Edward Conard

Top Ten New York Times Bestselling Author

  • “…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 provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…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 offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, September 22, 2025

AI Summary. A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

Edward Conard Macro Roundup
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I debate @JasonFurman—Pres. Obama’s Chair of the Council of Economic Advisors—at Harvard over the effect of tax increases on the expected value of innovative risk-taking and the magnitude of changes needed to equilibrate America’s fiscal policy.

Do higher taxes reduce the expected value of innovative risk-taking?

Core argument: In a debate with Jason Furman, Ed Conard argues that driving U.S. debt below 100% of GDP is critical given rising interest rates and CBO's failure to assume periodic budget-busting recessions.

I debate Jason Furman on changes needed to equilibrate America’s fiscal policy. I argue that spending increases slow growth, not tax increases needed to pay for them; that tax cuts are temporary; that, unlike Europe, which lacks investment-worthy ideas, tax increases will reduce the expected value of America’s innovative risk-taking; and that driving debt below 100% of GDP is critical with rising interest rates and CBO’s failure to assume periodic budget-busting recessions. Read more

Takeaways by Macro Roundup® AI

  1. In a debate with Jason Furman, Ed Conard argues that driving U.S. debt below 100% of GDP is critical given rising interest rates and CBO's failure to assume periodic budget-busting recessions.
  2. Conard argues that spending increases, rather than the tax increases needed to pay for them, slow growth, and that tax cuts are temporary.
  3. Conard argues that tax increases will reduce the expected value of America's innovative risk-taking, unlike in Europe, which he contends lacks investment-worthy ideas.

Related Articles:

  • Why the U.S. Economy Is Trouncing Europe’s — Only about 12% of Americans score at the highest levels on international academic tests versus 34% at the lowest, yet the U.S. has created nearly 250 companies worth over $10bn ($30tn in value) against Europe's 14, and median U.S. disposable household income is 25% above Germany's. The author argues expanding high-skilled immigration is the fastest way to accelerate growth.
  • Mitigating Benefits Cliffs for Low-Income Families: District of Columbia Career Mobility Action Plan as a Case Study — The authors estimate that a hypothetical low-income family with children receives $68,686 in government support at an income of $11,000 but only $22,709 at $65,000, while its tax liability rises from $842 to $12,835. The lost assistance plus higher taxes fully offsets the $54,000 income gain.
  • A Visualization of Europe’s Non-Bubbly Economy — The Draghi report notes that no European Union company with a market capitalization above €100bn was founded from scratch in the past fifty years, while all six US companies valued above €1tn were. The 13 EU companies founded in that period and worth at least $10bn total about $400bn, versus nearly $30tn for their US counterparts.

AI Summary. The share of U.S. prime-age men out of the labor force has more than quadrupled from about 2.5% to around 11%, with most supported by parents, wives, or partners rather than disability insurance. The shift toward knowledge and services has reduced male-coded jobs across all advanced countries, including Germany.

Paul Krugman Krugman Wonks Out
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11% of American men 25–54 are neither employed nor looking for work. The destruction of low-skilled, “male-coded” jobs, Krugman argues, has led these men to look for support from parents and female partners.

Why are more prime-age men out of the labor force?

Core argument: The share of U.S. prime-working-age men out of the labor force has risen from around 2.5% in the 1950s to around 11%, meaning more than 1 in 10 are neither employed nor seeking work.

In the 1950s only a tiny fraction of men in their prime working years — around 2.5% — were out of the labor force. That percentage has now more than quadrupled, to around 11%. That is, more than 1 out of 10 men of prime working age are neither employed nor looking for work. What are these non-working men living on? Some are receiving government aid via disability insurance. Mostly, however, they’re being supported by “cohabitants’” i.e. living with parents, or relying on income earned by wives or other partners. Around 1980, the U.S. economy became increasingly oriented towards knowledge and services rather than manual labor and industry. This worked to the advantage of large metropolitan areas that already possessed highly educated workforces. Yet many small industrial towns and cities were damaged economically, stranded by economic change. The same economic transformation also reduced the number of male-coded jobs while it increased the number of female-coded jobs. The percentage of jobs created by sectors that are male-coded -- that disproportionately employ men without higher education -- has declined in all advanced countries [including Germany], even though Germany runs huge trade surpluses in manufactured goods.

