From the Federal Reserve Bank of Atlanta's Macroblog, August 4:
It is widely recognized that demographics can have broad and consequential implications for factors including the neutral rate of interest, potential output growth, and transmission of monetary policy (see, for example, here, here, and here) by affecting households' decisions about consumption and savings over their life cycle (see here and here). As the size and the composition of the age distribution change slowly, demographic projections are readily available (see here) and can be used to elicit valuable information about the low-frequency dynamics of key latent variables that guide monetary policy as well as asset valuations (see here and here) and inflation (see here).
This Macroblog post highlights some recent evidence on demographics as a low-frequency driver of trend inflation. This evidence suggests that—in addition to the overall aging of the population—the demographic effect on inflation depends crucially on the composition of the age distribution—that is, whether the effect is disinflationary or inflationary depends on how saving behavior varies across age cohorts as the population ages. To quantify these effects, I revisit and extend the empirical framework of Juselius and Takáts (2015, 2018) (and for more comprehensive analysis, see Goodhart and Pradhan, 2020). I consider annual data for 22 advanced economies (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States) for the period 1960–2024. The data are obtained from the OECD database for demographic variables and CPI (year-over-year) inflation rates, with complementary data for real GDP per capita and missing observations for inflation from the World Bank's World Development Indicators.
I start by examining how a commonly used summary statistic of the age distribution—the dependency ratio, defined as (100 times) the number of people aged 19 and less and people aged 65 or older, relative to the number of people of working age (20 to 64 years old)—co-moves with the inflation rate. Figure 1 plots these two variables for Sweden—for which this co-movement is particularly pronounced—as well as their cross-sectional averages across the 22 countries. Although the inflation rate is volatile, the dependency ratio is very smooth and persistent. Note, however, that the dependency ratio is essentially serving as a low-frequency filter for inflation and is tightly correlated with the corresponding low-frequency component of inflation. But the graph with averaged data (the right plot in figure 1) also suggests that for the majority of countries, including the United States, the dependency ratio tends to lead inflation. It is important to emphasize, at this point, that the potential effect of demographic structure on inflation reflects secular forces that may only amplify or dampen the prevalent sources of (dis)inflationary pressure such as monetary and fiscal policy, as well as commodity or geopolitical shocks, among others....
From Iran's semi-official Tasnim News Agency, September 29:
IRGC Presents Iran’s Logic in Letter to US People
(IRGC) spokesman said Iran’s letter to the American people is intended to go beyond media publicity and provide a direct and genuine explanation of Iran’s positions and reasoning.
In comments at a press conference on Tuesday, Brigadier General Hossein Mohebbi explained the purpose behind sending the letter to the people of the United States.
“Our goal in sending the letter to the American people goes beyond media publicity and is aimed at creating familiarity with Iran’s logic,” Mohebbi said.
He stressed that the initiative is not a short-term publicity campaign, saying that if the purpose had merely been a media operation, Iran could have created a temporary appearance of impact through several posts on social media or other media activities.
“Instead, we decided to speak to the American people in an honest, logical and genuine manner,” the IRGC spokesman said.
Iran believes that many Americans might not be sufficiently familiar with Iran’s logic and positions, and therefore the letter is intended to provide a platform for greater understanding, he added.
The spokesman noted that, unlike the US, which has hundreds of television and radio networks enabling it to communicate with other nations around the clock, Iran faces limitations in terms of having extensive media outlets operating inside US territory.
“For this reason, choosing a letter as a tool to convey our message directly and clearly is a solution that was selected based on the realities that exist,” he said.
Mohebbi said Iran has asked the American people to read the letter at least once and expresses readiness to correspond with those who wish to respond, offer criticism or request further explanations. He added that an official address for such correspondence would also be provided to the media....
Iran's Guards urge Americans to vote out their leaders in 26-page letter
A designated terrorist organization has written to American voters. Iran's Revolutionary Guards sent a 26-page letter to US scholars, students and media describing a government in decline and telling Americans they have the power to change it at the ballot box in November.
The letter, published by Iranian media on Tuesday in English and Persian, presents the Islamic Revolutionary Guard Corps as a force for the people, portrays Iran as victorious and the United States as a power in decline, and returns repeatedly to a single instruction: that Americans turn against the politicians they elected.
The Guards and their Basij volunteer force led the suppression of nationwide protests in January, in which security forces killed tens of thousands of people in two days. A UN fact-finding mission said this month that the crackdown involved crimes against humanity.
Signs of 'decline'
"Tyranny, an excessive tendency to behave violently and murderously, relying on and promoting falsehoods, giving precedence to the vulgar elements of society over the wiser elements in occupying positions of power, and an inordinate preoccupation with inessential matters at the expense of society's essential affairs" are the signs of a state in decline, the letter says.
"The United States government today exemplifies all of these flaws."....
...The letter also explains the slogan "Death to America." "The true meaning of 'Death to America' is 'Death to the crimes perpetrated by the American elite,'" it says. "It is, in a word, not an expression of ill will toward the American people."
The slogan is chanted at state-organized rallies and Friday prayers across Iran and appears on murals maintained by the state in central Tehran, including on the walls of the former US embassy....
The Cuban Commander-in-Chief is renowned for his oratory. A Google search for: Fidel, lengthy, speeches; gives you 120K hits. Even in translation it can be mesmerizing.
Important meetings take place at such a frantic pace and Bush flies around and speaks at such speed that it is almost impossible to keep track. En route to Sydney, he stopped over for a few hours in Iraq, no less. I can’t say whether this happened two or three days ago, because when it's Thursday in Sydney and the sun is almost at high noon over the land, it’s still Wednesday in Havana with its fresh night air. The globalized planet Earth changes and transforms our concepts. Only one reality remains unchanged: the Empire’s network of air, sea, land and space military bases, increasingly more powerful and at the same time more vulnerable.
We don’t need to go into any special efforts of persuasion. Let us allow the U.S. news agency to speak for itlself.
... However, this is not the only news coming from the unstoppable deluge of Bush’s words. ... This reflection is getting very long and I have to conclude.
