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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, November 7, 2025

AI Summary. An analysis of five industries with major producers in both countries — shipbuilding, integrated steel mills, electric vehicles, solar photovoltaic modules and cement — finds China's manufacturing labor productivity in physical output per worker averaged 2.4x that of the US. Measured in nominal value-added per worker, China's advantage averaged 1.2x.

Weijian Shan Gavekal
Date Posted:

Focusing on 5 manufacturing industries for which physical measures of gross output are available, Weijian Shan finds that Chinese labor productivity (measured as physical units of output per worker) is 2 to 3 times that of the US in 4 of the 5 sectors.

Does China produce more physical output per manufacturing worker than the US?

Core argument: Across shipbuilding, integrated steel mills, electric vehicles, solar photovoltaic modules and cement, China's manufacturing labor productivity in physical output per worker exceeded that of the US by an average of 2.4 times.

I examine five industries with significant producers in both the US and China where physical output measures are available: shipbuilding, integrated steel mills, electric vehicles, solar photovoltaic modules and cement. Except for solar modules where industry-wide data are deemed reliable, labor productivity data was sourced from the annual reports or 10-Ks of publicly listed companies. Electric vehicle data came from Tesla, which operates gigafactories in California and Shanghai, producing identical models. For each industry, labor productivity is measured in terms of both physical output and nominal value-added (without adjusting for price differentials). All calculations were performed for both 2023 and 2024, as labor productivity can vary due to capacity utilization and price fluctuations. In [each of the 5 industries], China’s manufacturing labor productivity in physical output per worker was greater than that of the US by an average of 2.4 times. In nominal value-added terms, China’s advantage narrows to an average of 1.2 times. (Complete data for both years in all industries is in the appendix.)

Takeaways by Macro Roundup® AI

  1. Across shipbuilding, integrated steel mills, electric vehicles, solar photovoltaic modules and cement, China's manufacturing labor productivity in physical output per worker exceeded that of the US by an average of 2.4 times.
  2. Measured in nominal value-added per worker without adjusting for price differentials, China's productivity advantage over the US narrows to an average of 1.2 times across the same five industries.
  3. Labor productivity figures for 2023 and 2024 came from annual reports and 10-Ks of publicly listed companies, with Tesla's California and Shanghai gigafactories producing identical models supplying the electric vehicle data and industry-wide data used for solar modules.

Related Articles:

  • What Would It Take to Bring Back US Manufacturing? Part 1: America’s Structural Headwinds — The US imports roughly 40% of the goods it consumes, directly and through imported inputs, with labor-intensive goods like apparel almost entirely imported. The authors argue America's main comparative disadvantage is its cost of production, driven mainly by labor costs, with real estate costs and a strong dollar also contributing.
  • America Is Missing The New Labor Economy – Robotics Part 1 — Building an identical robotic arm in the US costs about 2.2x more than in China, and US-labeled components still depend heavily on Chinese parts and materials with no scalable alternative. The author argues China is the only country positioned to capture full-scale intelligent robotic automation, which would let it outcompete the US across production.
  • How China Raced Ahead Of The U.S. On Nuclear Power — Data published in Nature show U.S. nuclear construction costs rose steeply after the 1960s while China's fell by half during the 2000s and have since stabilized. China's nuclear companies repeatedly build only a handful of reactor designs, which analysts say streamlines licensing, simplifies supply chains, and is essential for scaling efficiently.

AI Summary. China's exports contracted 1.1% from a year earlier, as a more than 25% drop in shipments to the US outweighed a 3.1% rise in exports to all other countries. Weak imports alongside export strength earlier in the year pushed China's trade surplus to a record $965bn.

Bloomberg Staff Bloomberg
Date Posted:

Chinese exports dropped for the first time since “Liberation Day.” The 1.1% y/y fall was due to a 25% decline in exports to the US. China is still on track for a record trade surplus, hitting $965B so far this year.

Are falling shipments to the US dragging China's exports lower?

Core argument: China's exports fell 1.1% year-on-year in October, the first decline in eight months, as a drop of more than 25% in shipments to the US outweighed a 3.1% rise in shipments to all other nations, according to official data.

