Recommended Weekend Reads

How Maduro’s Capture Puts Cuba at an Inflection Point, Mexico’s Morena Party is Floundering, The Iranian Regime Will Break – Then What Happens?, and the Geography of Science  

January 23 - 25, 2026

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them interesting and useful as well.  Have a great weekend. 

The Americas

• The Geopolitics of Maduro’s Capture: Cuba’s Inflection Point   Christopher Hernandez-Roy/Center for Strategic and International Studies

  The release of the US 2025 National Security Strategy that declared a “Trump Corollary” to the Monroe Doctrine, along with the early January U.S. military action in Venezuela, is altering political calculations across the Western Hemisphere, with deep implications for Cuba. The January 3, 2026, military operation to capture Nicolás Maduro and bring him to the United States to face terrorism charges, and the subsequent coercive management of the remaining Chavista regime, is a signal to the region that challenges long-standing assumptions about U.S. restraint, regime durability, change, and the use of external pressure in Latin America. Rather than pursuing traditional regime change centered on rapid democratization or wholesale dismantling of authoritarian systems, the United States has demonstrated a willingness to employ coercive power to manage regimes—controlling their behavior, extracting concessions, and preserving sufficient institutional continuity to avoid collapse.

• Mexico’s mighty left-wing government is floundering    The Economist

  Mexico’s Morena Party has no serious rivals in Mexico. The party has dominated Mexican politics. Together with its allies, it controls 24 of Mexico’s 32 states. It holds supermajorities in both legislative houses, more than two-thirds of the seats in each. It draws comparisons with the Institutional Revolutionary Party that ruled Mexico as a one-party state for seven decades until 2000.  But under Morena, Mexico has no money. Its economic growth has long lagged behind that of its neighbors in Latin America and comparable emerging economies in Asia, but the Morena years have been the most sluggish in a quarter-century. The IMF thinks the economy will grow by 1.5% in 2026, about half the Latin American average. Mexico’s President Claudia Sheinbaum’s Plan México, a flagship development strategy, is faltering: in 2025, investment reached 22% of GDP, short of the 25% target. With weak growth and little sign of a turnaround, few believe the government can maintain expansive welfare payments until the end of her term, in 2030.

• Sheinbaum’s Cuba policy is testing Washington’s patience     Washington Post

  At a moment of extraordinary tension in the U.S.-Mexico relationship, the Mexican government is choosing to remain Cuba’s oil lifeline. For decades, Venezuela filled that role, sending up to 100,000 barrels of oil per day at the height of Hugo Chávez’s rule. In recent years, as Venezuela’s oil output faltered, Mexico has stepped up. According to industry data, it became the top supplier of oil to Cuba last year — well before the ouster of Nicolás Maduro.  While the Trump administration has not publicly detailed its full strategy toward Cuba, Secretary of State Marco Rubio has signaled that the U.S. intends to bypass the Cuban government and direct assistance toward the Cuban people. Some members of Congress say Mexico’s approach points in the opposite direction.

• Delcy Rodríguez and the Architecture of Venezuela’s Kleptocracy    Felix Maradiaga Substack

  According to an investigative report recently written by “Transparency International Venezuela in Exile” under the title “Delcy Rodríguez se blindó para la era post Maduro,”  Acting Venezuelan President Delcy Rodríguez has been a central operating executive within the machinery that turned a nation’s wealth into private enrichment, political leverage, and international bargaining chips.  The report notes that the Venezuelan vice presidency under Rodríguez, she received a staggering share of the national budget—40% in 2024 and 44% in 2025—concentrating extraordinary spending discretion around Rodríguez’s office.

  
  The Iranian Uprising

• How the Iranian Regime Breaks        Foreign Affairs

  Over the last few weeks, the Iranian regime has faced remarkable challenges—and displayed remarkable unity. Hundreds of thousands of Iranians have taken to the streets to protest the Islamic Republic in what has become the most significant internal challenge the state has faced in its 47-year history. But the elite has not yet fractured. Instead of squabbling over how to handle the demonstrations, Iran’s reformist and hardline leaders have worked together to suppress them. To date, none of the regime’s elites objected to the killings of thousands of innocent civilians by security forces. In fact, figures from across the political spectrum have all outwardly (and falsely) blamed the violence on foreign infiltrators.  But behind the scenes, the picture is undoubtedly more tense. Unless they exclusively watch state television and believe their own false narratives, Iranian officials understand that the domestic system is under existential stress.

• Iran’s Uprising: What’s the endgame?     Brookings Institution Podcast

  In recent days, the Iranian regime has conducted an unprecedented and bloody crackdown on protests across Iran. In this episode, Brookings Fellow Aslı Aydıntaşbaş is joined by two Iran experts, vice president of Foreign Policy Suzanne Maloney and visiting fellow Mara Karlin, to discuss the unique nature of the protests and the regime’s violent response, options for U.S. military action, and President Trump’s possible endgame.

• Iran’s coming reckoning: Regime collapse is likely — democracy is not    Middle East Institute

  Since tens of thousands of Iranians took to the streets in protest and then experienced intense and gruesome repression by state security forces, the question is now: what next?   Much will depend on four factors: 1) Foreign intervention 2) The behavior of the opposition 3) Information control and connectivity, and 4) Elite dynamics within the regime itself.   But, as the author argues, the Islamic Republic as we know it cannot endure. However, its collapse or transformation does not guarantee liberation. What Iran is entering is not a revolution’s endgame but a dangerous interregnum — one in which brutality has proven effective, legitimacy has evaporated, and the future remains profoundly contested.  But, as the author makes clear, the Islamic Republic as we know it cannot endure.

  Geoeconomics

• The Hollow Dollar?    Alexander Evans/The British Academy & Carnegie Endowment for International Peace

  Abstract: This paper explores whether the US dollar’s dominance in global finance – long a pillar of American geopolitical influence – is being quietly eroded. While the dollar remains the world’s primary reserve currency, its centrality in international payments is increasingly contested. The weaponization of the dollar, particularly through sanctions and the extraterritorial reach of the New York banking license, has prompted strategic responses from states such as China, Russia, and India. These strategic responses include the development of alternative payment systems, local currency trade settlements, and digital infrastructure. The paper argues that a ‘hollowing’ of the dollar’s infrastructural dominance is underway – (perhaps very) gradual, partial, but geopolitically significant. This shift may not end dollar supremacy, but it could fragment the global financial system, weaken US sanctions leverage, and diminish the centrality of New York and London as financial hubs. The implications for global order are subtle but potentially profound. A less dollar-dependent system may facilitate a more multipolar world yet diminish liberal democratic power.

• The Geography of Science    Abhishek Nagaraj & Randol Yao/

  Abstract: Science has long been concentrated in the Western world, but the global research landscape is undergoing a profound reorganization. Using data on 44 million publications from 1980 to 2022, we document the geography of science in terms of who produces it, what it studies, and where it diffuses. The share of publications produced in the United States has fallen from 40% in 1980 to 15% in 2022, while China’s share has risen from near-zero to 32%. This pattern extends even to elite outlets, with China now producing over 35% of top-journal publications. Notably, this is driven not only by an expanding researcher base but also—to a large extent—by increases in individual productivity. Similar to China, other middle- and low-income countries (including India, Russia, and Brazil) have also expanded output producing as much research as high-income European Union countries combined (about 21% overall), but they remain underrepresented in top-tier journals. Overall, our findings highlight both the democratization and fragmentation of global science, raising important questions about the future of the global scientific enterprise.

• The Macroeconomic Consequences of Capital Constraints   Office of Financial Research, US Treasury Department

  Abstract: This working paper quantifies the effect that regulatory capital requirements have on bank lending and real economic activity. Exploiting a change in capital requirements by the Federal Reserve at the onset of the pandemic recession, it establishes causally that looser requirements increased the ability for banks to extend credit to consumers. On average, banks that received relatively more balance sheet space from the policy change passed this along to their customers in the form of relatively higher credit limits from Q2 2020 to Q1 2021. This also led to relatively higher credit card borrowing among these customers. Using a general equilibrium quantitative model calibrated to match the empirical findings, the paper shows that absent the Federal Reserve policy change, consumption would have fallen by an extra 2.7% in the three years following the pandemic recession. Motivated by these estimates, this paper evaluates the efficacy of countercyclical capital requirements and finds that such policy could lower consumption volatility over the business cycle by as much as 12%.

• Macroeconomic Implications of Immigration Flows in 2025 and 2026: January 2026 Update  The Brookings Institution

  Abstract: The first year of the second Trump administration has seen dramatic changes in immigration policy, resulting in a sharp slowdown in net migration to the United States. Building on work released in late 2024 and mid-2025, we use available data combined with judgment to estimate a range of likely outcomes for net migration for the years 2025 and 2026. We conclude that net migration was likely close to zero or negative over calendar year 2025 for the first time in at least half a century.  Specifically, we estimate that net migration was between –295,000 and -10,000 for the year. For 2026, we project net migration is likely to remain in negative territory.  The downward pressure on population stemming from negative net migration has important implications for the macroeconomy. In recent years, growth in the U.S.-born working-age population has been weak, and nearly all growth in the labor force has stemmed from immigration flows.

Recommended Weekend Reads

What Does Russia’s Inability to Support Its Allies Mean for Its Own Future?,  The Massive Industrial Challenge To Modernize the U.S. Navy, Was Pandemic Fiscal Relief Effective Stimulus? And An Assessment of China’s Military Buildup

January 16 - 18, 2026

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them interesting and useful as well.  Have a great weekend.

