These are trying times and interesting times—in line with the proverbs. And there is nothing that unique about it. It just seems unique from our perspective, which is always distorted. The thing that is actually fairly unique for us is how good things are and how much better they are getting—despite so many setbacks.
So, I’m not here to diminish or downplay suffering. Nor am I suggesting improvements are inevitable or easy.
But a better and better world is increasingly around us. Why is this underappreciated if not flat out unappreciated? I think a big factor is perspective bias as alluded to above and explored in this post by Adam Mastroianni:
I’ve got a different theory: people are predisposed to believe the end is coming not because it feels good,but because it seems reasonable.
GOOD CUP BAD CUP
In The Illusion of Moral Decline, my coauthor Dan and I showed how two biases could lead people to believe that humans are getting nastier over time, even when they’re not.
Humans pay more attention to bad things vs. good things in the world. And they’re more likely to transmit info about bad things—the news is about planes that crashed, not planes that landed, etc. We call this part biased attention.
In memory, the negativity of bad stuff fades faster than the positivity of good stuff. There’s a good reason for this: when bad things happen, we try to rationalize them, reframe, distance, explain them away, etc., all things that sap the badness. (Much of this might be automatic and unconscious.) But we don’t do that when good things happen, and so good things keep their shine longer than bad things keep their sting. We call this part biased memory.3
Here’s what it looks like when you combine those two tendencies. Imagine you’ve got two cups in your head: a Bad Cup that fills up when you see bad things, and a Good Cup that fills up when you see good things. Every day you look out on the world, and thanks to biased attention, the Bad Cup gets fuller than the Good Cup.
But thanks to biased memory, stuff in the Bad Cup evaporates faster than stuff in the Good Cup:
When you remember the past, then, the Good Cup has lost some good stuff, but the Bad Cup has lost even more bad stuff:
So when you compare the past to the present, it seems like there was a more positive ratio of Good Cup to Bad Cup back then:
That can explain why things always seem bad and why things always seem like they’re getting worse. Which is exactly what we see in the data: every year, people say that humans just aren’t as kind as they used to be, and every year they rate human kindness exactly the same as they did last year.
Another factor for the mistaken belief and the point of this post is that when good news conflicts with dogma, the good news is willfully ignored by those wishing to propagate the dogma. Consider these examples.
We hear A LOT about inequality. Long-time readers will know how little respect I have for this as a problem. The problem when it does exist is absolute levels of wellbeing not relative ones. If you have more than you used to have, you should be happy. If you’re not because someone else still has more, that is probably a problem of your own making—a “you” problem.
To wit, Daniel Waldenström points out in this piece,
A closer look at household wealth shows some surprising results.
Firstly, private wealth has risen sharply across the West since 1950. But importantly, this growth has been shared. Most wealth is now held in homes and retirement accounts—not in elite corporate shares. Today, 60–70% of households in Western countries own their homes, and most workers have pension savings in funds that track the stock market. This is financial democratization.
Secondly, wealth is less concentrated. In Europe, the richest 1% now hold only about one-third of the wealth share they had in 1910. In the U.S., there has been an uptick since the 1970s, but even there, wealth concentration is closer to its 1960s level than to the early 20th century. The most recent data show that U.S. wealth inequality has actually fallen slightly since the mid-2010s. Thus, the main story is not growing inequality, but growing ownership.
Thirdly, mobility matters. People move between income brackets over their lifetimes. Many in the bottom 10% today won’t stay there long, and some at the top may fall due to job losses or market changes. Also, pension rights and welfare reduce inequality further. For instance, in Sweden, counting public pensions cuts measured wealth inequality nearly in half. In the U.S., if we add Social Security and employer-provided health insurance, middle-class living standards look far better than raw income data shows.
. . .
Focusing too much on inequality can distract from real challenges: slow productivity growth, aging populations, and the costs of adapting to climate change. These issues will require investment and innovation—both of which depend on a healthy private sector.
Overreacting to inequality can also be regressive. Taxing housing wealth, for example, may hit retirees who are rich in assets but poor in cash. Heavy taxes on small businesses might force them to sell to multinational corporations with easier access to credit.
Mistrust also grows when people are told that only the elite benefit from capitalism—even when their own lives are improving. That opens the door to populist promises that often worsen the situation.
. . .
This is not a call for total laissez-faire nor for extreme equality. It is a recognition that the most important achievement of Western economies is the broad rise in living standards—not the fortunes of a few billionaires, but the everyday comfort of millions whose grandparents lived without antibiotics, central heating, or higher education.
Before declaring a crisis, policymakers should double-check the data. And they should keep doing what works: protecting markets, encouraging wealth-building, and lifting the bottom.
Zooming in on a particular area of concern, fresh water, where absolute levels of scarcity are quite rightfully raised, we see another area where worry outruns reality. Kyle O’Donnell explains how “humans are not running out of fresh water.”
Critics warn that humanity is depleting Earth’s finite fresh water supplies through overuse and pollution, urging drastic conservation measures. But this narrative misunderstands what “fresh water” is. Rather than a fixed natural endowment, fresh water is largely a product of human innovation and engineering. As technology advances and economic incentives align, humans continue expanding usable water supplies—turning the ocean, wastewater, and even air into sources of clean, drinkable water.
The vague concept of “fresh water” is actually very nuanced. And clean, fresh water itself is not something that occurs naturally. Rather it is the product of human ingenuity and hard work.
