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, March 6, 2026

AI Summary. Gross central government borrowing across OECD countries rose 7% to a record $17tn, about 23% of GDP, and is projected to reach roughly $18tn, or 24% of GDP. The United States and Japan account for close to 80% of the area's refinancing requirements, with the US share rising from 57% to 70%.

OECD Staff Organisation for Economic Co-operation and Development
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Across the OECD last year, $13.5T of governmental debt needed refinancing, 70% ($9.5T) of which was US debt, up from 57% in 2020. The US and Japan were outliers in refinancing requirements relative to GDP.

How high has government borrowing across advanced economies risen?

Core argument: OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.

The gross borrowing requirements of central governments in the OECD area continued the upward trajectory that began in 2023. This followed decreases in 2021 and 2022 after the large spike in issuance in 2020 at the onset of the COVID-19 pandemic. Borrowing increased by 7% in 2025, rising from around USD 16 trillion in 2024 to a record USD 17 trillion, and it is projected to reach around USD 18 trillion in 2026. As a share of GDP, gross borrowing decreased by almost 1 p.p. to 23% in 2025, but it is projected to rise again to 24% in 2026. Annual refinancing requirements reached a record high in nominal terms in 2025, but declined as a share of GDP. [Sustained output growth resulted in the debt stock as a share of GDP in the OECD area remaining stable at 83% in 2025]. A few large issuers account for the majority of refinancing requirements in the OECD area, with the United States and Japan representing close to 80% of the total (Figure 1.2, Panel B). However, while the share accounted for by Japan declined from 16% in 2020 to 7% in 2025, that of the United States increased from 57% to 70%.

Takeaways by Macro Roundup® AI

  1. OECD central government gross borrowing rose 7% in 2025 to a record USD 17 trillion from about USD 16 trillion in 2024, and is projected to reach roughly USD 18 trillion in 2026.
  2. Gross borrowing as a share of OECD GDP fell by almost 1 percentage point to 23% in 2025 and is projected to rise to 24% in 2026, while the debt stock remained stable at 83% of GDP amid sustained output growth.
  3. The United States and Japan account for close to 80% of OECD refinancing requirements, with the US share rising from 57% in 2020 to 70% in 2025 as Japan's declined from 16% to 7%.

Related Articles:

  • The Budget and Economic Outlook: 2026 to 2036 — The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
  • Are Government Bonds Safe in Times of War and Pandemic? — Government bonds severely underperform in wartime, in absolute terms and relative to equities, housing, and economic growth, unlike in financial crises when bonds tend to outperform stocks. The U.S. and U.K. reduced war-driven debt-to-GDP ratios without explicit default, using surprise inflation and financial repression that shifted fiscal burdens onto bondholders.
  • Across The Rich World, Fiscal Crises Loom — An analysis estimates most rich countries could keep debt stable as a share of their economies with only small primary surpluses—Britain's required surplus is 0.3% of GDP—even if all debt were refinanced immediately at current rates, but the tightening needed to stabilize debt ratios exceeds 2% of GDP in Britain and America and 3% in France.

AI Summary. Employment rates have declined for young adults both with and without college degrees, with non-degree holders faring marginally worse, and employment growth for young workers of all education levels has lagged that of other workers. Artificial intelligence can replace some lower-skilled jobs, but those jobs are too few to drive youth labor market weakness.

Adam Ozimek and Nathan Goldschlag Agglomerations
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Since the summer of 2023, the employment rate for Americans 22–25 has declined for both college grads and non-college workers, a phenomenon beyond both AI-elimination of routine jobs and replacement of programmers and entry-level college workers.

Is AI behind weak employment for young workers of all education levels?

Core argument: Employment rates have declined for young adults both with and without college degrees, and those lacking degrees have endured marginally worse labor market outcomes.

