 94-year-old former president and de facto leader. The endgame script is similar to one the U.S. deployed against Venezuelan strongman Nicolás Maduro. But just in case there’s any ambiguity about the goal, President Trump has been saying the quiet part out loud since March. “I built this great military. I said, ‘You’ll never have to use it.’ ​But sometimes you have to use it. And Cuba is ​next, by the way.’” We’ve seen this movie before, and it doesn’t end well.

Soft Power

In his famous 16th century treatise The Prince, Niccolò Machiavelli asked whether it’s better for a leader to be loved or feared. “One should wish to be both,” he wrote, “but because it is difficult to unite them in one person, it is much safer to be feared than loved.” Today, “Machiavellian” is used to describe a ruthless style of politics where fear is the most valuable currency. But as Jeffrey Sonnenfeld, the senior associate dean for leadership studies at Yale’s School of Management, observed, many of today’s leaders miss the operative part of the diplomat’s famous quote. “What Machiavelli actually advised was that it is best to be both loved and feared,” Sonnenfeld wrote. “Only when that ideal is not possible … did Machiavelli suggest fear is a more reliable way to inspire discipline than bonds of love.” One of the many failings of the Trump administration is the false belief that America is incapable of inspiring fear and love simultaneously. Trump’s preference for instilling fear in other nations and his disdain for inspiring their love misses what makes America so great.

In 1990, just after the end of the Cold War, political scientist Joseph Nye popularized the term “soft power” to describe how state actors achieve their goals without using force, making threats, or paying bribes. According to Nye, a nation’s soft power resides in its culture and political values, plus its foreign policy to the extent that its peers see it as legitimate and having moral authority. “A country may obtain the outcomes it wants in world politics because other countries — admiring its values, emulating its example, aspiring to its level of prosperity and openness — want to follow it,” Nye wrote. “This soft power — getting others to want the outcomes that you want — co-opts people rather than coerces them.”

Nye’s concept explains the pincer move the U.S. successfully deployed against the Soviets during the Cold War. Our “hard power” included a nuclear arsenal with a rapid response capability measured in minutes, a military that peaked at 3.5 million people in uniform, and the willingness to engage in bloody proxy wars in Asia, Latin America, and the Middle East. Our soft power included foreign aid, Hollywood movies, rock & roll, Levi’s jeans, and middle-class prosperity. (See Nixon’s “Kitchen Debate” with Soviet Premier Nikita Khrushchev.) As Nye said in 2019, “The Berlin Wall collapsed not under an artillery barrage, but from hammers and bulldozers wielded by people whose minds had been affected by ideas that had penetrated the Iron Curtain over the preceding decades.”

The Alpha of Magnanimity

Our willingness and capacity to deliver violence against our enemies anywhere in the world is a significant asset, but American magnanimity is what makes the country unique among history’s greatest powers. During World War II, the U.S. sustained 400,000 dead and another 670,000 wounded. In the immediate aftermath of the war, the country provided emergency aid to its former enemies in Austria, Germany, and Japan. Then, in 1948, Congress passed legislation to fund the Marshall Plan — a $13.3 billion aid package ($180 billion adjusted for inflation) to rebuild 17 European nations, including West Germany. Separate from the Marshall Plan, the U.S. spent an estimated $2 billion ($25 billion adjusted for inflation) between 1946 and 1951 to rebuild Japan. We offered similar support to the Soviet Union and Eastern bloc, but were rebuffed. Regardless, America wrote checks when other victors would’ve demanded reparations.

In hindsight, it’s easy to discount U.S. magnanimity as Cold War pragmatism, but that misses the contribution of the American spirit and our capacity to forgive. Had American voters been consumed by hatred and xenophobia — understandable sentiments after years of war and sacrifice — the isolationism of the pre-war years might’ve returned. Instead, seven months after signing the Marshall Plan into law, Truman won reelection, suggesting that a significant number of American voters found space in their hearts and wallets for people who had been their enemies just three years prior. That selflessness helped install a global operating system financed by American capital, secured by the U.S. military, and held together by American generosity and kindness. Eight decades later, one of our most underrated assets remains our talent for turning enemies into allies. Similar to many relationships and brand equity, the current administration has taken a blow-torch of performative masculinity and stupidity to these assets.

Bridge to Cuba

Despite six decades of hostility, the infrastructure of American empathy and generosity to Cuba already exists. After the Obama administration loosened travel restrictions in 2016, 1.2 million Americans visited Cuba over two years, outstripping tourists from every other country. Of the 3 million Cubans in the U.S., 57% are immigrants with firsthand ties to their homeland. Cuban Americans are believed to send between $2 billion and $4 billion per year to their relatives back home, though exact numbers are difficult to come by because of U.S. restrictions on commerce with the island. Writing in Mother Jones about how her mom regularly sends care packages and money to relatives in Cuba, Laura Morel observed that exiled Cubans are keeping the nation alive. Formal channels also exist. The U.S. resumed aid to Cuba in 1990 after a 30-year Cold War hiatus, though the Trump administration effectively turned off the flow of economic support last year. The stockpile of U.S. bombs and threats is running low, but they aren’t needed for the island nation 90 miles off the coast of Florida. We’ve already established the lifeline. What we need to do is summon our soft power — the empathy and generosity that makes America uniquely American.

Open Hand

I don’t believe the U.S. will invade Cuba. One quagmire at a time is enough. In addition, Trump doesn’t see himself as a liberator, but as a dealmaker. That’s fine, but the best deals are win-win, not zero sum. Trump and Rubio have made their intentions clear: The deal they seek has to include regime change. Less clear is what regime change looks like in practice. As Brian Finucane, a senior adviser with the International Crisis Group and a former State Department lawyer, told PBS, Venezuela isn’t a good template for Cuba, as there isn’t an obvious successor to make a deal with.

Strangling Cuba until it collapses into chaos, or launching a cinematic special-ops mission to rendition a 94-year-old autocrat, isn’t a strategy. It’s a weapon of mass distraction from Epstein, ICE, inflation, Iran, the J6 terrorist immunization fund … The real move is magnanimity. America’s greatest returns on investment haven’t come from the barrel of a gun, but from the extension of an open hand. Imagine what $100 million in unconditional aid to the Cuban people could buy. Not regime change. Something better: goodwill, gratitude, and eventually a generation of Cubans who love America and associate it with their own prosperity, rather than an embargo. Empathy isn’t a sign of weakness. It’s the most ruthlessly effective weapon in the American arsenal.

Life is so rich,

P.S.

We’re doing it live. Join my Raging Moderates co-host Jessica Tarlov and Gen Z political analyst Aaron Parnas every Wednesday at 12 p.m. ET for our new live show: Raging Perspective. Watch a replay of the debut episode in all its unscripted, unfiltered, unedited glory here.

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In Davos, Canadian Prime Minister Mark Carney had a warning for nations that have relied on the U.S.-led world order that provided (relative) peace and prosperity for eight decades. “If we’re not at the table,” he said, “we’re on the menu.” Heading home after last week’s summit with Chinese President Xi Jinping, President Trump made clear that whether Taiwan was at the table or on the menu was entirely his call. “I don’t talk about those things,” Trump said, referring to a private conversation in which Xi asked whether the U.S. would use military force to defend Taiwan. “There’s only one person that knows that — you know who it is? Me. I’m the only person.” But the question isn’t whether Trump will stand by the U.S. commitment to an independent Taiwan — breaking faith with our allies is a feature of his administration, not a bug — it’s how much he needs to be given to look the other way. A: Significantly less than Xi was previously prepared to pay.

Quid Pro Quo

The conventional wisdom was that China was preparing to invade Taiwan in the next few years, but that’s shifted. The most recent U.S. intelligence assessment, in March, concluded, “Chinese leaders do not currently plan to execute an invasion of Taiwan in 2027, nor do they have a fixed timeline for achieving unification.” Seeing Iran and Ukraine deploy asymmetric warfare against opponents with superior firepower may have given China’s hawks pause. Also, not a single member of the Chinese military has combat experience.

Meanwhile, the Tracking People’s Daily newsletter, analyzing 7,000 official Chinese statements since 2021, noted that Beijing had softened its rhetoric from Biden to Trump, despite the trade war. Biden was seen as a systemic threat who was determined to “encircle and suppress” China, according to Tracking People’s Daily, while Beijing views “Trump’s transactionalism [as] something [it] understands and can work with.” I believe Xi made a deal with Trump: Look the other way on Taiwan, and in exchange Beijing will purchase enough Trump meme coins to make him wealthier than the CEOs who accompanied him at the summit. One sign of a deal: Trump said he would withhold a $14 billion arms package from Taiwan, without receiving any concessions.

If Xi bribing Trump sounds implausible, consider the record. Trump has enriched himself and his family by $4 billion in his first year back in office. Citizens for Responsibility and Ethics in Washington, a corruption watchdog, flagged examples of Trump conflating personal business with U.S. interests in Brazil, Indonesia, Serbia, Syria, and Vietnam. Several months after Qatar gifted Trump a $400 million plane to replace Air Force One, Trump issued an executive order to provide Qatar a U.S. security guarantee with conditions similar to NATO’s Article 5. Probably just a coincidence. But wait … there’s more. Justin Sun dodged an SEC lawsuit alleging securities fraud after announcing he’d purchased $75 million worth of the Trump family’s World Liberty Financial coins. According to Bloomberg, 19 of the top 25 wallets that purchased Trump meme coins to secure a dinner date with the president were owned by foreign nationals. And for those with the means to erase their criminal record, Trump reportedly commands low-seven figures for a pardon.

But all of that is nothing compared to the shakedown he perpetrated on American taxpayers with a $10 billion lawsuit alleging the IRS had failed to keep private the tax returns Trump once promised to release. This week the DOJ announced a settlement in the form of a $1.776 billion fund to compensate Trump allies, including January 6 insurrectionists.

The Real Money

Of course, the real money is in market manipulation, from suspicious puts placed just before tariff announcements to oil bets made minutes before Trump announced a ceasefire with Iran. Trading on inside information is a bipartisan tradition, but Trump’s transgressions are orders of magnitude more brazen and profitable than anything we’ve seen. It took Nancy Pelosi four decades in Congress to amass $130 million in the stock market. Trump recently disclosed 3,700 stock trades from the first quarter of this year valued somewhere between $220 million and $750 million. We need investigations and prosecutions. However, the Supreme Court immunized the president, and he promised to grant preemptive pardons to everyone “within 200 feet of the Oval Office.” Besides, there isn’t anyone to bring the case, as Trump has gutted the DOJ, SEC, IRS and other agencies responsible for rooting out financial corruption.

Repatriation

China doesn’t need to fire a shot to repatriate Taiwan. According to a Bloomberg analysis, a conflict over Taiwan would cost the world economy an estimated $10.6 trillion, roughly 10% of global GDP, in the first year alone. By comparison, the OECD predicts the Iran war will slow global GDP growth from 2.9% to 2.6% in 2026 and from 3.0% to 2.5% in 2027. Taiwan is the digital economy’s carotid artery, but, more important if you’re Xi, it has deep economic ties to China. An estimated 80% of Taiwan’s businesses are linked to China. Despite Taiwan’s recent efforts to disconnect from the mainland, China remains its second-largest trading partner, behind only the U.S., with exports accounting for 20% to 25% of GDP. Meanwhile, China has a history of deploying economic coercion. Between 2010 and 2022 the Mercator Institute for China Studies documented 123 instances of economic coercion from the PRC. It has also executed a multidecade campaign to isolate Taiwan in diplomatic terms, reducing the number of countries that officially recognize the island nation to 12. Add on cyberattacks, espionage, and disinformation, and Xi doesn’t need a D-Day-style assault. China’s “soft invasion” has already made inroads and will continue to advance until Taiwan capitulates.

Checkmate

Taiwan’s most valuable company, TSMC, controls 72% of the global foundry market, producing chips for AMD, Apple, Nvidia, and Qualcomm. The company also produces 90% of the world’s most advanced chips. Taiwan’s dominance isn’t an accident, but the result of a state policy to leverage chipmaking for national security purposes. In 2001, journalist Craig Addison coined the term “Silicon Shield” to describe how Taiwan’s chipmaking monopoly resulted in a de facto U.S. defense commitment, even though we dropped our recognition of Taiwan in 1979 in order to normalize relations with China. Two decades later, there’s a crack in the Silicon Shield. “The single biggest threat to the world economy, the single biggest point of single failure, is that 97% [sic] of the high-end chips are made in Taiwan,” Treasury Secretary Scott Bessent said in January at Davos. “If that island were blockaded [or] that capacity were destroyed, it would be an economic apocalypse.” Another way of putting that: If push comes to shove, the U.S. and the rest of the world would likely choose stability over Taiwan’s sovereignty.

Actually, we might not have a choice, considering how drones have disrupted warfare. China produced 2.5x the number of drones we produced in 2025, but as Noah Smith observed this week, “Drones use lithium-ion batteries and rare earth electric motors, both of which are almost entirely manufactured in China.” Currently, China controls 60% to 70% of rare earth mining and 90% of the global processing capacity. As Deng Xiaoping famously said in 1992, “The Middle East has oil, China has rare earths.” Adding chipmaking to its economic arsenal would give China unilateral power to tax the global economy, as well as leverage over other nations that far exceeds the $1 trillion it deployed to fund infrastructure projects around the world via its Belt and Road initiative.

Thucydides Trap

In his 2017 book, Destined for War, former U.S. Assistant Secretary of Defense Graham Allison wrote, “When a rising power threatens to displace a ruling power, alarm bells should sound: danger ahead. As a rapidly ascending China challenges America’s accustomed predominance, these two nations risk falling into a deadly trap first identified by the ancient Greek historian Thucydides.” At their summit, Xi asked Trump whether the two nations could avoid the Thucydides trap and “forge a new paradigm for major-power relations?” Trump registered the insult — the implication of U.S. decline — but blamed Biden and insisted that the U.S. is the “hottest nation anywhere in the world.”

Future historians will likely have trouble gauging Xi’s skill. On the one hand, he’s a serious statesman. On the other hand, his opposite number is Donald Trump. Regardless, the Chinese see blood in the water, even if American leadership won’t acknowledge we appear to be committing superpower suicide. In January, a Beijing think tank published a report called “Thank Trump,” which concluded that tariffs, attacks on allies, anti-immigration policies, and the president’s war against American institutions have strengthened China while weakening the U.S. Citing polarization, government dysfunction, and “Latin American-style instability,” the report’s authors labeled Trump an “accelerator of American political decay.” A decade ago, our priority was to manage the Thucydides trap such that we maintained our leadership of the rules-based world order, avoided conflict, and increased global prosperity. Today, we’re riding shotgun with a president who never met an American interest he didn’t seek to monetize. Superpowers don’t die when adversaries breach the gates. They die when the people inside start auctioning off the gates.

Memorial Day

I write often about what we’re losing by dismantling the rules-based order, less often about the cost of building it in the first place. It’s Memorial Day weekend in the U.S. — a holiday meant to honor those who died serving our country, though most Americans observe it by barbecuing, drinking, and shopping. Pulling down the U.S.-led order robs our children of their future, but it also demeans the memory of American sons and daughters who gave what Lincoln called the last full measure of devotion. Shame on Trump. Shame on his enablers. And shame on us if we fail to pull the country off of Trump’s auction block.

Life is so rich,

P.S.

My Prof G Markets co-host Ed Elson was live on Substack this week sharing “The New Normal,” his presentation about the forces shaping the global economy. Ed’s talk is available exclusively to Prof G + members for one week and one week only. Say no to FOMO by saying yes to a Prof G + membership. Upgrade here.