Some people, usually men of the left, react as if bitten by a snake if you even raise the question in their presence. However, the similarities between the two forms of rule as practiced, not as promoted, pimped and pitched but as practiced are noteworthy. More on that after the jump.
From the legal eagles at the Volokh Conspiracy, hosted at Reason Magazine, September 29 (the author of this piece is Professor [law] Ilya Somin):
The Nazis were similar to socialists supporting economic statism, but different in other key aspects of their ideology.
Periodically, debate rages over the question of whether the Nazis were socialists. As a general rule, conservatives (and some libertarians) make this accusation, while left-wingers indignantly deny it. This question has returned to prominence in recent months, and it remains worth addressing. The right answer is that the Nazis were similar to socialists in backing sweeping government control over the economy, yet different from them in rejecting racial and ethnic equality. But the difference is greater in theory than in practice.When socialists come to power, they often engage in persecution of minority groups, even though this is inimical to their ideology. There are systematic reasons for this pattern, which go beyond the idiosyncracies of individual leaders.
All of this has significant implications for current political debates, at a time when "democratic socialism" is a growing movement and much of the right has embraced statist nationalist economics.
It is difficult to deny that the Nazis (and other similar right-wing nationalist movements) embraced sweeping economic statism, including socialist-style central planning. The movement wasn't called the National Socialist Party for nothing. I summarized some of the evidence in a 2007 post, relying on then-recent academic research (later research has not changed these conclusions):
The idea that Nazism was an extreme form of "capitalism" and Hitler primarily a tool serving the interests of "big business" is a longstanding myth that even now retains a measure of popularity in some quarters. This, despite the fact that the full name of the Nazi Party was the National Socialist German Workers' Party, and that Nazi political strategy was explicitly based on combining the appeal of socialism with that of nationalism (thus the choice of name). Once in power, the Nazis even went so far as to institute a Four Year Plan for running the German economy, modeled in large part on the Soviet Union's Five Year Plans….
Two recent books further explain the socialist elements of Nazi economic policy, and will hopefully put the final nails in the coffin of the myth that the Nazis were "capitalists" or free marketeers. In The Wages of Destruction: The Making and Breaking of the Nazi Economy, historian Adam Tooze describes the statist nature of Nazi economic policy in great detail, and concludes that the Nazis imposed greater government control over the economy than any other noncommunist regime in modern history. (pp. 658-60). Tooze notes that, even before the outbreak of World War II, government military spending accounted for some 20% of the GDP, while much of the rest of the economy came under government control as a result of the Four Year Plan and other similar measures.
In Hitler's Beneficiaries: : Plunder, Racial War, and the Nazi Welfare State, Gotz Aly argues on the basis of extensive evidence, that German support for Nazi rule was maintained by the creation of a massive welfare state funded in large part by plunder captured in Hitler's foreign conquests, but also partly by means of "soak the rich" taxation within Germany itself.
Some nonetheless persist in viewing the Nazi economic system as "capitalist" because 1) some big businessmen (such as the Krupps) supported the Nazi regime, and 2) most of the means of production remained under private rather than state ownership. It is certainly true that much industrial capital remained formally under private ownership under the Nazis. However, under the Four Year Plan and other similar policies, it was primarily the government that determined what goods would be produced, what prices would be charged, and (in many cases) who would be the consumers. "Capitalist" private firms in Nazi Germany played a role far more similar to that of socialist managers of enterprises in the Soviet Union than that of actual capitalists in a market system. The Krupps and others certainly profited greatly under the Nazis, but so too did high-ranking Communist Party enterprise managers in the Soviet Union. Neither, however, detracted from the state's ultimate control over economic production…..
More recently, economist Bryan Caplan has surveyed the data on Nazi economic policy, indicating extensive and rapidly growing government control of the economy.
But government control of the economy was not the only element of Nazi ideology. Another key facet was racial and ethnic hierarchy. The Nazis believed the state should serve the interest of "Aryan" Germans. Other groups were at best second-class citizens, and at worst slated for slavery (as in the case of Slavic peoples), or outright extermination (as in the case of the Jews).
By contrast, socialist ideology is egalitarian. The slogan "Workers of the World Unite" urges proletarians of all ethnic and national backgrounds to come together. Marx famously regarded nationalism as a form of "false consciousness." Not all socialists reject nationalism so completely. But, as a general rule, they support racial and ethnic equality and condemn discrimination. In part for this reason, historically oppressed racial and ethnic minorities have often played a role in nascent socialist movements.
The anti-Semitic trope that communism was a Jewish conspiracy is false. Most Russian Jews were not communists, and most communists were not Jews. But it is true that Jews (and a number of other ethnic minorities) were disproportionately represented among pre-1917 Russian communists. That was in part because the communists promised ethnic equality and an end to the Russian Empire's egregious anti-Semitic discrimination. Jews were similarly overrepresented in other movements promoting ethnic equality at that time, including the Constitutional Democratic Party, which sought to make Russia a liberal democracy.
Left-wingers who argue that the Nazis were not socialist like to emphasize this egalitarian dimension of socialist ideology. They have a point. But, sadly, socialist governments often fail to live up to these principles....
Back to comparisons. Both systems belittle the individual. In Fascism the state is more important than the individual. In Socialism the collective is more important than the individual.
Both systems, because they are contrary to human nature, require total control of the ruled, by their very form and function they are totalitarian.
Because of that, both systems very quickly become authoritarian and subject to strong-man rule.
As a side note, the experiences of Eastern Germany and neighboring Poland under Nazism and then Communism are instructive. East Germany made the transition from one to the other to the point they out-Commied the Soviets whereas the Poles under Nazism practiced a passive (to the point of surliness) resistance. Of course resistance any more overt than that would likely get you tortured and/or murdered. Regarding Moscow's rules, Stalin got so frustrated that he said trying to impose communism on Poland was like putting a saddle on a cow [NYT August 1989, some have him saying the same thing about Germany but I know of no ref.] Similar sentiments in Brussels, I'm sure.
Two trailers belonging to PlusAI, a self-driving trucking company, were stolen late Wednesday from a Fremont warehouse. The trailers, emblazoned with PlusAI and Nvidia logos, contained 20 tons of sand used for research and development.
