Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, October 11, 2024

AI Summary. The authors estimate that U.S. commuting zones an additional 200km (125 miles) from the nearest pre-2007 artificial intelligence innovation hotspot had 17% lower growth in AI jobs' share of online vacancies, an effect driven by distance from AI research papers rather than patents. About 20% of the effect is attributed to intervening state borders.

Jennifer Hunt, Iain Cockburn, and James Bessen National Bureau of Economic Research
Date Posted:

A commuting zone 125 miles farther from the closest pre-2007 AI hotspot has 17% lower growth in AI jobs’ share of vacancies over 7 years. A hotspot is defined as having 1,000 AI-related publications and patents related to “deep learning.”

Does distance from innovation hubs slow local AI job growth?

Core argument: A U.S. commuting zone an additional 200km (125 miles) from the closest pre-2007 AI innovation hotspot shows 17% lower growth in AI jobs' share of online vacancies, based on AI publication data merged with Burning Glass vacancies for 2007–2019.

Using our own data on Artificial Intelligence publications [related to “deep learning”] merged with Burning Glass vacancy data for 2007-2019, we investigate whether online vacancies for jobs requiring AI skills grow more slowly in U.S. locations farther from pre-2007 AI innovation hotspots. We find that a commuting zone which is an additional 200km (125 miles) from the closest AI hotspot has 17% lower growth in AI jobs' share of vacancies. This is driven by distance from AI papers rather than AI patents. Distance reduces growth in AI research jobs as well as in jobs adapting AI to new industries, as evidenced by strong effects for computer and mathematical researchers, developers of software applications, and the finance and insurance industry. 20% of the effect is explained by the presence of state borders between some commuting zones and their closest hotspot. Distance does not capture difficulty of in-person or remote collaboration nor knowledge and personnel flows within multi-establishment firms hiring in computer occupations.

Takeaways by Macro Roundup® AI

  1. A U.S. commuting zone an additional 200km (125 miles) from the closest pre-2007 AI innovation hotspot shows 17% lower growth in AI jobs' share of online vacancies, based on AI publication data merged with Burning Glass vacancies for 2007–2019.
  2. The distance effect is driven by remoteness from AI papers rather than AI patents, and it reduces growth in AI research jobs as well as jobs adapting AI to new industries, with strong effects for computer and mathematical researchers, software application developers, and finance and insurance.
  3. State borders between commuting zones and their closest AI hotspot explain 20% of the estimated distance effect, which does not capture difficulty of in-person or remote collaboration or knowledge and personnel flows within multi-establishment firms hiring in computer occupations.

Related Articles:

  • The Rapid Adoption of Generative AI — A nationally representative U.S. survey found 39% of people aged 18-64 used generative AI, with more than 24% of workers using it in the prior week and nearly one in nine using it every workday. The authors estimate 0.5-3.5% of U.S. work hours are currently assisted by generative AI.
  • Assessing the Implications of a Productivity Miracle — If artificial intelligence can perform economically valuable cognitive tasks at very low marginal cost, consumers would buy far more of the cheapened goods and spend the savings in other categories, expanding activity and employment in sectors facing new demand. Where supply is inherently limited, such as real estate, those savings could bid up prices and produce inflation.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. U.S. economic output has exceeded pre-pandemic forecasts, but the outperformance is mostly attributable to an unexpected surge in immigration rather than new technology. Long-run technology forecasts made in the 1960s correctly anticipated innovations such as smartphones while predicting roughly 60 others that never materialized.

Cardiff Garcia and Paul Krugman Economic Innovation Group
Date Posted:

.@paulkrugman argues “if we believe our numbers, which maybe we shouldn’t, but if we believe our numbers, total factor productivity growth has been really pretty lousy” for the last 20 years, even with significant technological changes.

Is the economy's post-pandemic outperformance driven by immigration rather than technology?

Core argument: U.S. economic output has exceeded pre-pandemic forecasts since Covid, but that outperformance is attributed mostly to an unexpected surge in immigration rather than to new technology.