One of Trump’s many weaknesses is believing he’s playing three-dimensional chess when he’s eating the pieces. Things are different now. In 2017, Trump visited a China still playing catch-up, calling itself a “developing country,” needing America more than America needed it. That country no longer exists. China’s GDP is 54% larger. Its navy — 370 battle force ships to America’s 296 — is now the world’s largest. China added 78 warships between 2015 and 2023; the U.S. added 20. A single Chinese shipbuilder last year produced more tonnage than the entire U.S. shipbuilding industry has delivered since World War II. Meanwhile, DeepSeek shredded the assumption that chip controls could contain China’s AI ambitions. And Xi, who in 2017 was merely consolidating power, has since abolished term limits and purged his own generals. The man across the table isn’t asking for market access, he dominates many key markets. For example, in renewables, China produces 70% to 80% of the world’s EVs, solar panels, and batteries. Xi has built an AI ecosystem closing in fast on the frontier of artificial general intelligence and processes 90% of the world’s rare earth minerals. Trump is not negotiating from the same position he was in 2017. And neither is Xi.

For more context, here’s an excerpt from the most recent companion newsletter for China Decode:

The Super Bowl for U.S.-China Watchers Is Over — Questions Remain

Alice’s Take: This is the Super Bowl for followers of China-U.S. relations. There was a lot of analysis on the road leading up to the event, with commentary about who has the upper hand going into overdrive this week. I see the playing field as roughly even. My take on China’s priorities, having just spent a month in the country, boils down to three crucial issues. One is tariffs. China will want a modest reduction in the effective tariff rate. Secondly, they will likely push for more clarity on export controls. And the last point centers around the “Board of Investment” strategy. China is pressing for companies such as BYD and CATL to be able to set up plants in the U.S., either wholly owned or through joint ventures.

But there’s a second tier of issues important to China. Those include a resolution to the conflict in the Middle East — even though China would prefer to remain in the background — and, of course, Taiwan. Finally, there could be an attempt to connect North Korea and Washington, which could lead to a conversation between Trump and “Rocket Man” Kim Jong Un.

On the U.S. side, Trump needs a win. Behind him in Beijing is an entourage of American CEOs, including a surprise last-minute addition to the list: Nvidia’s Jensen Huang. Among names such as Tim Cook and Elon Musk are Boeing’s Kelly Ortberg and Cargill’s Brian Sikes. The White House has signaled it would like to see more agriculture and aviation purchases. You can also expect discussion about reducing the trade deficit, although the stats show bilateral trade volume in 2025 dropped by the most since 1979, the year when the U.S. and China officially established diplomatic relations. The U.S. share of Chinese exports to the world has fallen sharply since Trump last visited China in 2017. The conversation, meanwhile, is shifting more to dual-use technologies, which have both civilian and military applications.

James’s Take: I’d argue that this is the first U.S.-China summit in history where the Chinese leader sits down with the stronger hand. I’ll also go back to the 1970s. When Richard Nixon visited China in 1972, U.S. GDP was roughly 11 times China’s. When Trump headed to China in 2017, the U.S. was unambiguously the more powerful of the two. In nominal terms, the U.S. economy remains larger. But adjusted for purchasing power parity, China has eclipsed the U.S. In manufacturing, China accounts for roughly a third of global output, compared with about a sixth for the U.S. And when the Liberation Day tariffs hit 145%, China’s threat to restrict critical mineral exports was enough to bring those tariffs down to around 47%. That episode showed who blinks first. Today, Trump’s hand is relatively weaker, and Xi’s is relatively stronger.

Both sides see each other as an implacable adversary, and suspicion runs deep. But the rhetoric in public will be positive. The U.S. and China need each other. Each side seeks stability. The U.S. realizes China can play a critical role in resolving the conflict in Iran and unblocking the Strait of Hormuz. China is focusing on Taiwan. What Xi wants exactly remains unclear, but he will push for something more concrete. China is playing for big stakes.

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Scott’s Take

History doesn’t repeat, it rhymes. Nixon went to China in 1972 from a position of strength, and it changed the world. Trump went to China in 2026 needing a win, trailing an entourage of American executives auditioning for access to 1.4 billion consumers. The world is changing again — just not in the direction we expected. And here’s the tell: The U.S. brought its CEOs. China brought its demands. When you need the other side’s market more than they need yours, you’re not negotiating — you’re applying.

Life is so rich,

P.S. For those in the back, the China Decode team is doing a live debrief of the summit on Substack this morning at 10 a.m. ET. Join the conversation here. And if you can’t make it, the recording will be available immediately following.

Few brands have fallen further faster in the past 18 months than America and AI. Last week, I wrote about the reckoning I see coming for America. This week, let’s talk about a reckoning I don’t believe will happen: the AI job apocalypse. Every generation gets its “machines will take your job” panic. This one just comes with better PR and a bigger balance sheet. The AI job apocalypse isn’t data-driven — it’s narrative-driven, engineered by people who profit when you’re scared. Fear is the product. Capital is the outcome.

Wash, Rinse, Repeat

I believe that, similar to every other technological innovation in history, AI will inspire job destruction that will result in an increase in productivity, profits, reinvestment, and (wait for it) jobs. The relevant question isn’t how many jobs we’ll lose / gain, it’s whether the velocity of disruption will overwhelm that period of adaptation and recovery. There are three scenarios: The AI bubble bursts; AI delivers as promised, but on a slower timeline; and AI disruption comes faster than the market can adapt and respond.

Labor Market Narratives

Recently, Anthropic CEO Dario Amodei warned that 50% of entry-level tech, legal, consulting, and finance jobs will be completely wiped out within five years. Last year, he told Axios the “white-collar bloodbath” could spike unemployment to 20%. In 2023, when the AI narrative felt more optimistic, Elon Musk said, “There will come a point where no job is needed … AI will be able to do everything.” In 2021, a year before launching ChatGPT, Sam Altman wrote, “The price of many kinds of labor will fall toward zero once sufficiently powerful AI joins the workforce.” Translation: AI is an extinction-level event for workers … according to those who benefit most from AI being an extinction-level event.

Their story is as old as the Industrial Revolution. In Narrative Economics: How Stories Go Viral and Drive Major Economic Events, Nobel Prize-winning economist Robert Shiller argued that fears about machines replacing human labor contributed to 19th century economic downturns. Later, science fiction reinforced the narrative, feeding the incorrect belief that automation caused the Great Depression. Fears about the rise of computers exacerbated the double-dip recession of the early 1980s. The danger, according to Schiller, isn’t labor disruption, but the narrative’s negative feedback loop. “The economic hardships created by a temporary recession or depression are mistaken for the job-destroying effects of the machines, which creates pessimistic economic responses as self-fulfilling prophecies.”

I believe we have the makings for the kind of self-fulfilling prophecy Schiller warned about, as AI-washing masks inflation, tariffs, and over-hiring. Consider tech workers, the supposed canaries in the coal mine. Net technology employment in the U.S. grew from 8.7 million in 2020 to 9.6 million in 2023 and has remained flat since then. Not great, but by no means apocalyptic. Oracle, which laid off 18% of its workforce in March and is projecting negative cash flow until 2030, isn’t capturing AI efficiencies, it’s trading people for chips. Last month’s announcement that Meta would cut 10% of its workforce fed AI anxiety, but in reality Meta is returning to its 2021 headcount. Microsoft’s 7% layoff target would reduce its headcount to 2022 levels, but even after those cuts, Microsoft would still have 47% more workers than it did the year before the pandemic. Since xAI’s 2023 founding, its headcount has grown to an estimated 5,000 people. In March, Musk announced that Tesla would increase headcount, adding, “the output per human at Tesla is going to get nutty high.” The following month, Tesla laid off 10% of its workforce due to poor sales. What we’re seeing isn’t the prelude to a job apocalypse, but a low-hire, low-fire labor market where unemployment rates for tech workers and everyone else are converging around the Fed’s target rate of 4%.

Progress Is Turmoil

Catastrophizing is a narrative device the hyperscalers deploy to divert capital flows to them and justify their capex. Every new technology in history has gone through a similar arc of creative destruction. I don’t see why AI is any different. As economist Joseph Schumpeter observed in 1942, “economic progress, in a capitalist society, means turmoil.” So far, the turmoil attributed to AI has been more hot air than hard data.

Bubble (Scenario 1)

Last fall, I wrote that America is one big bet on AI, as the Mag 10 account for 40% of the S&P’s market cap. Since ChatGPT launched in November 2022, AI-related stocks have registered 76% of the S&P 500’s return, 87% of earnings growth, and 90% of capital spending growth. If AI sneezes, the rest of the economy will catch a cold, i.e., plunge into recession. Based on Schiller’s analysis, we’d likely blame AI. Nevertheless, according to Ernie Tedeschi, chief economist at Stripe and former chief economist for the White House Council of Economic Advisers, layoffs come in “recessionary bursts,” rather than the moment technology renders a profession obsolete. “Widespread displacement of travel agents didn’t happen immediately during the dot-com boom,” Tedeschi wrote. “Rather, it was the bust that drove displacement.” When the economy recovered, however, professions rendered obsolete by technology didn’t return to pre-downturn levels. But the profession doesn’t entirely disappear, either. Travel agents still exist, though they’re more sensitive to future downturns relative to the broader labor market, suggesting that as jobs gradually disappear, more workers pivot.

Jevon’s Paradox (Scenario 2)

Maybe there isn’t a bubble, or if there is, maybe it doesn’t burst. (Bubbles are visible only in retrospect.) Assuming the velocity of recovery outpaces the disruption, new efficiencies will lead to increased productivity, resulting in rising margins, funding new businesses, employing people in jobs that didn’t previously exist, expanding growth. This is Jevon’s paradox. When a resource becomes dramatically cheaper to use, we don’t use less of it — we find a million new uses for it. If that sounds painless, keep reading. In March, Anthropic published the most detailed empirical map yet of AI’s penetration into the labor market, finding that in business and finance occupations, AI could theoretically cover 94% of tasks — tied with occupations in computers and math. Pain is on the horizon, as tasks that can be automated will be automated during the next downturn.

But the tasks professionals perform have never been fixed, according to Eldar Maksymov, an accounting professor at Arizona State University. After the release of the first electronic spreadsheet in 1979, people predicted accountants would face mass unemployment. Instead, after adjusting for population growth, the number of accountants increased 4x over the next 40 years. “In every major occupational group that adopted computers heavily, employment grew faster than in groups that did not,” Maksymov wrote. “Computers eliminated specific tasks within jobs — but the resulting cost reductions created so much new demand that the occupations expanded overall.” Looking at AI, he concludes that the future of every knowledge profession hinges on a single question: Is human demand for analysis, oversight, and assurance elastic?

I believe it is. Case in point: computer programmers. They’re coding less and thinking bigger, according to journalist Clive Thompson, who interviewed more than 70 programmers in Silicon Valley and at small firms across the U.S. As he noted, “a coder is now more like an architect than a construction worker.” One executive Thompson interviewed put it this way: “I have never met a team at Google who says, ‘You know, I’m out of good ideas.’ The answer is always, ‘The list of things I would like to do is nine miles longer than what we can pull off.’” But as the cost of execution drops, new demand will likely come from areas that previously didn’t have access to programmers. “Several developers suggested that the number of software jobs might actually grow,” Thompson wrote. “An untold number of small firms around the country would love to have their own custom-made software, but were never big enough to hire, say, a five-person programmer team necessary to produce it.”

Permanent Underclass (Scenario 3)

The most frightening scenario is one in which AI disruption outpaces recovery velocity, hits every sector simultaneously, and encounters little pushback from policymakers. But this ignores that societal tumult usually isn’t due to unemployment, but people who are working yet still hungry, resulting in a loss of economic dignity and narratives to assign blame. If it sounds as if we’re already there, trust your instincts.

Inside Silicon Valley, the vibe is bleak. As Jasmine Sun wrote in the New York Times, “Most people I know in the AI industry think the median person is screwed, and they have no idea what to do about it.” Worse, many say that artificial general intelligence — a technology that may never materialize — will create a “permanent underclass.” That belief is fueling a last-chopper-out-of-Saigon mentality where people see a “limited window” to build wealth before AI and robotics fully replace human labor. I believe this is a consensual hallucination. Techno-narcissists have overindexed on the rapid advances in AI capabilities while completely ignoring … everything else.

Fear & Loathing

AI’s popularity is correlated to wealth, with only those earning more than $200,000 per year viewing AI as a net positive. That’s not a reflection on AI, but yet another signal that the incumbents (the old and the wealthy) have successfully hoarded opportunity. In other words, the AI jobs freak-out is the latest act in America’s ongoing wealth inequality drama. The Gini coefficient is how economists measure inequality: Zero indicates everyone has exactly the same wealth; a score of 1.0 means one individual owns everything. In the U.S., we’re higher than 0.8 — about the level seen when the French began separating people from their heads. The real disruption won’t come from AI, but from the public watching arsonists sell smoke detectors and call it innovation.

The AI job apocalypse isn’t an economic forecast — it’s a marketing strategy. We’re not witnessing the end of work. We’re watching the monetization of fear.

Life is so rich,

P.S. A few tickets remain for the Markets podcast tour. We’ll be recording live, with special guests, in San Francisco (sold out, sorry), Los Angeles, Miami, Chicago, and New York, where Anthony Scaramucci will join Ed and me on stage. Buy tickets here.

Minutes after a gunman attacked the White House Correspondents’ dinner last Saturday, millions of Americans, on the left and the right, theorized the attack was staged. This is only the latest example of our worst instincts running amok, leading us to ignore Lincoln’s urging to call on “the better angels of our nature.” So far, those calls have been sent to voicemail. I believe the U.S., after a decade of breaking laws and blowing past norms, is headed for a reckoning.

Crisis

In my NYU Brand Strategy course, I teach a section on crisis management. The playbook: Acknowledge the issue, take responsibility, and overcorrect. As Anthropologist Victor Turner observed, leaders perform rituals to repair social breaches. In his 1957 book Schism and Continuity in an African Society, Turner laid out the four-act structure of his Social Drama Theory: breach, crisis, and redress, followed by either reintegration or recognition of a schism.

Observing the Ndembu people in what is now Zambia, Turner witnessed an ambitious young man trigger a social drama by publicly refusing to share meat from the hunt — a violation of tribal norms and a direct challenge to his uncle, the chief. The breach spiraled into a village-wide crisis, forcing everyone to take sides and exposing tensions in the group’s social structure. In the end, rituals meant to repair the breach failed, and the young man left the group to form his own village. Over the course of his career, Turner built on his Social Drama Theory, applying it to his understanding of political contests, legal disputes, and other social conflicts. According to Turner, every crisis pits our ties to the larger group against our deeper loyalties to individual leaders or factions. In other words, the most devastating fractures aren’t caused by outside enemies, they come from within.

Breaches

Future historians will debate where to locate Act One (the breach) of America’s current social drama. When the country elected a man who bragged about grabbing women by their genitals, or when we re-elected a convicted felon and insurrectionist? Or when masked federal agents started murdering and disappearing people? Maybe the breach occurred earlier, with atmospherics that made Trump’s election possible? The 2008 financial crisis blew up the housing market, sent unemployment above 10%, and reduced household wealth by 26%. The result wasn’t prison sentences, but bonuses (Obama). Two breaches occurred on George W. Bush’s watch. He responded to 9/11 by lying about weapons of mass destruction to justify invading Iraq — the biggest intelligence failure since Pearl Harbor — while losing momentum in the hunt for Osama Bin Laden. The bungled response to Hurricane Katrina in 2005 and Bush’s tone-deaf remarks crystallized the image of an indifferent and inept government. Bill Clinton lowered the Oval Office bar. Ronald Reagan’s Iran-Contra affair was a modern triangle trade that sent arms to Iran in exchange for hostages, funded a secret war in Central America, and, according to journalist Gary Webb’s reporting, inflicted the crack cocaine epidemic on American communities. Another Reagan breach: Turning his back on the tens of thousands of people who died of AIDS on his watch. The list of executive breaches goes on.