China’s exports unexpectedly contracted in October as global demand failed to offset the deepening slump in shipments to the US, dealing a blow to an economy already slowing amid sluggish consumer spending and investment at home. Exports fell for the first time in eight months, dropping 1.1% from a year earlier, according to official data released Friday. Shipments to all nations except the US rose 3.1%, not enough to compensate for the more than 25% decline to America. Yet even with the overall drop in exports in October, they still exceeded $3 trillion in the first 10 months of the year - the first time they’ve hit that mark so quickly. In combination with weak imports for much of the year, the trade surplus has been setting fresh records, hitting $965 billion so far in 2025.

Takeaways by Macro Roundup® AI

  1. China's exports fell 1.1% year-on-year in October, the first decline in eight months, as a drop of more than 25% in shipments to the US outweighed a 3.1% rise in shipments to all other nations, according to official data.
  2. China's exports still exceeded $3 trillion in the first 10 months of 2025, the first time they have reached that mark so quickly, despite October's overall decline.
  3. China's trade surplus has been setting fresh records, reaching $965 billion so far in 2025, in combination with weak imports for much of the year.

Related Articles:

  • How NOT To Negotiate With China — Trade diversion signals deep distress in China's export sector, and the author argues a sustained 10% tariff hike would be more credible than larger ones and could counter China's rare earths leverage. Easing up on Chinese exporters instead signals weakness and discourages Europe from coordinating with the US.
  • 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%.
  • China’s “Anti-Involution” Campaign: Global Implications — 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%.

AI Summary. Germany's chancellor has backed protectionist measures to shield the country's ailing steel industry from cheap Chinese imports, departing from Germany's traditional commitment to free trade. He also supported taxing imports from countries that do not apply EU carbon emissions standards and incentives for companies to buy EU-produced steel.

Anne-Sylvaine Chassany Financial Times
Date Posted:

Friedrich Merz is backing a series of protectionist measures to insulate the country’s steel industry from cheap Chinese steel, including tariffs and a tax on imports from countries “that do not apply the same CO₂ emissions standards as the EU.”

Is Germany abandoning free trade to protect its steel industry?

Core argument: German Chancellor Friedrich Merz has backed protectionist measures to shield Germany's ailing steel industry from cheap Chinese imports, a departure from the country's traditional commitment to free trade.

German Chancellor Friedrich Merz has backed protectionist measures to shield the country’s ailing steel industry from cheap Chinese imports, in a striking departure from the country’s traditional commitment to free trade. He also supported taxing imported goods from countries that do not apply the same CO₂ emissions standards as the EU, and said he would favour incentives for companies to source EU-produced steel.

Takeaways by Macro Roundup® AI

  1. German Chancellor Friedrich Merz has backed protectionist measures to shield Germany's ailing steel industry from cheap Chinese imports, a departure from the country's traditional commitment to free trade.
  2. Merz supported taxing imported goods from countries that do not apply the same CO₂ emissions standards as the EU.
  3. Merz said he would favour incentives for companies to source EU-produced steel.

Related Articles:

  • China Is Also Fighting A Trade War with Europe (and Winning) — China is displacing foreign imports in sectors that were core European export strengths, including autos, construction equipment, industrial robots, specialty chemicals, batteries, permanent magnets, solar panels, wind turbines, and high-speed rail. European exports to China have fallen by about half a percentage point of European GDP, and the EU's trade deficit with China is set to double.
  • US-China Trade Clash Risks Making Europe Dumping Ground for Cheap Goods — China's trade surplus with the European Union reached a record $90bn over four months, fueling concerns that the bloc could become a dumping ground for cheap Chinese goods facing higher US import barriers. Most rerouting of Chinese exports currently passes through Latin America and Southeast Asia.
  • How German Industry Can Survive the Second China Shock — The European Union has 30mm manufacturing jobs, and China has grown from a $4tn economy producing under 15% of global manufacturing output to an $18tn economy producing over a third, with well over 50% of global capacity in many sectors. European tariffs on Chinese electric vehicles limit import competition but do not offset lost export markets.

AI Summary. In the US, 41% of women and 50% of men aged 25-34 were single, double the share of five decades earlier, and the share of people living alone rose in 26 of 30 mostly rich OECD countries. One estimate puts the global increase in single people at over 100m in a decade.