It turns out that employment rates have declined for young adults both with and without degrees. If anything, those without degrees have actually endured marginally worse labor market outcomes. And similar to the trend observed in labor force participation, growth in the employment rates of young adults of all education levels have lagged behind those of all other workers. Young workers of all education levels are lagging the rest of the labor market. Focusing too much on education rather than age as the main labor market weakness starts us in the wrong direction. So is AI nonetheless to blame for the broad-based weakness in the labor market for young people? It’s true that some lower-skilled jobs can be replaced by AI. Call center workers and data entry jobs are potential examples. But there are not enough of these jobs to really drive the youth labor market. And this explanation certainly does not fit the media narrative focused on AI displacing computer science majors and entry level college graduates. The whodunnit is not about recent college graduates, but about young people of all types.

Takeaways by Macro Roundup® AI

  1. Employment rates have declined for young adults both with and without college degrees, and those lacking degrees have endured marginally worse labor market outcomes.
  2. Employment-rate growth for young adults of all education levels has lagged that of all other workers, mirroring the trend in labor force participation, pointing to age rather than education as the main labor market weakness.
  3. AI can replace some lower-skilled jobs such as call center and data entry work, but those jobs are too few to drive the youth labor market and do not fit the narrative of AI displacing entry-level college graduates.

Related Articles:

  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.
  • Tech Has Never Caused a Job Apocalypse. Don’t Bet on It Now — Labor Department data analyzed by researchers show the number of software developers up 5% year over year, a pace largely consistent with the past 23 years, while computer programmers declined slightly in line with a decades-long trend. The median young computer science graduate earned 63% more than the typical young graduate in 2024, up from 47% in 2009.
  • AI Tracker – The GDP Dividend; A Jobs Dilemma — Unemployment in occupations exposed to artificial intelligence rose to 3.8% from 3%, a larger increase than the 0.3 percentage point rise in the national rate, while unemployment in non-exposed occupations edged lower. The rise is concentrated among workers aged 34 and under, whose jobless rate jumped to 5.3% from 3%.

AI Summary. American technology capital spending rose 32% year over year while non-technology spending fell 3%, according to the analysis; in non-US developed markets, technology capital spending rose 9% and non-technology spending was flat. The author argues the global capital spending story is largely a US technology story.

Paul Kedrosky Notes on Complexity
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Kedrosky finds American tech capex rose 32% y/y, while non-tech capex declined 3%. Non-US developed market tech capex increased 9% while non-tech capex was flat.

Is global capital spending growth mainly a US technology story?

Core argument: Kedrosky finds American tech capex rose 32% year over year while US non-tech capex fell 3%.

The ongoing global capex story is largely a US tech one, not a global one. Absent the US, there is no story to tell.

Takeaways by Macro Roundup® AI

  1. Kedrosky finds American tech capex rose 32% year over year while US non-tech capex fell 3%.
  2. In non-US developed markets, Kedrosky finds tech capex rose 9% while non-tech capex was flat.
  3. Kedrosky argues the global capex story is largely a US tech one, with no story to tell absent the United States.

Related Articles:

  • Commoditization, Orchestration, and the New AI Stack — The author argues that as incremental gains from larger AI training runs shrink, the return on additional computing power falls, weakening the case for the training spending that dominates data center demand. Survivors of model commoditization will be those owning the orchestration layer or the applications where outcomes are priced.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.
  • Rough Notes, Feb 20, 2026: AI Capex in Q4 GDP, Anthropic Revenues, Agentic Domains, etc. — An early estimate puts the floor contribution of artificial intelligence capital spending to fourth-quarter US GDP growth at about 64%, and likely closer to 80% including externalities and multipliers, though the calculation is not adjusted for imports. The author also notes that token price deflation persists and that US-China token price differences are immense and growing.

AI Summary. U.S. electricity net generation reached a record 4.43 terawatt hours, up 2.8% from the prior year's high, contrasting with relatively flat generation from the mid-2000s to the early 2020s. Much of the recent demand growth comes from the commercial sector, which includes data centers, and the industrial sector.

EIA Staff Energy Information Administration
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In 2025, the United States generated 4.43 terawatt hours (TWh) of electricity, up 2.8% from 2024’s record level, and in “contrast with the trend of relatively flat electricity generation between the mid-2000s and early 2020s.”