The Future of Russia

• Putin’s great-power project faces the ‘end of an era’      Politico EU

  Moscow was also seemingly unable to protect its closest friend in South America earlier this month when the United States captured Venezuela’s Nicolás Maduro, a leader who had dutifully made the trip to Moscow for Putin’s Victory Day Parade in May last year.  Embarrassingly, Moscow wasn’t even able to fend off the unprecedented U.S. seizure of an oil tanker flying a Russian flag. Just a year ago, Putin signed a 20-year strategic partnership agreement with Tehran. Now the regime — which supplied Russia with killer Shahed drones for its fight in Ukraine — is in danger of being toppled by protesters whom Trump has indicated he could intervene militarily to defend.  Russians have taken notice. “An entire era is coming to an end,” wrote a pro-war military blogger under the pen name Maxim Kalashnikov on Sunday, reflecting growing criticism of the Russian leadership. 

• Russia Is the World’s Worst Patron     Foreign Affairs

  For the last 20 years, Moscow has demonstrated an ability to inject itself as a player in regions with strong anti-American sentiment. But the Kremlin’s costly adventures have yet to show any practical benefits for enhancing Russia’s genuine security interests or boosting its economic prosperity. Involvement in places such as Venezuela serves only Putin’s vanity, a few votes of solidarity with Moscow at the UN General Assembly, and money-making opportunities for corrupt Russian officials. The result has been that from Syria to Venezuela to Iran, Putin has overpromised and underdelivered.
  

• Why Didn’t the Ukraine War Turn Russia’s Ruling Class Against Putin?   Carnegie Politka

  The answer is that Russia’s ruling class is disillusioned and fragmented. And, as the writer points out, the apparent suicide of the dismissed transport minister Roman Starovoit in 2025 was a reminder of the fragility of everyone’s position. For another, the idea that had brought together much of the establishment, “autocratic modernization”—that despite the authoritarian system, a rational state, capable of learning lessons and balancing interests, could still emerge in Russia—has obviously turned out to be a failure.

The Massive Challenge to Modernizing the U.S. Navy

• Helming A Sea Change: Building The Future Workforce For US Shipbuilding  McKinsey & Company

  According to the US Department of Labor, the shipbuilding industry may require about 200,000 to 250,000 additional maritime workers in critical occupations, such as welding, soldering, and front-line management, to satisfy demand over the next decade. If demand for ships increases, the labor gap will be even wider.

• Outlining the Challenges to the U.S. Naval Shipbuilding    Center for Strategic and International Studies

  Growing the size of the Navy has been a bipartisan goal of successive administrations and Congress over the last decade. The service faces capacity limitations as it struggles to meet the demands of its current aggressive operational tempo with a fleet that is small by historical standards and faces delays in conducting maintenance. The demand to increase the Navy’s ship count has only grown as China’s navy has overtaken the U.S. fleet in terms of size, with the blistering rate of production of its own shipbuilding industry.  Despite the Navy’s plans for growing the fleet and bipartisan efforts and funding from Congress, the U.S. shipbuilding enterprise—including the Navy, Department of Defense (DoD), Congress, and industry—has failed to consistently produce ships at the scale, speed, and cost demanded. These longstanding challenges stem from a series of interwoven, systemic issues within both the U.S. government and industry, as well as broader socioeconomic trends. This report outlines the challenges facing the U.S. naval shipbuilding enterprise, their underlying drivers, and some efforts the government has taken to mitigate them. 

Geoeconomics and Technology

• Was Pandemic Fiscal Relief an Effective Fiscal Stimulus? Evidence from Aid to State and Local Governments    Journal of Macroeconomics

  Abstract: We use an instrumental-variables estimator reliant on variation in congressional representation to analyze the macroeconomic effects of federal aid to state and local governments during the COVID-19 pandemic. Through December 2022, we estimate statistically insignificant impacts of federal aid on employment. Our baseline point estimate suggests that $603,000 were allocated for each state or local government job-year preserved, and the bounds on our baseline confidence interval rule out estimates smaller than $220,400. Our estimates of effects on aggregate income and output are centered on zero and imply modest, if any, spillover effects onto the broader economy.
  

• When Trade Compresses: The Impact of Liberalization on Wage Inequality  Federal Reserve Bank of Cleveland

  Abstract: We study the effects of trade liberalization on the full wage distribution, exploiting Spain's 1993 entry into the European Single Market. Using employer-employee data, we identify the causal effects of trade across the entire wage distribution, using a novel shift-share instrument embedded in an unconditional quantile regression. We find that the liberalization reduced wage inequality, leading to wage compression through earnings gains at the bottom of the distribution and wage losses at the top. We trace this compression to two asymmetric channels: import competition disproportionately harmed high earners, while export opportunities benefited low earners. The key mechanism is an import-driven “skill-downgrading.” A multi-region multi-sector model shows that the key insight for understanding these empirical results is that trade's distributional effects depend on the skill intensity of a country's tradable sector, and Spain's was relatively low-skill-intensive back then.
  

• Foreign Affairs: The Myth of the AI Race     Colin Kahl/ Foreign Affairs

  In July, the Trump administration released an artificial intelligence action plan titled “Winning the AI Race,” which framed global competition over AI in stark terms: whichever country achieves dominance in the technology will reap overwhelming economic, military, and geopolitical advantages. As it did during the Cold War with the space race or the nuclear buildup, the U.S. government is now treating AI as a contest with a single finish line and a single victor. But that premise is misleading. The United States and China, the world’s two AI superpowers, are not converging on the same path to AI leadership, nor are they competing across a single dimension. Instead, the AI competition is fragmenting across many domains, including the development of the most advanced large language and multimodal models; control over computing infrastructure such as data centers and top-of-the-line chips used to train and run models; influence over which technologies and standards are used throughout the world; and integration of AI into physical systems such as robots, factories, vehicles, and military platforms. Having an edge in one area does not automatically translate into an advantage in the others. As a result, it is plausible that Washington and Beijing could each emerge as leaders in different parts of the AI ecosystem rather than one side decisively outpacing the other across the board.

China’s Military Capability

• Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2025    U.S. Department of Defense

  Abstract: China’s historic military buildup has made the U.S. homeland increasingly vulnerable. China maintains a large and growing arsenal of nuclear, maritime, conventional long-range strike, cyber, and space capabilities able to directly threaten Americans’ security. In 2024, Chinese cyberespionage campaigns such as Volt Typhoon burrowed into U.S. critical infrastructure, demonstrating capabilities that could disrupt the U.S. military in a conflict and harm American interests. The PLA continues to make steady progress toward its 2027 goals, whereby the PLA must be able to achieve “strategic decisive victory” over Taiwan, “strategic counterbalance” against the United States in the nuclear and other strategic domains, and “strategic deterrence and control” against other regional countries. In other words, China expects to be able to fight and win a war on Taiwan by the end of 2027.

The World Economic Forum’s Global Risk Assessment

• Global Risks Reports 2026     World Economic Forum

  In advance of the World Economic Forum (WEF) meetings in Davos ,Switzerland this coming week, the WEF released their 21st edition Global Risks Report 2026. The report analyses global risks through three timeframes to support decision-makers in balancing current crises and longer-term priorities. Chapter 1 presents the findings of this year’s Global Risks Perception Survey (GRPS), which captures insights from over 1,300 experts worldwide. It explores risks in the current or immediate term (in 2026), the short-to-medium term (to 2028) and in the long term (to 2036). Chapter 2 explores the range of implications of these risks and their interconnections, through six in-depth analyses of selected themes. Below are the key findings of the report, in which we compare the risk outlooks across the three-time horizons.

Recommended Weekend Reads

Understanding Trump’s Latin American Military Buildup, The Secret and Massive Drug Smuggling Routes into the US, Young Adults Are Spending Less Time Together, and The Desperate Search for Safe Havens

October 31 - November 2, 2025

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them interesting and useful as well.  Have a great weekend.

The Americas

• Understanding Trump’s Military Buildup in Latin America    Americas Quarterly Podcast

  The recent deployment of the USS Gerald R. Ford, the U.S. Navy’s largest aircraft carrier, has intensified speculation about Washington’s true objectives in the Southern Caribbean. In this episode of the Americas Quarterly Podcast, we examine what’s really behind the Trump administration’s escalating military activity. Is it a hardline campaign against drug cartels, or the opening moves of a broader effort to pressure Venezuelan leader Nicolás Maduro? What do we know about dynamics within the Venezuelan military? And to what extent could this impact Washington’s relations with Colombia and other countries in the region? Our guest is Ryan Berg, director of the Americas Program and head of the Future of Venezuela Initiative at the Center for Strategic and International Studies.

•  From Posture to Purpose: Rethinking U.S. Strategic Aims in Venezuela    FIU Jack D. Gordon Institute for Public Policy  

  The U.S. military buildup in the Caribbean reflects a strategic confusion between counter-narcotics and regime-change objectives in Venezuela. Current operations project power but lack coherence, risking escalation without achievable outcomes. A sustainable strategy must align U.S. means and ends, favoring intelligence, law enforcement, and targeted financial tools over military coercion. Even limited “surgical strikes” risk hardening regime cohesion, triggering regional instability, fueling migration flows, and creating governance vacuums with grave humanitarian consequences. To avoid these pitfalls while focusing on transnational criminal organizations, Washington should prioritize multilateral law-enforcement cooperation, expand Coast Guard and intelligence capabilities, and strengthen sanctions enforcement targeting the regime’s illicit revenue streams. Aligning coercive, diplomatic, and economic instruments toward realistic, proportional goals offers the only path to sustainable results without deepening Venezuela’s crisis on entangling the United States militarily.

