Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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
  • “…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 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
  • “…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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, April 23, 2026

AI Summary. Comparing Americans in their late 30s across generations, median household market income growth has slowed since the Baby Boomers while remaining positive: Baby Boomers earned 31% more than the Silent Generation, Generation X 10% more than Baby Boomers, and Millennials 15% more than Generation X. Accounting for taxes and transfers softens the slowdown.

Kevin Corinth and Jeff Larrimore Demography
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As measured by the 36–40 cohort across generations, Americans’ real market income has continued to rise but at a slower pace. Accounting for taxes and transfers partially offsets the slowdown in the growth of market income.

Has income growth across successive generations of Americans slowed?

Core argument: Household market income for Baby Boomers in their late 30s was 31% above that of similarly aged Silent Generation adults, while Generation X gained 10% over Baby Boomers and Millennials gained 15% over Generation X.

We zoom in on a focal age range in peo­ple’s late 30s—an age at which we observe the five gen­er­a­tions from the Greatest Generation (born 1901–1927) through the Millennial Generation (born 1981–1996)—and assess both whether gen­er­a­tional prog­ress is positive and the extent to which the rate of growth is speeding up or slowing down. Focusing first on median market income, there are two notable takeaways that apply for both the individual/couple and the household sharing units.The first is that generational progress has clearly slowed since the Baby Boom Generation, although it remains positive. Second, despite the perception that slowing generational progress is a recent phenomenon, the substantial slowdown did not start with Millennials but began a generation earlier with Generation X. Looking at the patterns formed in household market income by generation, the income of Baby Boomers in their late 30s was 31% above that for similarly aged adults in the Silent Generation. Progress slowed substantially for Generation X—their incomes increased by 10% relative to Baby Boomers—and then ticked up for Millennials, whose incomes rose by 15% relative to Generation X. Although market income is an important indicator of progress, it does not reflect the full set of resources that individuals have available for consumption. The slowdown in generational progress is softened when accounting for taxes and transfers.

Takeaways by Macro Roundup® AI

  1. Household market income for Baby Boomers in their late 30s was 31% above that of similarly aged Silent Generation adults, while Generation X gained 10% over Baby Boomers and Millennials gained 15% over Generation X.
  2. Generational progress in median market income has slowed since the Baby Boom Generation but remains positive for both the individual/couple and household sharing units.
  3. The substantial slowdown in generational income progress began with Generation X rather than Millennials, and is softened when taxes and transfers are taken into account.

Related Articles:

  • The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated — Using an alternative cost-of-living adjustment, the typical 40-year-old's pre-tax family income rose 52% between 1979 and 2019, or 73% adjusting for family size, versus 15% under the methods behind widely cited mobility estimates. Absolute mobility is down 20 percentage points since 1979 but stood at 72% in 2023.
  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Across the 1978 to 1992 birth cohorts, adult household incomes fell for white children raised in low-income families and rose for those raised in high-income families, increasing the intergenerational persistence of income ranks among white children by 28%. Over the same cohorts, adult incomes rose for Black children at all parental income levels.
  • 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. An analysis of industries that rely most heavily on noncitizen workers with a high-school degree or less—including construction, restaurants, food manufacturing and hotels—found hourly earnings in those 41 industries rose 3.5% from a year earlier, below the 3.8% increase for all workers. Employment in those industries fell by 90,400 over the same period, while overall employment grew by 298,000.

Paul Kiernan and Drew An-Pham Wall Street Journal
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Industries most dependent on low-skilled immigrant workers saw wages rise 3.5% and employment fall by 90,400 Y/Y in Feb, underperforming the broader economy, where wages grew 3.8% and total employment rose by 298,000.

Have immigration-dependent industries seen wages rise faster than the broader economy?

Core argument: Hourly earnings across the 41 industries most reliant on low-skilled immigrants rose a weighted average of 3.5% in February from a year earlier, below the 3.8% gain for all workers and a slowdown from before Trump took office.