Is U.S. electricity generation hitting records after years of flat output?

Core argument: U.S. net electricity generation reached a record 4.43 TWh in 2025, up 2.8% from 2024, which had itself been the highest annual total in the Monthly Energy Review dataset dating back to 1949.

U.S. electricity net generation reached a record in 2025 based on data from our Electricity Data Browser. In 2025, the United States generated 4.43 terawatt hours (TWh) of electricity, up 2.8% from 2024 generation, which previously had been the highest annual total in our Monthly Energy Review Data Browser dataset dating back to 1949. This growth contrasts with the trend of relatively flat electricity generation between the mid-2000s and early 2020s. Net generation is related to electricity demand. Much of the recent growth in electricity demand comes from the commercial sector, which includes data centers, and the industrial sector, which includes manufacturing establishments. In 2025, U.S. retail sales of electricity to ultimate customers, which is a key indicator of demand, increased compared with 2024 in all three sectors: residential (by 10%), commercial (by 4%), and industrial (by 1%).

Takeaways by Macro Roundup® AI

  1. U.S. net electricity generation reached a record 4.43 TWh in 2025, up 2.8% from 2024, which had itself been the highest annual total in the Monthly Energy Review dataset dating back to 1949.
  2. U.S. retail electricity sales to ultimate customers, a key indicator of demand, rose in all three sectors in 2025 compared with 2024: residential by 10%, commercial by 4%, and industrial by 1%.
  3. Much of the recent growth in U.S. electricity demand comes from the commercial sector, which includes data centers, and the industrial sector, which includes manufacturing establishments, contrasting with relatively flat generation from the mid-2000s to the early 2020s.

Related Articles:

  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
  • New U.S. Electric Generating Capacity Expected To Reach A Record High in 2026 — U.S. power plant developers plan to add 86 gigawatts of new utility-scale generating capacity, which would be a record if realized, with solar at 51% of planned additions, battery storage at 28% and wind at 14%. The prior year saw 53 gigawatts added, the largest single-year installation since 2002.

AI Summary. Taiwan's economy has grown more than 12% over the past year, its fastest annual pace in nearly 50 years, as AI chip demand lifts net exports and pushes manufacturing to nearly 40% of output. Its trade surplus is flowing into outbound direct investment and foreign lending rather than US bonds.

Joseph Politano Apricitas Economics
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The Taiwanese economy grew more than 12% in 2025 and ~23% since the launch of Chat-GPT in late-2022, driven by demand for chips to power datacenters, with ~80% of GDP growth due to net exports and manufacturing growing to ~40% of the economy.

How is AI chip demand reshaping Taiwan's growth and foreign investment?

Core argument: Taiwan's GDP rose at a 23.6% annualized rate in 2025:Q4, the fastest pace since its initial recovery from the 2008 recession, as demand for AI chips from TSMC buoyed the economy.

Taiwanese GDP rose at a 23.6% annualized rate in the last quarter of 2025:Q4, the fastest pace since the nation’s initial recovery from the 2008 recession, as demand for AI chips from Taiwan Semiconductor Manufacturing Company (TSMC) buoys the economy. Overall, the Taiwanese economy has grown more than 12% over the last year, the fastest annual growth rate in nearly 50 years, and GDP has increased almost 23% since the launch of ChatGPT in late 2022. Manufacturing now makes up nearly 40% of the nation’s economy, the highest since the late 1980s. Growth in net exports has driven the vast majority of this boom, as data center builders in the US, China, and beyond try to get their hands on as much compute as possible. Gross exports exceed $63B per month, more than double the pre-COVID average. Taiwan’s massive trade surplus is being shoved into the acquisition of foreign financial assets, plus record foreign direct investment by TSMC. Yet buying of debt securities - mostly long-dated US Treasury bonds—has dried up dramatically. Taiwanese life insurers are usually some of the world’s largest buyers of US bonds, but were actually net sellers to the tune of $7.9B in 2025. The majority of Taiwan’s surplus is absorbed by unusually large outbound foreign direct investment by companies like TSMC (net FDI is at $35B, more than 10x 2019 levels) and a rapid increase in non-bond lending abroad.