PlusAI spokesperson Lauren Kwan believes the joint branding with Nvidia made the trailers a target for thieves who assumed they contained valuable equipment. The trailers held 40,000 pounds of sand instead.
A friend of PlusAI's vice president of legal spotted the trailers in Newark and texted a photo, writing, "Just saw two of your trucks near my work place!:)" The company alerted authorities, who recovered both trailers.
By Thursday afternoon, Newark authorities and Fremont Police Department officers returned both trailers to PlusAI. No suspects have been arrested, and Fremont Police Department spokesperson Amy Gee said the investigation remains open....
Director of National Intelligence Jay Clayton has been picked to serve as AI czar, leading a task force to address growing concerns about artificial intelligence, The Wall Street Journal reported.
The new “Super Intelligence Force” will make recommendations on the role the federal government should play in overseeing the technology, the Journal said.
AI industry leaders have called for a slowdown in development after a series of high-profile rogue AI agent hacks and warnings about how quickly AI is improving.
Director of National Intelligence Jay Clayton has been chosen as the Trump administration’s new AI czar, leading its response to artificial intelligence amid growing concerns about the risks of this rapidly evolving technology, The Wall Street Journal reported on Saturday.
Clayton told the Journal he will lead a new White House task force, which will have 120 days to research and report on AI’s risks and opportunities, and offer recommendations on the federal government’s responsibilities regarding the new technology....
For the second time in five years, Britain is experiencing an energy crisis. The political debate has coalesced around two proposed solutions. The first, advocated by the ‘Drill, baby, drill’ contingent, favours fast-tracking new oil and gas licences and reducing taxes on fossil fuel companies. Its proponents point to the Norwegian energy system as a model, but don’t suggest setting up a majority state-owned company like Equinor or bringing in export controls on oil and gas. That the UK’s remaining fossil fuel reserves in the North Sea are inadequate to demand is often ignored.
Supporters of the second solution believe that Britain should focus on scaling up renewable forms of electricity generation, such as wind and solar power. This overlooks the fact that electricity and total energy use are not the same thing. Even if Britain were to produce all its electricity from renewables, the country won’t be able to escape the influence of fossil fuels as long as 85 per cent of UK homes continue to rely on gas central heating. This camp, with a quixotic commitment to globalised energy capitalism, also claims that any new domestic production won’t affect our energy prices because oil and gas are traded on a global market. But many countries do control exports and prices. Renewables boosters want to see increased subsidies to private sector electricity generators (especially wind and solar farms), but have no enthusiasm for public ownership. Britain’s political class remains unified in its belief that energy infrastructure must be owned by the private sector. Since privatisation in the 1980s, successive leaders have rejected any suggestion of nationalisation, despite the scale of the crisis facing the British energy industry. The Burnham government may mark a turning point. It has promised to set out plans for ‘stronger public control’ of essential services, though the relationship between control and ownership has yet to be defined.
In January 2009, a border dispute between Ukraine and Russia led to a rapid rise in European gas prices. Ed Miliband, then energy secretary under Gordon Brown, went on the Today programme to reassure listeners that Britain had a ‘diverse range of sources where our gas comes from, which is the most important thing this dispute teaches us’. By this he meant gas entered Britain from the North Sea fields and on tankers carrying liquefied natural gas, mostly from Qatar and Algeria. A few months later, Miliband approved a National Strategy for Climate and Energy, which pitched renewables as a way to ‘improve the security of Britain’s energy supplies’ and claimed that the ‘diversity of our gas supplies helped the UK to remain largely unaffected by the Russia-Ukraine dispute’.
Others were concerned about the potential impact on prices of future shocks. In 2010, the energy industry regulator, Ofgem, concluded a major study into the resilience of the system. One of the scenarios it tested was a Russia-Ukraine conflict. The resulting report, Project Discovery, warned that ‘consumer bills rise in all scenarios due to the levels of new investment required... and especially so if oil and gas... prices spike sharply.’ Project Discovery was swept under the carpet then and is almost never mentioned today. To remember it is to admit that the British state lacked the capacity to do anything about the crisis it correctly predicted would happen.
The energy crisis of 2021-23 was much more serious than that of 2009, although in its early stages politicians were keen to tell the public that there was nothing to be worried about. In September 2021, the business secretary, Kwasi Kwarteng, dismissed concerns as ‘alarmist, unhelpful and completely misguided’, assuring Parliament that Britain had ‘a diverse range of gas supply sources’. As the scale of price hikes became clear, the government desperately tried to pull every lever, even contemplating buying gas itself. This proved too complex an undertaking; the civil service had no experience of buying gas in bulk. As Britain’s privately-owned gas system operator put it: ‘The underlying market arrangements in the UK are predicated on the basis that the market will provide.’ Trying to get financial support to the households that needed it most was particularly difficult, because the IT systems holding data on welfare beneficiaries weren’t linked to those of the energy companies.
In the end, the government threw money at the problem. Energy suppliers were told to pay whatever was necessary, all consumer bills were capped and the state picked up the bill – at least £40 billion. In the aftermath there were recriminations and calls for reform. But most of these initiatives failed, scuppered by the complexity of the task and lobbying by energy companies. The IT systems still aren’t linked up. The way electricity and gas markets operate remains the same.
Britain has some of the highest electricity prices in the world. It is convenient for the industry to blame this on Russia’s invasion of Ukraine, but electricity prices have been rising above the rate of inflation since 2003. Between 2000 and 2019, prices for residential customers increased by 80 per cent. Only a handful of countries had greater price increases than the UK in this period. The energy industry and political commentators debate the reasons for this ad nauseam. Some blame it on renewables, claiming that even if wind farms are cheaper to run than gas-fired power stations, they require lots of electricity network in remote places and lots of battery storage. Others blame fossil fuels, claiming that the real issue is Britain’s reliance on gas. According to the rules of the wholesale market, the price of electricity is set by the most expensive source needed to meet demand. In Britain that source is gas around 60 per cent of the time, down from around 90 per cent five years ago. Many other countries have the same approach to electricity pricing. What differs is the kind of power that sets the price. In France it is usually nuclear, and in Norway, hydro. Britain scrapped its coal-fired power stations and has little flexible hydro or nuclear, so the last power station called on is almost always gas.