The analysis used 2024 census data to identify fields—including construction, restaurants, food manufacturing and hotels—that rely heavily on noncitizens with a high-school degree or less, a common proxy for people who entered the country illegally. The Journal excluded industries such as agriculture and the gig economy, for which the Labor Department doesn’t publish hourly earnings. The result: Across 41 industries that rely most heavily on low-skilled immigrants, hourly earnings rose by a weighted average of 3.5% in February from a year earlier, according to the latest figures. That was less than the 3.8% increase in average hourly earnings for all workers and marked a slowdown from before Trump took office. Employment in those 41 immigrant-dependent industries fell by 90,400 in February from a year earlier, while overall employment grew by 298,000 jobs in the same stretch. Preliminary March figures available for 23 of the sectors show a year-over-year gain of 39,400 jobs, boosted by hiring in construction and food service.

Takeaways by Macro Roundup® AI

  1. Hourly earnings across the 41 industries most reliant on low-skilled immigrants rose a weighted average of 3.5% in February from a year earlier, below the 3.8% gain for all workers and a slowdown from before Trump took office.
  2. Employment in the 41 immigrant-dependent industries fell by 90,400 in February from a year earlier, while overall employment grew by 298,000 jobs over the same stretch.
  3. Preliminary March figures available for 23 of the immigrant-dependent sectors show a year-over-year gain of 39,400 jobs, boosted by hiring in construction and food service.

Related Articles:

  • Macroeconomic Implications Of Immigration Flows In 2025 And 2026: January 2026 Update — The authors estimate that job growth consistent with full employment was 20,000–50,000 a month in the second half of 2025, while reported nonfarm payroll growth averaged about 14,500 and unemployment rose 0.3 percentage points. They project immigration policy changes will keep potential employment growth low, reducing GDP growth by roughly 0.2 percentage points in 2025 and 0.1 in 2026.
  • Labor Force Growth, Breakeven Employment, and Potential GDP Growth — Slowing net immigration could cut US labor force growth so much that the breakeven pace of job creation falls to nearly zero — under 10,000 jobs a month — far below any point in the past 65 years. Monthly payroll declines as large as 100,000 would then not be unusual even with output at potential.
  • Break-Even Employment Declines As Unauthorized Immigration Outflows Continue — Net outflows of unauthorized immigrants have lowered the break-even rate of U.S. payroll growth needed to hold the unemployment rate steady, so smaller job gains that once signalled economic slack are now consistent with a balanced labor market. Recent payroll growth has slightly exceeded that break-even rate on average.

AI Summary. The U.S. government has invested $20.9bn across sixteen deals taking direct ownership stakes, expanding beyond its traditional toolkit of grants, loans, and tax incentives. The Department of Defense leads with seven deals, the Department of Commerce has six including a 10% stake in Intel, and partners have mobilized an additional $4.75bn.

Jonathan Hillman Council On Foreign Relations
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Since January 2025, the USG has taken equity stakes totaling $20.9B in 16 American businesses. $8.6B, ~41% of the total, was invested in critical mineral miners and processors, while $8.9B, ~43% of the total, funded the government’s 10% stake in Intel.

Is the U.S. government taking direct equity stakes in companies?

Core argument: Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit traditionally focused on grants, loans, and tax incentives.

Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit that has traditionally focused on grants, loans, and tax incentives. The Department of Commerce has participated in six such deals, including taking a 10% stake in Intel. The Development Finance Corporation, the United States’ development bank, has executed three equity transactions in critical minerals, healthcare, and infrastructure. The Department of Defense leads the way with seven such deals. The U.S. government is also working with a range of partners and has mobilized an additional $4.75 billion in investment. Private co-investors include J.P. Morgan, Goldman Sachs, and others.

Takeaways by Macro Roundup® AI

  1. Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit traditionally focused on grants, loans, and tax incentives.
  2. The Department of Defense leads with seven direct-ownership deals, followed by the Department of Commerce with six, including a 10% stake in Intel, while the Development Finance Corporation has executed three equity transactions in critical minerals, healthcare, and infrastructure.
  3. The U.S. government has mobilized an additional $4.75 billion in investment alongside private co-investors including J.P. Morgan and Goldman Sachs.