Economist Staff The Economist
Date Posted:

Among Americans 25–34, 41% of women and 50% of men were single in 2023, a share that has doubled over the past 5 decades. Between 2010 and 2022, the fraction of people living alone rose in 26 of the 30 OECD countries.

Are more people across rich countries living single?

Core argument: In America, 41% of women and 50% of men aged 25-34 were single in 2023, a share that has doubled over the past five decades.

Across America, 41% of women and 50% of men (25-34) were single in 2023, a share that has doubled over the past five decades. Nor is America exceptional in this regard. Between 2010 and 2022 the share of people living alone (an admittedly imperfect measure of singlehood, but one for which data are more widely available) rose in 26 of the 30 members of the OECD, a club mostly of rich countries. Michael Rosenfeld, a sociologist at Stanford University, has found that the reduction in dating owing to the covid-19 pandemic produced 13.7m more singles in America in 2022 than if the singlehood rate (conservatively defined) had stayed at the level of 2017. To generate an estimate of the global increase in plus-nones, The Economist extrapolated from his data, while also taking into account sharp falls in marriage rates in a number of Asian countries, which predate the pandemic. We calculate that over the past decade such effects have swollen the ranks of single people around the world by at least 100m.

Takeaways by Macro Roundup® AI

  1. In America, 41% of women and 50% of men aged 25-34 were single in 2023, a share that has doubled over the past five decades.
  2. The share of people living alone, an imperfect but more widely available measure of singlehood, rose in 26 of the 30 OECD members between 2010 and 2022.
  3. Michael Rosenfeld, a Stanford sociologist, estimates that reduced dating during the covid-19 pandemic left 13.7m more American singles in 2022 than if the singlehood rate had held at 2017 levels; The Economist extrapolates a global rise of at least 100m over the past decade.

Related Articles:

  • 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.
  • Women, Men and Jobs — 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.
  • The Sex Recession: The Share Of Americans Having Regular Sex Keeps Dropping — General Social Survey data show the share of US adults ages 18–64 reporting weekly sex fell from 55% in 1990 to 37% by 2024. The decline extends to married adults across age groups, whose weekly rate fell from 59% to 49%.

AI Summary. OpenAI's chief executive said the company does not want federal guarantees for its data centers or a bailout if it fails, and that the government should build and own its own AI infrastructure, potentially including a strategic national reserve of computing power. OpenAI has commitments of about $1.4tn over the next eight years.

Sarah Krouse Wall Street Journal
Date Posted:

Sam Altman said OpenAI doesn’t want federal guarantees for its datacenters or a bailout if it fails, but did suggest the Federal government should build its own AI infrastructure, and possibly create a strategic national reserve of computing power.

Should the government guarantee or bail out AI companies?

Core argument: Altman said he expects OpenAI to end the year above a $20 billion annualized revenue run rate and grow to hundreds of billions by 2030; the startup has commitments of about $1.4 trillion over the next eight years.

OpenAI Chief Executive Sam Altman said the startup doesn’t want federal guarantees for its data centers or a bailout if it fails, laying out what he thinks the government’s role should be in America’s AI infrastructure build-out; “If we screw up and can’t fix it, we should fail, and other companies will continue on doing good work and servicing customers.” Altman’s post came a day after OpenAI Chief Financial Officer Sarah Friar said that the startup hoped financial institutions and perhaps the federal government would support its efforts by helping to guarantee chip financing. The startup has commitments of about $1.4 trillion over the next eight years. Altman said he expects the company to end the year with more than “$20 billion in annualized revenue run rate and grow to hundreds of billion by 2030.” Altman said the government should build and own its own AI infrastructure and potentially create a strategic national reserve of computing power. “But this should be for the government’s benefit, not the benefit of private companies,” he wrote.

Takeaways by Macro Roundup® AI

  1. Altman said he expects OpenAI to end the year above a $20 billion annualized revenue run rate and grow to hundreds of billions by 2030; the startup has commitments of about $1.4 trillion over the next eight years.
  2. Altman said the government should build and own its own AI infrastructure and potentially create a strategic national reserve of computing power, for the government's benefit rather than that of private companies.
  3. Altman said OpenAI does not want federal guarantees for its data centers or a bailout if it fails, a day after Chief Financial Officer Sarah Friar said the startup hoped financial institutions and perhaps the federal government would help guarantee chip financing.