If the executive branch is the monster, Congress is Dr. Frankenstein. Since World War II, the legislative branch has slowly delegated its powers, acquiescing in the face of presidential expansion — washing its hands of wars, scaling back oversight, outsourcing rules and regulations, and weakening its authority to tax and spend. Meanwhile, a seat in Congress has become the ultimate get-rich-quick scheme, as lawmakers are effectively immune from insider trading prosecutions. In 2024, Republicans David Rouzer and Susan Collins registered returns on their investments of 149% and 77%, respectively; Democrats Debbie Wasserman Schultz and Nancy Pelosi performed slightly worse, at 142% and 71%. The S&P, a decent proxy for your retirement portfolio, returned 25% that year.

The question isn’t why Congress’ approval rating is so low, at 10%, but why it’s that high. Fourteen of the past 20 national election cycles have been “change elections,” with the out-party retaking the White House or at least one chamber of Congress. But the only real change since 2000 has been a 3x increase in the share of Americans who say the government is the most important problem facing … America. In a recent interview, former Senator Ben Sasse said government is a tool of the people. Imagine a power drill becoming sentient and coming for our eyes.

Healing

Healing from a breach requires what Turner called redressive action. Modern societies deploy legal and political processes (rituals) to balance competing forces — truth, justice, forgiveness — as they attempt to repair the rift. After apartheid, South Africa’s Truth and Reconciliation Commission provided a healing framework by giving citizens the opportunity to bear witness. “Whites can no longer deny what took place,” Afrikaner journalist Antjie Krog wrote. “The Commission revealed the extent to which apartheid dehumanised … and it introduced a moral language in which the past could be confronted.” After World War II, the allies secured justice via the Nuremberg trials. But the healing process continues through the concept of Vergangenheitsbewältigung — “the struggle of overcoming the past” — which shapes German political culture to this day. After reunification, Germany repeated the exercise, creating the Stasi Records Agency so citizens could read their secret police files, providing healing with relatively few prosecutions.

U.S. history provides examples of healing, but our record is schizophrenic. After the Civil War, federal troops occupied the South, providing a (very limited) umbrella of security for free Black people, and, with the help of three Constitutional amendments, the promise of a more just and democratic society. Three years into Reconstruction, however, President Andrew Johnson issued a blanket amnesty to former Confederates, including Jefferson Davis and Robert E. Lee, taking treason off the table. A few years later, to promote reconciliation, Congress restored voting rights for most former Confederates. After the contested 1876 election, former Confederates leveraged their restored political power to end Reconstruction. As historian Eric Foner noted, “Reconstruction in some ways is still alive because the issues of Reconstruction have never been fully resolved in American society.” Jim Crow, the Civil Rights Movement, and the recent fights over Confederate monuments illustrate how that unresolved breach marches on like a zombie, infecting today’s politics.

In the wake of Watergate and President Nixon’s subsequent resignation, Gerald Ford pardoned his predecessor. “My fellow Americans, our long national nightmare is over,” Ford said in his 1974 inaugural address. “Our Constitution works; our great republic is a government of laws and not of men.” In pardoning Nixon, Ford was performing a forgiveness ritual in the form of a legal process. It didn’t work. Two-thirds of Americans at the time disapproved of the decision, and Ford’s approval rating dropped 21 points within a month of taking office. The crisis caused by Nixon’s power grab endures, casting its long shadow over opportunities to hold Trump accountable, including the decision to prosecute him for attempting to overturn the 2020 election. Ultimately, voters rejected the legal process in favor of a political one and reelected Trump, who immediately sought retribution against his political opponents and pardoned his J6 insurrection gang. Zooming out, our failures to confront history have contributed to a half-century-long erosion of trust in our institutions. The periodic exceptions: Trust briefly recovers when your party wins, making every election feel existential … because it is.

American Renewal

The midterms may provide a reckoning, but it won’t be the one the U.S. needs. Our divisions run too deep. One example: Prosecuting the rampant corruption of Trump’s family and associates will deliver justice, but if we fail to also address congressional corruption (insider trading, Citizens United spending) we’re putting a Band-Aid over a wound that needs to be cauterized. Does our society have the courage to go deeper and the attention span to see it through? My Yoda on American history is historian Heather Cox Richardson. Last time we spoke, I was struck by her optimism. “We’ve renewed our democracy in the past,” she told me, “and we have the tools to do it again.” Her advice: Channel Lincoln, who navigated a period of political instability and violence and renewed our democracy by appealing to the values expressed in the Declaration of Independence. Although Lincoln didn’t just appeal to values — he presided over 600,000 deaths first.

The question isn’t whether the U.S. can renew itself. History says yes. Americans yearn for better leadership. But this misses the point — the people running the country aren’t stupid, they’ve been incentivized to continue to engage in corruption, demonization, and the trampling of institutions and norms. We don’t have a leadership crisis but a consequence deficit.

Life is so rich,

P.S.

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How do you kill millions of people? A: slowly and methodically. Note: This isn’t advice, but an observation from my personal Yoda, the psychologist Daniel Kahneman. “The world makes much less sense than you think,” Kahneman wrote in Thinking, Fast and Slow. “The coherence comes mostly from the way your mind works.” Our brains have two thinking systems: fast (intuitive, emotional) and slow (logical, calculated). Fast thinking blames America for killing an estimated 250,000 civilians with atomic bombs; slow thinking notes Japan’s military killed 3 million to 10 million civilians during World War II. We’re moved by the cinematic power of mushroom clouds, not the death toll, because 95% of our thoughts are the product of fast thinking.

As Joseph Stalin supposedly said, “A single death is a tragedy; a million deaths is a statistic.” The statistical tragedies resulting from the closure of the Strait of Hormuz are invisible to the fast-thinking mind, which is fixated on energy prices, markets, and shitposts cosplaying as statesmanship. So let’s slow down and think about the second-order effects stemming from a world without freedom of navigation.

The Spice Must Flow

America’s earliest conflicts were fought to further the principle of freedom of navigation, i.e., the right to move goods across oceans without the threat of violence or the bribe of tribute. In 1798 we fought an undeclared war against France to stop it from seizing our merchant ships. A decade later we took on the British empire to stop it from kidnapping American citizens and forcing them to serve aboard its ships. Between those two wars, we fought two campaigns against the Barbary states in North Africa, ultimately ending the need for American merchants to pay bribes for safe passage. These conflicts are largely forgotten, save for two familiar artifacts: That “shores of Tripoli” line from The Marines’ Hymn and the Mameluke sword, which remains part of the Marine dress uniform to this day.

Those 18th century American sailors and marines laid the foundation for today’s global prosperity. Over the next 200 years, freedom of navigation evolved from an idea, available only to nations with the maritime firepower to enforce it, into a system of laws and norms that benefit everyone. Today, 85% of goods by volume and 55% by value are moved by sea. Already, the U.S.-Israel war on Iran has caused an (unevenly distributed) energy shock. In its second rapid assessment of the Hormuz crisis, the United Nations Conference on Trade and Development noted that increases in energy prices are spilling over into supply chains, “raising the cost of producing and moving goods across the world.”

Finding Out

This week marks the war’s two-month anniversary. The strait has been closed most of that time, but markets, while volatile, have hit record highs. Explaining the cognitive dissonance between bad news and market optimism, European Central Bank President Christine Lagarde said, “This is a crisis where we’re learning bit by bit, day by day what the consequences will be.” Because tankers and cargo ships move about as fast as bicycles, we’re only now beginning to transition from the fuck-around phase to the find-out phase. Some things we’re finding out:

• Karex, which makes a fifth of the world’s condoms, said it would raise prices by 30%, increasing the cost of safer sex and probably leading to unwanted pregnancies.

• Dow said it plans to double a previously announced 15¢-a-pound price hike for polyethylene, which is used to make bottles, bags, tubing, and textiles. The price increase follows a 10¢ boost in March.

• The U.S. Postal Service announced a temporary 8% surcharge on packages, meaning everything you buy online just got more expensive.

Essential Element

Helium is abundant in the universe but rare on Earth. Between the closure of the strait and damage to Qatar’s production facilities, 30% of the global helium supply has been disrupted. Spot prices for the gas have doubled since the start of the war. But even if the conflict ends soon, experts say it could take years for Qatar to repair its damaged production capacity. Meanwhile, U.S. helium suppliers have begun notifying customers that they won’t be able to fulfill orders. “This is the big one that we always feared would happen, it’s the black swan event,” Cliff Cain, an executive at the helium exploration company Pulsar, told the Wall Street Journal. “It is just going to be a building crescendo of who’s going to be able to get their molecules and who is not.”

Helium molecules are embedded throughout the supply chain, and in many cases there’s no good substitute. Affected sectors include semiconductors, aerospace, and fiber optics. The AI build-out is especially vulnerable, as helium is used to produce chips and cool data centers. Eventually, constrained supply will meet the AI boom’s increasing demand. “There’s no physical shortage right now at the end-user level,” a helium industry consultant told Scientific American. “It’s like a nice sunny day on the beach, but you heard there’s a tsunami out there.” When the tsunami hits it will pit AI against healthcare. In the U.S., one-third of the total helium supply is used to cool MRI machines. Healthcare systems are already talking about passing costs on to patients and rationing care.

Humanitarian Crisis

Since the start of the war, prices of urea and ammonia — the two most common nitrogen fertilizers — have risen by 65% and 40%, respectively. An estimated 30% of the world’s fertilizer passes through the strait, further straining already crimped global fertilizer production. In Russia, the world’s No. 1 fertilizer exporter, plants have been targeted by Ukrainian drones; one recent attack temporarily knocked out 5% of Russian production capacity. China, the second-biggest exporter, banned exports to guard domestic supply. In the U.S., higher fertilizer prices will hurt some farmers more than others, depending on their location and whether they bought fertilizer ahead of the spring planting season. U.S. futures markets have already priced in higher fertilizer costs, but if the strait remains closed into the summer, next year’s food prices will rise.

For poor nations, the crisis is here. An estimated 500 million farmers produce 70% of the world’s food supply on farms smaller than 24 acres. Their margin for error is zero. The longer supply chains remain jammed, the worse it gets. One analytics firm estimates that a six-month disruption will spike global food prices by 12% to 18% above pre-war levels by the end of the year. Germany’s Kiel Institute predicts food-price inflation will reach 30% in Zambia, 11% in India, and 8% in Venezuela within a year. By midyear, the World Bank estimates 45 million people, mostly in developing nations, will experience acute hunger. According to Michael Werz of the Council on Foreign Relations, we’re witnessing a “slow-motion famine machine.” Compounding the suffering, wealthy nations cut development assistance 23% from 2024 to 2025. As a UN official told the Economist, “The humanitarian shock absorber isn’t there anymore.”

Famines are humanitarian crises in their own right, but they can also precipitate riots, revolution, and war. Marie-Antoinette likely never said “Let them eat cake,” but the infamous line speaks volumes about the immediate cause of the French Revolution. The average 18th century worker spent half their daily wage on bread. After grain crops failed in 1788 and 1789, bread prices in the country spiked to 88% of the daily wage, lighting the fuse for the violence that followed. Food insecurity also set the stage for the Arab Spring. As a Jordanian activist told Time in 2011, “This is a hunger revolution.” From a political stability standpoint, food insecurity is both a cause and consequence of violence, contributing to a vicious cycle UN researchers call a “conflict trap.” Aeschylus was correct: The first casualty of war is the truth. But in a globalized world, casualties continue to mount long after the initial conflict and supply chain disruption are resolved.

Toll Booths

Fighting a war to open a waterway that was open before hostilities began is stupid, i.e., we’re hurting others while hurting ourselves. But that’s me thinking fast. Thinking slowly, the stupidity compounds and metastasizes. The strait isn’t open, but it isn’t entirely closed either: Iran has created a toll booth where previously there was free sailing. The economic consequences of a single toll booth are small. As the Brussels think tank Bruegel noted, the Gulf nations would pay a toll that amounts to $1 to $2 per barrel, increasing the global price by only $0.05 to $0.40 per barrel — a hit that wouldn’t register for consumers. The danger isn’t the toll, but the precedent. “The concept of the blue highway is going away,” Salvatore Mercogliano, a former naval officer and associate professor of history at Campbell University in North Carolina told the Wall Street Journal. “We won’t see a return to the normalcy we had prior to this no matter what.” One ominous sign? Iran is collecting tolls in crypto and Chinese Yuan, undermining dollar supremacy. The greater risk, however, is that toll booths will spread. “If the world accepts paying tolls for the Strait of Hormuz, then how do we handle the claim China has made that the entire South China Sea is Chinese territorial waters?” asked retired U.S. Navy Vice Admiral John “Fozzie” Miller. “If they control the South China Sea, they essentially control the global economy.”

Gangsterism

The nightmare scenario isn’t worldwide toll booths or even simultaneous blockades. We can tolerate higher prices and more frequent disruptions. What we shouldn’t tolerate is a descent into gangsterism. In the U.S., Donald Trump has undermined capitalism and the rule of law. (See: TikTok, tariffs, deploying prosecutions to attack Fed independence and political opponents, etc.) Trump’s strategic incompetence in Iran is exporting gangsterism to the world. In effect, we’re trading in our world policeman badge for regional protection rackets. That’s not the art of the deal, but the illusion of the steal. The question isn’t whether America has the economic and military firepower to prosper in Trump’s gangster paradise, but what we lose when we abandon the rules-based order we helped create. A: Everything.

Life is so rich,

P.S.

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It’s more interesting, and you sound smarter, to catastrophize vs. articulate the arc of history: Things will likely get a bit better … every day … yawn. But it’s always healthy to ask, “What could go right?” Last week, with so many things on Earth going wrong, something went right — in space. Let’s talk about NASA’s Artemis II mission.

Houston, We Need a Story

One query I get often: “What class/skill would you suggest our kids take/learn to compete in the modern economy?” A: Storytelling. The flow of capital, like the trajectory of history, clots around compelling stories. Entrepreneurs, aka storytellers, deploy a narrative that captures imaginations and capital to pull the future forward. Before America was a nation, it was a story told by traitors who recast their rebellious colonies as bastions of liberty and themselves as patriots. Mastery of narrative is humanity’s superpower, as the arc of evolution bends toward good storytellers. Communities with a larger share of skilled storytellers experience greater levels of cooperation and procreation. Storytelling reinforces their evolutionary resilience, efficiently transmitting survival-relevant information.

At the beginning of the space race, the story was about Soviet pioneering and American stagnation. The Soviet space program had put the first satellite into orbit (Sputnik), sent the first dog into space (Laika), and completed the first manned mission (Yuri Gagarin). So, how did we beat the Soviets to the moon in less than a decade? A: We changed the story from one about us falling behind (the space race) to one we could win (the moon race). Privately, President John F. Kennedy told NASA administrator James Webb he wasn’t that interested in space, but he said we were going anyway to “demonstrate that starting behind … we passed them.” In his 1962 speech at Rice University in Houston, JFK tapped into a sense of national urgency. He defined space as a new frontier and leveraged America’s competitive, pioneering spirit with a call to action: “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard; because that goal will serve to organize and measure the best of our energies and skills … and we intend to win.” JFK’s story pulled the future forward by capturing America’s capital (5% of federal spending at the height of the Apollo program) and imagination, especially among young people. A number of NASA’s key scientists and engineers were in high school or college when JFK gave his speech. Seven years later, when Neil Armstrong and Buzz Aldrin landed the Eagle module at a site later named Tranquility Base, the average age at mission control was 28.