Takeaways by Macro Roundup® AI

  1. The share of U.S. prime-working-age men out of the labor force has risen from around 2.5% in the 1950s to around 11%, meaning more than 1 in 10 are neither employed nor seeking work.
  2. Non-working prime-age men are supported mostly by cohabitants — living with parents or relying on income earned by wives or other partners — with some receiving government disability insurance.
  3. The share of jobs created by male-coded sectors, which disproportionately employ men without higher education, has declined in all advanced countries, including Germany despite its large trade surpluses in manufactured goods.

Related Articles:

  • Bachelors Without Bachelor’s: Gender Gaps in Education and Declining Marriage Rates — Marriage rates for college-educated women have remained stable over the past fifty years even as the relative supply of college-educated men declined, with the overall decline in marriage driven almost entirely by fewer marriages between non-college women and non-college men. The education gap in women's marriage rates is larger in areas where non-college men face the highest joblessness and incarceration.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.
  • The Declining Labor Market Prospects of Less-Educated Men — The decline in labor force participation among less-educated men is partly attributed to greater willingness to be supported by family income, with participation falling despite stable wages, pointing to factors beyond labor demand. Changes in family structure, including fewer stable marriages and more men living with relatives, reduce incentives to work.

AI Summary. US Census data show the first-marriage rate among 22- to 45-year-olds fell 9% between 2008 and 2023, to 60 marriages per 1,000 never-married Americans. Marriage rates declined far less for college graduates and top-third earners than for those with less education and lower incomes.

Rachel Wolfe Wall Street Journal
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Americans aged 22–45 are seeking financial stability before marrying, shifting from marriage as a starting point to an achievement after career and wealth building. This change delays marriage, increases selectivity, and lowers the overall marriage rate.

Is marriage increasingly concentrated among higher-earning, college-educated Americans?

Core argument: The first-marriage rate among 22- to 45-year-old Americans fell 9% between 2008 and 2023, to 60 marriages per 1,000 never-married Americans, according to Bowling Green University's National Center for Marriage & Family Research.

The marriage rate, that is the rate of new marriages to the overall population, has been on a long downward trajectory, census data shows. Between 2008 and 2023, the first-marriage rate among 22- to 45-year-olds declined 9%, to 60 marriages per 1,000 never-married Americans, according to an analysis by Bowling Green University’s National Center for Marriage & Family Research. Overall marriage rates have declined much less for 22- to 45-year-olds with a bachelor’s degree than they have for those with less than a college education between 2008 and 2023, according to an analysis of census data by the Institute for Family Studies. The share of married adults in the top third of earners also fell slightly, while dropping much more for the bottom two thirds of the income spectrum. While 59% of American 37-year-olds with parents in the top income quartile were married as of 2019 [according to Benjamin Goldman, an economics professor at Cornell University] only 30% of those from the bottom quartile could say the same.

Takeaways by Macro Roundup® AI

  1. The first-marriage rate among 22- to 45-year-old Americans fell 9% between 2008 and 2023, to 60 marriages per 1,000 never-married Americans, according to Bowling Green University's National Center for Marriage & Family Research.
  2. Marriage rates among 22- to 45-year-olds with a bachelor's degree declined much less than among those with less than a college education between 2008 and 2023, according to an Institute for Family Studies analysis of census data.
  3. Among American 37-year-olds, 59% of those with parents in the top income quartile were married as of 2019, versus 30% of those from the bottom quartile, according to Cornell economics professor Benjamin Goldman.