Related Articles:

  • Industrial Policy and Economic Security — Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.
  • The Cold War and the U.S. Labor Market — The authors estimate that declining U.S. military procurement spending from the 1950s to the 1990s explains roughly 18–30% of the decline in manufacturing employment and just under 10% of the rise in top-decile income inequality. They argue Cold War procurement raised demand for manufacturing workers and helped sustain tight labor markets for low-skill workers.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.

AI Summary. A database trawl counts 1,727 private companies valued above $1bn globally, and if private market valuations are accurate, the largest of them have outperformed public markets since the pandemic. Several, led by SpaceX and OpenAI, plan initial public offerings, which can signal trouble ahead since insiders are choosing to sell.

John Authers Bloomberg
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“Brace for a thundering herd of unicorns.” John Authers notes that in recent years, large IPOs have marked the peak for multiple asset classes, citing Blackstone’s June 2007 IPO and the 2011 Glencore deal, which saw the peak of the metals market.

Do large private company listings signal market peaks?

Core argument: BestBrokers' trawl of databases counts 1,727 unicorns globally, with 70 added in the first quarter of this year.

A trawl of databases by BestBrokers finds that there are now 1,727 globally, with their numbers swelling by 70 in the first quarter of this year. If private market valuations are right, the biggest unicorns have far outperformed public markets since the pandemic. Several unicorns, led by SpaceX and OpenAI, are planning initial public offerings this year. That’s not necessarily good news. As ever when insiders at a company decide to sell, IPOs can signal trouble ahead. Two of this century’s biggest IPOs marked the top for entire markets and asset classes.

Takeaways by Macro Roundup® AI

  1. BestBrokers' trawl of databases counts 1,727 unicorns globally, with 70 added in the first quarter of this year.
  2. If private market valuations are accurate, the biggest unicorns have far outperformed public markets since the pandemic.
  3. Several unicorns, led by SpaceX and OpenAI, plan initial public offerings this year, and two of this century's biggest IPOs marked the top for entire markets and asset classes.

Related Articles:

  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.
  • Public Markets Are a Shrinking Part of the US Economy — S&P 500 companies account for 18% of total US employment, 21% of total US capital expenditure, roughly half of economy-wide corporate profits, and less than half of outstanding corporate debt. Privately owned firms account for almost 80% of job openings, and 81% of firms with revenues above $100m are private.
  • The Deep End: 2025 Alternative Investments Review — In venture capital, only consistently investing with top-quartile managers outperformed the S&P 500, while the median manager at best matched public equity markets and fourth-quartile managers destroyed value relative to equities. Fees are part of the issue: an 11.7% annualized NASDAQ 100 return falls to 7.4% under a 2%/20% fee structure.

AI Summary. Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027, compared with an estimated 4% drag during the 2022/23 energy crisis. The current shock is primarily an oil supply shock affecting industry broadly and is more global, leaving European energy-intensive industries less exposed to competitiveness pressures.

Niklas Garnadt Goldman Sachs
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Per GS, the current energy shock will lower Europe’s industrial production by ~2%, ½ the ~4% decline that occurred during the 2022 shock. As the current shock is global, also hitting Asia, Europe does not face the competitive disadvantage it did in 2022.

Why does the new energy price shock hurt European manufacturing less?

Core argument: Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027 relative to a pre-conflict baseline, versus an estimated 4% drag during the 2022/23 energy crisis.

[We] project that higher oil and gas prices [will] lower Euro Area industrial production by almost 2% by end-2027 relative to our pre-conflict baseline, with negative IP growth later this year but a return to positive growth in 2027. This compares to an estimated drag of 4% during the energy crisis of 2022/23. The current price shock is expected to be smaller and less persistent, while the decoupling from Russian pipeline gas that began in 2022/23 has been sustained. The 2022/23 crisis was fundamentally driven by a sharp reduction in Russian pipeline gas supply to Europe and impacted a narrow set of highly gas-intensive industries particularly hard. The current shock is primarily an oil supply one that tends to reduce industrial production more broadly. However, in 2022/23, energy market shifts were largely focused on Europe, leading to major cost disadvantages for energy-intensive industries, particularly relative to China, and a surge in import competition. This time, energy price pressures are more global, with Asia appearing to be affected to a similar (or even greater) extent. European energy-intensive industries therefore look less exposed to competitiveness pressures.