• After Argentina’s Midterms, a New Chapter for U.S.-Argentina Relations  Center for Strategic and International Studies

  Argentina’s midterms may also herald a new era of U.S. relations with the country and Latin America as a whole. In the weeks leading up to the election, the United States announced a major financial assistance package, giving Argentina access to a total of $40 billion in U.S. dollar currency swaps, with $20 billion coming from the U.S. Department of the Treasury’s Exchange Stabilization Fund, and a further $20 billion from banks and sovereign wealth funds. In addition to this, the Trump administration announced plans to purchase Argentine beef, a move that was deeply unpopular with U.S. ranchers but offered a powerful signal of the importance Washington places on its relationship with Buenos Aires

• See the Secret Networks Smuggling Drugs to the U.S. From Latin America   The Wall Street Journal

  These interactive reports and accompanying maps show how demand in America for illegal drugs such as fentanyl and cocaine fuels sophisticated systems for smuggling them in. Traffickers deploy everything from fast-moving fiberglass boats to stealthy “narco-subs” to cargo ships to get their products to users without losing shipments to seizures or couriers to arrest. With decades of experience, according to U.S. counternarcotics officials, the traffickers are usually a step ahead of America and its allies in Latin American and Caribbean waters

 Youth and Family Trends and Their Future Impact on the Economy

• Cognitive Skills Beyond Childhood    The Economic Journal

  Data from a British birth cohort followed since 1958 show that cognitive skills early in life predict wages at age 50 better than cognitive skills at age 50. Early cognitive skills likely allow for higher educational attainment or on-the-job learning.
  

• Young Adults Are Spending Less Time With Friends       Institute for Family Studies

  In post-pandemic America, young adults are spending a record amount of time alone. But even before the pandemic, young adults began spending less time with friends. In 2010, young adults ages 18 to 29 on average spent 12.8 hours a week with friends. By 2019, that number nearly halved, falling to 6.5 hours a week. The pandemic exacerbated this trend with a low point of 4.2 hours a week with friends in 2020.  And while we’ve seen a slight increase since, socializing has not nearly recovered. Today, young adults spend just 5 hours a week with friends. Lingering effects of pandemic-era isolation are certainly at play, but the role of technology cannot be ignored.

•  Mind the Fertility Gap: Why people stopped having babies and how economic freedom can help     Institute for Economic Affairs

  n a new paper published by the Institute, British women are falling at least 0.4 children short of their own stated family goals, according to fertility data through 2011, with this gap likely widening as fertility now hits record lows of 1.44 while desired family size remains stable at 2.2.  New report shows how pro-natal policies that focus on cash incentives, such as baby bonuses, subsidies, and maternity pay, may have some short-term effect but are often found wanting and prohibitively expensive.  Evidence shows policies affecting economic freedom, including Labour market, childcare and housing liberalization, can have profound effects on fertility through their impact on work-family compatibility

Geoeconomics & Financial Markets 

• The Role of Single-Family Rentals in the U.S. Housing Market    Federal Reserve Bank of St. Louis

  When homeownership and home sales plummeted in 2010 in the wake of the housing market collapse, investors responded by purchasing single-family homes and renting them out to households that could not afford to buy such homes but still desired this type of housing. Subsequently, investor-owned single-family rentals (SFRs) increased as a share of total single-family properties, and they continue to increase as a housing supply shortage and higher mortgage rates make homeownership difficult for many first-time homebuyers. This blog post summarizes economic research that has been done on the role of investor-owned SFRs in the U.S. housing market.  Such research has found that the vast majority of SFRs are owned by small-scale investors. Properties owned by large-scale investors tend to increase prices of nearby homes,  while ownership by small-scale investors appears to have the opposite effect.  Research has also found that investor-owned SFRs expand housing options available to renters but may negatively impact renter welfare in terms of eviction filings4and rent increases.

• The Desperate Search for Safe Havens     Robin Brooks Substack

  Countries with low debt burdens are outperforming ones with lots of debt. The right chart above shows this dynamic. Since Jackson Hole, the Swedish Krona (red line) is the best performing currency against the Dollar, followed by the Norwegian Krone (orange line) and Swiss Franc (black line). The Euro (pink line) is flat against the Dollar, no surprise since it consists mostly of high-debt countries, with Germany’s recent move to soften up its debt brake and pursue big fiscal stimulus a major destabilizer for the region. The Japanese Yen (blue line) is down over two percent against the Dollar, no surprise given that gross government debt is 240 percent of GDP. The fact that Sweden is at the top of the pack makes sense. The Krona is massively undervalued (it’s at the same level against the Euro as during the global financial crisis), while Sweden has also managed to steer clear of endlessly rising debt levels that so bedevil the Euro periphery.

• As New Jobs In Finance Dry Up, New York City’s Fiscal Model Is Wilting   The Economist

  According to the Citizens Budget Commission New York state’s share of American taxpayers reporting more than $1m in income declined from 12.7% in 2010 to 8.7% in 2022. Such people paid $34bn in income tax to the state and city in 2022, a figure that would have been $13bn higher if New York’s share of millionaires had held up. Estimates from Goldman Sachs suggest that fully 10% of households in New York City with incomes of more than $10m established residency elsewhere between 2018 and 2023. As the ultra-rich have headed for the exit, the city’s employment growth has become concentrated in much worse-paid industries than finance. Since the end of 2019, New York has added more than 268,000 jobs in health care and social assistance, particularly home health care. Employment as a whole rose by just 220,000 over the same period, meaning that, if it was not for that industry, overall employment would have shrunk.

Recommended Weekend Reading

Looking at U.S. - China Policy Challenges in Advance of the Xi-Trump Meeting, Will the AI Data Center Boom Threaten the Trump Manufacturing Revival?, and Looking at the Supply Chain Chokepoints in Quantum

October 24 - 26, 2025

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them both interesting and useful.  Have a great weekend.

A Look at Major Policy Issues for Both the U.S. and China

• China’s Two Economy Problem    Semafor

  At a glance, China’s export-focused manufacturing sector is buoyant, racing away from the US and other advanced economies in areas including batteries, robotics, and biotechnology. And yet its domestic economy is in deep crisis, suffering from spiraling levels of joblessness, plunging consumer confidence, and falling business investment in the midst of a real estate collapse.  To understand China is to believe all these things to be true. It is an economy moving fast and slow at the same time, a tech superpower that creates opportunities for PhD scientists but not its underclass of rural workers, a nation that manufactures a third of everything made in the world but can’t stir demand at home. Its growth model is so lopsided it is unbalancing the global economy. In short, China is at war with itself; taking the long view, the current US-China trade spat is a sideshow.

• How China Raced Ahead of the U.S. on Nuclear Power     New York Times

  While U.S. nuclear construction costs skyrocketed after the 1960s, they fell by half in China during the 2000s and have since stabilized, according to data published recently in Nature. (The only two U.S. reactors built this century, at the Vogtle nuclear plant in Waynesboro, Ga., took 11 years and cost $35 billion.) China’s nuclear companies build only a handful of reactor types, and they do it over and over again. That allows developers to perfect the construction process and is “essential for scaling efficiently,” said Joy Jiang, an energy innovation analyst at the Breakthrough Institute, a pro-nuclear research organization. “It means you can streamline licensing and simplify your supply chain.”

• Taiwan Is Not for Sale       David Sacks/Foreign Affairs

  When U.S. President Donald Trump meets with Chinese leader Xi Jinping in the coming weeks and months—likely starting next week at the Asia-Pacific Economic Cooperation forum in South Korea—the immediate focus will be on how to de-escalate the latest round of export restrictions and tariff threats that the United States and China have wielded against each other. But Trump and Xi are also likely to consider a more ambitious deal to reset bilateral relations, which would seek not only to stabilize economic ties but also to reevaluate geopolitical flash points—above all, Taiwan.

• How U.S. Can Outcompete China   Daniel Bob/RealClearWorld

  Leadership in critical technologies such as artificial intelligence, quantum computing, semiconductors, robotics, advanced materials, biotechnology, and aerospace will determine who leads the world economically and strategically in the decades ahead. These technologies spur productivity gains, provide supply chain resilience, and shape military strength that sustain national security and prosperity.

• China Against China     Jonathan Czin/Foreign Affairs

  Thirteen years after Xi Jinping ascended to the top of China’s leadership hierarchy, observers in Washington remain deeply confused about how to assess his rule. To some, Xi is the second coming of Mao, having accumulated near-total power and bent the state to his will; to others, Xi’s power is so tenuous that he is perpetually at risk of disgruntled elites ousting him in a coup.

Technology, Trade, Immigration, and Geopolitical Power

• The Fiscal Impact of Immigration       The Manhattan Institute

  Using a methodology aligned with the congressional budget window, this report estimates the fiscal, economic, and population effects of immigrants by age, education, and category of admission. It updates previous Manhattan Institute research by incorporating more recent census data, more precise life-expectancy and fertility adjustments, economic and capital stock growth, and the fiscal effects of the descendants of immigrants. This report estimates fiscal impact in nominal dollars over a 10- and 30-year horizon. This report also updates and fixes several assumptions from previous research on the fiscal impact of immigrants, including the calculation method for interest on the debt and correctly adjusting tax credits for inflation. It uses an updated method for accounting for public-goods spending.  Overall, the average new immigrant reduces the federal budget deficit and expands the economy, but this is not true of all categories of immigrants. Immigrants without college degrees receive more government benefits than they pay in taxes, even when we consider only their preretirement years. By contrast, immigrants who finished college or obtained an advanced degree contribute millions of dollars more in federal taxes than they receive in government benefits, and they save substantial amounts of interest on the debt while growing the economy.