Related Articles:

  • OpenAI Isn’t Yet Working Toward an IPO, CFO Says — OpenAI is seeking backing from banks, private equity, and potentially governments to help guarantee financing for AI chips, arguing such guarantees could lower borrowing costs and raise the amount of debt it can take on. The company expects to spend roughly $600bn on computing power from Oracle, Microsoft, and Amazon.
  • Minsky Moments and AI CapEx — Capital-spending forecasts for the four largest cloud providers rose nearly 50% over the year, and AI data centers are increasingly funded through leveraged and off-balance-sheet structures, including $3.2bn in senior secured notes and a roughly $30bn asset-backed financing. The author argues this marks a speculative-finance phase where borrowers must roll over principal.
  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.

Monday, November 10, 2025

AI Summary. Four decades of U.S. monthly demographic data show marriage has declined while cohabitation has risen, both union types have become more stable, and remaining single has become more common, alongside a substantial fertility decline. A matching model estimates that rising match-formation costs outpaced gains from partnering, reducing partnership formation.

Sean Elliott University of Toronto
Date Posted:
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In the mid-1990s, individuals became more likely to cohabit and less likely to marry. After the financial crisis, remaining single became more common and fertility declined sharply. Dissolution rates for both marriage and cohabitation have declined.

Why have fewer Americans formed partnerships as marriage gave way to cohabitation?

Core argument: Four decades of monthly U.S. demographic data show marriage declining while cohabitation rose, with both union types becoming more stable over time and fertility falling substantially after the 2008 financial crisis.

Using four decades of monthly U.S. demographic data, I show that: (i) marriage has declined while cohabitation has risen, (ii) both unions have become more stable over time, and (iii) there are two inflection points: the mid-1990s, when substitution from marriage to cohabitation accelerated, and after the 2008 financial crisis, when remaining single became more common. Figure 3 summarizes these changes in one-year hazard rates. The first phase of the transition corresponds to substitution from marriage toward cohabitation; the second marks a regime in which remaining single became increasingly common. I refer to these as the first and second inflection points of the second demographic transition. Figure 3d also shows that fertility declined substantially after the 2008 financial crisis. Estimates of a nonstationary matching model show that rising match-formation costs outpaced surplus gains, reducing partnership formation, while marriage stability is driven by rising surplus and cohabitation stability by higher dissolution costs. Policy reforms in the 1990s coincide with the marriage-cohabitation substitution, and counterfactuals indicate that, coming out of the 2008 crisis, had house prices not risen so sharply, marriage formation would have been higher while cohabitation would have decreased.

Takeaways by Macro Roundup® AI

  1. Four decades of monthly U.S. demographic data show marriage declining while cohabitation rose, with both union types becoming more stable over time and fertility falling substantially after the 2008 financial crisis.
  2. The author identifies two inflection points in the second demographic transition: the mid-1990s, when substitution from marriage to cohabitation accelerated, and the post-2008 period, when remaining single became increasingly common.
  3. Estimates from a nonstationary matching model indicate rising match-formation costs outpaced surplus gains and reduced partnership formation, with marriage stability driven by rising surplus and cohabitation stability by higher dissolution costs.

Related Articles:

  • 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.
  • All Over The Rich World, Fewer People Are Hooking Up And Shacking Up — In the US, 41% of women and 50% of men aged 25-34 were single, double the share of five decades earlier, and the share of people living alone rose in 26 of 30 mostly rich OECD countries. One estimate puts the global increase in single people at over 100m in a decade.
  • The Sex Recession: The Share Of Americans Having Regular Sex Keeps Dropping — General Social Survey data show the share of US adults ages 18–64 reporting weekly sex fell from 55% in 1990 to 37% by 2024. The decline extends to married adults across age groups, whose weekly rate fell from 59% to 49%.

AI Summary. A suggestion that the U.S. government could guarantee data-center financing, later disavowed by OpenAI's leadership, signaled that AI build-out costs have reached utility proportions. The author argues lenders may now price OpenAI more like a sovereign-backed utility than a growth company, exposing the fragility of the capital structure behind compute-intensive AI.