Takeaways by Macro Roundup® AI

  1. Taiwan's GDP rose at a 23.6% annualized rate in 2025:Q4, the fastest pace since its initial recovery from the 2008 recession, as demand for AI chips from TSMC buoyed the economy.
  2. Taiwan's economy grew more than 12% over the past year, the fastest annual rate in nearly 50 years, with manufacturing at nearly 40% of the economy and gross exports above $63bn per month, more than double the pre-COVID average.
  3. Taiwanese life insurers, usually among the world's largest buyers of US bonds, were net sellers of $7.9bn in 2025, while net outbound FDI by firms such as TSMC reached $35bn, more than 10x 2019 levels.

Related Articles:

  • US Notches One of Its Biggest Annual Trade Gaps Since 1960 — The US goods and services trade deficit reached $901.5bn for the year, one of the largest in data going back to 1960. US companies increased imports of computers and accessories by nearly $145bn from the prior year, an acceleration in demand that reflects large-scale artificial intelligence investment.
  • TSMC Overseas Fabs – A Success? — TSMC's Arizona chip plant cannot compete on cost with its Taiwan operations because U.S. construction and operating costs are far higher, even though equipment costs — usually the largest share of cost per wafer — are similar across locations. The author argues the Arizona plant does little to reduce concentration of advanced logic production in Taiwan.
  • TSMC To Speed Up Construction Of US Chip Plants By ‘Several Quarters’ — TSMC says it is accelerating construction of its second and third Arizona plants by several quarters to meet strong U.S. customer demand for smartphone and AI computing chips. The company has committed an additional $100bn to build five more facilities in the state and expects around 30% of its 2-nanometer and more advanced capacity to be located in Arizona.

AI Summary. The authors estimate replacing two destroyed U.S. radars would take five to eight years and $1.1bn for one and 12–24 months and $50m–$75m for the other, making supply-chain fragility and replacement timelines a greater constraint than materials cost. Both systems require gallium, of which China controls 98% of global supply.

Macdonald Amoah, Morgan Bazilian, and Jahara Matisek Foreign Policy
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A Colorado School of Mines analysis of the munitions used in the first 36 hours of the war estimates the “mineral bill” and highlights the current and target timelines to replenish these systems, noting critical minerals “cannot be surged.”

Do replacement timelines constrain radar rebuilding more than materials cost?

Core argument: The first 36 hours of the war consumed over 3,000 U.S.-Israeli munitions, and two advanced U.S. radars were destroyed: the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain.

Beyond the sheer volume of munitions, the loss of high-value assets introduces another layer of complexity. The destruction of two advanced U.S. radars, the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain, highlights a problem where the total weight of the “mineral bill” is less of a concern than the extreme fragility of the supply chain and the extensive timelines for replacement. Per our analysis, for the AN/FPS-132, it will take five to eight years for Raytheon to build a new radar at a cost of $1.1 billion. Meanwhile, Lockheed Martin will require at least 12 to 24 months and an estimated $50 million to $75 million to replace the AN/TPS-59, based on the original Bahrain Foreign Military Sales contract adjusted for inflation. The biggest issue for the defense industrial base will be sourcing the 77.3 kilograms of gallium needed for both systems, a material for which China controls 98% of the global supply. This is not to mention the 30,610 kilograms of copper that will also be needed, a commodity facing surging demand from the technology sector.

Takeaways by Macro Roundup® AI

  1. The first 36 hours of the war consumed over 3,000 U.S.-Israeli munitions, and two advanced U.S. radars were destroyed: the AN/FPS-132 in Qatar and the AN/TPS-59 in Bahrain.
  2. By the authors' analysis, replacing the AN/FPS-132 will take Raytheon five to eight years at a cost of $1.1 billion, while Lockheed Martin needs at least 12 to 24 months and an estimated $50 million to $75 million for the AN/TPS-59.
  3. Sourcing the 77.3 kilograms of gallium needed for both radars is, by the authors' assessment, the biggest issue for the defense industrial base, since China controls 98% of global supply; the systems also require 30,610 kilograms of copper.