If you weren't paying attention, you might have thought that with all of this new technology — the U.S. economy has definitely outperformed post-Covid, we're above pre-pandemic forecasts, which is really amazing — but if you start to look into it, it's mostly because of an unexpected surge in immigration. And so with the technological stuff, we really don't know. Back in the 60s, there was all this futurism. There were people making long-run projections, and Herman Kahn had this thing called the Year 2000, which was about what the world would look like in this far distant year of 2000. There were like a hundred predicted innovations, and he got almost all of the ones that actually did happen. There’s stuff in there that is recognizably smartphones. There are things that recognizably are pretty much all of the sexy technologies that have come along since the 1960s. There's also like 60 technologies he predicted that didn't come to pass. We have a much more pokey backwards world than what people in the 1960s thought we were going to be even 10 or 15 years ago.

Takeaways by Macro Roundup® AI

  1. U.S. economic output has exceeded pre-pandemic forecasts since Covid, but that outperformance is attributed mostly to an unexpected surge in immigration rather than to new technology.
  2. Herman Kahn's 1960s "Year 2000" project listed about 100 predicted innovations and anticipated almost all of those that did arrive, including recognizable descriptions of smartphones.
  3. Kahn also predicted roughly 60 technologies that never came to pass, and today's world is more pokey and backward than 1960s futurists expected.

Related Articles:

  • Business Spending Is Lining Up to Reinforce Growth — Around 70% of sectors are posting positive year-over-year profit growth, with big tech showing the largest acceleration in demand and profits but strength broadening across the economy. Companies are responding with rising capital spending growth and more optimistic investment plans, as firms typically add capacity with a slight lag after real demand picks up.
  • The AI Transition One Year Later: On Track, but Macro Impact Still Several Years Off — Investment in AI hardware is projected to rise substantially as a precursor to integrating AI into business processes, with the investment cycle estimated to peak at 2–2½% of GDP and early signs visible among AI-enabling companies. The authors estimate generative AI could raise developed-market labor productivity growth by 1.5pp annually over a 10-year adoption period, roughly 15% cumulatively.
  • How AI & Robots are Smashing Economics, and Why It Matters — As artificial intelligence and robots make wages less responsive to employment conditions, the link between tight labor markets and inflation weakens, undermining central banks' inflation-targeting frameworks. The author argues central banks would then need far larger interest-rate moves to achieve the same effect, producing more volatile and less predictable outcomes.

AI Summary. The Advanced Placement program states that most of its 40 subjects have historically had exam pass rates of 60–80%, while nine subjects—including world history, English literature, biology, macroeconomics, and U.S. history—fluctuated between 40–50% and 70–80%. New data collection and analysis methods are now used to set pass rates, bringing those nine subjects in line with the others.

Frederick Hess American Enterprise Institute
Date Posted:

The College Board periodically changes standards for AP exams to better match college performance, raising concerns of grade inflation. @AP_Trevo, representing the Board, claims standards have not systematically fallen. @rickhess99 is skeptical.

Why have pass rates risen in nine advanced high school subjects?

Core argument: Trevor Packer, senior vice president of the AP program since 2003, says most of the 40 AP subjects have historically had exam pass rates of 60–80%, while nine subjects, primarily in the humanities, fluctuated between 40–50% and 70–80%.

[According to] Trevor Packer, senior vice president for the AP program, who has overseen it since 2003, “historically, most of the 40 AP subjects have had exam pass rates of 60 to 80%. However, in nine subjects—primarily those in the humanities—pass rates have fluctuated between 40 to 50% and 70 to 80% over time. New technologies for rapid data collection and analysis have recently enabled researchers to utilize such evidence to derive AP pass rates rather than rely on the more subjective process used in the past. As a result, the pass rates in these nine AP subjects—world history, English literature, biology, macroeconomics, microeconomics, chemistry, U.S. government, U.S. history, and European history—are now consistent with the traditional pass rates in the other AP subjects. We brought about these changes in part because, over the years, we’ve polled hundreds of college faculty and admissions officers, and they have consistently expressed a conviction that AP students—typically the most academically strong of American high schoolers—should be able to achieve 60 to 80% pass rates on AP exams.”