Paul Kedrosky Applied Complexity
Date Posted:

Paul Kedrosky notes that the flare-up around OpenAI’s proposed debt backstop suggests “how fragile the capital structure behind this compute-intensive ecosystem has become.”

Does talk of a government backstop change how lenders price AI firms?

Core argument: OpenAI's CFO floated a government guarantee for data-center financing, which the author reads as a signal that AI build-out costs have reached utility proportions.

The recent flare-up around OpenAI’s semi- proposed debt backstop reveals the structural tension between venture-style growth and infrastructure-scale spending, especially when the two become wrapped in the flag. The company's CFO’s comments floated the idea of a government guarantee for data-center financing — a remarkable signal that AI build-out costs have reached utility proportions. Sam Altman’s follow-up disavowed any such plan, saying OpenAI should “fail if we get it wrong,” but the damage was done. Investors now see an enterprise straddling the line between startup and state-sponsored critical infrastructure, with an overlay of an implied "Greenspan put"—that AI is so important it can't be allowed to fail. The optics matter: lenders must begin to price OpenAI more like a sovereign-backed utility than a growth company. The episode marks the point where AI financing entered the quasi-public domain. Even if the “backstop” was rhetorical, it exposed how fragile the capital structure behind this compute-intensive ecosystem has become.

Takeaways by Macro Roundup® AI

  1. OpenAI's CFO floated a government guarantee for data-center financing, which the author reads as a signal that AI build-out costs have reached utility proportions.
  2. The author contends lenders must begin pricing OpenAI more like a sovereign-backed utility than a growth company, with the episode exposing the fragility of the capital structure behind the compute-intensive ecosystem.

Related Articles:

  • OpenAI Isn’t Yet Working Toward an IPO, CFO Says — OpenAI is seeking backing from banks, private equity, and potentially governments to help guarantee financing for AI chips, arguing such guarantees could lower borrowing costs and raise the amount of debt it can take on. The company expects to spend roughly $600bn on computing power from Oracle, Microsoft, and Amazon.
  • Minsky Moments and AI CapEx — Capital-spending forecasts for the four largest cloud providers rose nearly 50% over the year, and AI data centers are increasingly funded through leveraged and off-balance-sheet structures, including $3.2bn in senior secured notes and a roughly $30bn asset-backed financing. The author argues this marks a speculative-finance phase where borrowers must roll over principal.
  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.

AI Summary. Internal financing has been the main source of capital for U.S. corporations, with steady new debt issuance except in recession years, consistent with a stable capital structure. Companies have retired equity on average, and net equity issuance remains negative even after accounting for stock-based compensation.

Michael Mauboussin and Dan Callahan Morgan Stanley
Date Posted:
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The American corporate sector has been substantially self-financing since 2000. Net equity issuance is negative even after taking stock-based compensation expenses into consideration.

How do US corporations finance themselves?

Core argument: Internal financing has been the primary source of capital for U.S. corporations since 1970, with companies also adding new debt steadily except in some recession years.

Internal financing has been the primary source [of capital for U.S. corporations since 1970]. Companies have also added new debt steadily except for some years when the economy was in recession. This issuance is consistent with a stable capital structure. Companies have retired equity on average. Note that this analysis does not include equity issuance in the form of stock-based compensation. But net equity issuance is negative even after taking SBC expense into consideration.

Takeaways by Macro Roundup® AI

  1. Internal financing has been the primary source of capital for U.S. corporations since 1970, with companies also adding new debt steadily except in some recession years.
  2. Steady debt issuance by U.S. corporations is consistent with a stable capital structure, while on average companies have retired equity rather than issued it.
  3. Net equity issuance by U.S. corporations is negative even after accounting for stock-based compensation expense, which the underlying analysis of equity issuance excludes.