There are elements of truth to both positions. A third of the increase in the average electricity bill between 2016 and 2026 was due to the increase in gas prices. But another third was due to increased subsidies for generators (resulting in part from higher interest rates and the growing cost of equipment and labour). A further 20 per cent was due to rising electricity network charges following a wave of construction after decades of underinvestment. Whatever the reasons for rising bills, the bigger problem for renewables is trust. For at least a decade, the British public has been told that renewables are cheap and will bring down bills. Between 2000 and 2025, the share of electricity generated by renewable and clean sources (wind, solar, hydroelectric, nuclear) rose from 24 per cent to 50 per cent. But this has failed to translate into stable or reduced electricity prices.
The shift to renewable electricity generation won’t reduce electricity prices in the short term. When Labour was elected in 2024, one of its top priorities was to reach ‘clean power by 2030’. This means the electricity industry has to build a huge amount of infrastructure very quickly. Privatisation in the 1980s established the principle that all costs must be recovered from the consumer. Until very recently, even the subsidies given to generators of renewable energy came entirely from consumers rather than from the Treasury (the 2025 budget moved roughly a fifth of total renewable subsidies onto general taxation for the next three years, but the rest still falls on bills). In other countries, including France, Norway and China, the state picks up more of the tab – energy infrastructure is publicly owned and subsidies are paid from general taxation.
Britain’s energy strategy over the last two decades has been predicated on the assumption that generating electricity from renewables is cheaper than generating it from fossil fuels. ‘Decarbonisation’ was supposed to drive down prices and encourage consumers to switch from using fossil fuels for driving and heating. This hasn’t happened. One important metric is the share of final energy demand serviced by electricity: it has barely increased over the last two decades, going from 19 per cent in 2000 to 21 per cent in 2023. Between 2000 and 2019 electricity consumption per capita actually fell by 22 per cent. Only Yemen, Zimbabwe, Jamaica, Tajikistan and Syria have had greater drops.
Rising electricity prices have undermined electrification. Electricity is harder to deliver than gas and thus more expensive, but how much more expensive – what is known as the ‘spark gap’ – is an important factor when households or companies decide whether or not to electrify. The UK has one of the widest spark gaps in Europe. In the three years after the last energy crisis, the gap grew so the incentive for consumers to switch to heat pumps weakened....
The premiums are juicy, but the financial stakes are hard to digest
EARLIER THIS month Monte Carlo hosted the annual get-together of the world’s insurance firms, including the reinsurers who insure them. The “Rendez-Vous de Septembre” is a swanky affair. Rooms at the main venue can cost over $2,000 per night. Attendees can choose to arrive via helicopter. The organisers discourage any side-events that might compete with the “Official Cocktail”. Yet at this month’s gathering the gin drinkers’ thoughts drifted to less glamorous locales: the dusty deserts, flat farms and desolate shrublands where data centres are being built.
Despite their downmarket locations, such centres are worth vast sums of money. Their owners are thus keen to insure them against natural catastrophes, cyber-hacks and a host of other dangers. Premiums tied to such projects are set to rise from $11bn today to $24bn by 2030, reckons Swiss Re, a reinsurance giant. That makes data centres a welcome source of growth in an industry that is anxious about a looming downturn. But like a good cocktail, the rush can also induce some headaches.
For a start, data centres are big undertakings, physically as well as financially. Although some have been in use—and insured—since the dot-com boom, the greater scale required by artificial intelligence can scramble conventional risk models. The larger the data centre, the greater the chance that a tornado might rip through it. Some 40% of America’s data-centre capacity sits in zones often exposed to such dangers, Swiss Re notes. More than a quarter are at risk of being pelted by large chunks of hail multiple times each year. Many centres are clustered together in spots like Virginia and Texas. If a natural disaster affects one, it will probably affect others.
Inside the big boxes, the layouts of many centres also worry underwriters. Operators are eager to place power storage, including lithium batteries, as close as possible to the AI chips. Builders reckon this cheek-by-jowl arrangement helps ensure a consistent power supply. But proximity also increases the chances that a battery fire will engulf semiconductors and other ultra-pricey kit. The concentration of expensive assets, especially chips, in a single building means a single event could inflict eye-watering losses.
The internet has always been vulnerable to power failure, cyber-attacks and other mishaps that can sever connections and disrupt business. These business interruptions are often covered by cyber-insurance policies. But in the case of data centres, such interruptions may be unusually costly, says Alexis Dyschkant of Covington & Burling, a law firm, because of the sheer scale of economic activity that could be tied to a single centre. Given bottlenecks in many parts of the AI supply chain, replacing damaged kit could take a while. The precise terms of coverage will therefore matter a great deal. Some policies may only begin payments after the first 12 or 24 hours of disruption—plenty of time for millions of dollars of losses to occur.
Assuming they can iron out the details of mega-policies, insurers then face a second hurdle: how to fund them. The largest insurance bundles today typically cover up to $8.5bn of value for projects worth up to $25bn in total. Policy writers then cover their own exposure through reinsurance, says Jimmy Keime of Swiss Re. Even if today’s coverage limits increase in the coming years, many large projects will be insured to less than half their value.
Projects seeking additional cover will have to get creative. One option is to add on “surety bonds”, which already play a role in the industry. They are sometimes issued by insurance companies on behalf of builders at the insistence of the builder’s clients. The client can then get compensated even if the builder falls down on their obligations....
The former Google China chief and longtime AI investor on Beijing’s open-model advantage, the future of work and why CEOs still underestimate AI.
Chinese AI companies are rapidly closing the gap with US rivals, even after years of restrictions on their access to advanced chips. But the race between the world’s two AI superpowers is only one part of a much bigger transformation — of companies, jobs and even how people think about work. Few have watched it unfold from as many vantage points as AI pioneer and investor Kai-Fu Lee, who has worked at Apple and led Microsoft and Google teams in China. His backing of dozens of tech startups has helped create billion-dollar Chinese companies, while his own AI company is 01.ai.
This conversation has been edited for length and clarity. You can listen to an extended version on The Mishal Husain Show podcast.