•  AI Data Center Boom Threatens Trump’s Manufacturing Revival   Bloomberg

  The AI boom is coming to America’s industrial heartland, which speaks to how the economy is being transformed—even propped up—by a surge in investment in software, chipmaking and data centers. But the Lordstown plant’s reinvention raises the question: Is the exuberance around the technology that Trump has enthusiastically endorsed getting in the way of his goal of making America great again at churning out things like gasoline-powered cars, steel and furniture? Access to capital, power and people is key to the success of any construction or manufacturing project—and right now AI is gobbling up all three.

•  The Supply Chain Chokepoints in Quantum      War on the Rocks

  As quantum technologies move from proof-of-concept to deployment, supply chain resilience becomes just as critical as qubit coherence times. Resilience includes redundancy, domestic capacity, and timely alternatives when foreign manufacturers face disruptions or reprioritize their customers. Expertise and capital are key to driving technological innovation, but mean little if a company or research lab does not have access to the necessary inputs and reliable supply chains.  Lack of access to one aspect of the supply chain can grind further research and development to a standstill, a red flag for investors and potential researchers. If the United States is to remain on the leading edge of quantum technologies, ensuring companies, government labs, and academic projects can consistently access critical supplies is a prerequisite.

Recommended Weekend Reads

Listen to Venezuelan Opposition Leader Machado Learn She Has Won the Nobel Peace Prize, Preparing for Putin’s Death, How Ukraine has Crippled Russia’s Oil Lifeline, Where Could Reshoring Manufacturers Find Workers?

October 10 - 12, 2025

Each week, we gather up the best research and reports we have read in the past week and pass them on to you.  Below is this week’s curated collection.  We hope you find them interesting and informative, and that you have a great weekend.

Latin America

• Recording of the Nobel Prize Director calling Machado to inform her She has Won the Nobel Peace Prize    Twitter

  “Oh my God… I have no words.” Listen to the emotional moment this year’s laureate, Maria Corina Machado, leader of the Venezuelan democracy movement, finds out she has been awarded the Nobel Peace Prize. Kristian Berg Harpviken, Director of the Norwegian Nobel Institute, shared the news with her directly before it was announced to the world.

• Escalation Against the Maduro Regime in Venezuela: Puerto Rico’s Emerging Role in U.S. Power Projection   Center for Strategic & International Studies

  The United States is overseeing a seismic reordering of defense priorities and assets to the Western Hemisphere. At the time of this writing, four destroyers, one cruiser, one nuclear-powered attack submarine, one landing helicopter dock, two amphibious vessels, and one special operations platform, alongside a host of enablers and support vessels, are present in the Caribbean. In total, more than 10 percent of all deployed U.S. naval assets are currently located in the SOUTHCOM area of responsibility. These forces are more than a mere show of force; since the first warships entered the region in August, the U.S. military has conducted at least four lethal strikes against alleged drug trafficking boats in international waters, killing at least 21.  The next phase of operations could witness strikes within Venezuelan territorial waters or even on land. Reportedly, the Trump administration has already drawn up strike packages for such contingencies, which are currently being reviewed by the president. Meanwhile, President Donald Trump has notified Congress of his determination that the United States is involved in a “non-international armed conflict” against drug trafficking groups now designated as foreign terrorist organizations, suggesting that the tempo of operations will only increase in the coming weeks.

• Understanding Trump’s Shift on Brazil    Americas Quarterly

  Donald Trump’s Brazil strategy was not working. Instead of helping former President Jair Bolsonaro avoid prison or be allowed to run again in 2026, a barrage of U.S. tariffs and sanctions was having the opposite effect—hastening Bolsonaro’s conviction while boosting the popularity of his rival, President Luiz Inácio Lula da Silva. Brazil’s economy seemed to handle the strains surprisingly well, while a procession of business leaders to the White House in recent weeks warned of risks to U.S. inflation from coffee, beef, and other goods. So the U.S. president did what he has on other occasions: He listened. And then he changed course. Trump’s brief encounter with Lula at the United Nations, after which he proclaimed they had “excellent chemistry,” was not a chance meeting. And then they had a phone call. What comes next? 

Russia 

• Preparing for Putin’s Death     The Rand Corporation

  Vladimir Putin is the longest-serving Russian ruler since Joseph Stalin. He turns 73 on Oct. 7, old for a Russian, but even if he is fanatical about his health, he cannot continue indefinitely. It is essential to consider who might succeed him.  This is a challenging task—under Putin's rule, the Russian political system has, once again, become an authoritarian dictatorship bearing some of the features of a personality cult. Under these conditions, Putin has not, as far as we can tell, been publicly grooming a successor, presumably because his personal authority would begin to ebb to them, and because they would become a target for others who fear losing their influence.

• How Russia Recovered    Dara Massicot/Foreign Affairs

  The story of Russia’s invasion of Ukraine has been one of upset expectations and wild swings in performance. At the start of the war, most of NATO saw Russia as an unstoppable behemoth, poised to quickly defeat Ukraine. Instead, Russia’s forces were halted in their tracks and pushed back. Then, outside observers decided the Russian military was rotten, perhaps one counterattack away from collapse. That also proved incorrect—Ukrainian offensives failed, and Moscow resumed its slow advance. Now, plenty of people look beyond Russia to understand the state of the battlefield, blaming Kyiv’s troubles on insufficient external backing instead.  What many policymakers and strategists have missed is the extent to which Moscow has learned from its failures and adapted its strategy and approach to war, in Ukraine and beyond. Today, the military is institutionalizing its knowledge, realigning its defense manufacturers and research organizations to support wartime needs, and pairing tech startups with state resources.

• Ukraine’s Drone War Is Crippling Russia’s Oil Lifeline   National Security Journal

  Ukraine’s expanding long-range drone fleet has knocked nearly 40% of Russia’s oil refineries offline. According to an analysis by BeefeaterFella, with refined fuels yielding far higher margins than crude, Russia could be losing $3–6 billion annually in revenue, while shortages, rationing, and black markets spread at home.  Since January, 21 of Russia’s 38 major refineries have been struck, with successful Ukrainian attacks already 48% higher than in all of 2024, according to the BBC. The cascading effects are being felt far from the battlefield. Owners of small petrol stations in Siberia told Russian media they were forced to close due to supply shortfalls, with one manager in Novosibirsk comparing the crisis to the hyperinflation of post-Soviet Russia.

Trade, Tariffs, and Reshoring of Manufacturing

• Where Could Reshoring Manufacturers Find Workers?    Federal Reserve Bank of Cleveland

  The announcement of new tariffs this year has reignited the discussion of whether the United States can expand its manufacturing employment by millions of workers. Reversing decades of manufacturing job losses is one explicit goal of the new higher tariffs. This District Data Brief presents measures of employment and demographics as context around the current and potential employment in US manufacturing. Raising manufacturing employment by 4 to 6 million workers would constitute a large increase relative to current levels. However, an increase of this scale would not be large relative to the global growth of manufacturing employment in recent decades, the current US labor force size, or the number of US adults not engaged in high-paying work

• SORCE Insights: Tariff-Related Uncertainty and Pass-Through to Pricing   The Federal Reserve Bank of Cleveland

  In the Survey of Regional Conditions and Expectations (SORCE) fielded in June 2025, the Cleveland Fed asked respondents a set of special questions about the impact of tariffs and tariff-related uncertainty on costs, selling prices, staffing, and capital expenditure plans. Most respondents (64 percent) said that they were incurring costs caused by uncertainty over tariff rates, the direct expenses of paying tariffs, or both. Of these respondents, 68 percent expected to pass through at least some of those costs to their customers. About one in five firms said that they had scaled back plans to hire staff or make capital expenditures because of uncertainty over tariff rates.

• Who Will Pay for Tariffs? Businesses’ Expectations about Costs and Prices   Federal Reserve Bank of Boston

  Amid evolving global trade policy and rising tariff uncertainty, understanding how small and medium-sized businesses (SMBs) form expectations about future costs and adjust their pricing is critical for assessing how the recently imposed tariffs on US imports could impact consumer prices. To that end, this brief analyzes several waves of a survey of owners and other decision-makers at a nationally representative sample of US SMBs. It focuses on waves conducted during the period of December 2024 to August 2025. Key Takeaways from this paper include:

  • From December 2024 to April 2025, the share of SMBs expecting larger tariffs increased considerably; expectations about the size of future tariffs also increased over time. 

  • In the August 2025 survey wave, SMBs whose costs are affected by the new tariffs reported paying an average tariff rate in July 2025 (11.4%) that was nearly double the average rate they paid in January 2025 (6.5%). 

  • SMBs that believe the new tariffs will persist for a year or longer expect to pass through as much as three times more of their cost increases into consumer prices compared with SMBs that believe the new tariffs will be short-lived. 

  • A back-of-the-envelope calculation suggests a 0.75 percent near-term increase in core consumer prices stemming from recent tariff increases on directly imported consumer goods.

Recommended Weekend Reads

The Geopolitics of Trump’s War on Drugs, America Loves Cocaine Again,  What is Stablecoin?, How Many Manufacturing Jobs Will Tariffs Create, and The Growing Link Between Marriage, Fertility, and Partisanship

September 26 - 28, 2025

Each week, we gather up the best research and reports we have read in the past week and pass them on to you.  Below is this week’s curated collection.  We hope you find them interesting and informative, and that you have a great weekend.