Related Articles:

  • The Growing Link Between Marriage, Fertility, and Partisanship — Among US women born 1975–1979 who have completed childbearing, conservatives average 2.1 children, moderates 1.8, and liberals 1.5; among those born 1985–1989 the figures are 2.1, 1.9, and 1.7. Birthrates and marriage rates are lower for all ideological groups than before 1975.
  • Changes in Milestones of Adulthood — Among US young adults aged 25–34, the share completing a high school or college degree rose 9 percentage points to 83%, while the share ever married fell 18 points to 44% and the share living with a child fell 16 points to 39%. Economic milestones became more common as family formation milestones became less common.
  • The Downside of Fertility — In developed countries that modernized very rapidly, men do considerably less housework and care for others at home relative to women than in countries with more continuous growth. Larger gender gaps in household and caring hours are strongly correlated with lower fertility rates across these countries.

AI Summary. Across rich countries, longer lifespans and falling birth rates mean fewer working-age people supporting those too young, old, or sick to work, straining the tax levels and public services electorates expect. Immigration faces fierce political opposition, risking a loop in which restrictions worsen fiscal pressures and services, deepening opposition further.

Stephen Bush and John Burn-Murdoch Financial Times
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Efforts by advanced economies to offset demographic decline via immigration have been met with widespread public opposition. Slower growth associated with lower immigration likely means “ever greater demands on the purse of the native-born population.”

Can rich countries sustain public services and taxes without immigration?

Core argument: Across the rich world, longer lifespans and falling birth rates are pushing care-dependency ratios—the number of workers supporting the young, old and sick—below the level needed to sustain the public services and tax levels electorates expect.

Across the rich world, almost every state faces a version of the same problem: their people are living longer and having fewer children. Every year, tens of thousands of citizens will hit state pension age or retire, and fewer of us are having enough children to maintain our care-dependency ratio (the number of working people supporting those who are too young, too old or too sick to work themselves) at a point that provides the standard of public services and the levels of tax that modern electorates have grown accustomed to. But politicians have a problem: immigration is the subject of fierce political opposition. Democracies risk falling into a doom loop, in which restrictions on immigration mean ever greater demands on the purse of the native-born population and ever worse services, which in turn deepens opposition towards immigration and therefore creates yet greater pressures, and so on.

Takeaways by Macro Roundup® AI

  1. Across the rich world, longer lifespans and falling birth rates are pushing care-dependency ratios—the number of workers supporting the young, old and sick—below the level needed to sustain the public services and tax levels electorates expect.
  2. Tens of thousands of citizens in rich countries reach state pension age or retire each year, while birth rates remain too low to sustain the working population supporting them.
  3. Democracies risk a doom loop in which immigration restrictions raise the fiscal burden on the native-born population and worsen public services, which deepens opposition to immigration and intensifies the pressures further.

Related Articles:

  • Political Representation Gaps and Populism — A study comparing survey responses of citizens and parliamentarians across 27 European countries finds that policymaking reflects voters' economic attitudes well, but the average parliamentarian is about one standard deviation more culturally liberal than the national mean voter. The author finds this cultural gap spans nearly all issues, countries, and established parties, and that right-wing populists fill it.
  • Changing Sub-Saharan Africa’s Growth Trajectory — Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.
  • Life Under Two: Debt, Deficits, and the AI Discontinuity — The United States averaged annual GDP growth above 3% for decades, but 2% or less is now more likely. Over ten years, the author estimates that gap amounts to a $3.36tn larger economy, $3.7tn more tax revenue, and 6m more jobs, shifting public psychology from abundance toward scarcity.

AI Summary. The H-1B visa program is the main pathway to the U.S. for highly skilled foreign workers, and critics argue it gives jobs to foreigners at the expense of native-born workers. A Pew Research Center analysis found India-born workers received nearly three-quarters of these visas, with China-born workers a distant second at a bit more than one in 10.

Justin Lahart Wall Street Journal
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The H-1B program has been the main pathway to the US for highly skilled foreign workers. The Trump administration is switching from a lottery system to a $100,000 fee borne by the hiring entity.

Does a high skilled-visa fee help American workers?

Core argument: India-born workers received nearly three-quarters of H-1B visas in 2023, with China-born workers a distant second at a bit more than one in 10, according to a Pew Research Center analysis.