We’ve turned to you because there are so many headlines on AI in the US and China. You know both these countries. You have seen the development of this technology over 40 years. What do you think is still underappreciated?
The speed of improvement and reduction of costs. Most people do not realize that AI is solving tasks 10 times longer than it was a year ago. If AI solved a four-minute task [then], now it can solve a 40-minute task. The acceleration is going to drive adoption like no technology ever has before. More than the steam engine, the internet [and] Moore’s Law.
AI improving that fast means our companies, enterprises, society [and] governments will need to consider the drastic changes it will bring about. In my view, the CEO is currently one of the least aware of how important this technology is. 1
1This is quite a statement on CEOs, given how many make a point of publicizing their use of AI, and their penchant for hiring $25,000-a-day “AI gurus.” In a preview of Lee’s new book, AI Native: The Mandate to Transform Your Company, he dismisses most AI programs in use as “theater.” Note-takers and departmental chatbots are useful, he writes, but “irrelevant to the real value at stake … if your AI program hasn’t moved a single number on your earnings call, you didn’t transform anything.”
Jobs are going to change. In five years, the typical company’s organizational chart will be different; people who occupy the most important places will look different. AI workers are becoming better, cheaper [and] faster. In order to make that work effectively in an organization, it cannot be retrofitted into a hierarchy intended to manage people. AI workers don’t need hierarchies. What they need is people who know how to design the right problem to solve, organize AI to solve it, and — importantly — be accountable if anything goes wrong. AI can’t be accountable.
What are the qualifications that would put people in these positions? What should people study?
I suggest they study how to solve problems, come up with new problems, and command armies of AI to parallel-solve complex problems — show your mastery of AI. This is not coding. This does not require any engineering background; a humanities student can easily do this. Hard requirements can be learned, even [by] an older, non-tech-background person; that’s the good thing.
Good to know. [Laughs] Can I put a real-world example to you? We are a small team — myself and a handful of producers. I would hate to think of a future where it’s me and essentially an AI team.
I am not saying the [team] is one person and all AI. It’s as many as needed to ensure that the people connection part is worked out.
I don’t know enough about your business so using my business as an example: maybe a unit of 20 people and 100 AI to begin with. Over time, if the business is flat, then probably fewer people and more AI. If the business is growing, there may be more people and more AI.
Look at the protests that have just happened in India, the frustrations of so many young people that entry-level jobs aren’t there anymore. There are very serious social implications. Unless you’re saying there will be enough jobs in other fields for those people. 2
2India’s Gen Z movement, which forced the resignation of a cabinet minister, has tapped into widespread unhappiness at the limited availability of jobs for recent graduates. India’s economy remains fast-growing, but hiring in the customer support and tech-services industry has dropped in recent years.
Graduates Rise, Jobs Lag in India
The number of young graduates has increased 13 times since 1983 to 63 million, while those unable to find work have grown 16-fold to 11 million as of 2023.
Source: State of Working India 2026, Azim Premji University
There will be jobs in certain new industries.
Our whole society needs to rethink how much we depend on jobs. AI will generate a lot of wealth, and I think we can find ways of redistribution so people can work fewer hours and be paid for activities that were not economically important. But I think this is very hard to communicate to someone who couldn’t find a job, or lost [their] job.
You were at the forefront of Microsoft and Google’s foundations in China. How much of a challenge do Chinese AI companies like DeepSeek and Moonshot represent to US companies like OpenAI and Anthropic?
They represent a significant challenge, especially if they continue to keep up at recent levels. OpenAI and Anthropic always stayed at number one or two by most metrics on AI quality, but their models are closed. The Chinese models have been largely open source.
If you are OpenAI or Anthropic, you have a product you sell for a very high price, with an open-source version equivalent to your best model six months ago. Would you pay $50,000 for a [new] Tesla, or $15,000 [for a] Tesla that’s six months old? Obviously, the second is a strong value proposition. 3
3What Lee refers to as “open source” is described by most analysts as “open weight,” meaning that the AI model can be downloaded and potentially modified or redistributed; unlike in open-source software, the code used to train the model is typically not released. While US labs have mostly maintained closed-weight models, Nvidia, Microsoft and Meta were among firms recently warning US policymakers against “premature” restrictions on open-weight models, saying that they “expand access to the AI economy.” Anthropic and OpenAI were not among the signatories.
In the long run, are the Chinese companies more likely to make a profit?
No, the American companies will make more money.
Anthropic and OpenAI have built the iPhone. The Chinese companies are more like the way Google felt. Okay, you got the best product; we’ll build something that’s almost as good, sell it cheaply and win the larger share.
Like Android, the open-source models will have more share, more footprint, more usage. But people will pay very little. In some cases, they just copy the model, pay for the servers on which it’s run [and] don’t pay the Chinese companies anything.
Anthropic and OpenAI have the American system — selling enterprise products that are very highly priced....
Back
in May we thumbnailed Lee Kai-fu as "Sometimes the competition is just
plain intimidating/scary/resistance-is-futile, smart." Followed by his mini-bio from Edge.org:
"KAI-FU LEE, the founder of the Beijing-based Sinovation Ventures, is ranked #1 in technology in China by Forbes.
Educated as a computer scientist at Columbia and Carnegie Mellon, his
distinguished career includes working as a research scientist at
Apple; Vice President of the Web Products Division at Silicon Graphics;
Corporate Vice President at Microsoft and founder of Microsoft Research
Asia in Beijing, one of the world’s top research labs; and then Google
Corporate President and President of Google Greater China. As an
Internet celebrity, he has fifty million+ followers on the Chinese
micro-blogging website Weibo. As
an author, among his seven bestsellers in the Chinese language, two
have sold more than one million copies each. His first book in English
is AI Superpowers: China, Silicon Valley, and the New World Order (forthcoming, September)
Yes,
yes, in the headline I am mixing-and-matching two ancient Asian
cultures but, despite his having been born on Taiwan Dr. Lee really is a
sensei in the Japanese meaning of being both master and teacher....
That seems a lofty target but it also seems the whole country is mobilized to extract value out of the entire AI ecosystem, from chips to software to use cases so maybe 1/3 of the pie isn't so lofty.