The Geopolitics of Trump‘s War on Drug Cartels 

• The Wrong Way to Fight the Cartels    Ryan Berg/Foreign Affairs

  Since returning to the White House, U.S. President Donald Trump has pledged to defeat the Western Hemisphere’s violent drug traffickers by any means necessary. In a March address to Congress, Trump declared, “The cartels are waging war in America, and it’s time for America to wage war on the cartels.”  Washington has left behind its traditional conception of the fight against transnational criminal organizations as a matter of law enforcement with its threats of “war” and consideration of military action against the cartels.  A militarized approach may be a politically attractive way for Trump to project strength. And indeed, the United States can, and should, draw on many valuable lessons from the last two decades of counterterrorism missions during the “war on terror” in its campaign against the cartels. But there is a more productive path forward than drastically shifting the rules of engagement with transnational criminal groups.

• The Geopolitics of Trump’s War on Drugs     Americas Quarterly

  Half a century after former U.S. President Richard Nixon launched the war on drugs, global cocaine output and consumption are at record highs. According to the UN’s latest drug report, cocaine production jumped roughly a third in 2023 to over 3,700 tons, with usage rising to an estimated 25 million people. Over the past decade, narcotics supply chains have diversified, and demand has hardly blinked.   President Donald Trump’s second term has repackaged the drug war with sharper geopolitical edges. While fentanyl from Chinese sources seemed to be the president’s main focus during his campaign, the more traditional target of cocaine has lately become more prominent. Washington has pledged to “disrupt the supply chain from tooth to tail” and to “partner with – or otherwise hold accountable” source countries, language mirrored in the U.S. Drug Enforcement Administration (DEA) National Drug Threat Assessment 2024. 

•  America Loves Cocaine Again—Mexico’s New Drug King Cashes In    The Wall Street Journal

  Cocaine sold in the U.S. is cheaper and as pure as ever for retail buyers. Consumption in the western U.S. has increased 154% since 2019 and is up 19% during the same period in the eastern part of the country, according to the drug-testing company Millennium Health. In contrast, fentanyl use in the U.S. began to drop in mid-2023 and has been declining since, according to data from the Centers for Disease Control and Prevention.  For new users, cocaine doesn’t carry the stigma of fentanyl addiction. Middle-class addicts and the tragic spectacle of homeless crack-cocaine users in the 1990s helped put a lid on America’s last cocaine epidemic.

Geoeconomics

• ‘Capital absorption’ is big in economic development. But what is it?   Federal Reserve Bank of Boston

  The term “capital absorption” is not well-known or easily understood. But it’s critical in the local economic development world, and I recently heard an analogy I think can help people understand it. Picture an irrigation system designed to direct the flow of money to the projects that need it most. Such a system frees communities from merely hoping that the unpredictable “rainfall” of funding falls in the right place. Instead, the system guarantees it gets there. That’s what capital absorption is. It’s coordination that helps local places absorb capital investments in the kinds of projects that can literally change what these places look like – things like child care centers, or housing, or downtown building renovations. Reliable systems are established and run by prepared partners to accept the funding when it appears and move it exactly where it’s needed, so the work can get done in ways that strengthen local economies.
  

• How Many Manufacturing Jobs Will Trump’s Tariffs Create? And at What Cost?    AEI Center for Technology, Science, Industry, and the State Project

  Secular decline in the share of manufacturing jobs in the labor force largely reflects the shift of consumer expenditures from goods to services. High tariffs cannot restore manufacturing jobs to the 27 percent share of the labor force experienced 60 years ago. Achieving Trump’s objective for eliminating the trade deficit in manufactures would require tariffs at least twice as high as those imposed through September 2025. The annual cost to American consumers of shifting each job from service employment to manufacturing employment through high tariffs exceeds $200,000.

•  What is a Stablecoin?      McKinsey & Company

  In the rapidly evolving world of digital assets, one innovation stands out for its potential to bring stability and reliability to the historically volatile blockchain-based currency market: the stablecoin. As the name suggests, a stablecoin is a type of digital currency designed to maintain a stable value. These digital currencies are pegged to a traditional fiat currency like the US dollar. Stablecoin use has increased significantly in recent years: In the past 18 months, the total market capitalization of stablecoins has more than doubled to $250 billion, from $120 billion, and industry forecasts expect it to reach up to $2 trillion by 2028. With major players like JPMorgan Chase experimenting with tokenized deposits and PayPal launching its own stablecoin, digital money is a major story in digital finance.  For individuals and organizations looking to capitalize on the benefits of blockchain-based transactions, what exactly is Stablecoin?

US Political & Social Trends

• The Growing Link Between Marriage, Fertility, And Partisanship   The Institute for Family Studies

  Conservative women born between 1975 and 1979—women who are finished having children—have a completed family size of 2.1, right at replacement. Moderate women in the same age group have 1.8 children, and liberal women just 1.5. Narrower gaps exist between conservatives born between 1985 and 1989, who have a completed fertility rate of 2.1, while moderates are at 1.9 and liberals 1.7. Conservative women born between 1995 and 1999 have, so far, only had 0.7 children, the same as moderates. Liberals in the same cohort average 0.4 so far. Differences between conservative and liberal women should not be overstated. Birthrates are lower for all groups when compared to the state of fertility before 1975. Marriage rates for all groups are lower, too. Yet the differences are large enough that the parties ultimately appeal to manifestly different constituencies.

•  It's Not Just You: Americans Are Still Not Hanging Out      Generation Tech

  The average American spent 38 minutes a day socializing in 2019 and 35 minutes in 2024. In 2024, for the first time, adults 50 and older spent (very slightly) more time socializing in person than teens and young adults. Young people’s social time is at an all-time low in the 21-year history of the survey. Fifteen- to 25-year-olds spend 26 fewer minutes a day socializing in person than they did in 2003. That’s three hours a week, 13 hours a month, and 158 hours a year less getting together with friends, having a face-to-face conversation, meeting for dinner, or chatting before seeing a movie together. No wonder so many more teens now describe themselves as lonely.

• Why do only humans weep? The evolutionary puzzle of crying     BigThink

  In an excerpt from Steven Pinker’s new book, When Everyone Knows That Everyone Knows…, Pinker explains that crying is not just an expression of sadness but an evolved signal of surrender, helplessness, and a plea for comfort. However, tears can also mark moments of joy, compassion, and awe, reflecting the emotional opposites of the things that make us laugh.  The unique human capacity to weep may have evolved to strengthen social bonds and generate common knowledge regarding our inner states.
  

• If I Work Harder, Will You Love Me?    Arthur Brooks/The Atlantic

  Between teaching Harvard MBA students and speaking to a lot of business audiences, I’m often interacting with successful people who work extremely long hours. It’s common for me to hear about 13-hour workdays and seven-day workweeks, with few or no vacations. What I see among many of those I encounter is workaholism, a pathology characterized by continuing to work during discretionary time, thinking about work all the time, and pursuing job tasks well beyond what’s required to meet any need. Workaholics feel a compulsion to work even when they are already earning plenty of money and despite getting minimal enjoyment from doing so.

Recommended Weekend Reads

Latin America Can De-Risk Semiconductor Supply Chains, Why Russian-Indian Relations Have Remained Steady, and Why Tariffs Led to More Demand for Stablecoins Went Up and Less for the Dollar

August 29 - 31, 2025

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list. 

Americas 

• Latin America’s Role in De-Risking Semiconductor Supply Chains   Center for Strategic & International Studies

  While the semiconductor supply chain currently spans several continents, China has made efforts to develop a self-sufficient semiconductor manufacturing ecosystem through industrial policies such as “Made in China 2025,” which presents a direct strategic and economic challenge to the United States. De-risking the semiconductor supply chain, particularly that of “legacy chips,” is of paramount importance, particularly at a time in which the Trump administration considers imposing additional sectoral tariffs on semiconductors. Latin America sits at the juncture of possibility and opportunity at a critical time for the expansion of semiconductor manufacturing, providing some of the key elements and capabilities that allow for semiconductor assembly, testing, and packaging as well as final integration into electronics. For companies relying on semiconductor manufacturing, diversifying production sources is key to reducing the risks associated with supply chain disruptions and great power competition.

• Latin America’s Opportunity in the AI Race     Americas Quarterly

  In recent weeks, two starkly different visions of the future of the digital world emerged from the globe’s AI superpowers. These competing philosophies have put Latin America in an uncomfortable position between them. The region now faces a digital dependency trap that could determine its technological fate for decades.  Last month, the Trump administration released “Winning the Race: America’s AI Action Plan,” a comprehensive national AI strategy that frames artificial intelligence as a zero-sum competition where the U.S. must achieve “unquestioned and unchallenged global technological dominance.  China then unveiled its “Action Plan on Global Governance of Artificial Intelligence.” For Latin American policymakers, these manifestos present what appears to be a binary choice. Choosing wrong could mean decades of technological dependency, limited sovereignty, and diminished prospects for indigenous innovation. The tension between the two paths, however, could offer the region an opportunity for growth.

• On the Ground With a Top Mexican Cartel     New York Times

  For the last year, Paulina Villegas, an investigative journalist for The New York Times, had the daunting task of meeting repeatedly with members of the Sinaloa Cartel. The assignment had obvious risks: The Sinaloa Cartel is a U.S.-designated terrorist group. But the meetings, Ms. Villegas said, were vital to her quest to provide readers a clearer understanding of how powerful criminal groups operate, documenting the practices and root causes that both the Mexican and American governments are trying to address.