The H-1B program, created by Congress in 1990, is the main pathway to the U.S. for highly skilled foreign workers. It has long generated controversy, with critics contending that it gives jobs to foreigners at the expense of native workers. Workers born in India accounted for nearly three-quarters of these visas in 2023, a Pew Research Center analysis found. China-born workers were a distant second, accounting for a bit more than one in 10 visas.

Takeaways by Macro Roundup® AI

  1. India-born workers received nearly three-quarters of H-1B visas in 2023, with China-born workers a distant second at a bit more than one in 10, according to a Pew Research Center analysis.
  2. The H-1B program, created by Congress in 1990, is the main pathway to the U.S. for highly skilled foreign workers, and critics contend it gives jobs to foreigners at the expense of native workers.

Related Articles:

AI Summary. China's economy has slowed as domestic investment stagnates and consumer spending stays weak, with the shortfall partly offset by rising net exports. The author argues these internal problems are being passed to the rest of the world, since export values are rising about 6% a year while import values are down 2.2%.

Matt Klein  The Overshoot
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China’s persistently weak consumer spending since Covid, now 17% below the pre-pandemic trend, has led to an entirely export-led recovery of Chinese manufacturing, with flat imports creating negative spillovers for the rest of the world, Klein argues.

Is China's domestic slowdown being passed to the rest of the world?

Core argument: The 2024 increase in China's trade surplus contributed more to China's reported growth rate than in any year since 1997, partly offsetting a domestic slowdown in which investment stagnates and consumer spending remains weak.

China’s economy has slowed sharply in 2025 as domestic investment stagnates and consumer spending remains persistently weak, as it has ever since the imposition of “Covid Zero”. The investment slowdown is a recent choice, and while the motivations for it are understandable, the danger—for China and for the world as a whole—is that it is much easier for the party-state to cut excessive spending in one part of the economy than it is to raise spending where it is most needed by enough to make up the difference. So far, the impact of the domestic slowdown has been partly offset by soaring net exports. In 2024 the increase in China’s trade surplus contributed more to the reported growth rate than in any year since 1997.  So far in 2025, the dollar value of China’s goods exports is rising about 6% a year, which is about the same as the full-year growth rate in 2024. But unlike last year, when spending on imports rose by 2.5% in January-August, or by 1.1% for the full year, so far in 2025, the dollar value of Chinese imports is down by 2.2%. China’s internal problems are therefore being dumped on the rest of the world. Businesses and workers elsewhere are earning less income because spending in China is too low.

Takeaways by Macro Roundup® AI

  1. The 2024 increase in China's trade surplus contributed more to China's reported growth rate than in any year since 1997, partly offsetting a domestic slowdown in which investment stagnates and consumer spending remains weak.
  2. The danger of China's investment pullback is that the party-state finds it easier to cut excessive spending in one part of the economy than to raise spending where it is most needed by enough to make up the difference.
  3. The dollar value of China's goods exports is rising about 6% a year in 2025, matching the full-year 2024 rate, while the dollar value of Chinese imports is down 2.2%, after rising 1.1% for full-year 2024.

Related Articles:

  • Xi Overcapacity Fight Leaves Economy Vulnerable Without Stimulus — China's total debt has risen to over 300% of gross domestic product from a little over 200% a decade ago, and with the main policy rate at 1.4%, the central bank has limited room to cut. Price declines are more widespread than in past deflationary episodes, and large-scale stimulus remains off the table.
  • China’s Youth Unemployment Soars To 2-Year High As Job Crunch Deepens — China's urban unemployment rate for 16- to 24-year-olds excluding students rose to 18.9% from 17.8%, the highest since the National Bureau of Statistics revised its calculation method for the series. A record 12.2m university students graduated into a job market strained by deflationary pressures and external uncertainties, with many struggling to find roles matching their education and skills.
  • The Trump Shock That Wasn’t (At Least Not Yet) — Excluding pharmaceuticals and gold — categories where trade is distorted by tax treatment and stockpiling ahead of tariffs — U.S. trade flows look largely normal despite tariff increases. Imports from China fell sharply, but imports from Taiwan and Southeast Asia rose, with electronics imports up on data center investment, leaving total Asian imports little changed.