Related Articles:

  • Why China Keeps Winning The Trade War — Governments seeking supply-chain leverage face limited visibility into their own supply chains, and China's rare earth licensing requirements for multinationals may be partly intended to give Beijing that visibility and allow more precise targeting of future restrictions. Effective measures must impose asymmetric costs, and keeping foreign manufacturers dependent on drip-fed supply is central to Beijing's strategy.
  • China Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets — China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.
  • How U.S. Defense Industry Dodged a Rare-Earth Shortage After China’s Curbs — A decades-old stockpile of samarium nitrate held at a chemical plant in France was refined into usable metal, allowing a U.S. maker of samarium-cobalt magnets to source the rare-earth material outside China. Samarium processed outside China costs 5–8x as much, and the French plant had stopped separating rare-earth elements as uneconomical.

Monday, March 9, 2026

AI Summary. With crude unable to reach world markets through the Strait of Hormuz, Iraq has cut output by more than two-thirds and producers in Kuwait and Abu Dhabi have slowed production as storage tanks fill. JPMorgan Chase analysts estimate regional daily output could fall by around 9m barrels, close to a tenth of global demand.

Joe Wallace, Summer Said, Rebecca Feng and Georgi Kantchev Wall Street Journal
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US oil prices briefly broke $100/barrel for the 1st time since Russia invaded Ukraine. In real terms, crude prices are ~20% below their 2022 level, ~33% under the level set in the aftermath of the Iranian Revolution, and only half their level preceding the GFC.

How much oil output falls when Gulf shipping stalls?

Core argument: JPMorgan Chase analyst Natasha Kaneva estimates Persian Gulf daily output could fall by more than 4 million barrels if the strait remains closed through Friday, with the decline reaching around 9 million barrels by the end of March — almost a 10th of global demand.

Unable to ship crude to world markets, much bigger producers in Iraq began to run out of places to put it. The country cut output by more than two-thirds. Tanks in Kuwait were next to fill up. On Saturday, the Abu Dhabi National Oil Company signaled it too was slowing production so tanks didn’t overflow. If the strait is still closed this Friday, daily output in the region could fall by more than four million barrels, JPMorgan Chase analyst Natasha Kaneva estimates. The decline could reach around nine million by the end of March, representing almost a 10th of global demand. The strait isn’t officially closed or physically blocked, and a small number of vessels have traversed it, some carrying Iranian crude. Still, on Sunday, more than 1,000 ships were waiting to pass through, their owners and sailors scared of being attacked after strikes on at least nine vessels that left one crew member dead.

Takeaways by Macro Roundup® AI

  1. JPMorgan Chase analyst Natasha Kaneva estimates Persian Gulf daily output could fall by more than 4 million barrels if the strait remains closed through Friday, with the decline reaching around 9 million barrels by the end of March — almost a 10th of global demand.
  2. Iraq cut crude output by more than two-thirds as storage filled, tanks in Kuwait filled next, and the Abu Dhabi National Oil Company signaled on Saturday it was slowing production so tanks didn't overflow.
  3. The strait is neither officially closed nor physically blocked, and a small number of vessels have traversed it, some carrying Iranian crude, yet more than 1,000 ships were waiting to pass on Sunday after strikes on at least nine vessels left one crew member dead.

Related Articles:

  • Global Economics Comment: Global Economic Impacts of the War in Iran — The main economic risk to major economies from the war in Iran is that higher energy prices lift inflation and slow growth, with oil near $80/bbl, up 14% since late February. Analysts project oil moderating to $76/bbl and then $65/bbl as the risk premium fades in a structurally oversupplied market.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • The Risks to Energy Prices From Iran — Tanker traffic through the Strait of Hormuz, which normally carries a fifth of global oil and liquefied natural gas supply, appears significantly disrupted as shippers, producers, and insurers turn cautious. Analysts estimate an $18/bbl risk premium in crude, and project European gas and spot liquefied natural gas could reach about $25/mmBtu if flows halt for a month.