Takeaways by Macro Roundup® AI

  1. Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027 relative to a pre-conflict baseline, versus an estimated 4% drag during the 2022/23 energy crisis.
  2. The 2022/23 crisis stemmed from a sharp reduction in Russian pipeline gas supply and hit a narrow set of highly gas-intensive industries, while the present shock is primarily an oil supply shock that tends to reduce industrial production more broadly.
  3. Energy price pressures are now more global, with Asia appearing affected to a similar or greater extent, leaving European energy-intensive industries less exposed to competitiveness pressures than in 2022/23, when cost disadvantages relative to China accompanied a surge in import competition.

Related Articles:

  • The Future of European Competitiveness – A Competitiveness Strategy for Europe — A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
  • Salem’s Lot: Gulf War Update; The Purge Of Senior US Military Officers; A US Fossil Fuel Reliance Fever Dream — The US is not insulated from market effects of a Strait of Hormuz closure: while US natural gas prices have declined this year, most other hydrocarbon and refined product prices have risen materially, with US crude oil, wholesale gasoline, naphtha, shipping fuel and some petrochemical increases exceeding those in Europe and Asia.
  • Europe is Pricing Itself Out of Existence — Europe paid 166.3% more for its primary energy mix than it would have using conventional sources, equal to 5.6% of GDP rather than 3.37%, which the author argues largely explains minimal European growth. European Union primary energy consumption has fallen 17.47% from its peak, with renewables at 16.6% of the mix and renewable electricity priced at 5x conventional.

AI Summary. Boeing delivered 143 commercial aircraft in a quarter, up 10% year over year and 29 more than Airbus, its widest delivery lead since 2018, as Airbus contended with supply-chain bottlenecks including engine shortages. Revenue at Boeing's defense, space and security division rose 21%, aided by rising global defense spending.

Christian Davies and Sylvia Pfeifer Financial Times
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In Q1, Boeing delivered more planes than Airbus for the first time since 2023. Defense and space revenue rose 21%, as global defense spending surged.

Has Boeing retaken the commercial aircraft delivery lead from its rival?

Core argument: Boeing delivered 143 commercial aircraft in the first three months of this year, up 10% on 2025, and 29 more jets than Airbus, its widest delivery lead since 2018.

Boeing delivered 143 commercial aircraft to customers in the first three months of this year, up 10% on 2025. It shipped 29 more jets than Airbus, its widest lead since 2018, as its rival struggled with supply-chain bottlenecks, particularly engine shortages. Revenue at Boeing’s defence, space and security division rose 21%, buoyed by a surge in global defence spending.

Takeaways by Macro Roundup® AI

  1. Boeing delivered 143 commercial aircraft in the first three months of this year, up 10% on 2025, and 29 more jets than Airbus, its widest delivery lead since 2018.
  2. Airbus trailed Boeing on deliveries as it struggled with supply-chain bottlenecks, particularly engine shortages.
  3. Revenue at Boeing's defence, space and security division rose 21%, buoyed by a surge in global defence spending.

Related Articles:

  • Crises at Boeing and Intel Are a National Emergency — Intel and Boeing, once benchmarks for high-quality, demanding manufacturing, declined because of their own mistakes rather than cheap foreign competition. Because leading U.S. tech firms' software and devices depend on advanced semiconductors fabricated under contract, especially by Taiwan Semiconductor Manufacturing Co., Chinese subjugation of Taiwan could leave the U.S. tech sector at Beijing's mercy.
  • Boeing Battles Brain Drain As Engineers Chase the Allure of Space — The average tenure of a Boeing engineer has fallen from 16.4 years to 12.6 years, according to data from the union representing 12,000 Boeing engineers, with tenure shortening in almost every age bracket. Analysts, recruiters and union officials describe this "brain drain" as a drag on operations that could make launching a new plane harder.
  • The Old Economy Begins To Take Its Revenge — The author argues that capital rotates between the financial economy's asset-light booms and the physical economy, with commodity capacity constraints and the use of critical materials as geopolitical leverage now making returns on physical investment more attractive. In this view, higher interest rates reflect the better returns and capital spending needed to expand production capacity.