Tuesday, September 23, 2025

AI Summary. Slowed private equity distributions mean that at the current pace it would take roughly nine years for investors to get their money back from the more than 12,000 companies held by US buyout funds, according to Pitchbook. Nearly two-thirds of private equity clients say they would prefer traditional sales even below internal valuations, with only 17% favoring continuation funds.

Allison McNeely, Preeti Singh, and Laura Benitez Bloomberg
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Fewer exits from buyout funds have “slowed fund distributions so dramatically that, at the current rate, it would take about nine years” for US buyout fund LP’s to collect their money from the more than 12,000 companies held by US buyout funds.

How long will private equity investors wait to recover capital?

Core argument: At the current distribution rate, it would take about nine years for limited partners to collect their money from the more than 12,000 companies held by US buyout funds, according to PitchBook.

The snags have slowed fund distributions so dramatically that, at the current rate, it would take about nine years for customers [of buyout funds] to collect their money from the more than 12,000 companies held by US buyout funds, according to Pitchbook. That’s making clients — known as limited partners — reluctant to pony up fresh capital at a time when Bain & Co. estimates more than 18,000 private capital funds are seeking $3.3 trillion. Almost two-thirds of private equity clients would prefer to see sponsors exit investments through traditional sales, even at a price below where the firm had internally valued the assets, according to a survey conducted by Bain. Only 17% of LPs viewed continuation vehicles as a preferred solution for liquidity.

Takeaways by Macro Roundup® AI

  1. At the current distribution rate, it would take about nine years for limited partners to collect their money from the more than 12,000 companies held by US buyout funds, according to PitchBook.
  2. Bain & Co. estimates more than 18,000 private capital funds are seeking $3.3 trillion, even as slowed distributions make limited partners reluctant to commit fresh capital.
  3. Almost two-thirds of private equity clients would prefer sponsors exit investments through traditional sales, even below internal valuations, while only 17% of limited partners viewed continuation vehicles as a preferred liquidity solution, according to a Bain survey.

Related Articles:

  • Private Equity Fundamentals — An analysis of North American private equity- and venture-backed companies with public stock or debt finds they trade at 22.4x adjusted earnings, in line with small-cap growth stocks, but at 33.4x on standard accounting measures with net debt of 8.8x earnings. The authors describe the group as heavily leveraged and mostly cash-flow negative.
  • Private Equity Operational Improvements — Companies acquired by private equity firms average operating profit margins 0.5% above their industry in the three years before the deal, drop in the transaction year, and afterward recover only to the industry average. The authors argue this pattern reflects buying higher-performing companies that mean-revert rather than post-deal efficiency gains.
  • It’s Mostly a Paper Moon: Alternative Investments Review — Venture capital financing has tightened: the median time between funding rounds has lengthened, more startups have shut down through bankruptcy, and the share of "down rounds" — new financing at a lower valuation — rose from 8% to nearly 20%, with those rounds cutting post-money valuations by more than 50%.

AI Summary. The US government collects tariffs at an annualized rate of about $350bn, equal to 18% of annual household income tax payments.

Torsten Sløk Apollo
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Torsten Sløk reports, “The US government currently collects ~$350B in tariffs at an annualized rate, corresponding to 18% of annual household income tax payments.”

How much revenue do tariffs collect relative to income taxes?

Core argument: The US government collects tariffs at an annualized rate of about $350 billion, an amount described as very significant.

The US government currently collects about $350 billion in tariffs at an annualized rate, which corresponds to 18% of annual household income tax payments. The bottom line is that the amount of money collected in tariff revenue is very significant.

Takeaways by Macro Roundup® AI

  1. The US government collects tariffs at an annualized rate of about $350 billion, an amount described as very significant.
  2. Annualized US tariff collections of roughly $350 billion equal 18% of annual household income tax payments.