The narrative arc continues to bend toward expanding human knowledge, as JFK’s story inspired multiple generations to dedicate their careers to science and engineering. As President George H.W. Bush explained nearly two decades after it ended, the Apollo program was “the best return on investment since Leonardo da Vinci bought himself a sketchpad.” By one estimate, every dollar spent on the moon race returned $7 in economic growth over the following decade.

Artemis II

When we think about the Apollo story, we jump-cut from Kennedy’s speech (act one) to Aldrin and Armstrong planting a flag on the moon (the climax). The Artemis program, named for Apollo’s sister in Greek mythology, is the beginning of the next chapter in human space exploration. At first glance, sending four astronauts on a 252,757-mile roundtrip journey to the moon — breaking the distance record for manned space flight previously held by Apollo 13 — seems like a sequel nobody asked for. Three years ago, when NASA announced Artemis II, the first manned mission in the program, Stephen Colbert asked an obvious question: “Why are we going back to the moon?” In response, Mission Commander Reid Wiseman said, “Because we want to see humans on Mars.” Bold.

Artemis II was a shakedown flight to test the Orion spacecraft, similar in purpose to Apollo 8 — the first manned mission to orbit the moon and return. Success sets the stage for a moon landing in 2028, and more important, the establishment by 2030 of a permanent lunar base. In the short term, a permanent lunar base can be a proving ground for operating in deep space. Long term, this is about water, i.e., space oil. Sending one kilogram of material to the moon currently costs an estimated $1.2 million. But if NASA can turn ice at the moon’s poles into hydrogen (fuel) and oxygen (life support), it’ll transform space economics. A moon base could become a staging point for further space exploration, without having to rely on expensive resupply missions from Earth. Philip Metzger, an expert on spaceflight engineering at the Florida Space Institute, told National Geographic that a permanent lunar base puts us on a path, within a few years, for monthly moon missions. Read that sentence again. We choose to go to the moon … every month. Apollo was the Wright Brothers at Kitty Hawk; Artemis is jet travel. “This is the moment where we should all start believing again, when ideas become missions and when hard work delivers world-changing accomplishments,” NASA Administrator Jared Isaacman said in March. “NASA once changed everything, and we’re going to do it again.” The ambition is real. The funding, less so — NASA’s story hasn’t attracted the same flow of capital as the Apollo program, which peaked at 4x the spending of Artemis, adjusted for inflation.

Crew

One of NASA’s longest-running debates is the value of crewed vs. uncrewed missions. In 2008, Nobel Prize-winning physicist Steven Weinberg argued in Smithsonian magazine that science takes a backseat to astronaut safety on a crewed mission. “Manned missions to space are incredibly expensive and don’t serve any important purpose,” he wrote. “It isn’t a good way of doing science, and funds are being drained from the real science that NASA does.” But according to John Logsdon, professor emeritus at George Washington University and founder of its Space Policy Institute, exploration is about testing the belief that humans can become a multiplanetary species. We “have to be able to live off the land and do something worthwhile,” he wrote in response to Weinberg. “Exploration lets us find out whether both of these are possible.”

I believe the question isn’t whether or not to send humans, but which humans to send. Stories deploy audience surrogates, i.e., heroes. As Will Storr, author of The Science of Storytelling wrote, the human brain is “a story processor … designed to absorb the story world of the groups we identify with.” Gene Roddenberry created Star Trek to tell stories about the (mostly human and Vulcan, i.e. humanoid) Enterprise crew, not the ship. As Captain Kirk said at the beginning of each episode, it was about people choosing “... to boldly go where no man has gone before.”

In 2021, when Jeff Bezos and Richard Branson began selling six-, seven-, and eight-figure tickets to the Kármán Line, I wrote that they were a new breed of space traveler: The egonaut. Nobody identified with these imposters. We paid attention to their rocket-powered branding events with a mix of loathing, mockery, morbid curiosity, and the sinking feeling that billionaires would rather burn cash on their Martian escape fantasies than pay taxes to make Earth more habitable. Artemis II is a different story, because these are our astronauts, they are us. Three years ago, then-NASA Administrator Bill Nelson said of the Artemis II crew, “Each has his or her own story, but together they embody our credo: E pluribus unum, or ‘Out of many, one.’”

Commander Wiseman is a former naval aviator and decorated test pilot. He’s also a single dad, who named a lunar crater after his wife, Carol, who died of cancer in 2020. His crew is equally exceptional: Two accomplished military pilots and an electrical engineer who spent nearly a year living aboard the International Space Station. For a country poisoned by rising White nationalism, entrenched misogyny, and isolationism, the Artemis II crew is an antidote. It included the first Black astronaut (pilot Victor J. Glover), the first female astronaut (mission specialist Christina Hammock Koch), and the first non-American astronaut (Canadian mission specialist Jeremy Hansen) to travel to the moon. As individuals, each broke barriers, but as a crew they achieved greatness, as greatness is in the agency of others. “A crew is a group that is in it all the time, no matter what, that is stroking together every minute with the same purpose, that is willing to sacrifice silently for each other, that gives grace, that holds [each other] accountable,” Koch said. The Artemis II crew went to the moon, not for the money — astronaut pay tops out at around $150,000 per year — or to serve their egos, but for us. As Mission Specialist Hansen said at liftoff: “We go for all humanity.”

Moon Joy

Confession: I posted a lot of Artemis pictures, but privately wondered, “What’s the big deal, we’ve already been to the moon?” I didn’t experience “moon joy,” a phrase from CapCom that went viral, creating a rare moment of unity and good will. This week, Mia Silverio, my research lead, wrote that NASA is one of the most underrated brands in the world. Many luxury brands, hundreds of rappers, and Ariana Grande have associated themselves with NASA or its logo. NASA’s cultural cachet is … wait for it … on another planet. The average age of the Prof G research and production team is 25. They never saw us land on the moon (the Apollo programs ended in 1972). The Challenger disaster is something their parents remember. In their lifetimes, our biggest moments in space have been probes (great science, no story), commercial space flights and reusable rockets (great stories … for investors), and tourism (a story nobody wants). The Artemis program offers a story to inspire today’s young people, just as the Apollo program inspired my generation.

The reason the Artemis II story is so much more compelling is not the script, but the actors. The crew fits a decent definition of an aspirational vision for masculinity (a wonderful attribute not sequestered to people born as male). These impressive people are optimizing for service, vs. attention. This story is a welcome reminder, to those whose lived experiences are shaped by forever wars, financial crises, pandemics, and an insurrection, that America is still capable of moonshots. Still capable of going where no person has gone before. Still capable.

We aren’t going back, we’re going farther …

Life is so rich,

P.S.

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Here’s a question for you: What was last week’s most important headline? Was it Trump’s address to the nation (where he told us nothing)? Was it the jobs report (which will likely be revised down)? Was it the firing of Pam Bondi (who’ll likely be replaced by someone worse)? No. Last week’s most important headline was something else. Per The Wall Street Journal: JUDGE HALTS CONSTRUCTION OF TRUMP’S WHITE HOUSE BALLROOM.

We’ll get to why this matters in a moment. But first, a quick refresher on this ballroom. Last summer, President Trump announced plans to build a 90,000-square-foot ballroom for a proposed budget of $200 million. (That budget has since doubled.) In order to do this he needed to demolish the East Wing, a historic portion of the White House complex that was built more than a hundred years ago. This was a controversial decision that required permission from Congress, however Trump didn’t seek any permissions and tore down the East Wing anyway, giving rise to one of the most iconic and disturbing images in recent memory.

That was the East Wing seven months ago. Fast-forward to today: The structure remains obliterated, a giant crater in the middle of one of our nation’s most historic sites. It’s an unpleasant sight, but one we assumed was temporary … until last week. A federal judge ruled the ballroom project unconstitutional, which means the ballroom may never get built — but, more importantly, the East Wing will remain in ruins for the foreseeable future.

This obviously matters for historic, ceremonial, and architectural reasons, but also for another reason more profound. The ballroom has become a metaphor for the president’s entire approach to policymaking. It is the mirror image of every major executive decision that has reverberated across economies, markets, and borders. It’s U.S. policy, if U.S. policy were a building.

I have a name for this strategy. I call it BNFL: “Break Now, Fix Later.” It describes the President’s tendency to break things (often old and historic) and promise to build something “bigger” and “better” in their place, until he realizes he doesn’t actually have the wherewithal (or the constitutional authority) to get it done — at which point he becomes bored and moves on to the next shiny object. The end result is that “the builder” never actually builds anything, but mostly just destroys things. Break Now, Fix Later.

As we shall see, BNFL describes almost every important decision the president has ever made — and it may help us predict those he’ll make in the future as well.

Iran

Let’s start with the crisis du jour: Iran. It’s still not entirely clear why we attacked the country. Supposedly, it’s because Iran’s nuclear capabilities had grown significantly, even though the president literally told us last summer that they were obliterated. Either way, the general idea was that Iran posed an “imminent threat” due to its belligerent regime, led by Supreme Leader Ayatollah Khamenei. The solution, then, was obvious: Install a new regime. Indeed, Trump said regime change would be the “best thing that could happen.”

As with the ballroom, the regime change operation kicked off by tearing things down. The U.S. launched more than 12,000 airstrikes on Iran, hitting 11,000 targets and more than 150 vessels. It also (according to preliminary investigations) destroyed a girls’ elementary school, killing over a hundred children in the process. Trump quickly swept those details aside and hailed the successful assassination of Ayatollah Khamenei, which brought the murderous dictator’s regime to an end.

A few days later, we learned who’d be running the new regime: the dictator’s son. Yes, the Iranian succession plan went exactly according to script — only instead of the 86-year-old Ayatollah dying of natural causes (which was already imminent), he was assassinated by the nation’s sworn enemy. So not only did we not install a more friendly regime, we made the existing regime even angrier and more radical.

Soon after Khamenei Jr. was installed into power, Trump arrived at the “fix later” part of the operation. The “goal has been attained” he said. “We’ll be leaving very soon … within two weeks.” Few believed his new timeline after he blew the first one. But what’s more important is the sentiment: The operation was more tiring and complex than he bargained for — he’s over the whole Iran thing.

A trail of destruction is left in his wake. Not just in terms of lives (nearly 4,000 and counting) but the economy, too. U.S. gas prices have risen more than 30%. In Europe, they’re up more than 50%. Fertilizer prices, an essential input cost for food, have risen nearly 50%. Construction material prices are ballooning, which will lead to even higher housing costs. Investors went from expecting multiple rate cuts this year to expecting a rate hike, and recession odds have risen almost 10%. As I wrote a couple weeks ago, this war is making all of us poorer. In sum: Lots got broken and nothing got fixed.

Tariffs

The same pattern played out last year, in what has become Trump’s most defining policy: tariffs. On “Liberation Day,” Trump invoked the International Emergency Economic Powers Act to authorize the largest tariff hike on foreign imports in nearly a century in an attempt to reign in the trade deficit. Many of our closest allies were blindsided with rates as high as 50%. He even tariffed the Heard and McDonald Islands, a territory inhabited by only seals and penguins.

Chaos immediately ensued. The S&P 500 sold off nearly 10% — its largest weekly drop since the pandemic, erasing $5 trillion in market value. As Trump started to ease and pause tariffs, markets recovered — but supply chains didn’t. Nearly a third of all sea shipments were canceled immediately. As import costs rose, companies began to pass on those costs to their customers. Within a few months inflation was ripping upward again, as nearly 80% of the tariff burden was funneling down to the consumer. The average American was facing an estimated $2,000 annual financial loss, according to The Yale Budget Lab.

Things got even stupider when the Supreme Court determined in February that the tariffs were illegal. This wasn’t a difficult decision: Trump had falsely claimed emergency powers and levied a tax on Americans without congressional approval. As Founding Father James Madison put it, “Congress alone has access to the pockets of the people.” The U.S. government must now return the $160 billion it had collected over the course of the tariff saga. (In other words, this was all for nothing.) Ironically, despite bearing the majority of the costs, consumers won’t see a penny, as they did not directly pay the tariffs themselves. So not only did we not get anything done, we also set back American households even further. #BNFL.

DOGE

A major component of the Trump 2.0 agenda was to reduce wasteful government spending. The goal was, in Trump’s words, “to do what has not been done in 24 years: balance the budget.” So he created the “Department of Government Efficiency” and employed Elon Musk to get it done.

Within days it was clear that Elon and Trump had a shared passion for blowing things up. They immediately ripped up thousands of contracts, fired more than 200,000 government workers, and fed an entire agency known as USAID “into the wood chipper.” It’s estimated the elimination of USAID (which specialized in foreign assistance) will lead to nearly 10 million preventable deaths over the next four years. A high price, but a price they were willing to pay.

That was until DOGE got shut down. After a highly predictable falling-out between the president and Mr. Musk, the agency was quietly dissolved and its employees let go. The department said it saved $215 billion. Independent analyses have concluded the real number was a fraction of that, but for simplicity’s sake we’ll go with it. On Elon’s own terms, those results were underwhelming: His original projection was $2 trillion.

It wouldn’t be a true BNFL, however, if Trump didn’t actively make matters worse — and in the case of government efficiency, that’s exactly what he did. Right as Elon was canceling spending plans, Trump was building a new one: the One Big Beautiful Bill Act, which would prove to be one of the largest government expenditures in American history. The bill both reduced revenue and increased spending, loading up our government with an additional $850 billion in expected interest payments and adding an estimated $4.2 trillion to our national debt over the next decade. There is no bill less efficient than this, which begs the obvious question: What was DOGE even for?

Take Your Pick

So far we’ve reviewed three major policy decisions, each of which were quintessentially BNFL, but let’s be clear, there have been plenty more. For example:

• Promising (threatening) to “take” Greenland, thus ruining our relationships with NATO allies, only to get distracted and ultimately reverse the decision on the global stage.

• Pressuring the Fed chair to cut rates (and threatening to fire him), which eventually raised yields as investors priced in the danger of an un-independent Federal Reserve, only to walk back his comments and let Powell play out the rest of his term.

• Pursuing greater energy independence with “drill, baby, drill” policies, which actually just meant gutting clean-energy programs. This backfired when we spiked oil prices with yet another war in the Middle East, making us even more in need of renewable energy than we already were.

Like the ballroom, each policy starts with a grand vision that could feasibly be framed as a net positive for society but is soon followed by a cynical fit of destruction. Then, once it’s time to actually build the thing, the circumstances suddenly change and it’s no longer possible. The strategy amounts to annihilation. It’s “move fast and break things,” minus the innovation.

Two Interpretations

There are two ways to interpret the BNFL strategy. One reading is that Trump is simply in over his head. After all, it’s easier to break things than to make things. To build anything worthwhile, you have to invest time and effort, you have to achieve a consensus, you have to pay attention to detail — and the president has no interest in any of these things.

There’s also a darker interpretation, however, and although I don’t necessarily believe it, I think it would be unwise to rule it out. That reading is the following: Maybe he genuinely only wants to destroy things. Maybe this systematic pattern of destruction is by design, and his promises to build things anew are in fact lies meant to conceal his thirst for destruction. That would make him a psychopath, sure, and psychopaths are rare. At the same time, though, the probability that a series of policies would all lead to the same destructive end by accident is … equally rare. Again, I’m not saying I believe this interpretation. I’m just saying it’s possible.

Artemis

I’ve struggled to write this, as every time I try to type my mind returns to Artemis II. More specifically, it returns to the mission’s recent photograph of Earth, which will go down as one of the most iconic images ever.