Takeaways by Macro Roundup® AI

  1. Trevor Packer, senior vice president of the AP program since 2003, says most of the 40 AP subjects have historically had exam pass rates of 60–80%, while nine subjects, primarily in the humanities, fluctuated between 40–50% and 70–80%.
  2. Pass rates in world history, English literature, biology, macroeconomics, microeconomics, chemistry, U.S. government, U.S. history, and European history are now consistent with the traditional pass rates in other AP subjects, according to Packer.

Related Articles:

  • 2024 SAT Data Drop — Race gaps in SAT scores are consistent across years, with most differences within the range expected from sampling error; the exceptions are Amerindian scores falling and Asian scores rising relative to White scores. The author attributes those shifts to changes in who selects into SAT test-taking rather than genuine population changes.
  • The Misguided War On The SAT — The National Assessment of Educational Progress, a nationwide test of elementary and middle school students with no test-prep industry around it, shows racial and economic gaps closely resembling those on the SAT and ACT. Researchers argue this indicates college admissions tests measure underlying learning, making score disparities a symptom rather than a cause of inequality.
  • Standardized Test Scores and Academic Performance at Ivy-Plus Colleges — Using admissions records and first-year grades at multiple Ivy-Plus colleges, the authors find SAT and ACT scores substantially predict college academic success even among students with the same high school grades, while high school grade point average does little to predict it. Conditional on test scores, students from lower- and higher-resourced high schools have virtually identical college grades.

AI Summary. Polling analysis from Echelon Insights finds that white progressive Americans hold views on immigration, racism, patriotism, and meritocracy that are out of line with the average black or Hispanic voter, while hardline conservatives are equally distant in the opposite direction. By self-reported ideology, Americans of colour now sit roughly equidistant between the two groups.

John Burn-Murdoch Financial Times
Date Posted:

Racial polarization in Americans’ political ideology is declining as white liberals’ views have diverged from Hispanic and black Americans. “Americans of colour are now roughly equidistant between white progressives and conservatives.” @jburnmurdoch

Are white progressives' views out of step with minority voters?

Core argument: White progressive Americans hold views on immigration, racism, patriotism, and meritocracy that are out of line with the average black or Hispanic voter, according to analysis from pollster Echelon Insights.

The sharp leftward turn among educated white liberals has caused white Democrats to overshoot the minority position on a growing number of issues, including immigration, racism, patriotism, and meritocracy. White progressive Americans now hold views on these culture questions that are completely out of line with the average black or Hispanic voter, according to analysis from pollster Echelon Insights. To be clear, hardline US conservatives are just as far in the opposite direction. But where, historically, the left was the natural home for non-white Americans, that is growing less obviously the case. In terms of self-reported political ideology, Americans of colour are now roughly equidistant between white progressives and conservatives.

Takeaways by Macro Roundup® AI

  1. White progressive Americans hold views on immigration, racism, patriotism, and meritocracy that are out of line with the average black or Hispanic voter, according to analysis from pollster Echelon Insights.
  2. By self-reported political ideology, Americans of colour sit roughly equidistant between white progressives and conservatives, making the left less obviously the natural home for non-white Americans than it was historically.
  3. The sharp leftward turn among educated white liberals has pushed white Democrats past the minority position on a growing number of issues, while hardline US conservatives sit just as far in the opposite direction.

Related Articles:

  • Americans and Affirmative Action: How the Public Sees the Consideration of Race in College Admissions, Hiring — Survey research finds more Americans disapprove than approve of colleges considering race and ethnicity in admissions: half of U.S. adults said they disapprove of selective colleges weighing race and ethnicity to increase diversity, a third approved, and 16% were unsure. In another survey, 82% said colleges should not consider race or ethnicity, versus 17% who said they should.
  • Consistent Signs of Erosion in Black and Hispanic Support for Biden — Polling shows the Democratic presidential candidate's support among nonwhite voters running well below his prior election standing across racial groups, with leads of 72-11 among Black voters, 47-35 among Hispanic registrants, and 40-39 among other nonwhite voters. About 5% of his former nonwhite voters now back the Republican candidate, including 8% of Hispanic voters.
  • American Politics Is Undergoing A Racial Realignment — National election surveys and Gallup polling show the Democratic Party's advantage among Black, Latino, and Asian voters at its lowest level since 1960. The article argues this shift reflects fading civil rights-era ties, a weakening link between income and party choice, and non-white voters with long-held conservative views aligning their votes with those views.