Related Articles:

  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • Trump Signals Imminent Supreme Court Appeal to Protect Tariffs — The U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the International Emergency Economic Powers Act — a statute that primarily authorizes sanctions and does not mention tariffs — was unlikely to have been intended by Congress to grant the president nearly unlimited tariff authority. The White House is preparing a Supreme Court appeal.
  • Tariffs are Dumb Enough to (Almost) Work — A universal 15% tariff on imported goods could raise roughly $300–$400bn annually, a fraction of what a value-added tax would generate but real revenue given U.S. imports of about $4tn. The author argues tariffs are a poorly designed form of consumption tax that could build political groundwork for replacing them with a more efficient value-added tax.

AI Summary. China's trade surplus, nearly $1tn, is on track for a record $1.2tn as exports continue despite steep US tariffs, according to Bloomberg calculations. With US access curtailed, Chinese manufacturers have redirected shipments to India, Africa and Southeast Asia, prompting alarm among governments weighing damage to domestic industries against antagonizing Beijing.

Bloomberg Staff Bloomberg
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Bloomberg estimates that China’s trade surplus will reach a record $1.2T in 2025, ~ 20% above its 2024 surplus of just under ~$1T.

Are US tariffs redirecting Chinese exports to other markets?

Core argument: China's trade surplus reached almost $1 trillion last year and is on track for a record $1.2 trillion in 2025, according to Bloomberg calculations, despite five months of sky-high US tariffs.

China’s trade surplus last year was almost $1 trillion and is on track to exceed that in 2025, based on Bloomberg calculations. President Xi Jinping’s export engine has proved unstoppable during five months of sky-high US tariffs, sending China toward a record $1.2 trillion trade surplus. With access to the US curtailed, Chinese manufacturers have shown they aren't backing down: Indian purchases hit an all-time high in August, shipments to Africa are on track for an annual record and sales to Southeast Asia have exceeded their pandemic-era peak. That across-the-board surge is causing alarm abroad, as governments weigh the potential damage to their domestic industries against the risk of antagonizing Beijing — the top trading partner for over half the planet. While so far only Mexico has hit back publicly this year — floating tariffs as high as 50% on Chinese products including cars, auto parts and steel — other countries are coming under increasing pressure to act.

Takeaways by Macro Roundup® AI

  1. China's trade surplus reached almost $1 trillion last year and is on track for a record $1.2 trillion in 2025, according to Bloomberg calculations, despite five months of sky-high US tariffs.
  2. With access to the US curtailed, Chinese exports have surged elsewhere: Indian purchases hit an all-time high in August, shipments to Africa are on track for an annual record, and sales to Southeast Asia have exceeded their pandemic-era peak.
  3. Mexico is the only country to hit back publicly this year, floating tariffs as high as 50% on Chinese cars, auto parts and steel, while other governments weigh damage to domestic industries against antagonizing Beijing, the top trading partner for over half the planet.

Related Articles:

  • The Trump Shock That Wasn’t (At Least Not Yet) — Excluding pharmaceuticals and gold — categories where trade is distorted by tax treatment and stockpiling ahead of tariffs — U.S. trade flows look largely normal despite tariff increases. Imports from China fell sharply, but imports from Taiwan and Southeast Asia rose, with electronics imports up on data center investment, leaving total Asian imports little changed.
  • Trade With China Is Becoming a One-Way Street — China's import volumes have shown no growth since the end of 2022 while its export volumes rose 33%, according to data from the Netherlands Bureau of Economic Policy Analysis. In dollar terms, Chinese imports fell 11% from the US, 17% from Japan, and 18% from Germany, as Chinese companies replace overseas suppliers with domestic ones.
  • China Emerges From Trade Chaos With Record Exports, Surplus — China posted a record half-year trade surplus of about $586bn, with exports up 5.8% year-over-year to $325bn and imports up 1.1%. Shipments to the US fell 16.1% from a year earlier, while exports to the 10 Southeast Asian nations in the Asean group rose 17%.