The Indo-Pacific 

• Why Russian-India Relations Have Been Steady in the Storm    War on the Rocks

  Russia has more friends than Western analysts like to admit, even three years into the Russo-Ukrainian War. While many have paid close attention to Russia’s beneficial partnership with Iran, the introduction of North Korea’s legions into the Ukrainian battlespace, or persistent materiel support from China, Russia’s other rising-power relationship is often underdiscussed — that of India. The Russian-Indian relationship is both of longer duration and deeper history than those Russia has with its other key partners. It is also sometimes ignored as it does not extend to shared adversarial relations with the greater West. This is a mistake, as India is one of Russia’s self-identified civilizational friends. Furthermore, despite various ups and downs, the partnership has proven quite resistant to third-party pressures, including recently from the anti-Russian Western coalition.

• What’s New About Involution?     Carnegie China

  In recent months “neijuan” (内卷), or “involution,” has become one of the most important buzzwords in Chinese policymaking circles. It has come to describe a disruptive process of relentless competition and price cutting among Chinese businesses, and has been increasingly criticized by policymakers, from President Xi Jinping down, for leading to a zero-sum race to the bottom, marked by vicious price wars, large-scale losses, homogenous products, and improper business practices. An August 2 article in Caixin explains:   China’s top economic planner vowed on Friday to intensify its crackdown on “involution,” pledging to curb disorderly corporate competition, rein in wasteful investment and standardize local governments’ business attraction practices to protect fair market order.  The article is referring to the July 30 Politburo meeting that set out Beijing’s priorities for the second half of 2025. Of the three main priorities, two—the need to boost domestic consumption and the promise to support the real estate market—have been proposed regularly in the past three to four years. Much of the focus, however, was on the newest priority, which is to battle deflationary pressures by reducing “disorderly” price competition and overcapacity in manufacturing—measures, in other words, aimed at reining in involution.

• Xi Unleashes China’s Biggest Purge of Military Leaders Since Mao   Bloomberg

  China’s leader has ousted almost a fifth of the generals whom he personally appointed while running the country, something his predecessors never did, according to a Bloomberg News analysis of TV footage, parliamentary gazettes, and other public records. Moreover, Xi’s purge has left the CMC with only four total members, down from seven when his third term started. That’s the fewest in the post-Mao era, the Bloomberg analysis shows.  As more and more of China’s top military leaders fall, it leaves those trying to understand the nation grappling with a near-impossible question, given the opaque nature of the Communist Party: Is this all a sign of Xi’s political strength, or of his weakness? The implications reach around the world and across the global economy.

 Geoeconomics 

• Tariffs, Stablecoins, and the Demand for Dollars    Federal Reserve Bank of Cleveland

  Several studies have shown that aggregate demand for US dollars fell following the announcement of tariffs by the US government on April 2, 2025. Using data on stablecoins as a proxy for dollar trading, we find that the decline in dollar demand is smaller for investors in countries that saw larger increases in tariffs. Our interpretation is that, as foreign investors anticipate that tariffs will make it more expensive to acquire US dollars in the future, they buy dollars today. This channel is stronger for more liquid stablecoins and for countries with tighter capital controls, consistent with the idea that, when actual dollars are hard to acquire, stablecoins may be regarded as a substitute. Our findings cast light on the effects of the tariffs on global foreign exchange markets, as well as on the degree to which stablecoins are considered a close substitute for dollars.

• America’s Coming Crash:  Will Washington’s Debt Addiction Spark the Next Global Crisis?   Kenneth Rogoff/Foreign Affairs

  For much of the past quarter-century, the rest of the world has looked in wonder at the United States’ ability to borrow its way out of trouble. Again and again, under both Democratic and Republican administrations, the government has used debt more vigorously than almost any other country to fight wars, global recessions, pandemics, and financial crises. Even as U.S. public debt rapidly climbed from one plateau to the next—net debt is now nearing 100 percent of national income—creditors at home and abroad showed no signs of debt fatigue. For years after the 2008–9 global financial crisis, interest rates on Treasury debt were ultralow, and a great many economists came to believe that they would remain so into the distant future. Thus, running government deficits—fresh borrowing—seemed a veritable free lunch. Given the dollar’s reputation as the world’s premier safe and liquid asset, global bond market investors would always be happy to digest another huge pile of dollar debt, especially in a crisis situation in which uncertainty was high and safe assets were in short supply.  The past few years have cast serious doubt on those assumptions.

• How Chips Factor Into a De Facto US Sovereign Wealth Fund    OMFIF

  In July 2025, former Intel Chief Executive Officer Pat Gelsinger called for a US sovereign wealth fund to ‘keep America’s technological edge’. Just a month in, a US SWF has materialized under Donald Trump’s administration – owning 10% of Intel Corporation, the only American company manufacturing advanced chips on US soil. Traditionally, sovereign wealth funds are state-owned investment funds that manage national surpluses. Norges Bank Investment Management, for example, manages Norway’s export surplus derived from its natural resources.  However, the US SWF is from a trade deficit country. It is not one single fund authorised by the legislature. Instead, it’s a strategy driven by executive power.  Unlike a conventional SWF, the US SWF has no formal, top-down asset allocation plan. That’s why in the months following Trump’s executive order for establishing the fund, the US SWF appeared first as an ad hoc collection of US stakes in business sectors, ranging from attempted control over TikTok to a golden share in the proposed Nippon Steel-US Steel merger, to equities in bitcoins formerly collected from various criminal and civil actions of the US government.

Recommended Weekend Reads

Did Trump Just Hand China the Tools to Beat the US in AI?, The Strategic Mineral Alliance the West Needs, US Construction’s 5 Decades of Decline, and Democrats Face A Voter Registration Crisis

August 22 - 24, 2025

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list. 

AI’s impact on National Security and GDP

• Trump Just Handed China the Tools to Beat America in AI   Matt Pottinger & Liza Tobin/The Free Press

  Pottinger, who served as Deputy National Security Advisor to President Trump in his first term, and Tobin, write President Trump’s team just gave China’s rulers the technology they need to beat us in the artificial intelligence race. If he doesn’t reverse this decision, they argue, it may be remembered as the moment when America surrendered the technological advantage needed to bring manufacturing home and keep our nation secure.  They argue we should not believe the claims that these chips aren’t very advanced. China’s lack of unfettered access to U.S.-designed AI chips, they write, is America’s clearest advantage in the AI race. By reversing the ban, the White House is helping Beijing’s Communist regime close the gap.

• Global Compute and National Security   Center for New America Security

  The United States faces a choice: leverage its current lead to promote U.S. AI infrastructure and applications globally, while preserving its edge at the frontier; or continue to primarily focus on protection, while other countries gradually narrow the gap. As Michael Kratsios, President Donald Trump’s science and technology advisor, put it: “It is not enough to seek to protect America’s technological lead. We also have a duty to promote American technological leadership.”  The protect and promote strategy outlined in this report offers a path to sustainable leadership that both safeguards critical capabilities and expands American influence in the global AI ecosystem.

• The Macro Impact of AI on GDP     the Overshoot

  Capital spending related to AI is growing so rapidly that it is now meaningful relative to the $30 trillion U.S. economy. Gross Domestic Product (GDP) was about 0.2%-0.3% larger in 2025Q2 than it would have been if businesses’ spending on data center construction, computers and peripheral equipment, and communications equipment had grown in line with the 2011Q1-2022Q31 trend.  Moreover, this impact is likely understated, because existing methodologies are (probably) not fully capturing the investment being done by the five companies responsible for the bulk of the data center buildout: Amazon, Google, Meta, Microsoft, and Oracle. Those five companies also happen to be the ones with the five largest capex budgets in the entire S&P 500 in 2025Q2.  I estimate that U.S. GDP would be about 0.4% higher than currently reported—or about 0.6% higher than if there had been no AI boom—if the capital expenditures of the big 5 were fully incorporated into the official data. Or put yet another way, the growth in direct AI-related capex by the big 5 since mid-2023 would correspond to about 10% of the total increase in the dollar value of U.S. GDP over the past two years. Including additional capital spending on power plants and electricity generation would lead to an even larger number.

Geoeconomics

• Reform or Realignment? The Geopolitical Lessons of Bretton Woods    Carnegie Endowment for International Peace

  The history of Bretton Woods sharpens questions about the issues and interdependencies that can provide the basis for any reform of existing institutions.

• Five Decades of Decline: U.S. Construction Sector Productivity   Federal Reserve Bank of Richmond

  Construction labor productivity in the US fell by more than 30 percent from 1970 to 2020, while overall U.S. economic productivity doubled over the same period; Despite potential biases in price deflators, multiple studies confirm that the productivity decline is real, with physical measures like housing units per worker showing similar stagnation, and; Increasing land-use regulations may be a plausible cause for the decline, as more strict land-use regulations disincentivize construction companies from pursuing larger projects, keeping them relatively small. In addition, this reduces incentives for technological innovation and economies of scale.

•  The Ghost in Capitalism's Machine: Industrial policy returns to global trade   Peter Draper/ Hindrich Foundation

  Industrial policy is the ghost in capitalism’s machine — always present, rarely acknowledged. Even laissez-faire economies flirt with it, while denying its existence. It attracts polarized views anchored in ideological conceptions over how much power to accord states, or freedom to markets. Industrial policy is making a comeback as geopolitical contestation amongst the major powers sharpens.