Bayer's pharmaceuticals unit on Friday unveiled plans to invest $2.2 billion in a new manufacturing site in New Albany, Ohio, part of a push to boost the business's US revenue.
Bayer expects to create about 600 high paying jobs in New Albany, with another 1,500 jobs resulting temporarily from construction.
The prescription drug unit of Germany's Bayer has increased the US share of global revenue to 35% from 20% in 2018 and it aims to double US sales by the end of the decade, said Sebastian Guth, chief operating officer for pharmaceuticals.
Among the main products to underpin the expansion are Kerendia to treat chronic kidney disease, prostate cancer drug Nubeqa as well as drug candidate asundexian to prevent strokes.
US prescription medicine prices are far higher than in other developed nations, and President Donald Trump has been pressuring drugmakers to lower their prices, while also demanding that other developed countries increase their prices.
"It is a very deliberate decision to strengthen our presence in the United States, alongside our historically strong presence in Europe and our strong presence in Asia," said Bayer Pharma's Guth.
A drug substance manufacturing site is set to become operational in 2031 with a site for finished drug product to follow in 2034.
...Both the plant and the delay are pretty big deals. Unlike the U.S. where it seems there is something announced each week, Canada is not currently attracting a lot of foreign direct investment, particularly not on this scale.
Here's hoping things turn around for both VW and Canada before the technology is rendered obsolete by some of the stuff coming over the horizon.
From Emma at sluttyprimarysource aka Past Life, Present Cleavage substack, September 28:
Sue
On the morning of August 12, 1990, a truck belonging to the Black Hills Institute got a flat tire outside Faith, South Dakota. The crew had spent the summer on a ranch owned by a man named Maurice Williams digging up duck billed dinosaurs, and they were basically done. The men stayed with the tire. Sue Hendrickson took her golden retriever, Gypsy, and walked off into the fog toward some cliffs nobody had checked yet.
She was forty. She had dropped out of high school at seventeen and drifted state to state with a boyfriend before landing in Florida, diving for tropical fish to sell to aquariums and fishing lobster on the side. After that came shipwrecks, and after the shipwrecks came the Dominican Republic, where a miner up in the amber mines showed her an insect trapped in amber and she was, as she tells it, hooked on the spot. By her own account she became one of the top experts in the world on fossils in amber. No degree. I honestly think that's part of why she was so good, she never had anybody telling her where not to look, she just went where the stuff was, and I would follow that woman into any fog.
So the woman walking toward that cliff had spent the eighties pulling ancient bugs out of amber, which is the entire premise of a novel that hadn't come out yet.
At the bottom of a bluff she found broken pieces of bone in the dirt. She looked up. About eight feet over her head, vertebrae were sticking straight out of the rock.
She carried pieces back to camp, and Peter Larson, who ran the institute, has said the team literally ran to the site. It was a Tyrannosaurus rex, roughly 90 percent of it. They named it after her.
Sue Hendrickson at the Sue site, South Dakota, 1990.
Three months later Knopf published Michael Crichton's Jurassic Park, a novel about a very rich old man who clones dinosaurs out of blood in amber and builds a private island to show them off. The timing is so on the nose I would cut it from a screenplay for being lazy.
Spielberg's movie came out in June 1993. John Hammond, a Scottish billionaire in a white suit, flies in some scientists to bless his park before it opens, and one of them is Laura Dern as Ellie Sattler, a paleobotanist in shorts who shoves her arms elbow deep into a pile of triceratops dung to figure out why the animal is sick. She also gets "Dinosaurs eat man. Woman inherits the earth." Then the fences go down and the lawyer gets eaten off a toilet, which he had coming.
The scene I actually care about is a quiet one. The power's out and everyone's scattered, and Hammond is alone in the empty restaurant eating the ice cream before it melts. Ellie comes in and sits with him. He tells her the first attraction he ever built, after he came down from Scotland, was a flea circus in Petticoat Lane. A tiny trapeze and a tiny carousel, all of it motorized. There were no fleas. People swore they could see them anyway, and this time, he says, he wanted to give them something real. Ellie tells him he never had control, that was the illusion. Then they keep eating the ice cream, because it's melting and it's still good.
That's a museum, honestly, the flea circus. You light a thing in a case and write a label telling people what they're looking at, and they see what you told them to see, and the only real question is whether there was ever a flea. Hammond's park even dresses like one, skeletons posed in a rotunda under a big banner. There's a shot of the park gift shop stacked with lunchboxes and plush dinosaurs, and that was real merch Universal was selling out in the actual theater lobby.
Meanwhile the real T. rex was sitting in a storage room in Rapid City.
In May 1992, a few months before Spielberg started shooting, FBI agents and the National Guard raided the Black Hills Institute and took Sue. Larson had paid Maurice Williams five thousand dollars for her. Williams, a member of the Cheyenne River Sioux Tribe, later said the money was for digging her out and cleaning her, not for buying her. His ranch was also trust land held by the federal government, so he couldn't sell anything off it without permission anyway. The bones went into custody at the South Dakota School of Mines and Technology while everybody sued everybody.
The courts decided Sue belonged to Williams, because Sue was part of the land. Legally, a Tyrannosaurus rex was real estate. A condo with teeth.
Larson ended up doing about eighteen months in federal prison for customs violations, which had nothing to do with Sue, which somehow makes it worse and funnier at the same time? Like they couldn't get him on the dinosaur so they got him on paperwork.
Then, the day before the movie opened, the journal Nature published a paper claiming scientists had pulled DNA out of a weevil trapped in amber that was 120 to 135 million years old. The actual premise of Jurassic Park, out of an actual rock, right on time for the premiere. To get the DNA they had to sacrifice part of the weevil. Nobody has been able to repeat it since. DNA breaks down way too fast to survive that long, and the explanation most scientists land on is that the DNA they read was modern, stray genetic material from the lab or the people handling the sample, nothing that ever came from the bug. That weevil was older than the T. rex. Somebody ground it up, and what they most likely sequenced was the lab.