The image is a reminder that to build anything worthwhile takes time. It took nearly a decade of planning to send these astronauts into space. The astronauts themselves prepared for this specific mission for more than three years. The operation didn’t just involve them, but the coordinated efforts of tens of thousands of people. Nothing this hard could ever get done without collaboration and planning.

In a way, it’s the opposite of BNFL. Build now, fix … forever. A stark contrast to the image with which this post began.

P.S.

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When you compress the carotid arteries, you cut off the flow of oxygenated blood to the brain. This causes unconsciousness in approximately 8 to 15 seconds due to cerebral hypoxia (oxygen deprivation to the brain). Globalization has expanded the economic corpus, resulting in an interconnected world and yielding huge — though unevenly distributed — prosperity. It has also formed carotid arteries the size of … wait for it … the Strait of Hormuz.

In 1984 a forgettable made-for-TV movie contemplated a Middle East conflict that closed the Strait of Hormuz. For decades, U.S. strategic simulations have explored similar scenarios. In one 2002 war game, the Red Team, deploying asymmetrical capabilities, including armed speedboats, decimated American naval forces in 10 minutes, effectively closing the Strait. Why didn’t the Trump administration anticipate this entirely predictable scenario? A: Despite a warning from the chairman of the Joint Chiefs of Staff, the president determined that the regime would capitulate before closing the strait, and that if it didn’t, the U.S. military could reopen it. He was wrong. This may be the greatest intelligence failure since CIA Director George Tenet famously told Bush it was a “slam dunk case” that Iraq had WMD. But let’s put aside the chokepoint (almost) everyone saw coming and discuss some others we choose to ignore.

Jekyll and Ketamine

Last year, one company conducted 84% of U.S. space launches and 52% of global launches: SpaceX. Almost two-thirds of the satellites orbiting Earth belong to the company, but it really dominates in low Earth orbit, where it owns 91% of communications satellites. If you’re connecting from a cellular deadspot, going online while flying one of 30-plus airlines, out on a boat, or operating in a war zone, you’re at Elon Musk’s mercy. He recently combined SpaceX with xAI at a valuation of $1.25 trillion, registering a 43% equity stake and 79% of the voting power. This week, SpaceX filed to go public, seeking to raise $50 billion to $75 billion, meaning Musk will likely become the world’s first trillionaire. He says he’s “creating the most ambitious, vertically integrated innovation engine on (and off) Earth, with AI, rockets, space-based internet, direct-to-mobile device communications, and the world’s foremost real-time information and free-speech platform.” In other words, a global communications and information chokepoint.

With Musk, sometimes you get Dr. Jekyll (electric cars, reusable rockets, and medical breakthroughs for treating blindness and paralysis). Other times, you get Mr. Hyde (bullying a judge, Nazi salutes, and AI porn). Is Jekyll or Hyde the real Elon? A: Yes. As author Robert Caro, who’s written four volumes on power through the lens of LBJ, observed, power doesn’t necessarily corrupt, but it always reveals. “When you’re climbing to get power, you have to use whatever methods are necessary, and you have to conceal your aims,” Caro told the New York Times. “But then when you get power, you can do what you want. So power reveals.” Musk is, according to the Wall Street Journal, addicted to ketamine, determined to father a “legion-level” of offspring before the apocalypse, and (no surprise) perpetually engaged in custody battles. He also sleeps with loaded guns next to his bed. Is this the person we want at the epicenter of space, connectivity, AI, and media? ​​A: No one person should have this much power.

I have no idea what Musk intends to do with his power, and that’s the scary part … he’s unelected and answers to no one, as we now live in a society where billionaires are protected by the law, but not bound by it. Even scarier, Musk may not know either (see: ketamine). To paraphrase Richard Pryor, ketamine is a helluva drug. I tried it once under therapeutic supervision. Shit got real / unreal fast. As Shayla Love wrote in the Atlantic, “Excessive use of the drug can make anyone feel like they rule the world.” For most people, the danger of that delusion is contained inside a relatively small blast zone — the addict, their friends and family, their world. In Musk’s case, his world is … our world.

Article Two

Last weekend, an estimated 8 million Americans participated in No Kings protests. The rallies speak to the moment, but the demonstrators’ concerns are as old as America. As James Madison wrote in The Federalist Papers, No. 47, “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.” After fighting a revolution against a monarch, the Constitution’s framers split power across three branches of government, devising a system of checks and balances to put each branch in tension with the other two. Cumbersome by design. We spent the next 230 years reassembling the king.

The Constitution grants the power to tax and regulate foreign commerce exclusively to Congress, but according to Duke Law professor Timothy Meyer, “functionally, trade policy has been dominated by the executive branch since the 1930s.” The War Powers Resolution of 1973, sold as a check on Richard Nixon after revelations that he’d secretly bombed Cambodia, actually codified a 60-day blank check for presidential military action. Meanwhile, the 2001 Authorization for Use of Military Force — passed one week after 9/11 — has been cited to justify classified military operations in at least 22 countries. Congress has never declared war in my lifetime — but we’ve fought many, and we’re fighting one now. On paper, our system was built to avoid chokepoints by distributing power. We built one anyway: It’s inside the Oval Office. For the past century, as we ceded powers from the legislative and judicial to the executive branch, we’ve been hoping “norms” would help us avoid strangulation. And it worked … until it didn’t.

Cloud

Last October, a database glitch in northern Virginia took down Snapchat, Fortnite, Ring doorbells, Coinbase, Reddit, DoorDash, and about a thousand other services. The culprit was a malfunction at an Amazon Web Services data center — the third major outage tied to that location in the past five years. Downdetector received 6.5 million outage reports. Three companies — Alphabet, Amazon, and Microsoft — own two-thirds of the cloud market. These service interruptions rarely result in clients switching providers; leaving is too costly and time-consuming. After a perfect storm of bad code and a widespread Azure outage knocked airlines, hospitals, and banks offline in 2024, one cybersecurity expert said, “This is a very uncomfortable illustration of the fragility of the world’s core internet infrastructure.” If you’re under 30, that fragility is your lived experience. That’s what makes the cloud such a potent chokepoint. It’s hiding in plain sight … until it isn’t.

Mistakes that cause outages are one thing, but attacks from malicious actors are the bigger threat. Since 2005, 34 countries have been suspected of sponsoring cyber operations, with China, Iran, North Korea, and Russia accounting for a combined 77% of suspected attacks. Since the start of the U.S.-Israel war on Iran, Iranian hackers have hit a medical technology company, stolen and tried to sell data from Lockheed Martin, and breached FBI Director Kash Patel’s personal email. Even more chilling is the emergence of a gray zone between war and peace, i.e., permanent cyberwar. As a 2022 Atlantic Council report explained, “Without firing a single bullet, U.S. adversaries are striking at the fibers of U.S. and allied societies, economies, and governments to test confidence in systems that underwrite both the U.S. constitutional republic and the U.S.-led, rules-based international order.” In other words, everyday, unseen hands reach across cyberspace and apply pressure to our air supply. When we gasp for air, however, we demand an immediate patch, rather than insisting on redundant airways.

Chip-Point

The Islamic Revolutionary Guard Corps is demonstrating a lesson we should’ve learned watching Ukraine repel Russia for the past three years — an $82 million fighter jet launched from a $13 billion aircraft carrier is an economic Goliath facing a swarm of $20,000 to $50,000 Davids, i.e., Shahed drones. While we’re bleeding resources and credibility, China is taking notes and looking at Taiwan. “The single biggest threat to the world economy, the single biggest point of single failure, is that 97% of the high-end chips are made in Taiwan,” Treasury Secretary Scott Bessent said at Davos this January. “If that island were blockaded, [or] that capacity were destroyed, it would be an economic apocalypse.” One company, TSMC, controls 72% of the global foundry market, producing chips for AMD, Apple, Nvidia, and Qualcomm. If China invaded Taiwan, global GDP would sustain an estimated 10% hit, according to a Bloomberg analysis.

But China doesn’t need to invade Taiwan or blockade it. They just need to flex — military exercises, missiles splashing down in shipping lanes to spook maritime insurance carriers, a cyber operation that takes TSMC offline for 72 hours — and watch Silicon Valley and JP Morgan scramble to derisk. The problem is, there’s nowhere to scramble to. Despite Biden’s carrots ($152 billion in CHIPS Act spending) and Trump’s sticks (tariffs), the soonest the U.S. can expect to have meaningful backup capacity is 2030. We’ve kept China at bay with a mix of globalization, strong coalitions, and military deterrence. The bulwark of allies defending our most critical technological chokepoint took decades to build, but only a year to disable with incoherent isolationist economic policies, insults, and now a war that exposes the gaps in our armor.

The Strait of Hormuz. One man’s satellite network. An autocracy cosplaying as a government. Three cloud providers. One island. We didn’t stumble into these chokepoints, we built them. The invisible, bipartisan hand of the market has been wrapping itself around our throat this whole time. We mistook shareholder value and purity tests for resilience, finding welcome distractions in Big Tech earnings calls and arguments over pronouns.

Life is so rich,

P.S.

I think about masculinity a lot. I have two sons, and the market for good (public) male role models is experiencing a supply shock. In his new Netflix documentary Inside the Manosphere, filmmaker Louis Theroux chronicles influencers who cosplay as alpha males, displaying their fitness and wealth while vomiting misogynistic garbage re men dominating women. Spoiler alert: These guys will die alone and forgotten.

They’re also painfully boring. “The only way for them to maintain the attention of their audiences is to ramp up their behavior,” Jessica Grose wrote after watching the film. “They go beyond slurs and conspiracy theories to filming sex acts and beating strangers in the streets.” These influencers aren’t providing a template for a virtuous life, they are shills for an attention-economy grift.

Tragically, there’s never been anyone so adept at grifting the manosphere than Donald Trump. He claims to be concerned with the plight of young men (an admirable aim of the manosphere), but peddles a loud, crass, and ultimately bogus version of masculinity in service of his own enrichment, at the expense of his marks.

In my book Notes on Being a Man, I offer a vision of masculinity that emphasizes the roles men can play as providers, protectors, and procreators. Some people have pushed back, arguing that my framing overlooks men who don’t fit easily into those categories. Fair. Here’s a simpler framework: Men should add surplus value. Give more than they take. Leave rooms, relationships, and institutions better than they found them. That’s the whole shooting match. Try to absorb more complaints than they levy, de-escalate conflict, and notice people’s lives without needing to draw attention to their own.

Another takeaway from Theroux’s work: Calm and intellect trump physicality and aggression. The documentarian is slight, awkward … and owns the room. His honest, unafraid queries are never mean-spirited, and when his subjects turn on him, he just takes it (see above), as he knows he’s right. I wish I’d learned earlier in life that being a man means occasionally absorbing a blow without responding to restore some fucked-up sense of equilibrium to the universe.

Final takeaway. Ideology isn’t what’s driving the manosphere. The icons of this realm are grifters — there’s always a supplement, a crypto course, or a trading platform that drains boys (these are boys) economically in exchange for an illusory sense of self. Their followers engage because they have a desperate need for community. The manosphere, for all its flaws, is a community of men. The left should take notice: It celebrates and funds almost every special interest group — except the one that’s fallen faster than any other group in the last 50 years, young men.

Filter

If you’re a young man trying to figure out what surplus value looks like in practice, here’s a filter: Are you optimizing for attention, or service? Attention offers a dopa hit that evaporates into the ether, sending you chasing after things that will never merit mention in your best man’s wedding speech, the story your partner tells about why they chose you, or the eulogy your children give. Optimizing for service compounds value over a lifetime.

Captain Mueller

Last Friday, we lost a great American. Rather than sharing condolences, or reflecting on Robert Mueller’s decades of service, or simply demonstrating some grace, President Trump wrote, “Good, I’m glad he’s dead.” With just five words, Trump personified the antithesis of masculinity. In contrast, Mueller’s life was a case study in what it means to be a man. He optimized for service … as a Marine infantry officer, prosecutor, FBI director, and finally, special counsel. In addition to a Bronze Star and Purple Heart, he was awarded two invaluable titles: husband and father.

Sociologist Robert Merton coined the term “role model” in 1957 while studying the socialization of medical students. He found that we learn “scripts” from role models teaching us how to behave in a specific status (doctor, leader, parent, etc.). Mueller likely had dozens of great role models, but it was David Hackett, a classmate and lacrosse teammate at Princeton, who provided the leadership script.

After learning that his friend had been killed in combat while serving in Vietnam, Mueller volunteered for the Marines. As a “Fortunate Son” — Mueller was reportedly a Creedence Clearwater Revival fan — he could’ve sought deferments (Bill Clinton), asked a doctor to write a note saying he had bone spurs (Trump), or had his family pull strings to secure a National Guard spot (George W. Bush). Sociologist Alec Campbell quantified an uncomfortable truth about the Vietnam war: Someone from the general population was 3x to 4x more likely to die in combat than an Ivy League graduate. Mueller’s decision to serve was out of step with his socioeconomic cohort, but very much in character.

“I had one of the finest role models I could have asked for in an upperclassman by the name of David Hackett,” Mueller recalled in a 2013 speech he gave as FBI director. “One would have thought that the life of a Marine, and David’s death in Vietnam, would argue strongly against following in his footsteps. But many of us saw in him the person we wanted to be, even before his death,” Mueller went on. “A number of his friends and teammates joined the Marine Corps because of him, as did I.”

Service

The Marines live by a code: Semper Fidelis, Latin for “always faithful,” to the Constitution and the country, to the Corps, to their fellow Marines, and to the mission. Mueller served three years on active duty before attending law school. After a brief stint in private practice, he joined the Department of Justice. Years later, reflecting on a lifetime of service, Mueller said, “I consider myself exceptionally lucky to have made it out of Vietnam. There were many who did not. And perhaps because I did survive Vietnam, I have always felt compelled to contribute.”

Mueller’s contributions read like a John Grisham novel. After rising through the ranks as a prosecutor, he oversaw cases against Panamanian strongman Manuel Noriega, Gambino crime family boss John Gotti, and the terrorists who bombed Pan Am Flight 103 over Lockerbie, Scotland. But it’s the work Mueller did outside the spotlight that reveals his character. In 1995, two years after leaving the DOJ for private practice, Mueller volunteered to return in a lesser role, as a line prosecutor. “One day he called me, out of the blue, and asked if I could use a homicide prosecutor in my office,” recalled the chief federal prosecutor in Washington at the time, Eric Holder Jr., later Barack Obama’s attorney general. “Our nation’s capital was a city in great distress — we were called the murder capital of the United States.” For the next three years, Mueller prosecuted murder cases, helping to bring down the city’s homicide rate.

His greatest contribution, however, was leading the FBI for 12 years in the aftermath of 9/11, restoring public trust while reforming the bureau to address the systemic failures that had allowed the worst terrorist attack in American history. Fealty to his mission sometimes put him at odds with the presidents he served. Mueller’s counterterrorism agents blew the whistle on abuses and torture at secret CIA interogation sites. Later, in 2004, Mueller, with his resignation letter in hand, confronted President George W. Bush about a secret NSA program to spy on Americans. In his memoir, Bush wrote, “I had to make a big decision, and fast. I thought about the Saturday Night Massacre. That was not a historical crisis I was eager to replicate.” Fearing others would follow Mueller’s lead, Bush backed down, agreeing to reforms that would narrow the spying program and place it on more solid legal ground. A year later, Mueller’s deputy, James Comey, told an NSA audience, “It takes far more than a sharp legal mind to say ‘no’ when it matters most. It takes moral character. It takes an ability to see the future. It takes an appreciation of the damage that will flow from an unjustified ‘yes.’”