AI Summary. Swing-state polling shifted toward Trump, though the movements are relatively minor and the electoral map remains scrambled and close, with each candidate gaining ground in states that had been among their weakest.

Nate Silver and Eli McKown-Dawson Silver Bulletin
Date Posted:

The latest @NateSilver538 update shows Harris leading in the national popular vote by 3pp. His model shows a 52% probability of Harris winning the electoral college where the “map is as scrambled (and close) as ever.”

Is the swing-state map still close despite recent polling shifts?

Core argument: Silver Bulletin records Trump's best week of swing state polling since the presidential debate, while noting the underlying shifts are probably relatively minor.

I'll just be expedient about the themes of the week. 1) Best week of swing state polling for Trump since the debate; 2) Nonetheless also probably some tendency for the media to exaggerate what are relatively minor shifts; 3) Also a weird week insofar as Trump has gained ground in what were some of his worst states before but the same is also true for Harris… map is as scrambled (and close) as ever.

Takeaways by Macro Roundup® AI

  1. Silver Bulletin records Trump's best week of swing state polling since the presidential debate, while noting the underlying shifts are probably relatively minor.
  2. Silver Bulletin argues the media likely exaggerates what are comparatively small movements in swing state polling.
  3. Trump gained ground in what had been some of his worst states, as did Harris, leaving the electoral map as scrambled and as close as ever.

Related Articles:

AI Summary. Federal authorities are investigating breaches of Verizon, AT&T and Lumen networks attributed to Salt Typhoon, a hacking group tied to Chinese intelligence. Investigators believe the compromises may have given the hackers access to systems the U.S. government uses for court-authorized wiretapping requests, though the severity remains unclear.

Dustin Volz and Drew FitzGerald Wall Street Journal
Date Posted:

A major hack of American broadband providers may have allowed Chinese intelligence to observe ongoing American domestic surveillance efforts, including court-ordered wiretapping.

Have Chinese hackers breached U.S. telecom networks used for wiretapping?

Core argument: Federal authorities and cybersecurity investigators are probing breaches of Verizon Communications, AT&T and Lumen Technologies, which a stealthy hacking group known as Salt Typhoon and tied to Chinese intelligence is believed to have carried out.

Federal authorities and cybersecurity investigators are probing the breaches of Verizon Communications, AT&T and Lumen Technologies. A stealthy hacking group known as Salt Typhoon tied to Chinese intelligence is believed to be responsible. The compromises may have allowed hackers to access information from systems the federal government uses for court-authorized network wiretapping requests. Hackers still had access to some parts of U.S. broadband networks within the last week, and more companies were being notified that their networks had been breached, people familiar with the matter said. Investigators remain in the dark about precisely what the hackers were seeking to do, according to people familiar with the response. The breaches are considered by some investigators to be a possibly catastrophic security lapse that could have enabled China to spy on U.S. domestic wiretapping efforts, but others have cautioned that it is too soon to know the severity of the intrusions.

Takeaways by Macro Roundup® AI

  1. Federal authorities and cybersecurity investigators are probing breaches of Verizon Communications, AT&T and Lumen Technologies, which a stealthy hacking group known as Salt Typhoon and tied to Chinese intelligence is believed to have carried out.
  2. The compromises may have allowed hackers to access information from systems the federal government uses for court-authorized network wiretapping requests, a lapse some investigators consider possibly catastrophic while others caution it is too soon to judge its severity.
  3. Hackers retained access to some parts of U.S. broadband networks as recently as the past week and more companies were being notified of breaches, while investigators remain unclear about what the hackers sought to do.