Related Articles:

  • Why Global Imbalances Do Matter — From 2008 to 2023 the US household and corporate sectors ran average savings surpluses of 3.5% and 1.6% of GDP respectively, leaving the federal government as the dominant net borrower in the US economy. This suggests the benefit of persistent net capital inflows is the ability to run larger fiscal deficits and grow public debt.
  • Global Economy in Flux, Prospects Remain Dim — Global current account imbalances are projected to widen before narrowing, with trade ahead of prospective tariffs temporarily widening the US deficit and China's surplus. Narrowing is expected to work through trade policy shifts, a weaker US dollar that aids export competitiveness, and fiscal expansion in China and Germany that reduces their surpluses.
  • The US Trade Deficit and Foreign Borrowing — The authors argue US trade deficits persist because foreign investors find US financial assets attractive, but the current deficit level is not sustainable. They estimate that stabilizing the US net foreign liability position requires improving the trade balance by about 2% of GDP, or over 3% if low-cost borrowing privileges are lost.

AI Summary. Cable news emphasizes cultural issues far more and economic issues far less than broadcast news or politicians, a strategy the authors trace to cultural content attracting viewers who would otherwise not watch news at all. The authors estimate cable news can account for one-third of the increase in cultural conflict since 2000.

Shakhed Noy and Aakaash Rao Harvard University
Date Posted:
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Since 1996 cable news’s incentive to attract viewers with exciting cultural news rather than economic news has shifted the political discourse and is in turn responsible for ⅓ of the increased cultural conflict since 2000, Noy and Rao estimate.

How much of rising cultural conflict does cable news explain?

Core argument: The authors estimate that cable news can account for one-third of the increase in American cultural conflict since 2000, linking the "culture war" to 1980s media technology changes and the cable networks that responded to the era's incentives.

We link the contemporary American “culture war” to changes in media technologies in the 1980s and to the cable news networks which responded to the new incentives of the era. We first show that cable news emphasizes culture-war issues much more, and economic issues much less, than older broadcast news or politicians. Using household-by-second smart TV data, we trace cable news’ emphasis on cultural over economic issues to a distinctive business strategy: culture attracts viewers who would otherwise not watch news (“mobilization”); economics attracts viewers who would otherwise watch competing news outlets (“poaching”); and the number mobilized by culture is greater than the number poached by economics, so culture increases viewership. [While] cable outlets value poaching and mobilization equally, politicians maximize vote share and so value poaching twice as much as mobilization. Cable news’ incentive to center mobilizing culture war content influences politics: constituencies more exposed to cable news assign greater importance to cultural issues, and politicians respond by supplying more cultural ads. Our estimates suggest that cable news can account for one-third of the time-series increase in cultural conflict since 2000.

Takeaways by Macro Roundup® AI

  1. The authors estimate that cable news can account for one-third of the increase in American cultural conflict since 2000, linking the "culture war" to 1980s media technology changes and the cable networks that responded to the era's incentives.
  2. Using household-by-second smart TV data, the authors trace cable news' cultural emphasis to a business strategy in which culture mobilizes viewers who would otherwise not watch news while economics poaches viewers from competing outlets, with mobilization exceeding poaching.
  3. Cable outlets value poaching and mobilization equally while politicians maximizing vote share value poaching twice as much as mobilization; constituencies more exposed to cable news assign greater importance to cultural issues, and politicians respond with more cultural ads.

Related Articles:

  • The Winter Of Our Discontent — Digital video has overtaken traditional TV in the attention of the average US adult, with social video platforms YouTube, TikTok and Instagram estimated at 25% of US daily video screen time. New media venues tend to monetize each hour of content at lower rates, and AI text-to-video tools are lowering barriers for new entrants to create high-quality content.
  • Bad News Bias in Gasoline Price Coverage — An analysis of over one million television transcripts finds that coverage of gasoline prices shows a negative news bias, ramping up sharply once the nominal price reaches $3.50 a gallon, most steeply at Fox News. Because that threshold is fixed in nominal terms, the inflation-adjusted trigger has fallen by one-third.
  • The Anti-Social Century — Americans spend less time with other people than in any period with reliable data back to 1965, with in-person socializing down more than 20% from 2003 to 2023 according to the Bureau of Labor Statistics' American Time Use Survey. Among unmarried men and people under 25, the decline exceeded 35%.

AI Summary. Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.