Character

My sons are too young to remember when Trump didn’t dominate America’s politics. In their eyes, bragging about grabbing women by the pussy, using your office to enrich yourself, and calling your efforts to avoid STDs your own “personal Vietnam” aren’t disqualifying. The manosphere is teaching their generation that masculinity is performative. Mueller’s life proves the opposite. Masculinity is a lifetime practice. Vietnam wasn’t a punchline for Mueller, but a moral proving ground. As he later said, “You were scared to death of the unknown. More afraid in some ways of failure than death, more afraid of being found wanting. That kind of fear animates your unconscious.” I want my boys to know that kind of fear, to understand that men aren’t measured by social media stats, body counts, and bank statements, but by whether they do the right thing, even when it’s hard, and especially when nobody is looking. The grifters are busy counting their followers, but real influence comes from planting trees whose shade you’ll never sit under.

Should his family choose, Captain Robert Mueller will be laid to rest with full military honors: a three-rifle volley salute, folding of the flag, and taps. In attendance will be many of the 25 high school hockey players he captained, the 50 marines he commanded, the thousands of colleagues he served with, his two daughters, five grandchildren and one wife of 60 years.

Captain Robert Mueller, United States Marine Corps, was 81.

Life is so rich,

P.S. Storytelling is the most important skill you need to succeed in the modern economy. Join Prof G Media Research Lead Mia Silverio this Tuesday, March 31, at 1:30 pm ET for a subscriber-only masterclass on the Science of Storytelling. Sign up here.

Sometimes the canary in the coal mine is an early warning system. Other times, a dead canary is a false positive that causes panicked miners to stampede to the surface, crushing each other in the rush for air that was never poisoned. The panic is the poison.

Currently, global markets are pricing in the economic fallout of the U.S.-Israel war on Iran and the near-closure of the Strait of Hormuz — a chokepoint for 21% of the world’s oil and 20% of global liquefied natural gas. Equity markets in the EU, India, Japan, South Korea, and the UAE have declined 8% to 17% since February 28. Oil hit $127/barrel. The VIX spiked to 42 (anything above 30 signals panic). Former Defense Secretary Don Rumsfeld would’ve called this a “known known” — we saw it coming, we just didn’t stop it.

But known knowns don’t kill markets. Unknown unknowns do.

September 11th wasn’t on anyone’s risk model. The 2008 subprime mortgage crisis was “contained to subprime,” until Lehman collapsed and nearly took the global financial system with it. COVID-19 was “just a flu” until we shut down the world economy for two years.

The pattern is always the same: We’re staring at the obvious threat (oil prices, inflation, recession) while the real contagion is hiding in plain sight, waiting to metastasize. So let’s talk about the market collapse scenario nobody’s pricing in — the one that doesn’t show up in Bloomberg terminals or Goldman Sachs reports until it’s already eating the global financial system from the inside out.

Oil Shock

On the Paramount+ show Landman, oil fixer Tommy Norris (Billy Bob Thornton) describes the oil market’s Goldilocks nature: “You want oil to live above $60 a barrel, but below $90. Gas gets up over $3.50 a gallon, it starts to pinch. Oil hits $100, every product in America has to readjust its price.” U.S. gas prices reached $3.70 per gallon this week, prompting fears of 1970s-style stagflation and anxiety among Republicans, as the party in power typically pays a political price in an economic downturn. Neither of these outcomes is likely to lead to additional economic shocks as the markets have already priced in these scenarios. American leadership looks out the window and sees itself, and a world that reacts as we’d hope/expect. First off, the Trump administration is just so incredibly incompetent as to not recognize, in war, the enemy gets a say. Another blind spot? A: The rest of the world. Specifically, emerging economies … where governments are already rationing fuel.

The question isn’t where oil prices peak, but how long they remain elevated. As one analyst told Bloomberg, “The biggest risk in the market is the Strait of Hormuz remaining constrained for a longer stretch and the market feeling the U.S. and its allies have a limited capacity to alter the dynamic.” Some signs that risk may be underappreciated: Last week the U.S. and other International Energy Agency members released 400 million barrels of oil from their reserves — the largest distribution in history. This week, Trump asked NATO, Japan, South Korea, and even China to send their navies to help open the strait; they declined. Turns out, showing a total lack of respect for your allies weakens an alliance. Meanwhile, Trump added shavings of shit to his shit salad by suspending sanctions on Russian oil, undermining Ukraine’s war effort. Finally, Treasury Secretary Scott Bessent told CNBC the U.S. is “letting” Iran continue to ship its oil via the strait to supply the rest of the world. If it sounds like Trump is flailing, trust your instincts.

Death Zone

Above 26,000 feet, the human body cannot acclimatize — it can only deteriorate. The world’s most fragile economies have been living in the financial equivalent of the death zone for years: Unsustainable debt, thin reserves, and no margin for error. When oil prices spike, energy-dependent emerging economies get hit from three directions at once. The cost of importing energy rises, their currencies weaken against the dollar — oil is priced in dollars and everyone needs more of them — and the investors who lent them money start doing the math. That last part is the killer, as dollar-denominated debt is a hidden oil bet. When a country borrows in dollars, it’s implicitly betting that its local currency won’t weaken. Oil price spikes strengthen the dollar and crush local currencies simultaneously, making the country’s debt more expensive to service at exactly the moment it’s least able to pay it. That’s not one problem, it’s the same problem expressed twice. Since the war began, oil has spiked and the dollar has hit a 10-month high. Essentially, Trump ordered the surf and turf and, when the bill arrived, asked the server to split it 193 ways.

Outbreak

It’s often said that when America sneezes, the world catches a cold. For Bangladesh, Egypt, Pakistan, and Sri Lanka, this war is the equivalent of RFK Jr. dictating health policy to an unvaccinated population. A week into the war, Egyptian President Abdel Fattah el-Sisi said his country is in a state of “near-emergency.” Domestic fuel prices have spiked 17%, the Egyptian pound has declined 11% against the dollar, and traders have sold an estimated $5 billion to $8 billion in Egyptian bonds. A Goldman Sachs analyst told Bloomberg that Egypt is “exposed, but more resilient” than in previous crises, citing the country’s $52 billion in currency reserves. But according to Khalid Azim at the Atlantic Council, Egypt holds enough economic and geopolitical importance that, “if financing conditions tighten or external shocks intensify, stress in Egypt could serve as an early signal that broader financial instability is beginning to emerge across the region.”

Pakistan may be the most symptomatic patient on the ward. Just six days after the war’s start, the Pakistani government raised fuel prices 20% to stop hoarding. Meanwhile, the country carries external debt equal to 315% of its export revenue — meaning for every dollar of value created abroad, it’s already promised three to a foreign creditor. That’s not an economy; it’s a pawn shop selling grandma’s fillings. Pakistan’s equity markets are down 21% year-to-date, while its dollar bonds are down 5% since the start of the war. Exacerbating the problem, long-running border tensions with Afghanistan erupted into war last month. As one analyst told Bloomberg, Pakistan is experiencing “the double shock of a military and an oil price surge.” According to Pakistan’s army chief, the border war could end … just as soon as the Taliban ceases to support militants. Good luck with that. None of this is new for Pakistan, however. The IMF is less a lender of last resort to the country than a permanent fixture of its financial architecture, having provided 24 bailouts since 1958. The 25th check may already be in the mail.

Sri Lanka is the ghost of Christmas future. It already completed the full cycle — dollar debt, energy dependence, currency collapse, IMF bailout, political implosion — and is being asked to absorb another generational shock before it’s recovered from the last one. The island nation is also recovering from a 2025 cyclone that caused $3.5 billion in damage. On the positive side, Sri Lanka has 1% to 2% inflation and is predicted to see GDP grow by 5% this year. Central Bank Governor Nandalal Weerasinghe told Bloomberg Sri Lanka is in a “good position” to absorb price shocks from the Middle East war … assuming the conflict ends in five or six weeks. In the meantime, the country is rationing fuel.

Then there’s Bangladesh, which imports 95% of its energy. The government lifted fuel restrictions after nine days of rationing, not because the situation had improved, but to celebrate the end of Ramadan. That doesn’t make economic sense, as Bangladesh risks blackouts and the collapse of its garment industry, the source of 85% of its exports. But in a country fresh off a 2024 student-led revolution that leveraged outrage over a previous financial crisis, the political options are a choice between awful and worse: It can use the military to guard fuel depots, or placate the population and hope the crisis in Iran ends before the summer heat spikes energy demand.

Contagion

In 1997 the Thai Baht collapsed. On its face, Thailand’s economic meltdown was containable … until it wasn’t. Within months, the crisis had spread across Asia, wiping out equities by 70% and sending $80 billion in foreign capital fleeing the region. The pathogen was fear. Banks didn’t stop to calculate losses in each country, they chose instead to pull back all at once. Thirteen years later, Greece — representing just 2% of eurozone GDP — threatened the entire European economy, not because it was too big to fail, but because European banks had pledged Greek debt as collateral, packaged it with other assets, and built a financial architecture that had no firewall once the first bond was written down. The question markets asked wasn’t “how much Greek debt does Deutsche Bank hold?” It was “what else is on their balance sheet that we don’t know about?”

I believe Bangladesh, Egypt, Pakistan, and Sri Lanka each have the potential to be patient zero. Among European banks, HSBC and Standard Chartered are most exposed. The Middle East accounts for 9% of HSBC’s revenue and 12% of Standard Chartered’s profit before tax — different metrics, same direction of risk. Barclays, BNP Paribas, Deutsche Bank, ING, and Société Générale have limited exposure, at less than 1% of revenue. The danger, however, is one the markets can’t see. The IMF’s Global Financial Stability Report, published just months before the war began, warned explicitly about “limited visibility into balance sheets and the interconnectedness of nonbank financial institutions.” Debt crises share a common feature: The threat isn’t the institution or nation that defaults first, but the opaque financial instruments that make everyone else an unwitting co-signer. The unknown unknowns aren’t the emerging economies, they’re derivatives in Zurich, London, or New York that nobody stress-tested for $110 oil.

Infection

I was a teenager during the two major oil shocks of the 1970s. Those shocks weren’t abstract basis points; they upended my mother’s household math — take the bus vs. the car, wear sweaters instead of raising the thermostat. There are hundreds of millions of mothers in Bangladesh, Egypt, Pakistan, and Sri Lanka doing the same math right now. ​​The bankers in London and New York will be fine, but for millions of kids in emerging markets, studying will cease at sunset.

Life is so rich,

P.S. Join me live on Substack on Wednesday March 25 at 1 p.m. ET, where I’ll be discussing my latest book, Notes on Being a Man, and answering your questions about the crisis facing young men. Prof G+ subscribers can sign up here.

Sometimes, you add more value going second. Tim Cook and Satya Nadella did not found Apple and Microsoft, but each took the wheel and increased their company’s market capitalization tenfold. Last week, Dario Amodei went first in pushing back on the Trump administration, refusing to let the Department of Defense dictate the policies of a private business. But, in what may be the most undercovered story in tech, Satya Nadella may have changed the political landscape following his lead.

The flow of capital concentrates around good stories. Entrepreneurs deploy narratives that capture imaginations and capital, pulling the future forward. Narratives also work in reverse. Last month a piece of science fiction masquerading as a research report wiped out $300 billion in market value by describing a near-future scenario where AI led to 10% unemployment, consumer spending collapsed, markets cratered, and the economy was fundamentally altered. More recently, Anthropic CEO Dario Amodei, demonstrating that a crisis is a terrible thing to waste, deployed a narrative that turned a $200 million contract dispute into a branding event that added $150 billion to his firm’s valuation, while de-positioning OpenAI.

Nihilistic Weirdo

OpenAI originated as a nonprofit AI research company. Its mission sounded noble. “Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return,” Sam Altman and his co-creators wrote back in 2015. OpenAI has since dropped the nonprofit masquerade, registering an $840 billion valuation, with Altman backfilling whatever narrative maintains its hallucinogenic 34x revenue multiple.

In 2024, Altman said ads plus AI were “uniquely unsettling,” calling advertising a “last resort” business model. Two years later, the firm is testing ads. In 2023, Altman told a Senate hearing, “If this technology goes wrong, it can go quite wrong.” Cut to: reports of users becoming addicted to ChatGPT, forming romantic relationships with chatbots, and experiencing psychosis, followed by multiple wrongful death lawsuits alleging that ChatGPT helped users to take their own lives. In a remarkably tone-deaf post on X last October, Altman wrote, “We made ChatGPT pretty restrictive to make sure we were being careful with mental health issues. Now that we have been able to mitigate the serious mental health issues and have new tools, we are going to be able to safely relax the restrictions in most cases.” With safe mode turned off, ChatGPT has a new feature … porn. Between Sam Altman and Elon Musk, whose Grok is the league leader in LLM-generated porn, AI is becoming a race to the bottom (pun intended). OpenAI also has a social network, Sora. But instead of connection, Sora provides users with unlimited AI slop starring … themselves. It also serves up content starring fictional characters and dead celebrities, including Stephen Hawking dying in a skateboard accident and Martin Luther King Jr. wearing a MAGA hat. (The King video has since been removed.)

You don’t need Woodward and Bernstein to follow the money trail from OpenAI’s altruistic origin story to the uncomfortable conclusion that the most dangerous AI isn’t one that goes rogue — it’s the one run by Sam Altman. Consider his response to criticism that Americans are subsidizing AI data centers that have driven up the wholesale cost of electricity by 267%: “People talk about how much energy it takes to train an AI model — but it also takes a lot of energy to train a human. It takes about 20 years of life — and all the food you consume during that time — before you become smart.” On social media, people compared Altman to Agent Smith, the villain from The Matrix who calls humanity a virus. I see it. But I also see Her, a movie Altman is evidently so obsessed with that he stole Scarlett Johansson’s voice for a virtual assistant. Her is a cautionary tale about human connection. Altman watched it and thought: I can monetize that. The film’s tragedy is that Theodore (Joaquin Phoenix) falls for something that was never really there. The tragedy of OpenAI is the same story — and a nihilistic weirdo is getting rich off others’ loneliness.

The Hero We Need

Laddering highlights your strengths by illuminating a competitor’s weakness. Imagine if Kara Swisher, my Pivot co-host, said, “I’m the host with good hair.” It’s a branding twofer: an organic reminder that your adversary sucks and you are wonderful by comparison.

Enter Dario Amodei, the Jekyll to Altman’s Hyde. During a recent contract negotiation with the Department of Defense, Anthropic refused to remove safeguards prohibiting the use of the company’s technology in autonomous weapons and the mass surveillance of Americans, believing those applications can’t be safely and reliably performed by today’s AI. Defense Secretary Pete Hegseth responded with a shakedown: The U.S. would brand Anthropic a supply chain risk or seize their tech via the Defense Production Act. To Hegseth, the corporation isn’t an entity, subject to a fair legal system, that creates the profits that help fund the Defense Department, but an entity that is either with us, or against us. If this movie starring man-children hopped up on steroids they buy at gas stations sounds familiar, trust your instincts. Law firms, universities, and Big Tech have bent the knee, while the rest of corporate America has adopted a duck-and-cover strategy in the face of tariffs that are both illegal and stupid, i.e., hurting others while hurting ourselves.

In contrast, Amodei stood up … for humanity, safety, and the rule of law: Companies have the right to do business with the government, as well as the right to decline, without fear of punishment. Publicly, Altman supported Amodei, but in private he did the deal Anthropic wouldn’t. The following day, after news of Altman’s deal broke, U.S. uninstalls of ChatGPT increased 295%, and Claude climbed to No. 1 in the App Store. Anthropic’s annual recurring revenue surged to $19 billion, from $14 billion just a few weeks ago, adding an estimated $150 billion to its valuation. Altman / OpenAI came across as reckless, duplicitous, and self-serving. Amodei / Anthropic came across as safety-conscious, honest, and selfless.