The book's Hammond isn't the man in the white suit. He's a con artist who landed his investors by showing them a miniature elephant in a cage, and he barely cares about his own grandchildren. At the end he falls down a hill and gets eaten by a swarm of Procompsognathus, little chicken sized dinosaurs the book calls compys. Crichton clearly thought he had it coming.....
The 10-year Treasury yield topped 5% this past week, hitting the highest level since 2007 and blowing way past forecasts for borrowing costs over the next decade.
According to the Congressional Budget Office’s most recent long-term outlook issued in February—before the Iran war spiked oil prices and inflation views—the benchmark yield was seen at 4.1% this year and 4.2% in 2027. The 10-year yield was expected to hover around 4.3% from 2028 to 2031, then tick up to 4.4% from 2032 to 2036.
In addition to setting the pace on other borrowing costs, yields determine how much the Treasury Department must pay in interest on the U.S. debt, which can accelerate as rates go up.
To be sure, an end to the war in Iran and lower energy costs would help bring yields back down, but that’s not the only source of upward pressure.
The economy is running hotter, and the labor market is tight, meaning higher yields represent some normalization from crisis-era lows.
The $40 trillion in U.S. debt that has accumulated as well as $2 trillion in annual budget deficits that show no sign of improving are also factors.
At the same time, other heavily indebted countries and AI hyperscalers are competing for bond investors’ capital, so auctions require attractive yields to draw sufficient demand.
Then there’s the geopolitical environment. The recent wars, trade friction, and disasters have produced such frequent shocks that they are no longer seen as one-off events but a sign of a less stable world. That risk gets priced into yields too.
Add it all up, and the future looks more expensive. The Committee for a Responsible Federal Budget estimated that if yields remain more than 80 basis points over baseline projections, the U.S. will spend $2.7 trillion on annual interest payments by the end of the decade—more than Medicare or Social Security retirement benefits.
“The real threat is the debt spiral. If interest begets debt, and debt begets interest, eventually debt will spin out of control. A fiscal crisis, once unthinkable, is now a distinct possibility,” Maya MacGuineas, president of the CFRB, said on Monday....
Sticking with the Fed for another post and working on the assumption that at some point, maybe a couple years out, buyers of U.S. Treasury paper will begin to demand more interest than the Treasury can afford to pay (forcing the Fed back into the market on a net basis) here are a couple articles that may be of interest, so to speak....
And the following month, on the effect moving downstream of the sovereign:
The risk for farmers is the same as that faced by the U.S. government.
It's not the debt per se, it is the cost of servicing it. Low interest
rates seduce borrowers into taking on more debt than they should because
the current interest cost is manageable. Should rates increase the
proportion of cash flow that must go to debt service can crowd out any
other use....
One more self-reverential -referential bit, this one from March 2025:
That interest cost is the problem. Everyone knows that sovereign debt will never be repaid, just rolled for the next generation to deal with, but those current interest payments will really put a damper on the ongoing party.
The writer is Author of 'Those Were The Days' - the definitive story of Utd in the '90s (buy it at twitter.com/1990sUtd) and 'Red Rebels: The Glazers and the FC Revolution'
From John-Paul O'neill's JPO7 substack, March 3, 2026:
“But what of the Roman Mob? They follow Fortune, as always, and hate whoever she condemns. If Nortia, as the Etruscans called her, had favoured Etruscan Sejanus; if the old Emperor had been surreptitiously smothered; that same crowd in a moment would have hailed their new Augustus. They shed their sense of responsibility long ago, when they lost their votes, and the bribes; the mob that used to grant power, high office, the legions, everything, curtails its desires, and reveals its anxiety for two things only, bread and circuses.” – Juvenal, The Satires
Zapata and the Bay of Pigs
About four years ago I was asked to meet a bloke who was formerly the editor of the Independent. He wanted to speak to me as he was writing a new book about the Glazers’ ownership of United, which seemed a bit of a pointless exercise as, in mid-2022, there was surely nothing new to say about them (besides, I’d previously literally written the book on their takeover myself).
Regardless, I agreed to meet him one lunchtime in Manchester’s Malmaison – I supposed it was worth the trip into Town for an expenses-paid lunch, if nothing else. When I turned up, I was slightly surprised to see my interviewer already tucking into a hefty serving of food himself, and he beckoned me to sit down. As food dribbled down his chin, he continued to stuff his face whilst telling me how hungry he was. Apparently he’d had a busy morning at Old Trafford where he’d undertaken the stadium tour – information which instantly had me casting prejudicial judgment on what sort of book his would likely be.
I soon realised I wasn’t going to be offered any grub of my own in return for my time and, as his bizarre Jabba the Hutt skit approached the 10-minute mark, I was on the verge of walking out when, finally, I was offered a coffee. Once his plate was (thankfully) cleared away he embarked upon some questions relating to the Glazers, and I have to admit to being slightly impressed by the attention he had paid my book as he related passages to me which - five years on - I barely remembered.
After I’d rehashed a few well-worn tales, there was one snippet I wanted to test out on him: I had recently been reading a book about the JFK assassination and in it I’d come across mention of oil rigs off Cuba being used as listening posts in the CIA’s failed Bay of Pigs invasion. The rigs belonged to an oil company called Zapata, a name which seemed familiar. When I looked it up, my suspicion was correct that it was the same name as Malcolm Glazer’s one-time oil business, of which Avi Glazer had become CEO. Further investigation revealed that Zapata had originally been formed as a Agency shell company by CIA operative (and its future head) George HW Bush, seemingly with notorious former CIA director Allen Dulles also involved.
This seemed a remarkable coincidence. In my understanding of such matters, the CIA rarely cedes control of such companies. Whilst ‘ownership’ is often passed on, it is usually either to someone acting as a front, or to other trusted CIA-connected personnel. I checked Malcolm Glazer’s back story once again: his first big break came by way of a watch concession on a US military base – facilitated by persons unknown – at a time many males his age were being conscripted into the Armed Forces ahead of deployment in Europe or Korea. Hmmm...
When Chris Blackhurst’s book on the Glazers was eventually released in late 2023, I was promised a copy but never received one. However, I learned (and was slightly surprised) that my information about Zapata, including reference to the company’s CIA links, had been included at length over two pages:
“Mention Zapata in some quarters of Washington DC in particular, and eyebrows will shoot upwards and knowing looks will be exchanged. Zapata was almost certainly a commercial front for the CIA for many years.”