Related Articles:

  • Volt Typhoon Targets US Critical Infrastructure with Living-Off-The-Land Techniques — Microsoft has identified stealthy intrusions by Volt Typhoon, a Chinese state-sponsored actor, against US critical infrastructure organizations spanning communications, manufacturing, utilities, transportation, maritime, government, information technology, and education. Microsoft assesses with moderate confidence that the campaign is developing capabilities that could disrupt critical communications infrastructure between the US and Asia during future crises.
  • China Is Rapidly Building Warships. Satellite Images Reveal The Scale — China's shipbuilding capacity now exceeds the United States' by such a margin that it can build more ships in a month than American yards build in a year, with a workforce estimated at nearly 5x the US level. Chinese yards handled more than 1,700 orders in a year, compared with fewer than five for American shipyards.
  • Xi Jinping Says He Is Preparing China for War — China's leadership has emphasized war readiness, announcing a 7.2% increase in the defense budget—which has doubled over the past decade—and plans to reduce dependence on foreign grain imports. China has also opened National Defense Mobilization recruitment offices across the country, while cities in Fujian Province opposite Taiwan build or upgrade air-raid shelters.

Monday, October 14, 2024

AI Summary. The authors estimate substantially higher intergenerational persistence using expected lifetime resource measures than using traditional income measures. They estimate that, measured at ages 30–35, almost 80% of male children have higher disposable income than their fathers did, about 70% have higher consumption, and around 60% have greater expected lifetime resources.

Sadegh Eshaghnia, James Heckman, Rasmus Landersø, and Rafeh Qureshi National Bureau of Economic Research
Date Posted:

Estimating evolving expectations of lifetime resources over 40 years of Danish data, @r_landersoe finds that although 80% of male children have higher disposable income at ages 30-35 than their fathers, only 60% have higher lifetime income.

Do lifetime resource measures show stronger family influence than income measures?

Core argument: Nearly 80% of male children in the 1981–1982 birth cohort had higher disposable income at ages 30–35 than their fathers did at a similar age, versus about 70% for consumption and roughly 60% for expected lifetime resources.

Our expected lifetime measures quantify long-term family influence on children. We estimate significantly higher intergenerational persistence in expected lifetime measures compared to what is found using traditional measures of income and compared to realized lifetime measures. One measure of absolute mobility is the percentage of children who have better outcomes than their parents. For each measure of resources, we estimate the percentage of children (of the 1981—1982 birth cohort) whose resources are greater than those of their parents where we measure resources over ages 30–35. [In figure 9], the steep gradients for wage income, gross income excluding transfers, and gross income including transfers suggest substantial mean reversion across generations. However, once redistribution via taxes is factored in as done for disposable income and consumption, the gradient is much smaller. For disposable income, almost 80% of male children have higher income than their fathers had at a similar age. For consumption, this fraction is around 70%, while for expected PDV around 60% have higher expected lifetime resources than their father.

Takeaways by Macro Roundup® AI

  1. Nearly 80% of male children in the 1981–1982 birth cohort had higher disposable income at ages 30–35 than their fathers did at a similar age, versus about 70% for consumption and roughly 60% for expected lifetime resources.
  2. Expected lifetime measures of resources show significantly higher estimated intergenerational persistence than traditional income measures or realized lifetime measures.
  3. Steep intergenerational gradients for wage income and gross income with and without transfers suggest substantial mean reversion across generations, while the gradient is much smaller for disposable income and consumption, which factor in redistribution via taxes.

Related Articles:

  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility* — The authors find that children's economic mobility improves across birth cohorts in communities where parental employment rates increase, with larger effects for children who move to such communities at younger ages. The relationship is strongest for the parental employment rates of peers in a child's own birth cohort, suggesting it is mediated by social interaction.
  • The Life-Cycle Dynamics of Wealth Mobility — The authors identify four wealth trajectory groups within a birth cohort: 21% who start and remain near the top, 42% who start and remain near the bottom, and 21% and 15% who stay in the middle while rising or falling in rank. They conclude that wealth mobility is concentrated in these middle groups rather than shared across the population.
  • Intergenerational Mobility in American History: Accounting for Race and Measurement Error — Accounting for Black families, who historical studies routinely drop, and for measurement error in fathers' economic status can double estimates of intergenerational persistence in linked United States census data from 1850 to 1940. The author argues historical mobility was lower than previously estimated, implying greater equality of opportunity today than in the past.

AI Summary. Hungary and Norway devote more resources to family support than almost any other country, yet have fertility rates of 1.5 and 1.4 children per woman, below the 2.1 replacement rate needed to keep population steady; the U.S. rate is 1.6. Demographers suggest reluctance to have children reflects a cultural rather than purely financial shift.