AI Summary. China installed 277 gigawatts of wind and solar capacity in seven months, roughly four times the utility-scale additions U.S. federal analysts project for all power sources over a full year. Chinese firms' global market share in batteries and solar modules has reached 75% or higher, according to BloombergNEF.

David Uberti, Ed Ballard, and Brian Spegele Wall Street Journal
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So far this year, China has installed 277 gigawatts of wind and solar capacity, 4x the scale of “utility-scale additions,” via all power sources the US will bring online in 2025. Chinese firms now have a ~75% market share in clean energy manufacturing.

Is China outpacing the US in clean-energy buildout and manufacturing?

Core argument: China installed 277 gigawatts of wind and solar capacity in the first seven months of the year, quadruple the utility-scale additions U.S. federal analysts project across all power sources for 2025, which could give China a big advantage in the power-hungry AI race.

China installed 277 gigawatts of wind and solar capacity in the first seven months of the year, quadruple the utility-scale additions federal analysts in the U.S. project across all power sources for 2025. That could give China a big advantage in the power-hungry AI race. Chinese companies have also stepped up manufacturing capacity of batteries and solar modules, pumping out exports. Their global market share for those technologies has swelled to 75% or higher, according to BloombergNEF. Countries across the world “are going to be even more reliant on Chinese technology to power their economies, to make the cars they drive,” said Wally Adeyemo, who was deputy Treasury secretary under President Joe Biden. “It creates real chokepoints for China.”

Takeaways by Macro Roundup® AI

  1. China installed 277 gigawatts of wind and solar capacity in the first seven months of the year, quadruple the utility-scale additions U.S. federal analysts project across all power sources for 2025, which could give China a big advantage in the power-hungry AI race.
  2. Chinese global market share in batteries and solar modules has swelled to 75% or higher, according to BloombergNEF, as Chinese companies expanded manufacturing capacity and exports of those technologies.
  3. Wally Adeyemo, deputy Treasury secretary under President Joe Biden, said countries worldwide will be even more reliant on Chinese technology to power their economies and make the cars they drive, creating real chokepoints for China.

Related Articles:

  • How Xi Sparked China’s Electricity Revolution — Electricity has risen to 30% of China's final energy use while plateauing near 22% in Europe and the US, supported by a decades-long grid expansion and upgrade program projected to cost as much as $800bn by 2030. Chinese grid investment is forecast to grow about 5% annually through 2030, faster than projected economic growth.
  • How China Curbed Its Oil Addiction—and Blunted a U.S. Pressure Point — Nearly half of passenger vehicles sold in China last year were all-electric or plug-in hybrids, up from 6% in 2020, while domestic oil output rose 13% from 2018 to 2024 to about 4.3m barrels a day. China still imports roughly 11m barrels a day, about 70% of what it consumes.
  • The Real China Model — China generates more electricity annually than the United States and European Union combined, having added capacity equivalent to the United Kingdom's total supply each year. Electricity makes up nearly 30% of China's energy use, versus 22% in the US and 21% globally, and its share is growing about 6% a year.

AI Summary. An economist projects that within 50 years technological advances will roughly double the average American's inflation-adjusted income, while substantial inequality persists. The forecast also anticipates a more robust safety net including a modest universal basic income, higher taxes and a value-added tax, shorter work weeks, and fewer heavy-handed market interventions.

Greg Mankiw Wall Street Journal
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Looking fwd 50 years, Mankiw forecasts “heavy handed” state intervention in competitive US markets (such as industrial policy, tariffs and minimum wages) will decline, arguing “The arc of the economic universe is long, but it bends toward efficiency.”

How will technology, taxes, and the safety net reshape American capitalism?

Core argument: One contributor projects that technological advances will roughly double the average American's inflation-adjusted income within 50 years, while substantial inequality persists and populist agitators continue to argue that elites have rigged the economy.