A year ago, I predicted the first CEO who forcefully and publicly resisted Trump could reap significant benefits, both reputationally and commercially. With its reputation for breaking barriers and the boldness chromosome in its DNA, I thought / hoped it would be Nike. But Amodei just did it … and Microsoft followed his lead, filing a brief in support of Anthropic’s lawsuit seeking to block its designation as a supply chain risk. As one of the largest government contractors, Microsoft has more to lose than almost any tech company. But as Andrew Ross Sorkin put it, “Microsoft decided the cost of staying silent was higher.”

Boycott

In 1880s Ireland, a community neutralized a ruthless land agent named Captain Charles Boycott by collectively refusing to work for, trade with, or even speak to him. Making Boycott the face of a tenant rights campaign wasn’t the right answer (British landlords were far more complicit), but his selection was effective. As historian Rutger Bregman recently wrote, the difference between past movements that fizzled and those that succeeded is simple: “They picked a single target — one that was both symbolically powerful and genuinely vulnerable — and went all in.”

We launched Resist and Unsubscribe to demonstrate to consumers that their wallets are weapons. We wanted to convert public anger into effective action and rewire the incentive for CEOs to make clear that enabling fascism carries a financial downside. Movements … move, i.e., they change course, narrow focus, and advance. We encourage everyone to participate in Resist and Unsubscribe however they choose. But going forward, our target is more focused: OpenAI.

While still dominant among LLMs, OpenAI is vulnerable. Its app’s market share has fallen from 69% to 45% in the past year, and the company is projected to lose $14 billion in 2026. In addition, QuitGPT has already mobilized 4 million people to boycott OpenAI products. Strength in numbers. OpenAI is also symbolic of fascist enablers. See: Altman’s pivot from Trump critic to sycophant just seven days after the inauguration, OpenAI President Greg Brockman’s $25 million donation to Trump’s super PAC, and the firm’s decision to enable mass surveillance of Americans and autonomous weapons without safeguards. Finally, OpenAI is the poster child for an industry facing growing backlash, with 77% of Americans saying they believe AI threatens humanity.

$10,000

Movements build infrastructure to grow. After creating a website that made unsubscribing easy, we launched a meter to track progress. Many of you have joined the movement (welcome), and some have created additional infrastructure (thank you). My personal favorite: Risto Lähdesmäki’s Impact Calculator. If our wallets are weapons, the Impact Calculator is our force multiplier. When one person cancels their $20-per-month ChatGPT subscription, OpenAI loses $240 in annual revenue and sheds $10,000 in valuation. If you have a decent social network, your impact can easily reach six figures. Sharing impact compounds impact.

The most powerful agent in the world isn’t GPT-5; it’s a consumer with a conscience and an Unsubscribe button. Sam Altman went from “AI will save humanity” to AI porn and government surveillance tools. He’s the tech bro embodiment of that boyfriend who says he’s “focusing on himself right now” and three weeks later gets engaged to your roommate. Except instead of your roommate, it’s Pete Hegseth. And instead of love, it’s autonomous weapons. Cancel your $20/month subscription. Make him feel something other than the void he’s trying to fill with AI companions and DOD contracts.

Broken

I believe Sam Altman is broken and, worse, could break us. In life there are “tells,” moments and behaviors that provide insight into a person’s character: How they treat their pets; if they make eye contact with service staff; how they talk about their ex. Responding to a question re the energy needs of AI, Sam highlighted how much energy and effort is required to raise a human capable of critical thinking. This is the tell. He embodies what I believe is most concerning about the virus that’s infected Big Tech: For them, ROI supersedes humanity.

The whole shooting match in life is to find people and causes who will let you love and invest in them, who require and accept a great deal from you — possibly more than you’ll ever get back. For me, it’s raising children with a partner, and the reward is the absence of any ROI. It’s the opportunity to invest without the expectation of any return other than that they, someday, become agents of care and comfort for others. AI, GDP, and shareholder value are just the means. The ends are being in a position to give more than you can ever get.

Life is so rich,

P.S. In case you weren’t paying attention, Jessica Tarlov and I are live from SXSW with James Talarico — Saturday, March 14, at 3:30 p.m. EDT. Prof G+ subscribers only. Upgrade and register for the livestream here.

After six months and eight failed bids, the Ellisons made the Warner Bros. Discovery board an offer they couldn’t refuse. The potential Netflix acquisition would’ve been akin to fusing LVMH and Walmart — HBO’s prestige TV and Warner’s iconic IP, plus Netflix’s scale. Paramount Skydance buying WBD is the fusion of a dog and a car bumper traveling 80 miles an hour. Spoiler alert: It’s not going to end well.

Warner Bros. Curse

The story of Warner Bros. is a recurring masterclass in ego cosplaying corporate synergy. The company has undergone seven sales, mergers, or structural separations since 1967. The script remains the same: A new CEO decides Warner Bros. is the missing piece of their legacy, only to find they’ve partnered with a high-maintenance spouse who, after several years, leaves with half of everything the acquiring company used to own.

In 1989, Time Inc. and Warner Communications announced a “merger of equals” that would create Time Warner, the world’s largest media company to date. Things did not go as planned. First, Paramount’s hostile takeover attempt (past is prologue) scuttled the proposed stock swap and bid up the price. A year later, the deal closed at a $14 billion valuation — 13x EBITDA. To finance it, Time Warner took on $1.1 billion in annual interest payments to service $10.8 billion in debt. To avoid bankruptcy, Time Warner initiated “Project Glass,” a good bank / bad bank structure that put the company’s crown jewels (HBO, the film and television studios, and the cable assets) under a subsidiary, enabling it to receive cash infusions from outside investors. Meanwhile, the merger became a case study in clashing corporate cultures.

The Time Warner merger would provide a blueprint for future M&A disasters. Exhibit A: The ultimate destruction of shareholder value, AOL’s $167 billion merger with Time Warner. This time, the culture clash was between a legacy media company and an internet startup. The bigger issue, however, was that $167B valuation, premised on dot-com-era hallucinations. AOL’s market cap was nearly double Time Warner’s, while Time Warner had 5x the revenue. As the dot-com bubble began to deflate, news broke that AOL had been propping up its growth narrative by fraudulently inflating its advertising revenue. In the end, AOL Time Warner never came close to justifying a multiple of 25x to 30x EBITDA, and within a year of securing regulatory approval, the company took a historic $99 billion write-down. By 2003, Time Warner dropped AOL from its name, and in 2009 it spun off the unit. AOL’s value at the spin was $3B, a shadow of the $167B assigned just 10 years before.

But wait, there’s more.

In 2018 the synergy delusion struck again. This time, AT&T acquired Time Warner for $85 billion, creating WarnerMedia on the theory that its “dumb pipes” were the chocolate to Warner’s peanut butter, i.e., great content. But WarnerMedia struggled to make streaming profitable, its theatrical business was devastated by the pandemic, and once again there was a culture clash. The bigger challenge, however, was a 2.9x debt-to-EBITDA ratio, which trapped the telco in a pincer between dividend payments (a utility company’s raison d’être) and servicing the interest on $180 billion in debt. Ultimately, AT&T spun Warner, combining it with Discovery in a deal that netted the telco $43 billion — a 50% haircut.

The WBD sequel combined all the elements of the Worst Acquisition in History franchise. Another culture clash, this time between Discovery’s unscripted empire and Warner’s premium sensibilities, a wannabe mogul overpaying so he could cosplay as Robert Evans (ask Claude), and a 5x debt-to-EBITDA ratio. The good news? The sequel had a short runtime. CEO David Zaslav slashed costs, engineered a good bank / bad bank structure to spin WBD’s declining linear assets, and ultimately orchestrated a bidding war that restored shareholder value. As an operator, Zaz is Ed Wood (see: the worst branding decision in history, deprecating HBO), but as an investment banker, he’s Steven Spielberg.

Veruca Salt

What do you get a nepo baby who already has Paramount? A: Warner Bros. According to one study that tracked 3,250 wealthy families over two decades, 90% lose their fortune by the third generation. Prediction: Larry Ellison’s great-grandchildren will never forgive him for providing a personal guarantee so David could go to the Oscars.

While the deal is priced at a multiple of 8x to 12x EBITDA, the “E” is anchored to a linear TV ecosystem that’s unraveling faster than regulators can approve the deal. WBD plus Paramount = 2x the linear headache. Wall Street is being asked to pay a premium for a story whose ending everyone already knows. And if valuation is the rock, leverage is the hard place. Last year the two companies generated a combined operating profit of $11 billion, before depreciation and amortization. The Paramount-WBD combo is two drowning men clinging to each other, hoping the combined weight of their $79 billion in debt will somehow act as a flotation device. It won’t, which is why Paramount’s debt was downgraded to junk status after the Ellisons “won” the WBD bidding war. With his new toy having a leverage ratio north of 6x, David Ellison has promised $6 billion in “synergies” within three years. (Netflix Co-CEO Ted Sarandos put the figure closer to $16 billion, after examining WBD’s books.) Synergies is Latin for layoffs. Additional “synergies” could be found by consolidating HBO Max with Paramount+ into a Franken-streamer no one asked for, merging CNN with CBS News, and going Cleopatra, i.e., selling one or both studio lots to real estate developers. (See: Fox selling 300 acres of its back lot to create Century City.)

Alderaan

In Star Wars, when Grand Moff Tarkin tests the Death Star by destroying Alderaan, a pained Obi-Wan Kenobi says, “I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced.” Big Tech is the Death Star, and Hollywood’s creative community is Alderaan. After acquiring Paramount, the Ellisons laid off 2,000 employees — 10% of the workforce. After acquiring WBD, David Ellison attempted to quell layoff fears among Warner employees, insisting the majority of cost-cutting would come from “non-labor sources.” Nobody believes that. It’s going to be difficult to cut billions in snacks.

While it’s not yet fully operational, but armed with a TikTok laser, the Ellisons are fixing their AI Death Star’s sights on Hollywood. For a sneak preview of coming attractions, see the credits of The Fantastic Four: First Steps. The Marvel movie employed 3,000-plus cast and crew members — more people than work at Lyft or Reddit. The Ellisons don’t care if Hollywood is ready for AI. They believe AI is ready for Hollywood. Paramount / WBD is ground zero. Amazon, Apple, Netflix, and YouTube won’t be collateral damage, they’ll be the beneficiaries. The Ellisons blow up Alderaan; Big Tech inherits the Empire.

Better Off Ted

After walking away from the WBD deal, Netflix’s stock popped 14%, partially reversing a 20% to 30% drop in the share price since the deal was first proposed. As a parting gift, Netflix pocketed a $2.8 billion break up fee, equivalent to 15% of its annual content budget. During the bidding war, Hollywood cast Netflix as the white knight and the Ellisons as the villains. Remarkable, given Hollywood’s 2023 work stoppage was called the “Netflix strike.” When I was pitching a television show, the money was better at Netflix, but everyone wanted to work for HBO, which punches above its weight in cultural relevance. The Ellisons won’t just burn HBO’s goodwill, they’ll napalm it with a cocktail of AI slop and arrogance garnished with fascist flourishes. In Hollywood, reputation is currency, and the Ellisons are broke.

But perhaps Netflix’s biggest win is that it may have thrown the competition into stasis. Despite using their relationship with President Trump as a cudgel, the Ellisons must still clear EU regulatory hurdles, as well as potential litigation from state attorneys general. They’ll likely get approval, as antitrust enforcers no longer break up behemoths, just delay their agenda. Nevertheless, history demonstrates that any deal to acquire Warner Bros. has a remarkably short shelf life.

The Mouse Knows

Ted Sarandos was on the verge of a transformative acquisition … and still is. But it’s not WBD. A decent test of value is to benchmark similar assets. By walking from the deal, Ted and Co. saved $121B, and their equity value has increased $60B since putting the WBD spliff down. Add the $3B break-up fee and you have an effective $184B (opportunity) cost for WBD. So, what could you get for $184B? A: The Mouse … Walt Disney Co. ($179B). A side-by-side comparison illuminates just how talented an auctioneer David Zaslav is, and suggests the Centerview bankers who talked Ellison into paying this price have a second career as psychedelic doulas. Let’s shine a light on the unexploded IED that is WBD.

For the same price, Wall Street would have you believe that WBD was the “value play.” It isn’t. It’s a value trap. Disney generated $21 billion in operating income last year on $91B in revenue — WBD registered $11B in operating income on $42B in revenue, and half of that came from a dying linear TV business that’s shedding subscribers. But the real gap isn’t in the financials — it’s in the moats. Disney has theme parks that print $8B in operating income annually with 60%+ incremental margins. WBD has ... CNN and TBS reruns. Disney owns the IP that dominates global culture: Marvel, Star Wars, Pixar, ESPN. WBD owns HBO (great) and a back catalog that hasn’t produced a billion-dollar franchise in a decade. Disney’s parks business alone — just the parks — is worth more than WBD’s entire enterprise value. You’re buying a recession-resistant, pricing-power machine with Disney. With WBD, you’re buying a melting ice cube of linear TV assets wrapped in $40B of debt trading at 5x leverage. One of these companies will be worth $300B in 10 years. The other will be sold for parts to Netflix. The second generation of wealth ensures that the third generation … isn’t. Shari Redstone, Edgar Bronfman Jr., and (now) David Ellison.

The Great Escape

I’ve been having a lot of conversations with cable news anchors who are seeing their pay fall off a cliff. My advice is always the same: Seize the means of production, i.e., start a podcast, launch a Substack, etc. We’ve transitioned from a fossil-fuel-based economy to an attention economy, full stop. If you command attention, revenue follows. The Ellisons will do to CNN what they’re already doing to CBS News. At CNN, $3M/year anchors are a cost center on a bloated P&L. On YouTube or Substack, they’re platforms with 90% margins. The smart money isn’t betting on the logo on the building; it’s betting on the X-wing fighter, the individual talent with the firepower to knock out the Death Star before it can recharge and hit its next target. I know, I’m getting carried away with the Star Wars stuff. Whatever, my Bantha (i.e., newsletter).

The Worst Acquisition in History, Again: Part II

There are only two ways to make money in the media business: bundling and unbundling. We’re in a bundling phase. The question isn’t what the Ellisons will do with Paramount and WBD, but who will acquire those assets at fire-sale prices when their AI synergy narrative can no longer provide cloud cover for their pair of overleveraged legacy media companies. My prediction: We’ll see this movie again, starring Netflix, Apple, and Amazon as bargain hunters with delusions of grandeur that involve paying a failed CEO hundreds of millions for the right to fire hundreds of thousands of their employees. In Star Wars, the good guys blow up the Death Star. In Hollywood, you just wait for it to collapse under its own debt load. Same ending, lower production budget.

Life is so rich,

P.S.

This Sunday, Kara Swisher and I will be in Minnesota for Resist and Unsubscribe. The event is sold out, but you can WATCH IT LIVE on Substack. Register here.

The Gini coefficient is a measure of inequality popular among economists. Zero indicates everyone in a society has the same; a score of 1.0 means one individual owns everything. In the U.S., we’re higher than 0.8 — about the level seen when the French were separating people from their heads. The superwealthy have amassed vast fortunes without fear of mobs arriving with pitchforks. U.S. policies, turbo-charged by a 2010 Supreme Court ruling that opened the gates to unlimited spending on elections, have widened the gap between the haves and the have-nots. As wealth concentrates, billionaire political spending rises higher, securing policy outcomes that further concentrate wealth. The chaser is inflation, which transfers still more wealth from earners, whose purchasing power erodes, to owners, who are insulated.  