Chelsey Dulaney Wall Street Journal
Date Posted:
Is Database:
Database

Parental benefits have failed to raise birth rates in advanced economies. Both Hungary and Norway spend more than 3% of GDP on efforts to raise fertility. Yet their birth rates remain under the US rate of 1.6 and the replacement rate of 2.1.

Can government family support programs raise fertility rates?

Core argument: Hungary and Norway devote more resources to families than almost any other nation, yet their fertility rates stand at 1.5 and 1.4 children per woman, far below the 2.1 replacement rate needed to keep population steady.

Two European countries devote more resources to families than almost any other nation: Hungary and Norway. Despite their programs, they have fertility rates of 1.5 and 1.4 children for every woman, respectively—far below the replacement rate of 2.1, the level needed to keep the population steady. The U.S. fertility rate is 1.6. Demographers suggest the reluctance to have kids is a fundamental cultural shift rather than a purely financial one.

Takeaways by Macro Roundup® AI

  1. Hungary and Norway devote more resources to families than almost any other nation, yet their fertility rates stand at 1.5 and 1.4 children per woman, far below the 2.1 replacement rate needed to keep population steady.
  2. The U.S. fertility rate is 1.6 children per woman, below the 2.1 replacement level.
  3. Demographers suggest the reluctance to have children reflects a fundamental cultural shift rather than a purely financial one.

Related Articles:

  • The Age of Depopulation: Surviving a World Gone Gray — The United States remains the main outlier among developed countries resisting depopulation, with fertility of just over 1.6 births per woman — high for a rich country but below the 2.1 replacement threshold — plus steady immigration. The Census Bureau projects the U.S. population will peak around 2080 and decline continuously thereafter.
  • The Global Fertility Crisis Is Worse Than You Think — Adjusting United Nations figures for lower recorded births, the author estimates the global fertility rate was 2.18, below the 2.21 replacement threshold. Population is not yet falling because women born in the 1990s and 2000s are having children while older generations live longer, so births still exceed deaths, with a projected peak in about 30 years.
  • Why Family-Friendly Policies Don’t Boost Birth Rates — Developed countries roughly tripled real per capita spending on child benefits, subsidised childcare, and parental leave between 1980 and 2019 while birth rates fell from 1.85 to 1.53 per woman. Finland's fertility rate has fallen by a third since 2010, and Korea's "baby bonus" mainly paid women already planning children.

AI Summary. U.S. household incomes have been rising at a 6% annualized rate for two years, with no sign of slowing, while measures of underlying inflation run about 1 to 1.5 percentage points faster on an annualized basis than before the pandemic. Productivity and employment also appear to be rising faster.

Matt Klein The Overshoot
Date Posted:

The nominal value of US output is growing at ~6%/year, which is “unlikely to be consistent” with the Fed’s target. Underlying inflation remains ~1.0 to 1.5pp higher than its pre-pandemic level. @M_C_Klein

Is the US economy still growing at a rapid pace?

Core argument: American incomes have risen at a 6% annualized rate over the past two years, a pace that shows no signs of changing.

American incomes have been rising at a 6% annualized rate for the past two years—and this shows no signs of changing. Little wonder that measures of underlying inflation remain ~1-1.5 percentage points annualized faster than before the pandemic, even if productivity and employment also seem to be rising faster.

Takeaways by Macro Roundup® AI

  1. American incomes have risen at a 6% annualized rate over the past two years, a pace that shows no signs of changing.
  2. Measures of underlying U.S. inflation remain roughly 1 to 1.5 percentage points annualized faster than before the pandemic.
  3. U.S. productivity and employment also appear to be rising faster, alongside the faster pace of underlying inflation.