Russia, Ukraine, and the Economic and Security Implications of a Possible Ceasefire

• Tanks, Tech, and Tungsten: The Strategic Mineral Alliance the West Needs     War on the Rocks

  What good is a tank if you can’t get the metals to build it?  This week’s meeting between U.S., Ukrainian, and European leaders showed potential progress towards security cooperation. And while the new U.S.-Ukrainian Reconstruction Investment Fund agreement marks an important step toward increasing the resilience of both U.S. and European supply chains, there is more work to be done. Building on this momentum, the United States and the European Union should seek closer critical minerals supply chain cooperation.  There are several opportunities for the two economies to work together by focusing on defense and security, rather than the economic and clean energy framing of the past. Tighter cooperation could strengthen the E.U. defense-industrial base, enhance military readiness, and strengthen NATO’s deterrence posture while enabling the United States to secure critical minerals, preserve manufacturing capacity, and redirect precious resources to the Indo-Pacific. Supply chain cooperation would also help both sides reduce dependence on China, which dominates the critical minerals market by creating oversupply and using export restrictions. Indeed, the China challenge requires the United States and Europe to work together.

• Russia’s Imperial Black Sea Strategy   Foreign Affairs

  Russia’s aggression against Ukraine and other neighbors is transforming the Black Sea into Eurasia’s strategic frontier. Russia has disrupted flows of energy, food, and other commodities; generated millions of migrants; and heightened insecurity not just in Ukraine but also across the entire Black Sea region. These efforts constitute part of a much longer and larger strategy. Russia does not merely seek to dominate Ukraine. It wants to render each of the other five states that border the Black Sea—as well as Moldova, which borders Romania and Ukraine and whose waters flow into the sea—subservient to its interests so that it can exercise veto power over choices these countries make. Moscow also aspires to use the Black Sea as a platform from which to project power and influence throughout the Middle East, the Mediterranean, and the Caucasus.

U.S. Politics & Elections 

• The Democratic Party Faces a Voter Registration Crisis    The New York Times

  According to an analysis conducted by the New York Times, the Democratic Party is hemorrhaging voters long before they even go to the polls.  Of the 30 states that track voter registration by political party, Democrats lost ground to Republicans in every single one between the 2020 and 2024 elections — and often by a lot.  That four-year swing toward the Republicans adds up to 4.5 million voters, a deep political hole that could take years for Democrats to climb out of.

• Trump’s Tariffs and ‘One Big Beautiful Bill’ Face More Opposition Than Support as His Job Rating Slips   Pew Research Center

  The latest national survey by Pew Research Center – conducted Aug. 4-10 among 3,554 adults – finds that a 53% majority say President Trump is making the federal government work worse, while only about half as many (27%) say he is making the government work better. (Two-in-ten say he is making things about equally better and worse.)  Both Republicans and Democrats now offer more negative assessments of Trump’s impact on the federal government than they had predicted in a survey conducted in the weeks immediately following Trump’s inauguration. Six months into his second term, public evaluations of President Donald Trump’s job performance have grown more negative. His job approval stands at 38% (60% disapprove), and fewer Americans now attribute several positive personal characteristics to him than did so during the campaign.  Two of the new administration’s signature accomplishments – the rollout of its tariff policies and the tax and spending law known as the “One Big Beautiful Bill” – garner considerably more disapproval than approval:

  • 61% of Americans disapprove of Trump’s tariff policies, while 38% approve.

  • 46% disapprove of the tax and spending law, while 32% approve (23% say they are unsure).

  • 55% of Republicans and Republican-leaning independents now say Trump is improving the way the federal government works – while 16% say he’s making things worse and 29% say his effect is a mix of positive and negative. In the weeks after he took office, 76% of Republicans expected he would make government work better.

  • 87% of Democrats and Democratic leaners say Trump is worsening the way government functions, up from 78% who said this at the beginning of his term.

Recommended Weekend Reads

The Trump Trade Wars Bring Major Shifts in US Chip Policy, Escalating Risk of Conflict on the Moon, 5 Facts About Global Demographic Changes by 2100, and What’s Going on with the Grid?

August 1 - 3, 2025

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them of interest and useful as well.  We hope you have a great weekend.

Trade Wars & Semiconductors 

• US alters tech policy, puts chips on the table   Jennifer Lee & Fritz Lodge/The Strategist

  A shift is underway in the Trump administration’s approach to tech policy.  Nvidia said on 14 July that the US government would soon grant it licenses to resume exports of its H20 chips to China. AMD is expecting the same for its MI308 chips. This may appear surprising after multiple statements from Trump administration officials that controls on the export to China of higher-end AI chips, such as the H20, were off the table.  This move doesn’t change the broader bipartisan consensus behind restricting China’s access to strategic tech, but rather fits into a pattern of recent decisions showing that tech export controls—previously viewed as a non-negotiable issue of US national security—can now be used as bargaining chips in trade talks with China.  This shift exacerbates uncertainty for domestic and international tech firms and will encourage Beijing to push for further loosening of controls in future negotiations.
  

• How Does Semiconductor Trade Work?    Chris Miller/American Enterprise Institute

  Trade data on semiconductors is skewed due to the underreporting of imported semiconductors found in finished products like cars and phones. Any tariffs on semiconductors must carefully consider the structure of supply chains to avoid unintended consequences.  Much of the $40 billion of chips the US imports are actually made in the US, packaged abroad, and reimported, so tariffs would senselessly penalize domestic manufacturers. Since the US lacks packaging capacity, higher tariffs would raise costs and hurt competitiveness in key industries.  The US should focus tariffs on Chinese-made chips while striking sectoral trade deals with allies that commit both sides to zero tariffs, reducing non-tariff barriers, and continuing to invest in diversified supply chains.

Demographics

• 5 facts about how the world’s population is expected to change by 2100   Pew Research Center

  Here are five facts about how the world’s population is projected to change in the coming decades, based on a Pew Research Center analysis of the UN’s World Population Prospects. The latest data is from 2023, so the numbers for 2024 and beyond are projections.

1. Global population growth is expected to slow between now and 2100 (the population is expected to peak at 10.3 billion in 2084).

2. The world’s three most populous countries in 2025 are expected to have radically different trajectories in the coming decades (India will grow, China has begun to shrink and fall sharply, and the US is expected to grow slowly and steadily).

3. Five countries are expected to contribute more than 60% of the world’s population growth by 2100 (The Democratic Republic of Congo, Ethiopia, Nigeria, Pakistan, and Tanzania).

4. The world’s population is expected to get older (the median age is projected to rise to 42 by 2100, up from 31 today and 22 in 1950).

5. Africa is currently the world’s youngest region, and it’s projected to stay that way in 2100.

• Why Is Fertility So Low in High Income Countries?    Melissa Schettini Kearney & Phillip Levine/NBER

  This paper considers why fertility has fallen to historically low levels in virtually all high-income countries. Using cohort data, we document rising childlessness at all observed ages and falling completed fertility. This cohort perspective underscores the need to explain long-run shifts in fertility behavior. We review existing research and conclude that period-based explanations focused on short-term changes in income or prices cannot explain the widespread decline. Instead, the evidence points to a broad reordering of adult priorities with parenthood occupying a diminished role. We refer to this phenomenon as “shifting priorities” and propose that it likely reflects a complex mix of changing norms, evolving economic opportunities and constraints, and broader social and cultural forces. We review emerging evidence on all these factors. We conclude the paper with suggestions for future research and a brief discussion of policy implications.

• Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come    Nicholas Eberstadt/Fertility and Sterility

  Abstract: This article addresses the prospect of global depopulation and its far-reaching implications. It argues that the advent of world population decline may come sooner than commonly anticipated, due to remarkable drops in birth rates underway in low-income regions as well as more developed locales. Notwithstanding uncertainties about the precise level of planetary fertility (due mainly to limited statistical capabilities in Africa), it is clear that overall childbearing patterns for our species are at most only slightly above the replacement level today—and might already actually have fallen below that significant threshold. Prolonged sub-replacement fertility will have far-reaching social, economic, and political ramifications. The following pages attempt to describe some of them, and to offer an introductory exploration of the new questions that could face problem-solvers in the future.

• Africa’s future demographic dividend matters to Europe today    ISS/African Futures

  Africa’s demographic surge offers Europe a chance to rethink labor, migration and global partnerships through a lens of long-term interdependence.  Europe’s population is shrinking, while Africa’s is growing. By 2050, Africa will be home to one in four people globally.  Similarly, the EU’s labor force is shrinking and aging, while Africa’s is growing rapidly and becoming younger. By 2050, more than 60% of Africa’s people will be of working age. In Sub-Saharan Africa, the labor force will more than double. It will have increased from 505 million in 2023 to 1,058 million people, while Europe’s labor force will have declined from 370 million to 342 million.

The Growing Electrical Supply Challenge 

• AI Demand Drives Record Electricity Supply Costs In Largest US Market   Financial Times

  The cost of providing electricity in America’s largest power market will hit a record high owing to soaring demand from artificial intelligence data centers and delays in building new power plants, raising energy prices for consumers.  Grid operator PJM said it procured energy supplies for $329.17 per megawatt day, a 22% increase compared with the previous year. The organization will pay power producers $16.1bn to meet its energy needs from June 2026 to May 2027, a 10% increase compared with the previous year. The operator said it expected a 1-5% rise for customers in their energy bills, depending on how utilities and states passed on costs. PJM sets prices at an annual capacity auction where power suppliers bid to provide the region’s projected demand. Earlier this year, PJM and some state governments took steps to try to keep power prices lower after last year’s capacity auction delivered a $269.92 per MW-day price — a more than 800% increase from 2023.