AI Summary. Saudi Arabia's 746-mile East-West pipeline to the Red Sea can bypass the Strait of Hormuz for up to 5m barrels a day, and a UAE pipeline to the Gulf of Oman for 1.5m, against roughly 20m barrels of daily crude and refined product flows through the strait.

Javier Blas Bloomberg
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The Saudis’ East-West Pipeline to the Red Sea and the UAE’s Habshan-Fujairah Pipeline to the Gulf of Oman could divert up to 6.5 to 7mm bpd. Pre-war, ~20mm barrels of crude and refined products flowed through the Strait of Hormuz.

How much oil can pipelines move around a blocked strait?

Core argument: The Strait of Hormuz, closed by Iran, is a choke point for about 20 million barrels a day of crude and refined products, equal to a fifth of global consumption.

The East-West pipeline [is a 746 mile conduit] crisscrossing the Arabian Peninsula from the Persian Gulf to the Red Sea. Its raison d’être is to meet this historic moment: Iran’s closure of the Strait of Hormuz. The Saudis built it 45 years ago thinking that, one day, Tehran would manage to do what was then unthinkable and halt shipments through the narrow waterway. The strait is a choke point for about 20 million barrels a day of crude and refined products — equal to a fifth of global consumption. The Saudi pipeline can’t offset all of that, nowhere near. But it can provide a workaround for as much as 5 million daily barrels. Another pipeline, owned by the United Arab Emirates, offers a separate bypass option to the Gulf of Oman for 1.5 million barrels. In an emergency, the UAE can probably push it close to 2 million. Right now about 25 supertankers, each capable of loading about 2 million barrels, have diverted from their original destinations and are headed toward the new pickup points. It remains to be seen how the ports will cope with these armadas.

Takeaways by Macro Roundup® AI

  1. The Strait of Hormuz, closed by Iran, is a choke point for about 20 million barrels a day of crude and refined products, equal to a fifth of global consumption.
  2. Saudi Arabia's 746-mile East-West pipeline, built 45 years ago in anticipation of a Hormuz closure, can bypass the strait for as much as 5 million barrels a day, far short of offsetting the full flow.
  3. A UAE-owned pipeline offers a separate bypass to the Gulf of Oman for 1.5 million barrels a day, and close to 2 million in an emergency, as about 25 supertankers divert toward the new pickup points.

Related Articles:

  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
  • China’s Secret Stockpiles Have Been A Great Success—So Far — A data firm estimates China's observable oil stocks reached a record 1.2bn barrels, triple the size of America's reserves, with storage capacity of 2bn barrels only 58% full and traders expecting stockpiling to continue. Analysts also note metal imports have soared even as China's metal-consuming industries have slumped.
  • The Rise Of The Security Premium — Energy security concerns, not environmentalism, are argued to drive the buildout of solar, wind, and nuclear power, since domestic generation avoids chokepoints like Hormuz, the Red Sea, and the Panama Canal. China and India are expected to demand higher strategic stockpiles of energy and other critical commodities, repricing security above efficiency.

AI Summary. American workers over 50 earned roughly 35% more per week than workers under 30 in the late 1970s, a gap that widened to about 55% at its early-2010s peak before narrowing to 47%. Their advantage in access to top-quarter-paying management jobs also widened, from about 5 to 8.3 percentage points.

Nicola Bianchi and Matteo Paradisi Aspen Economic Strategy Group
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In the late 1970s, US workers over 50 earned ~35% more per week than those under 30. By 2024, older workers earned ~47% more. Longer working lives and entrenchment in managerial positions decreased opportunities for younger workers.

How has the pay gap between older and younger workers changed?

Core argument: U.S. workers over 50 earned 47% more per week than workers under 30 in 2024, down from a peak of about 55% in the early 2010s but up from roughly 35% in the late 1970s.