Related Articles:

  • U.S. Inflation Is Still Hotter than Pre-Pandemic. And That’s Okay — If underlying services inflation holds near 2% a year and prior relationships reassert themselves, total yearly personal consumption inflation could settle near 3% rather than returning to 2%. That would carry implications for interest rate pricing, and traders assuming a reversion to pre-pandemic inflation norms may be surprised.
  • The Transition to a Higher Cost of Capital — Bond yields near 4.5% sit below the 5.5% short-term interest rate, leaving little risk premium, and those yields have been enough to draw buyers back toward normal bond holdings. The author argues yields still need to rise to a sustainable cost of capital given structurally higher fiscal and inflationary spending.
  • Kudos To Central Banks — The author argues a resurgence of inflation is the biggest threat to an otherwise positive economic outlook, noting the 2021–2023 inflation pattern resembles the first peak of the 1970s, which was followed by a second wave. Risks cited include expected interest rate cuts despite a strong underlying economy and potentially inflationary policy proposals.

AI Summary. Polling in Pennsylvania showed Harris leading 50% to 47%, within the margin of error, while Arizona polling showed Trump ahead 51% to 46%. Harris led by nearly 20 percentage points on handling abortion, her strongest issue across battleground states and the second most important concern for Pennsylvania voters.

Michael Bender and Ruth Igielnik New York Times
Date Posted:

NYT/Siena finds Trump leading Harris by 51-46 in Arizona and down 3pp in Pennsylvania 47-50. The margin of error is +/- 4pp.

Are the two leading candidates splitting key battleground states?

Core argument: Kamala Harris leads Donald Trump 50% to 47% in Pennsylvania in the Times/Siena poll, a margin inside the margin of error and equal to four percentage points using unrounded figures.

In Pennsylvania, Ms. Harris’s polling lead has been steady, though the state remains tight. Her advantage, 50% to 47%, falls inside the margin of error. But this was the third Times/Siena survey in two months showing support for Ms. Harris from at least half of the state. (Her lead in the poll was four percentage points when calculated using unrounded figures.) Fueling Ms. Harris in the state is her commanding lead of nearly 20 percentage points when it comes to handling abortion, her single best issue across battleground states and the second most important concern for Pennsylvania voters. In Arizona, Mr. Trump was ahead, 51% to 46%, or six percentage points when calculated using unrounded figures, nearly unchanged from September, when the poll showed the former president leading, 50% to 45%.

Takeaways by Macro Roundup® AI

  1. Kamala Harris leads Donald Trump 50% to 47% in Pennsylvania in the Times/Siena poll, a margin inside the margin of error and equal to four percentage points using unrounded figures.
  2. Donald Trump leads Kamala Harris 51% to 46% in Arizona, or six percentage points using unrounded figures, nearly unchanged from September's 50% to 45% result.
  3. Kamala Harris holds a lead of nearly 20 percentage points on handling abortion in Pennsylvania, her single best issue across battleground states and the second most important concern for Pennsylvania voters.

Related Articles:

  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Across the 1978 to 1992 birth cohorts, adult household incomes fell for white children raised in low-income families and rose for those raised in high-income families, increasing the intergenerational persistence of income ranks among white children by 28%. Over the same cohorts, adult incomes rose for Black children at all parental income levels.
  • The Left Is Losing Its Grip On Ethnic Minority Voters — Polling analysis from Echelon Insights finds that white progressive Americans hold views on immigration, racism, patriotism, and meritocracy that are out of line with the average black or Hispanic voter, while hardline conservatives are equally distant in the opposite direction. By self-reported ideology, Americans of colour now sit roughly equidistant between the two groups.
  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.

AI Summary. Unidentified drones flew over a U.S. military base for 17 days in a coordinated pattern of higher-altitude fixed-wing aircraft and smaller quadcopters below, leading U.S. officials to doubt hobbyists were responsible. Federal law bars the military from shooting down drones near domestic bases absent an imminent threat.

Gordon Lubold, Lara Seligman and Aruna Viswanatha Wall Street Journal
Date Posted:

Drone swarms have been flying over major American military facilities in VA and CA. Though they are likely being operated by foreign adversaries, the DOD currently doesn’t have authorization to shoot down the drones.

Can the U.S. military counter unidentified drones over domestic bases?

Core argument: Mystery drones swarmed a U.S. military base for 17 days, with the incident reported to the Pentagon's National Military Command Center and the White House Situation Room, and the president briefed on it in his daily briefing.