Despite this, it’s obviously quite a leap from there to the Glazers actually being a CIA front – even though such a proposition makes a lot more sense of much that has gone on since 2005. However, over the last two-and-a-half years it’s something I’ve kept an eye on and – even allowing for confirmation bias - it would appear to me that there might well be something in it, given the continual cast of Intelligence-connected characters who have drifted through Old Trafford’s Boardroom for the last 40 years and more. See what you think…
The Epstein Connection
Mere mention of the name ‘Rothschild’ is enough to induce in people eye-rolling and a Pavlovian “Oh, here we go!” response to what we are all conditioned to see as an inevitable descent into wacko conspiracy theorising. Yet despite the Rothschilds being a family of whom it is supposedly “antisemitic” to claim run global finance, their own website boasts how they bailed out the Bank of England, whilst an officially-sanctioned history tells how they took over the Royal Mint’s gold refinery at a time they were also bankrolling Prince Albert - the husband of the woman ruling over the richest empire in history. They also fronted the finance for the British government to buy the Suez Canal in 1875, through which much of European trade flowed, whilst their website also boasts how the global gold price was fixed every day in their London office which, throughout the days of the Gold Standard, sounds something akin to them controlling global finance. Suffice to say, they had a few quid. And people who have the level of wealth and influence to bankroll royalty and empires don’t usually tend to just give it up....
From the Food and Agriculture Organization of the United Nations, October 2:
» The FAO Food Price Index* (FFPI) averaged 136.0 points in September 2026, up 2.0 points (1.5 percent) from its revised August level. Price indices for crop-based commodity groups (cereals, vegetable oils, and sugar) all increased from the previous month, while the meat price index declined and the dairy price index remained stable. Compared to a year earlier, the FFPI stood 7.4 points (5.8 percent) higher but remained 24.3 points (15.1 percent) below its peak reached in March 2022.
» The FAO Cereal Price Index averaged 122.8 points in September, up 6.0 points (5.1 percent) from August and 18.0 points (17.2 percent) above its September 2025 value. World wheat prices increased by 6.3 percent from August, reaching their highest level since August 2023, although daily quotations eased towards the end of the month. The rise was largely associated with logistical constraints in the Black Sea region, which prompted importers to shift towards alternative origins. Dry weather conditions in parts of North America ahead of winter wheat planting also contributed to the increase. Global maize prices rose by 5.6 percent month-on-month to their highest level in more than three years, supported by a tightening supply outlook following lower-than-anticipated yields in the United States of America and less export availability in Brazil. Trade disruptions in the Black Sea region reduced maize export availability, while uncertainty over shipping through the Strait of Hormuz kept concerns about fuel, fertilizer and freight costs elevated, providing additional support to commodity prices, particularly for those used as biofuel feedstocks, such as maize. World sorghum and barley prices also increased in September, by 13.7 percent and 3.9 percent, respectively, in line with broader trend across feed grain markets, as well as expectations of increased Chinese purchases of sorghum following trade discussions between China and the United States of America. The FAO All Rice Price Index increased by 1.4 percent in September 2026, as Indica quotations rose amid weather concerns and seasonally tighter supplies.
» The FAO Vegetable Oil Price Index averaged 198.6 points in September, up 1.8 points (0.9 percent) from August and 18.3 percent above its level a year earlier. The increase was driven mainly by higher world palm oil prices, more than offsetting a decline in sunflower oil quotations. Soy and rapeseed oil prices remained broadly stable during the month. International palm oil prices rose for the fourth consecutive month, supported by strong global import demand and concerns over the impact of dry weather on production prospects in Southeast Asia. By contrast, sunflower oil prices declined for the third successive month, reflecting expectations of ample supplies from the Black Sea region, although ongoing logistical disruptions and constrained export capacity through alternative routes contained the decline. World soy oil prices were little changed, remaining well above their year-earlier levels, supported by robust demand from the biofuel sector. Rapeseed oil prices also remained largely unchanged.
» The FAO Meat Price Index averaged 127.9 points in September, down 1.5 points (1.1 percent) from its revised August value and in line with its level a year ago. The decline reflected lower poultry and pig meat quotations, while bovine and ovine meat prices remained broadly stable. International poultry meat quotations declined amid ample export supplies from Brazil and weaker import demand from the European Union following the entry into force on 3 September of the antimicrobial-related import requirements. The effect was most evident for higher-value products and was compounded by the front-loading of imports ahead of the implementation of the new rules. Pig meat prices also declined amid abundant supplies in major exporting countries. In the European Union, animal growth rates returned to normal levels following the decline during the summer heatwaves, supporting increased supplies and weighing on prices. For bovine meat, export prices in Australia declined amid intensified global competition, while quotations increased in Brazil, supported by stronger demand from the United States of America after the temporary expansion of the tariff-rate quota for lean beef trimmings on 1 September, which reduced duties on additional import volumes. Ovine meat prices remained on average unchanged, as support to export prices in Oceania from firm global import demand was tempered by lower quotations in New Zealand, largely reflecting currency movements.
» The FAO Dairy Price Index averaged 119.1 points in September, down by 0.2 points (0.1 percent) from August. Declines in cheese prices were almost offset by increases in milk powder quotations, while butter prices changed little. The index remained 19.1 percent below its level a year earlier. While skim milk powder quotations stood 33.1 percent above their year-earlier level, cheese and butter prices were substantially lower. Milk powder prices rose across major origins, supported by sustained import demand, particularly from Asia, and limited availability for prompt delivery. In Oceania, firm buying interest more than offset downward pressure from seasonally larger milk production. Cheese prices declined across the major exporting regions. The trend was driven mainly by developments in the European Union, where weaker buying interest and strong competition from abundant export supplies from the United States of America weighed on prices. Increasing seasonal export availability in Oceania added further downward pressure. By contrast, butter prices were on average little changed, as lower export quotations in Oceania were largely offset by firmer prices in Europe due to limited milkfat availability following a hot and dry summer....