Friday, April 24, 2026

AI Summary. Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited reported physical damage to oil fields and the likelihood that Saudi Arabia and the United Arab Emirates deploy spare capacity. Full recovery could take several quarters.

Daan Struyven, Ati Modak, Filippo Cuscito, Yulia Zhestkova Grigsby, et al. Goldman Sachs
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Assuming no further strikes on oil assets, Goldman forecasts that Gulf oil production can “mostly” recover in a few months after reopening. They caution that the longer the Strait of Hormuz is closed, the slower the production ramp will be.

How quickly does Gulf oil production recover after supply disruptions?

Core argument: Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited publicly reported physical damage to oil fields in contrast to LNG assets.

We see three reasons why Gulf production is likely to mostly recover within a few months after a full and safe reopening of the Strait: The publicly reported evidence on physical damage to oil fields remains limited in contrast to LNG assets. Comments from the Saudi Aramco President and CEO in March suggested that Saudi production is likely to ramp up relatively quickly. The history of supply disruptions suggests that Saudi Arabia and the UAE are likely to deploy available spare capacity to stabilize markets. We see three reasons why a full recovery may take several quarters and risks that the recovery may be only partial after a prolonged closure. There are large differences across Gulf fields in terms of reservoir characteristics, infrastructure sophistication, maintenance, and sanctions risks (partly reflecting the differences in causes of curtailments], and today's shock is unprecedented. For instance, the share of country production with relatively low reservoir pressure is estimated to be higher in Iran and Iraq than elsewhere in the Gulf.

Takeaways by Macro Roundup® AI

  1. Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited publicly reported physical damage to oil fields in contrast to LNG assets.
  2. Comments from Saudi Aramco's President and CEO in March suggested Saudi production would ramp up relatively quickly, and the history of supply disruptions suggests Saudi Arabia and the UAE would deploy available spare capacity to stabilize markets.
  3. A full recovery may instead take several quarters and could be only partial after a prolonged closure, as Gulf fields differ widely in reservoir characteristics, infrastructure sophistication, maintenance, and sanctions risks, with Iran and Iraq estimated to have higher shares of low-pressure reservoir production.

Related Articles:

  • A Q&A on Our Economic Forecasts Amid the Evolving War with Iran — The authors forecast that the drag on US growth from higher oil prices will roughly offset the boost from recent tax cuts, and have lowered their GDP growth projection by 0.5 percentage points to 2.0%. Their baseline now runs about half a percentage point below estimated potential growth, with adverse scenarios three-quarters to a full point below.
  • The Hormuz Blockade Is as Much About China as Iran — The author estimates Iran earned about $100m a day from crude sales before the war and roughly $175m a day afterward, so a US-enforced blockade would deal its economy a heavy blow. An earlier US maximum-pressure sanctions campaign cut Iranian crude earnings to no more than $10m a day without forcing Iran to yield.
  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.

AI Summary. Foreign private investors now hold more US Treasury securities than foreign central banks, a structural shift in the ownership of US government debt. This makes the Treasury market more sensitive to the return expectations of price-sensitive private capital.

Torsten Sløk Apollo
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For the first time, foreign private buyers own more Treasuries than the foreign official sector, Slok notes, suggesting the “Treasury market [may be] increasingly sensitive to the return expectations of price-sensitive private capital.”

Does private foreign ownership make the Treasury market more sensitive to returns?

Core argument: Foreign private investors hold more US Treasuries than foreign central banks for the first time, a structural shift in the composition of overseas ownership of US government debt.

For the first time, foreign private investors hold more US Treasuries than foreign central banks. This is a structural shift that makes the Treasury market increasingly sensitive to the return expectations of price-sensitive private capital.