The drone swarm was reported to the Pentagon office of the National Military Command Center, which is responsible for dispersing emergency messages to U.S. military commanders worldwide. A report went to the White House Situation Room, and the president learned about it in his daily briefing. U.S. officials didn’t believe hobbyists were flying the drones, given the complexity of the operation. The drones flew in a pattern: one or two fixed-wing drones positioned more than 100 feet in the air and smaller quadcopters, the size of 20-pound commercial drones, often below and flying slower. Occasionally, they hovered. Federal law prohibits the military from shooting down drones near military bases in the U.S. unless they pose an imminent threat.

Takeaways by Macro Roundup® AI

  1. Mystery drones swarmed a U.S. military base for 17 days, with the incident reported to the Pentagon's National Military Command Center and the White House Situation Room, and the president briefed on it in his daily briefing.
  2. The drones flew in a pattern of one or two fixed-wing aircraft more than 100 feet up paired with slower, lower quadcopters the size of 20-pound commercial drones, occasionally hovering; U.S. officials did not believe hobbyists were responsible, given the operation's complexity.
  3. Federal law prohibits the U.S. military from shooting down drones near military bases in the United States unless the drones pose an imminent threat.

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AI Summary. SpaceX's Starship launch system, the largest and most powerful ever developed, returned its Super Heavy booster to its launch site, where arms on the launch tower caught it after its engines reignited to slow the descent. SpaceX aims to fully reuse both the booster and spacecraft to enable multiple flights per day and lower launch costs.

Loren Grush Bloomberg
Date Posted:

In a major step towards making its Starship rocket system fully reusable, SpaceX successfully flew a 233-foot rocker booster back to its launch site and caught it with two mechanical arms.

Can catching a returning booster make rockets fully reusable?

Core argument: SpaceX's Starship, the largest and most powerful launch system ever developed, lifted off at 8:25 a.m. New York time, with the Super Heavy booster returning to its launch site and reigniting its engines to slow for landing.

The largest and most powerful launch system ever developed lifted off Sunday at 8:25 a.m. New York time. After propelling Starship to space, the Super Heavy booster returned to its launch site on Earth, where it reignited its engines to slow itself down as it came in for landing. Two arms protruding from Starship’s launch tower then “caught” the booster, as cheers and applause erupted at mission control. With Starship, SpaceX’s eventual aim is to fully recover the vehicle’s two main parts: the Starship spacecraft itself — which will carry satellites and eventually passengers — and the Super Heavy booster. By recovering both of these pieces after flight, SpaceX hopes to rapidly reuse and relaunch the hardware following takeoff, allowing for multiple flights of Starship in a single day. The company also expects full reusability to drastically lower the cost of launching Starship.

Takeaways by Macro Roundup® AI

  1. SpaceX's Starship, the largest and most powerful launch system ever developed, lifted off at 8:25 a.m. New York time, with the Super Heavy booster returning to its launch site and reigniting its engines to slow for landing.
  2. Two arms protruding from Starship's launch tower "caught" the returning Super Heavy booster, part of SpaceX's aim of fully recovering both the Starship spacecraft and the booster after flight.
  3. SpaceX expects full reusability of Starship's two main parts to allow multiple flights in a single day and drastically lower launch costs, with the spacecraft carrying satellites and eventually passengers.

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  • SpaceX’s Starship Rocket Successfully Completes 1st Return From Space — SpaceX's Starship completed its first return from space, with the booster setting down in the Gulf of Mexico and the upper-stage spacecraft surviving atmospheric re-entry for a controlled splashdown in the Indian Ocean. The flight was not flawless — the vehicle lost many heat-shield tiles and sustained a damaged flap — and technical hurdles remain.
  • and — SpaceX's Starship completed its first return from space, with the booster setting down in the Gulf of Mexico and the upper-stage spacecraft surviving atmospheric re-entry for a controlled splashdown in the Indian Ocean. The flight was not flawless — the vehicle lost many heat-shield tiles and sustained a damaged flap — and technical hurdles remain.
  • Building an Enduring Advantage in the Third Space Age — SpaceX's Starship completed its first return from space, with the booster setting down in the Gulf of Mexico and the upper-stage spacecraft surviving atmospheric re-entry for a controlled splashdown in the Indian Ocean. The flight was not flawless — the vehicle lost many heat-shield tiles and sustained a damaged flap — and technical hurdles remain.
  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.