• Power Check: Watt’s Going On With The Grid?   Bank of America Institute

  The US grid is facing an extended period of load growth. And while the drivers of this growth have changed over time, demand is largely due to 1) building electrification; 2) data centers; 3) industrial demand; and 4) electric vehicle (EV) adoption. If load growth forecasts continue to rise, utilities will need to invest to meet required reserve margins and increase spending on both power generation and transmission & distribution capacity. The good news? Deregulation and accelerated permitting may further help get more projects off the starting line, according to BofA Global Research.

• Are Small Modular Reactors Worthy of the Hype?   Oilprice.com

  Nuclear energy is experiencing a political and technical renaissance. Around the world, nuclear fission is gaining traction as a critical piece of the puzzle for maintaining energy security while also slashing greenhouse gas emissions. Much of the renewed excitement over nuclear power comes from advances in nuclear technologies, particularly small modular reactors (SMRs), which are supposed to make nuclear capacity expansion cheaper, safer, and more efficient.  However, Even though there is excitement from investors and policymakers alike, getting SMR models approved is taking much longer than anticipated. Only one model has been approved in the United States, and it is not yet operational. But many, many more designs are waiting in the wings.

Recommended Weekend Reads

Is the US Going to be Hit With a New China Shock?, Looking at Russia’s Next Generation of Leaders, How the Global Economy Has Evaded Disaster, and Data Centers are Eating Capex

July 18 - 20, 2025

Below are a number of reports and articles we read this past week that we found particularly interesting.  Hopefully, you will find them of interest and useful as well.  Have a great weekend.

China 

• We Warned About the First China Shock. The Next One Will be Worse     David Autor/Gordon Hansen, New York Times

  Autor and Handson warn the US faces a second “China Shock” that tariffs are ill-equipped to counter. According to an Australian analysis, btw 2003 and 2007, the US led China in 60 of 64 cutting-edge sectors; by 2023, China led the US in 57 of the 64.  The world’s largest and most innovative producers of EVs (BYD), EV batteries (CATL), drones (DJI) and solar wafers (LONGi) are all Chinese start-ups, none more than 30 years old. They attained commanding technological and price leadership not because President Xi Jinping decreed it, but because they emerged triumphant from the economic Darwinism that is Chinese industrial policy. The rest of the world is ill-prepared to compete with these apex predators. When U.S. policymakers deride China’s industrial policy, they are imagining something akin to the lumbering takeoff of Airbus or the lights going out on Solyndra. They should instead be gazing up at the nimble swarms of DJI drones buzzing over Ukraine.

• Why China’s Should Revalue the Renminbi – And Why It Can’t Easily Do So     Michael Pettis/Carnegie China

  In a recent piece for the Financial Times, Gerard Lyons, a British economist who sits on the board of the Bank of China (UK), argued that China’s currency, the renminbi, is undervalued, and that by encouraging it to appreciate, China would help raise its international profile. While many analysts have made similar arguments, it is not at all clear that a rising renminbi would indeed increase its international role. There are nonetheless very good economic reasons for China to revalue its currency, along with reasons why a serious revaluation is likely to be difficult. With its persistent excess production and under-consumption, a revalued renminbi would help correct some of the deep structural distortions in the Chinese economy by shifting the distribution of total domestic income from businesses to households.

• Is China’s Military Ready for War?    M. Taylor Fravel/Foreign Affairs

  A new wave of purges has engulfed the senior leadership of China’s military, the People’s Liberation Army. Since the 20th National Party Congress in October 2022, more than 20 senior PLA officers from all four services—the army, navy, air force, and rocket force—have disappeared from public view or been removed from their posts. The absences of other generals have also been reported, which could foreshadow additional purges.   The fact that these high-profile purges are occurring now is not lost on outside observers. In 2027, the PLA will celebrate the 100th anniversary of its founding. It is also the year by which Xi expects China’s armed forces to have made significant strides in their modernization. Finally, the year is noteworthy because, according to former CIA Director Bill Burns, Xi has instructed the PLA to be “ready by 2027 to conduct a successful invasion” of Taiwan. Xi’s instructions do not indicate that China will in fact invade Taiwan that year, but, as Burns put it, they serve as “a reminder of the seriousness of his focus and his ambition.”  With such ambitious goals set for the PLA, the question then arises as to how this new wave of purges could affect the PLA’s readiness. 

• China’s Stealth Trade Surplus    Brad Setser/Council on Foreign Relations

  China’s trade surplus has soared in the last five years. That basic statement maps to a host of well-known and easily verified realities. China now runs, for example, a large trade surplus in autos, when it ran a deficit as recently as five years ago. Net vehicle exports will top 6 million vehicles this year, net passenger car exports will easily top 5 million cars. It dominates renewables manufacturing (so much so that President Trump decided to essentially give up and take the U.S. back to the age of fossil fuels). China's export volume growth has consistently exceeded global trade growth. Moreover, it maps to standard economic theory: a large real estate crisis typically leads countries to rely more on exports to make up for the fall in internal demand (ask the IMF…) yet that surplus often seems to disappear when it comes to the statistics on global imbalances.

Russia 

• The Next Generation: Russia’s Future Leaders     The Atlantic Council’s Eurasia Center

  President Vladimir Putin is initiating a generational shift in Russia’s leadership. According to Kremlin insiders, during his current presidential term, Putin plans to retire some of his most influential and longest-serving allies, many of whom are well into their seventies. Putin himself, at age seventy-two, has no intention of stepping down. He sees himself as entirely irreplaceable. But he is gradually replacing other key figures with members of a younger generation, as the older officials age, fall ill, and become less effective. This transition began last year.  It is hardly surprising that a significant portion of this new generation coming to power consists of the children of current top officials and Putin’s closest friends—or even his own relatives. In this sense, Russia increasingly resembles a feudal state, in which power is inherited at all levels. The children of the bureaucratic aristocracy are all, in one way or another, striving for government careers and positions of influence.  This report examines the rising generation of the Russian elite and what this shift means for Russia’s future. It is based on extensive interviews with dozens of current and former Russian officials who spoke on condition of anonymity in order to discuss the inner workings of the Kremlin power elite without fear of reprisals.

• China may not want Russia to lose – or to win – in Ukraine   Asia Times

  The South China Morning Post (SCMP) cited unnamed sources to report that Chinese Foreign Minister Wang Yi told his EU counterpart that China doesn’t want Russia to lose in Ukraine because the US’s whole focus might then shift to China.  His alleged remarks were spun by the mainstream media as an admission that China isn’t as neutral as it claims, just as they and their alternative media rivals suspected. Both now believe that China will help Russia achieve its maximum goals, but that’s likely not the case.

Geoeconomics

• War, geopolitics, energy crisis: how the economy evades every disaster  The Economist

  Although today’s dangers are not in the same league as World War II, they are significant. Pundits talk of a “polycrisis” running from the covid-19 pandemic, land war in Europe and the worst energy shock since the 1970s to stubborn inflation, banking scares, a Chinese property bust and trade war. One measure of global risk is 30% higher than its long-term average (see chart 1). Consumer-confidence surveys suggest that households are unusually pessimistic about the state of the economy, both in America and elsewhere (see chart 2). Geopolitical consultants are raking it in, as Wall Street banks fork out on analysts to pontificate about developments in the Donbas or a potential Chinese invasion of Taiwan.  The world economy appears impressively and increasingly shock-absorbent. Why?

• What Happens When Big Tech Goes Nuclear?   Jayita Sarkar/Time Magazine & The Carnegie Endowment for International Peace

  Silicon Valley firms are advocating for the U.S. to embark on a nuclear energy renaissance... The ethos of Big Tech to “move fast and break things” could spur unprecedented innovation in nuclear energy, especially through the construction of small modular reactors, microreactors, and even fusion.  But, just like Silicon Valley itself, which has historically flourished through the invisible hand of the state, the nuclear energy industry might also need increased guidance from the government in order to be safe, secure, and reliable.

• The global persistence of work from home    PNAS

  Abstract:  Work from home (WFH) surged worldwide during the COVID-19 pandemic, then partially receded as the pandemic subsided. Using our Global Survey of Working Arrangements covering dozens of countries, we find that average WFH rates among college-educated employees stabilized after 2022. The average number of WFH days per week is steady at roughly 1 d per week globally from 2023 through early 2025. Cross-country variation persists: WFH is about twice as common in advanced English-speaking economies as in much of Asia. These results show how the pandemic-driven shift to remote work has persisted and reached a new equilibrium, with implications for urban

• Honey, AI Capex is Eating the Economy     Paul Kedorsky’s Applied Complexity

  Looking at the boom in building data centers in the US (and elsewhere around the world), Kedorsky looks at how the spending compares.  Compare this to prior capex frenzies, like railroads or telecom. Peak railroad spending came in the 19th century, and peak telecom spending was around the 5G/fiber frenzy. It's not clear whether we're at peak yet or not, but ... we're up there. Capital expenditures on AI data centers are likely around 20% of the peak spending on railroads, as a percentage of GDP, and it is still rising quickly. And we've already passed the decades-ago peak in telecom spending during the dot-com bubble.

 The Future of Election Polling

• Are Betting Markets Better than Polling in Predicting Political Elections       Institute of National Security, Peabody College, Vanderbilt University

  In a new study conducted at Vanderbilt University, the prediction markets – and Polymarkets in particular -  outperformed traditional national and state-level polling during the 2024 election. According to Professor Brett Goldstein, who oversaw the study, “Our research reveals a fundamental shift in how we might assess and forecast elections.”