In the late 1970s, workers over 50 earned roughly 35% more per week than workers under 30. Over the following four decades, this gap widened steadily, reaching a peak in the early 2010s, when older workers earned about 55% more. It has narrowed somewhat in the last decade, as the oldest baby boomers have begun to retire and leave the very top of the wage distribution, but even in 2024, older workers still earned 47% more per week than younger workers on average. And because working lives are now longer, with many employees remaining in senior roles well into their late sixties, there is little reason to expect this pay gap to return to the more modest levels observed in the 1970s without intervention from firms or policymakers. Older workers have pulled further ahead of younger workers in access to desirable, higher-paying managerial jobs, as displayed in figure 4. In the mid-1970s, workers over 50 were about 5 percentage points more likely than workers under 30 to be employed in management occupations in the top quarter of the wage distribution. By 2024, this gap had widened to almost 8.3 percentage points. Over the same period, these higher-paying managerial roles grew from just over 5% to a little more than 7% of full-time private-sector jobs. 

Takeaways by Macro Roundup® AI

  1. U.S. workers over 50 earned 47% more per week than workers under 30 in 2024, down from a peak of about 55% in the early 2010s but up from roughly 35% in the late 1970s.
  2. The gap between workers over 50 and workers under 30 in holding management jobs in the top quarter of the wage distribution widened from about 5 percentage points in the mid-1970s to almost 8.3 percentage points by 2024.
  3. Higher-paying managerial roles grew from just over 5% to a little more than 7% of full-time private-sector jobs between the mid-1970s and 2024, while longer working lives leave little reason to expect the age pay gap to return to 1970s levels without action by firms or policymakers.

Related Articles:

  • Countries for Old Men: An Analysis of the Age Pay Gap — Administrative data on 38mm Italian and German workers show wages of older workers grew much faster than those of younger workers, a widening age pay gap the authors also find in fourteen other high-income countries. The authors argue workforce aging leaves fewer top hierarchy slots for younger workers, slowing promotions.
  • 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.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.

AI Summary. A proposed one-time 5% California tax on the worldwide net worth of individuals above $1bn would have positive net present value only if its revenue exceeds the present value of income taxes lost to departing billionaires. The authors' simulations yield negative net present value in 71% of draws, averaging -$24.7bn.

Benjamin Jaros, Joshua Rauh, Greg Kearney, John Doran, et al. Stanford University
Date Posted:
Is Database:
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A simulation study of the proposed CA wealth tax on billionaires, finds a 71% chance that it will have a negative NPV, with a mean of −$24.7 billion. The PV of permanently lost income tax revenue more than offsets the one-time wealth tax collection.

Does a one-time wealth tax on billionaires raise net revenue?

Core argument: Simulations drawing from plausible ranges for discount rates, wealth-tax revenue, and lost income tax collections yield a negative net present value for California's proposed Billionaire Tax Act in 71% of draws, with a mean of −$24.7 billion, a median of −$19.1 billion, and a standard deviation of $38.4 billion.

The California Billionaire Tax Act of 2026 proposes a one-time 5% tax on the worldwide net worth of individuals exceeding $1 billion. This measure applies to tangible and intangible assets, including those held through trusts and certain recent transfers. Our proxy for these taxable assets in this dataset is the “Net Worth” of each California-based billionaire listed in the 2025 Forbes Billionaires listing. Our preferred revenue estimate implies that approximately 55% of the billionaire income tax base has or will avoid the tax, nearly double the 30.7% break-even threshold under even [proponent’s optimistic] assumption of six confirmed departures at a 1.5% real discount rate, and approaching the 61.4% threshold at 3%. The wealth tax has positive net present value only if the one-time revenue exceeds the present value of foregone income taxes from departing billionaires. We simulate draws from uniform distributions over the plausible ranges for discount rates, revenue from the wealth tax, and lost income tax collections; 71% of draws yield a negative net present value, with a mean of [-]$24.7 billion, with a median of −$19.1 billion, and standard deviation of $38.4 billion. [See Figure 3 in gallery]. These estimates are conservative in that we exclude all non-income-tax fiscal spillovers, including lost sales tax, property tax, and business activity, such as employing other income taxpayers.