If I squint, some patterns for the U.S. economy 50 years from now take shape. Thanks to advances in technology, the income of the average American, adjusted for inflation, will be about twice what it is today. Substantial inequality will persist, and populist agitators will continue to argue that the elites have rigged the economy. Partly as a response, the social safety net will become more robust, including a modest universal basic income. Taxes will be higher to fund the expanded safety net, and because people will have learned that government debt relative to GDP cannot rise forever. Like most of the world today, the U.S. will have a value-added tax. Work weeks will be shorter due to both the disincentive effect of higher taxes and the desire of most people to use their greater prosperity to enjoy more leisure. Acknowledging past mistakes, the government will eschew most heavy-handed interventions in competitive markets, such as industrial policy, tariffs, minimum wages, rent control and Nimby zoning. These developments will be deemed desirable by most of the public and economists at the time. To paraphrase Martin Luther King Jr., if he were an economist: The arc of the economic universe is long, but it bends toward efficiency.

Takeaways by Macro Roundup® AI

  1. One contributor projects that technological advances will roughly double the average American's inflation-adjusted income within 50 years, while substantial inequality persists and populist agitators continue to argue that elites have rigged the economy.
  2. The projection includes a more robust social safety net with a modest universal basic income, funded by higher taxes and a value-added tax, partly because people will have learned that government debt relative to GDP cannot rise forever.
  3. Work weeks are forecast to shorten, reflecting both the disincentive effect of higher taxes and a desire to spend greater prosperity on leisure, with government eschewing industrial policy, tariffs, minimum wages, rent control and Nimby zoning.

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  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.
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AI Summary. Inflation-adjusted US public transit bus prices show almost no trend by bus type, with electric buses holding slightly above $1m, hybrids around $850,000, and diesels near $500,000 — the same level as in 1983.

Léa Bou Sleiman, Edward Glaeser, Julia Shephard, and Samantha Silverberg American Enterprise Institute
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In the US, prices of private vehicles have dropped 40% (quality adjusted) since 1995, but costs of US-produced transit buses have remained flat, exceeding foreign prices. A duopoly in manufacturing, customization, and “Buy America” rules keep costs high.

Have inflation-adjusted public transit bus prices changed over time?

Core argument: The median inflation-adjusted price of a US electric transit bus has hovered slightly above $1 million across the period covered, showing almost no trend despite rapid improvements in electric vehicle technology.

Our data [shows] US buses are expensive. The prices are corrected for inflation to 2024 dollars. There is almost no trend in any of the median prices within bus type. The median price of an electric bus hovers slightly above $1 million through-out this period, which may be surprising given the rapid improvements in electric vehicle technology. (A counterargument is that the improvements in the technology led to rising prices, but the same does not hold for heavy-duty electric vehicles.) The cost of a hybrid bus rose until 2015 but has remained relatively constant since then at about $850,000. Diesel buses hover around $500,000, just as in 1983, when New York bought 325 buses from General Motors.

Takeaways by Macro Roundup® AI

  1. The median inflation-adjusted price of a US electric transit bus has hovered slightly above $1 million across the period covered, showing almost no trend despite rapid improvements in electric vehicle technology.
  2. Median US diesel bus prices, in 2024 dollars, sit around $500,000 — the same level as in 1983, when New York bought 325 buses from General Motors.
  3. Median hybrid bus prices rose until 2015 and have remained relatively constant since then at about $850,000.

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  • The Stationary Bandits of New York City — New York City's construction costs exceed international benchmarks: Paris installs metro platform edge doors for about €3.7m per station while the Metropolitan Transportation Authority says it needs $55m per station. The author argues stringent crane operator licensing and sidewalk shed regulations protect a small number of unionized contractors from competition.
  • Transit Costs Project — Five of the world's six most expensive subway lines are in New York City, where subway construction averages $1.5bn per km, far above global norms. The costs are attributed to complex regulation, labor expenses, and logistical challenges in a dense urban setting.
  • Economic Perspectives on Infrastructure Investment — US infrastructure projects cost more than international counterparts, averaging $1,601m per mile versus a global average of $478m, with a median of $965m per mile compared with $299m outside the US. Contributing factors include complex project designs, regulatory delays, elevated labor costs, and procurement and project management inefficiencies, while land costs are a minor component.