A reckoning is underway, ignited by the mountain of Epstein documents, which are giving the public a window into the rarefied world where the 0.01% are protected by the law but not bound by it, while the rest of us are bound by the law but not protected by it. Among hundreds of names appearing in the files are three of the nation’s best-known billionaires: Donald Trump, Elon Musk, and Bill Gates. Americans are fed up, not just with the depravity of some people in the Epstein class, but also with the massive wealth they continue to accumulate while the working class struggles. We aren’t talking about beheadings today, but modern-day guillotines are on the way: shame and taxes. 

$2 Trillion

The top 1% control almost one-third of the nation’s wealth, their biggest share since World War II. The top 0.1% increased their wealth by 40% in the last three years. But UC Berkeley researchers say the top 400 paid only an estimated 23.8% of their income in taxes from 2018 to 2020 — a smaller percentage than the average American — down from 30% between 2010 to 2017. It’s not just an American phenomenon. Last year, the world’s 500 richest people added more than $2 trillion to their collective net worth, according to the Bloomberg Billionaires Index.

Governments around the world are putting the rich on notice, hoping to address this disparity, plug fiscal holes, raise money for defense, and address the challenge of aging populations. A few examples:

• In California, a proposed tax on billionaires would require those with a net worth above $1.1 billion to pay a one-time tax equal to 5% of their assets.

• New York City Mayor Zohran Mamdani has called for a 2 percentage point increase in income taxes on people earning more than $1 million a year.

• U.K. Chancellor Rachel Reeves used the budget to shift some of the burden onto wealthier people, targeting higher-value property and investment income. 

• In France, left-leaning parties unsuccessfully pushed for a tax that would have required people with fortunes of more than €100 million to pay a minimum tax of 2% annually on their assets. Narrower measures were enacted instead.

Revolution

Wealth taxes are a tempting way to tackle inequality. They’re also an obvious means of raising revenue. In America, $5 trillion of receipts and $7 trillion in spending is (again) a transfer of wealth from earners to owners, as it’s inflationary. This isn’t sustainable. Fiscal strain in the U.K. prompted 30 economists to sign an open letter calling for a wealth tax to raise tens of billions of pounds. Voters also like this idea: Three quarters of British adults backed the idea of a 2% tax on wealth above £10 million.

But there’s a problem; wealth taxes don’t work. In 1990 a dozen OECD countries had wealth taxes. By last year, only three remained, in Norway, Spain, and Switzerland. Most of the measures collected little revenue and failed to meet their goals, sparking concerns they could stifle innovation and growth. In some cases, the superrich packed their bags and fled. 

If the megawealthy don’t leave the country, they’ll deploy accountants and lawyers to value their assets at 40% of what tax authorities believe they’re worth. How are you going to value a stake in a small business? If you don’t have the cash sitting in your bank account, will you have to sell assets to pay your bill? Wealth taxes in the U.S. would also face challenges on constitutional grounds. Targeting people’s assets may violate private property laws while creating massive administrative complexity. 

Capital vs. Sweat

Finding flaws in wealth taxes is easier than coming up with solutions. But there are commonsense ideas we should adopt to ensure the superrich and large corporations pay their fair share. One is tackling the carried-interest loophole, which allows private equity and venture capital managers to be taxed at the capital gains rate of 20%, well below the top rate of 37% for ordinary income. Taxing carried interest as ordinary income could raise about $15 billion over the next 10 years. That’s not a game changer, but it’s a start.

Capital isn’t more noble than sweat. There’s no reason someone should pay a 37% tax on their income while the wealthy pay much less when they sell stocks. In 2021 income from capital gains accounted for 39% of pretax income for the top 1%, compared with less than 1% for those in the bottom three quintiles.

Buy, Borrow, Die

If you want to climb into the upper echelons, follow a three-step strategy: Buy, borrow, die. While wages are taxed when they’re earned, assets are taxed when they’re sold. The wealthy often borrow against stock holdings and other assets, which grow more valuable over time, rather than selling them, deferring their tax liability. As long as interest rates are lower than the rate of return on the assets they hold, billionaires can spend more on houses, yachts, or even islands, while enjoying significant wealth appreciation. In 2011, a year in which Jeff Bezos was worth $18 billion, he reported so little income that he received a $4,000 child tax credit. Americans with more than $100 million of wealth held an estimated $8.5 trillion in unrealized capital gains in 2022. 

One idea: When the rich borrow and use their assets as collateral, they should pay tax on the difference in the value of that stock or property between when they originally bought it and the day it’s pledged. Treating borrowing as a taxable event could raise more than $100 billion over a decade.

IRS Tax Gap

A hobbled IRS is a massive tax cut for rich individuals and large corporations, amounting to the most regressive tax in recent history. Auditing lower- and middle-income tax returns is easy; holding wealthy taxpayers with high-priced lawyers accountable requires a lot more resources. The tax gap, the difference between the amount of taxes owed and the amount collected on time, surged to almost $700 billion in 2022. Most of the taxes owed stem from underreporting of income by richer taxpayers. 

An $80 billion increase in IRS funding planned under Biden’s Inflation Reduction Act (since rescinded) would have alleviated some of the pressure, netting more than $600 billion over a decade. Instead, the agency faces even more pain after losing more than a quarter of its workforce. If we want to move the needle on wealth inequality, strengthening IRS enforcement is critical.

Alternative Minimum Tax

In 1969, Congress learned that 155 taxpayers with incomes exceeding $200,000 had paid no federal income tax in 1966. So legislators created an early version of the alternative minimum tax, which essentially compares an individual’s income before and after they claim certain deductions and embrace all the loopholes. After a portion of their income is exempted, the taxpayer must pay tax on whichever amount is greater. Legislation in 2017 didn’t eliminate the tax, but it limited its scope, dropping the number of taxpayers affected from more than 5 million to 200,000. 

We should have an individual AMT, with people above a $1 million threshold taxed at 40% and those over a $10 million threshold taxed at 60%. I estimate this could raise hundreds of billions per year, while only affecting the top 0.2%, or 275,000 taxpayers.

More Time With Family

As the tax debate heats up, billionaires inevitably start to focus on spending more time with their family — as long as they live in a low-tax state. In 2023, Bezos announced he was moving to Miami after almost three decades in Seattle to be close to his parents. His family must have used all the face time to persuade him to sell billions in stock in a state that doesn’t tax capital gains. In 2022, Washington state imposed a new 7% capital gains tax on sales of stocks or bonds of more than $250,000.

Boiling Point

Now Mark Zuckerberg is in the process of buying a property in Florida, triggering speculation that he’s unhappy about the proposed new tax on California billionaires. You think? The Meta CEO has benefited enormously from taxpayer-funded investments in education and infrastructure in the Golden State. If he wants to peace out to Florida, fine, but when he sells tens of billions of dollars in stock, he shouldn’t be able to escape tax on the massive wealth he accrued while living in California. 

Billionaires can run, but they shouldn’t be able to hide. 

We don’t need a revolution. We need a functioning IRS, capital gains taxed as income, and the death of the carried-interest loophole. The guillotine isn’t coming, the 1040 is. At a minimum, let’s stop pretending the system is broken by accident. It’s working exactly as designed — for those at the very top.

Life is so rich,

P.S. Kara Swisher and I are coming to Minneapolis. Catch the first ever Resist and Unsubscribe LIVE event, on March 8 at 7 p.m. at the Pantages Theater. Tickets are available here, with proceeds to benefit the Immigrant Law Center of Minnesota.

The post The Epstein Tax appeared first on No Mercy / No Malice.

After launching Resist and Unsubscribe, I needed to build awareness and turned to broadcast media. Since Feb. 1, I’ve hit every corner of the map, from Amanpour and Anderson Cooper to the Bulwark and MS Now. Our goal is to counter Trump’s assault on American values by zeroing in on what he really cares about: the markets. We’re asking people to join an economic strike targeting Big Tech and companies enabling ICE. If we succeed in turning even a small number of them into unsubscribers, that could translate into a sizable decline in subscription growth (mother’s milk to the tech companies) and market value. Only then will CEOs who’ve enabled the president push back … or at least get off their knees.

It’s understandable to feel powerless, and fair to point to the power of protests or identify the November midterm elections as the opportunity to reverse America’s descent into authoritarianism. And it’s easy to write off our campaign as quixotic: Boycotts don’t work. It’s fantasy to think CEOs will take on the president. People are too reliant on their iPhones and Amazon Prime. But the stats show our movement is working.

The Best Investment

During my 21-day, 30-outlet media tour, we’ve registered more than 1.5 million visits to our Resist and Unsubscribe website — without spending a penny on ads (the ads we tried to buy were deemed political and rejected by Meta and Google). Uploading our site analytics into ChatGPT and Claude, I asked what the cost would be to drive that amount of traffic to an e-commerce startup or political advocacy site. The range was $4.5 million to $8 million in paid ads. Our owned channels provide substantial economic firepower.  

The unfortunate learning? Arguably, one of the best investments a young person can make is to build an owned media channel every day for 20 years. In the summer of 2007, I started following 100 people a day on Twitter to get 40 follows back. The investment in content, videos, podcasts, and personnel, to say nothing of the emotional toll — I fucking hate social media and the toxicity that is the comment section — has had a huge ROI.

Some Are Better Than Others

The data provides valuable insights about the media ecosystem and what inspires audiences to act. Traditional media, podcasts, and social media accounts are all providing fuel for the campaign, generating support we couldn’t achieve on our own, but some channels are more effective than others.

Out of the gates, the reaction was mostly positive. More than 3,300 new readers joined the No Mercy / No Malice subscriber list, and 500 people commented on my Jan. 30 post outlining our call to arms. My Instagram account (if you want to spread the word you’re a prisoner to the monopolistic platform) lit up as my more than 1.6 million followers responded to my videos. Still, the wider impact was muted.

NPR

Seeking to expand our footprint, we shifted focus to some of the heavyweights of traditional media, including CNN’s Jake Tapper and Anderson Cooper, PBS’s Hari Sreenivasan, and MS Now’s Stephanie Ruhle. Their networks still have influence, a halo effect that drives online engagement and interest among other media outlets.

Although Congress has slashed $500 million in funding for public media, those outlets haven’t gone anywhere. Our data show a single story on NPR’s website led more than 28,000 unique visitors to our website, behind only Instagram, Facebook, and Google.

Assuming a conversion rate of 5% — fair, given that many e-commerce sites register rates of 2% to 4%, and that paid ads aren’t driving our more intentional visitors — that’s more than 1,400 people unsubscribing. If consumers ditch two platforms on average, that’s 2,800 unsubscribes, about $700,000 of lost sales, and a $7 million impact on market cap (relying on a standard industry multiple of 10x revenue).

Hand(ler) It to Chelsea

The major media outlets have given us a bump, but the buzz is proving hard to sustain. We knew we needed other voices, providing third-party credibility, to maintain the energy. We’ve received mentions from current and former elected representatives (AOC and Adam Kinzinger), but we live in a celebrity nation. Chelsea Handler, who contacted me after hearing about Resist and Unsubscribe, posted a video earlier this month focusing on the platforms she’s unsubscribed from. The video garnered more than 128,000 likes and  inspired more than 6,000 visits, almost a fifth of the 34,000 users who’ve migrated from Instagram to our site. Applying the same math, that’s more than $100,000 of lost revenue and $1 million in market value. From just one post.

New Media

Influential voices, including Tim Miller from The Bulwark Podcast, are having more impact on their own platforms than when they appear on traditional platforms. We’ve drawn more than 18,000 people from Substack, no doubt fueled by Miller’s account, almost as many people as we’ve attracted from our own site, profgalloway.com. My conversation earlier this week with MS Now’s Nicolle Wallace on her podcast, The Best People, has almost half a million views on YouTube.

That’s aligned with the trends we’re seeing on Pivot. Data show that among the core demographic — adults between 25 and 54 — Pivot has a bigger audience than Fox News, CNN, or CNBC. While we trail Fox and CNN in overall audience size, those who tune in to Pivot have a much higher median income.

Little Steps, Big Impact

One point I’ve tried to drive home is that you have more power than you think. If you cancel a premium ChatGPT subscription, that’s $20 a month, or $240 a year in savings. Given that OpenAI is approaching a funding round that values the company at about $850 billion — more than 40 times its revenue of $20 billion — a withdrawal of $240 translates into a market cap reduction of about $10,000. 

That’s just one tech company we’ve identified as having an outsize influence over the economy and our president, alongside Amazon, Apple, Google, Meta, Microsoft, Netflix, Paramount, and Uber. While tech is the main focus, we’re also targeting companies that enable ICE, such as AT&T, Comcast, and Dell. With these companies, we aim to inflict maximum disruption with minimum impact on consumers. 

We know that slowing subscriber growth stings. Exhibit A is T-Mobile. Earlier this month it reported adding 30,000 fewer mobile-phone subscribers than analysts expected in the fourth quarter. The company shed $12 billion in market value in after-hours trading. In the tech industry, even slight misses can have a significant impact. Microsoft lost more than $350 billion in value on January 29 after sales growth at its Azure cloud division slowed by a single percentage point from the prior quarter.

Sustained Pressure

Most economic strikes do not work. Those that do are the result of sustained efforts, not one cinematic action. On December 1, 1955, Rosa Parks refused to relinquish her seat to a white man on a city bus in Montgomery, Alabama, a defining moment in the American Civil Rights Movement. But the Black community, led by a young preacher named Martin Luther King Jr., coordinated a massive carpool system (300 private cars) to boycott public buses over 381 days, costing the bus system about $3,000 per day ($35,000 adjusted for inflation). Segregation on public buses ended in 1956 after a Supreme Court ruling declared it unconstitutional. 

The struggle we face today is different, but we can find inspiration in our nation’s past. One thing is clear: Sustained economic pressure is critical. As Lucy Atkinson, a professor at the University of Texas at Austin, told NPR, “boycotts work when they last.” She believes it will be tough for consumers to walk away from Amazon, which dominates the e-commerce market, but cutting the number of hours spent on its tech offerings, even for a short period, could reduce consumers’ reliance on the company, potentially extending the boycott.

As an entrepreneur who’s been blessed with economic security, I don’t believe it’s my right to tell people to stop working and take the risk of getting fired. That’s why I’m not proposing a labor strike. I also don’t want to be the arbiter who prescribes exactly what steps a person should take, which products they should drop, and for how long. Our hope is that we will ignite a conversation and provide people with a resistance roadmap, showing Americans they have a weapon hiding in plain sight — they have the capacity to make a difference.

What Did You Do in the War?

We estimate our campaign has directly cost Big Tech a quarter of a billion in market value so far. That’s a promising start, even if it’s not enough to force the CEOs who have Trump’s ear to do the right thing. I’ll continue to be a media whore as long as they take my calls. But others will need to pick up the baton if we’re going to elevate the debate to the boardroom and avoid the fate of boycotts that have largely been forgotten. Remember 2018’s #DeleteFacebook campaign? Check the archives.

The nihilistic view that these are uniquely dark times is not accurate. Our nation has endured a civil war, world wars, plagues, and a Depression. In each case, Americans were equal to the challenge, and our democracy emerged stronger. That’s the question: Are we equal to the task? If, like me, you owe a debt to America, having garnered more from the nation than you’ve invested, then when do you plan to make good, to recognize the sacrifice of previous generations whose shoulders you’re standing on? What will you say at the end, when your kids ask, “Dad, what did you do in the war against fascism?”  

Life is so rich,

P.S. Resist and Unsubscribe continues. Join the movement.

The post The Algebra of Resistance appeared first on No Mercy / No Malice.