Takeaways by Macro Roundup® AI

  1. Simulations drawing from plausible ranges for discount rates, wealth-tax revenue, and lost income tax collections yield a negative net present value for California's proposed Billionaire Tax Act in 71% of draws, with a mean of −$24.7 billion, a median of −$19.1 billion, and a standard deviation of $38.4 billion.
  2. The authors' preferred revenue estimate implies roughly 55% of the billionaire income tax base has avoided or will avoid the proposed one-time 5% tax on worldwide net worth above $1 billion, nearly double the 30.7% break-even threshold at a 1.5% real discount rate and approaching the 61.4% threshold at 3%.
  3. The authors describe their estimates as conservative because they exclude all non-income-tax fiscal spillovers, including lost sales tax, property tax, and business activity such as employing other income taxpayers.

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  • Behavioral Responses to State Income Taxation of High Earners: Evidence from California — A California ballot measure raising top marginal income tax rates by up to 3 percentage points prompted an additional 0.8% of the affected tax base to leave the state, with an estimated income elasticity of 2.5–3.2 for high earners who stayed. The authors estimate these responses eroded 45.2% of windfall revenues within one year and 60.9% within two.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — 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.
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AI Summary. Between 2010 and 2022, taxpayers earning $1m or more in California, New York, Texas, and Florida accounted for about 50% of US capital gains realizations on average. Over that period Florida rose from 8% to 16.7% of millionaire capital gains income while New York fell from 14% to 8.9%.

E. J. McMahon Manhattan Institute
Date Posted:
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Database

Btw 2010 and 2022, New York State’s share of realized capital gains among income millionaires declined 5.1pp to 8.9%, while Florida’s increased 8.7pp to 16.7% – above California’s 14.9%.

Are millionaire capital gains shifting from high-tax to low-tax states?

Core argument: New York's share of capital gains realized by U.S. income millionaires fell from 14% in 2010, second among states, to 8.9% in 2022, dropping it to fourth place.

As the nation emerged from the Great Recession in 2010, the capital gains of income millionaires were disproportionately concentrated in the four most populous states: California, New York, Texas, and Florida. Between 2010 and 2022, taxpayers earning $1 million or more in these states accounted, on average, for 50% of the nation’s total capital gains realizations. At the start of the period, California led all states, with 16% of capital gains among all U.S. income millionaires. New York ranked second, at 14%, while Texas and Florida trailed at 8.7% and 8%, respectively. The next 12 years saw a significant shift in the rankings. By 2022, Florida had topped the list, with 16.7% of capital gains income among millionaire earners, followed by California at 14.9% and Texas at 9.7%. New York had dropped to fourth place, with 8.9%—essentially changing places with Florida.

Takeaways by Macro Roundup® AI

  1. New York's share of capital gains realized by U.S. income millionaires fell from 14% in 2010, second among states, to 8.9% in 2022, dropping it to fourth place.
  2. Florida rose from 8% of millionaire capital gains realizations in 2010 to 16.7% in 2022, topping all states and essentially swapping places with New York.
  3. California, New York, Texas, and Florida together accounted for an average of 50% of U.S. capital gains realizations by taxpayers earning $1 million or more between 2010 and 2022.

Related Articles:

  • Supply and The Mam — New York City has the highest combined city-state personal tax rate in the US and the highest all-in corporate income tax rate at 17.4%, and the highest industrial, retail and multifamily property taxes per square foot among ten major cities. New York State ranks first in tax collections per capita.
  • As New Jobs In Finance Dry Up, New York City’s Fiscal Model Is Wilting — New York state's share of US taxpayers reporting over $1m in income fell from 12.7% in 2010 to 8.7% in 2022, and the Citizens Budget Commission estimates state and city income tax receipts from that group would have been $13bn higher had the share held. Job growth has concentrated in lower-paid health care and social assistance.
  • 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.