Takeaways by Macro Roundup® AI

  1. Foreign private investors hold more US Treasuries than foreign central banks for the first time, a structural shift in the composition of overseas ownership of US government debt.
  2. The shift toward price-sensitive private capital makes the Treasury market increasingly sensitive to the return expectations of those private investors.

Related Articles:

  • A Mystery in Fixed Income — Long-term interest rates have drifted higher than short-term rates and oil prices would predict, an unusual pattern during Federal Reserve rate-cutting cycles. Proposed explanations include investor concern about growing Treasury debt issuance or an effective increase in the Federal Reserve's 2% inflation target.
  • War and Interest Rates — Ten-year Treasury yields and inflation-protected Treasury yields moving together indicate markets are pricing higher real interest rates rather than an inflation premium, since higher expected inflation would raise nominal yields alone. A forecast recession would instead show up as lower real and nominal interest rates.
  • 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.

AI Summary. The authors argue the US can extend its estimated seven-month lead in artificial intelligence by closing gaps in export controls: halting all AI chip exports to China including less advanced models, curbing smuggling networks, blocking cloud and remote access to controlled chips and US models, and restricting chipmaking equipment.

Chris McGuire Financial Times
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Chris McGuire suggests China could have an AI model as capable as Mythos in ~7 months. He suggests US export controls could delay Chinese AI progress by a year, buying ~18 months to “harden America’s entire digital infrastructure.”

Can tighter export controls preserve the US lead in AI over China?

Core argument: Existing US export controls helped produce a seven-month American lead in AI, but the author argues gaps and loopholes must be closed to extend that lead and buy time to shore up defences.

The US can extend its lead, and buy time to shore up defences, by tightening export controls on all critical AI-enabling technology. Existing controls helped the US obtain its current seven-month lead, but they contain gaps and loopholes that must be closed. And because defences need to be updated with each new model release, this is a continuous effort, not a one-time push. For the US to maximise its lead, it must halt all exports of AI chips to China, including less advanced models such as the Nvidia H200. It must curtail China’s AI chip smuggling networks — just one instance of which diverted $2.5bn of Nvidia servers to China via south-east Asia — by requiring export licences for large-scale orders globally. It must block Chinese companies from accessing export-controlled chips through the cloud, which is currently unrestricted. It must block China’s access to US AI models themselves, either via export or remote access. And it must halt exports of semiconductor manufacturing equipment capable of producing advanced chips, including foreign-made equipment relying on US technology.

Takeaways by Macro Roundup® AI

  1. Existing US export controls helped produce a seven-month American lead in AI, but the author argues gaps and loopholes must be closed to extend that lead and buy time to shore up defences.
  2. The author calls for halting all AI chip exports to China, including less advanced models such as the Nvidia H200, and curtailing smuggling networks that in one instance diverted $2.5bn of Nvidia servers to China via south-east Asia.
  3. The author urges requiring export licences for large-scale chip orders globally, blocking Chinese access to controlled chips through currently unrestricted cloud services and to US AI models, and halting exports of advanced semiconductor manufacturing equipment, including foreign-made equipment relying on US technology.

Related Articles:

  • China and the Future Of Science — China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.
  • Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities — Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
  • Anthropic Model Scare Sparks Urgent Bessent, Powell Warning to Bank CEOs — The US Treasury and Federal Reserve convened Wall Street leaders over concerns that Anthropic's Mythos artificial intelligence model and similar systems could usher in an era of greater cyber risk. The meeting aimed to ensure banks are aware of the possible risks and are taking precautions to defend their systems.

AI Summary. The White House Office of Science and Technology Policy accuses Chinese campaigns of using tens of thousands of proxy accounts and jailbreaking techniques to extract proprietary information from American artificial intelligence models. American AI companies argue such "industrial distillation" lets foreign labs cheaply close the US lead created by export controls on advanced chips.

Demetri Sevastopulo and Cristina Criddle Financial Times
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According to the White House, China is engaged in “deliberate, industrial-scale campaigns to distill US frontier AI systems.”

Is large-scale theft of American AI models eroding US competitive advantage?