Bloomberg Bloomberg Staff
Date Posted:
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A Bloomberg analysis finds that prices dropped on 51 of 67 products and services in China over the past two years. 34% of Chinese firms are unable to cover interest on their debt – a 25-year high – as China’s deflationary spiral worsens.

How deeply has deflation taken hold in China's industrial sector?

Core argument: Prices fell on 51 of 67 items tracked by Bloomberg News over the last two years, while China's GDP deflator, which includes upstream sectors, has declined for 10 straight quarters, indicating deflation is more entrenched in industry.

Among 67 items tracked by Bloomberg News, prices on 51 dropped over the last two years. A broader gauge that includes upstream sectors, known as the GDP deflator, has been steadily declining for 10 quarters, indicating that deflation is much more entrenched in the industrial sector. Polysilicon, the raw material for solar panels, saw prices drop to less than a fifth of its peak in 2022. Prices for steel rebar, widely used in construction, fell to an eight-year low in May. Across the market, company results show the same pressures: the share of “zombie” firms — those whose profits can’t cover interest payments on their debt — rose from 19% to 34% over the past five years; capital and R&D spending fell for most companies, a first in a decade; and more than a third of companies across industries cut jobs in 2024.

Takeaways by Macro Roundup® AI

  1. Prices fell on 51 of 67 items tracked by Bloomberg News over the last two years, while China's GDP deflator, which includes upstream sectors, has declined for 10 straight quarters, indicating deflation is more entrenched in industry.
  2. Polysilicon, the raw material for solar panels, has fallen to less than a fifth of its 2022 peak price, and steel rebar used in construction hit an eight-year low in May.
  3. The share of Chinese "zombie" firms whose profits cannot cover debt interest payments rose from 19% to 34% over five years, capital and R&D spending fell for most companies for the first time in a decade, and over a third cut jobs in 2024.

Related Articles:

  • How NOT To Negotiate With China — Trade diversion signals deep distress in China's export sector, and the author argues a sustained 10% tariff hike would be more credible than larger ones and could counter China's rare earths leverage. Easing up on Chinese exporters instead signals weakness and discourages Europe from coordinating with the US.
  • 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.
  • 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.

AI Summary. Federal Reserve balance sheet reduction and heavy Treasury bill issuance are pushing money market funding spreads higher, with key overnight repo rates rising above the rate the Federal Reserve pays on bank reserves. The financial system is nearing the point where bank reserves are no longer ample, and persistent funding-rate volatility could affect credit markets.

Torsten Sløk Apollo
Date Posted:
Is Database:
Database

QT, increased t-bill issuance, and the govt shutdown are all draining reserves from the banking system, putting upward pressure on money market spreads. Sløk suggests we may be “nearing the point” of switching from an ample to a scarce reserves regime.

Are bank reserves nearing the point where funding markets tighten?

Core argument: Federal Reserve balance sheet reduction and heavy Treasury bill issuance are pushing money market spreads higher, lifting SOFR and the Tri-Party General Collateral Rate above the interest rate on reserve balances.

Fed balance sheet reduction and heavy T-bill issuance are putting upward pressure on spreads in money markets. The ongoing government shutdown has amplified this dynamic, as the Treasury General Account balance has risen with delayed federal spending, further draining reserves from the banking system. With fewer reserves, funding markets face heightened competition for cash, pushing SOFR and TGCR above the IORB. Money market funds shifting from the Fed’s reverse repo facility to higher-yielding assets, combined with year-end balance sheet constraints, are adding to the strain. The bottom line is that the financial system is nearing the point where reserves are no longer ample. We are watching this development very closely because if rate volatility in funding markets persists, it could begin to have consequences for credit markets.

Takeaways by Macro Roundup® AI

  1. Federal Reserve balance sheet reduction and heavy Treasury bill issuance are pushing money market spreads higher, lifting SOFR and the Tri-Party General Collateral Rate above the interest rate on reserve balances.
  2. The government shutdown has amplified reserve scarcity, as delayed federal spending has raised the Treasury General Account balance and drained reserves from the banking system, intensifying competition for cash in funding markets.
  3. Money market funds shifting out of the Federal Reserve's reverse repo facility into higher-yielding assets, together with year-end balance sheet constraints, are adding strain, bringing the financial system near the point where reserves are no longer ample.

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