Core argument: White House Office of Science and Technology Policy director Michael Kratsios said Chinese campaigns were leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information.

Michael Kratsios, director of the White House Office of Science and Technology Policy said Chinese campaigns were “leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information.” American AI companies, including Anthropic and OpenAI, have increasingly voiced concern about distillation by Chinese groups, which they argue enables foreign labs to close the competitive advantage that the US enjoys because of export controls on advanced American chips. Kratsios said distillation was a vital part of the AI ecosystem when used legitimately to make lighter-weight models but “industrial distillation” used to undermine American research and development was “unacceptable.” He added that while models created by “surreptitious, unauthorised distillation campaigns” did not match the performance of the original models, they can benefit foreign groups because of the significantly lower cost.

Takeaways by Macro Roundup® AI

  1. White House Office of Science and Technology Policy director Michael Kratsios said Chinese campaigns were leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information.
  2. Kratsios said distillation is a vital part of the AI ecosystem when used legitimately to make lighter-weight models, but "industrial distillation" used to undermine American research and development is "unacceptable.".
  3. American AI companies including Anthropic and OpenAI argue that distillation by Chinese groups lets foreign labs close the competitive advantage the US gains from export controls on advanced American chips, while Kratsios said such models underperform the originals but cost significantly less.

Related Articles:

  • Misanthropic: On Mythos, Bad Human Behaviors and Systems Vulnerabilities — Anthropic reports that its Mythos model has detected thousands of high-severity cyber vulnerabilities, including ones found by chaining multiple obscure software weaknesses, and that these hacking skills are emergent rather than a designed capability. Mythos completed a corporate network attack simulation estimated to take an expert over 10 hours, which no other frontier model had solved.
  • Anthropic Model Scare Sparks Urgent Bessent, Powell Warning to Bank CEOs — The US Treasury and Federal Reserve convened Wall Street leaders over concerns that Anthropic's Mythos artificial intelligence model and similar systems could usher in an era of greater cyber risk. The meeting aimed to ensure banks are aware of the possible risks and are taking precautions to defend their systems.
  • Does Gemini Show That Scaling Still Works? No. — The author argues that frontier model pre-training is becoming uneconomic, delivering only marginal capability gains for enormous spending on chips, power, and compute. Meaningful advances have shifted to post-training, inference-time compute, and tool-augmented reasoning rather than raw model size.

AI Summary. Intel's annual revenue of $53bn is about $25bn below its 2021 peak, with Wall Street projecting 3% growth in 2026. Its foundry unit generated $5.4bn in revenue, up 16%, but relies almost exclusively on Intel's own product divisions for orders while seeking outside customers.

Ian King Bloomberg
Date Posted:

Intel’s shares hit a record high, eclipsing their 2000 dot-com peak. The USG has a ~10% stake in the firm.

Does a record share price mean a chipmaker regained industry leadership?

Core argument: Intel's annual revenue of $53 billion last year sat roughly $25 billion below its 2021 peak, and Wall Street projects 3% growth in 2026, even as its shares eclipsed their dot-com peak following a strong sales forecast.

[Intel] has a long way to go to restore its former chip-industry glory. Its annual revenue of $53 billion last year was roughly $25 billion shy of the company’s peak revenue, achieved in 2021. Wall Street projects 3% growth in 2026. The Intel Foundry Services division — the company’s factory unit — generated revenue of $5.4 billion, up 16%. That unit currently relies almost exclusively on Intel product divisions for orders, though it is seeking outside customers. Its PC chip division had revenue of $7.7 billion, and the data center unit posted sales of $5.1 billion. All of those totals topped Wall Street estimates. Intel has so far failed to field the type of AI accelerator that’s made Nvidia the richest in the chip industry and the most valuable publicly traded company in the world.

Takeaways by Macro Roundup® AI

  1. Intel's annual revenue of $53 billion last year sat roughly $25 billion below its 2021 peak, and Wall Street projects 3% growth in 2026, even as its shares eclipsed their dot-com peak following a strong sales forecast.
  2. Intel Foundry Services generated $5.4 billion in revenue, up 16%, while relying almost exclusively on Intel's own product divisions for orders as it seeks outside customers.
  3. Intel's PC chip division posted $7.7 billion in revenue and its data center unit $5.1 billion, both topping Wall Street estimates, though Intel has not fielded the type of AI accelerator that made Nvidia the world's most valuable publicly traded company.

Related Articles:

  • Crises at Boeing and Intel Are a National Emergency — Intel and Boeing, once benchmarks for high-quality, demanding manufacturing, declined because of their own mistakes rather than cheap foreign competition. Because leading U.S. tech firms' software and devices depend on advanced semiconductors fabricated under contract, especially by Taiwan Semiconductor Manufacturing Co., Chinese subjugation of Taiwan could leave the U.S. tech sector at Beijing's mercy.
  • Washington’s Growing Portfolio: Tracking U.S. Government Investments — The U.S. government has invested $20.9bn across sixteen deals taking direct ownership stakes, expanding beyond its traditional toolkit of grants, loans, and tax incentives. The Department of Defense leads with seven deals, the Department of Commerce has six including a 10% stake in Intel, and partners have mobilized an additional $4.75bn.
  • Industrial Policy and Economic Security — Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.

AI Summary. Across nearly every 10-year period measured, US construction cost indexes rose faster than overall consumer price inflation, with the main exception being a two-decade stretch in which most indexes rose more slowly than inflation or declined against it. Earlier periods of the 20th century show cost increases as large as or larger than recent ones.

Brian Potter Construction Physics
Date Posted:

Multiple measures show real construction costs have “virtually never fallen” since 1875, with the striking exception of 1975–95—consistent with input cost and productivity series. The upward drift is not new; if anything, it has moderated over time.

Do construction costs usually rise faster than overall inflation?

Core argument: Across nearly every 10-year period measured, virtually every construction cost index rose faster than CPI.

Let’s look at the average annual growth rate for each index over 10-year periods, minus the average growth rate of CPI for the same period. This will let us see how construction costs are changing with respect to inflation over specific periods: positive values mean construction costs are rising faster than inflation, negative means construction costs are rising slower than inflation. We see that in almost every period of time, construction costs are rising faster than overall inflation for virtually every cost index. The major exception is the period from 1975 to 1995, where most indexes show lower rates of increase or even declines against overall inflation. We also see that historic rates of cost increase seem to be as bad or worse than modern ones. For four of the five 10-year periods between 1915 and 1965, the Turner Cost index rose more than a percentage point faster than overall inflation, whereas for the periods from 1995 to 2025 it rose less than a percentage point.

Takeaways by Macro Roundup® AI

  1. Across nearly every 10-year period measured, virtually every construction cost index rose faster than CPI.
  2. The Turner Cost index rose more than a percentage point faster than overall inflation in four of the five 10-year periods between 1915 and 1965, versus less than a percentage point for the periods from 1995 to 2025.
  3. The period from 1975 to 1995 is the major exception, with most construction cost indexes showing lower rates of increase or even declines against overall inflation.

Related Articles:

  • Stagnant Construction Productivity Is a Worldwide Problem — Construction labor productivity has been roughly flat or declining since the 1990s across most of Western Europe, Japan, and Korea, a pattern consistent with the flat US trend. Countries often held up as models — Sweden and Japan for prefabrication, China for infrastructure — show little or unremarkable construction productivity improvement.
  • Five Decades of Decline: U.S. Construction Sector Productivity — U.S. construction labor productivity in 2023 was essentially unchanged from 1948, with real output per worker in 2020 more than 30% below its 1970 level, even as aggregate U.S. labor productivity tripled between 1950 and 2020. Construction accounted for about 4.5% of U.S. GDP in 2024.
  • Why Has Construction Productivity Stagnated? The Role of Land-Use Regulation — Homes built per construction worker boomed after World War II and fell after 1970, a decline the authors link to local land-use regulation that limits project size and keeps construction firms small and less productive. They estimate US residential builders would be roughly 60% more productive if their size distribution matched manufacturing.