As he concludes:
From ancient aqueducts to modern desalination plants and atmospheric water generators, humans have never accepted natural limitations on freshwater supplies. The same creativity that turned seawater into municipal water supplies and transformed sewage into drinking water continues expanding the definition of usable water. Global markets further reduce water stress by enabling regions to specialize by importing water-intensive goods from water-abundant areas rather than producing everything locally.
Rising demand creates rising incentives for innovation. As traditional sources become more expensive, market signals encourage both conservation and technological advancement, resulting in a continuously expanding water supply that grows to meet human needs and capabilities.
The lesson is clear: Water scarcity isn’t about planetary limits but about the pace of human innovation relative to demand growth. Given the remarkable technologies already emerging and the powerful economic incentives driving their development, the future promises water abundance through human ingenuity and market-driven innovation, not sacrifice and restriction.
Perhaps there is no area where factual news (be it good, bad, or mixed) is lost to dogma is the environment and climate. Fortunately, we have people like Roger Pielke, Jr. to keep us grounded.
I’d go so far as to suggest that it is likely that the first half of 2025 has seen the fewest deaths related to extreme weather of any half year in recorded human history, given how large losses were in decades and centuries past, as you can see below.
Estimated decadal deaths related to weather and climate for four decades: 1870s, 1920s, 1970s, 2020s (estimated based on deaths over the past decade). These estimates are highly uncertain and the 1870s and 1920s numbers are certainly underestimates. They should be interpreted as order-of-magnitude and not as precise figures. Sources: Davis 2017, Our World in Data.
The put the 2025 first half numbers into context, we can also look at deaths in the second half of each year this century, shown below and zoomed in as above.
The first half disaster deaths of 2025 are also lower than any second half deaths in any year this century.
Some additional context:
This century, during Jan-Jun ~408,000 people died related to extreme weather;
During Jul- Dec the total is ~288,000;
In 2000 (July 2000 to June, 2001), the global death rate related to extreme weather was ~1.4 people per million;
in 2025 (July 2024 to June 2025), the global death rate related to extreme weather was ~0.9 people per million.
The decrease in global death rates related to extreme weather from 2000 to 2025 was ~60%;
Of course large losses of life related to extreme weather are still possible — and perhaps even likely if we do not emphasize disaster risk reduction.
. . .
Not only do opinion polls show that this theory of change is misguided as politics, so too does the real world. In contrast to apocalyptic sermons, at no point in human history have humans had less risk of death related to extreme weather and climate. Understanding why that is so is central to keeping that trend moving forward into the future.
Smart energy and climate policies, as I’ve long argued, make good sense. Climate evangelism centered on scaring people about the weather does not make sense — in politics, policy, or science.
So should we be pessimistic about how pessimistic the narrative tends to be despite the optimistic reality? I say, “cautiously, no”. The world has always had this bias. It might be more pronounced today, but that is simply a byproduct of the achievements we’ve enjoyed—information flows easier today, which is great except it can be bad when that information flow is mistaken or maligned.
Regardless, stay the course. Case in point: I offer this from Alex Tabarrok as an implied lesson from the various links I’ve offered in this post. Since it is brief and has been up for over 30 days, I will quote it nearly in full:
Every generation launches a new competitor to America and the people who don’t like capitalism and America’s individualist, free market economy trumpet that now the American way is being left in the dust. In the progressive era it was the Germans (how did that work out?), then it was the Russians (remember Sputnik?), then it was the Japanese (buying up Rockefeller center! the horror!), then it was the Chinese (look at those high speed rail lines!). My message to Americans is to double down on America. Double down on immigration, entrepreneurship, innovation, building for tomorrow, free markets, free speech and individualism and America will take all new competitors as it has taken all comers in the past. The world should be more like America not the other way around.
Dogma is often standing athwart reality and shouting, “IT CANNOT BE!” It is vital that we stand athwart dogma and calmly argue back, “But it is, and here is how and why.”
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Initially my subtitle to this post, “Corruption is Less Bad Than Faith-Based Dogma”, was going to be the title, but I thought that was too clunky. Still, I struggle to find a way to properly introduce my thinking here. Perhaps this is because it is very hard to get a handle on what is going on.
Specifically, why are the capital markets seemingly so sanguine while, to at least some of us, there is so much trouble brewing?
I’m going to end up sounding a lot like Paul Krugman in this post, and I’m not entirely comfortable about that. Not just because I don’t want to write/think like him—he is at his worst when he lets emotions overtake his rational, great economist mind.1 It is also because I don’t think his diagnosis is very good. Markets might not seem to price in existential risk (still room for debate here), but that isn’t the current situation anyway. It’s bad, man, but it ain’t that bad.
Regardless, this vibe isn’t total off base:
The gist of the puzzle is this: The market reacted quite strongly to several policies of the Trump administration as they first developed. Tariffs are the most stark, but there were others as well. On top of that we have ample reason to believe many things we are witnessing are not great, Bob!
Mostly this is true in a policy sense, but there are other general economic developments that indicate weakness. Of course, that might all just be what a soft landing looks like. Hard to know since the U.S. economy has never had one, but there is room to believe this time it has. Still, the policy developments are unequivocally bad.
One big example is the on-going effort to shrink our labor force by reversing immigration. This includes the cruel, haphazard round up of people with all the unlawful features (e.g., no due process) and the “accidental” grabbing of U.S. citizens in the process. Additionally, many of those swept up in this process entered the US legally and have committed no crimes while here. Do whatever you want to try and justify this morally or legally, yet two facts remain:
The U.S. desperately needs immigrants to help our aging and shrinking domestic workforce as well as provide some help to our social programs that are nearing insolvency.2
No economy has ever grown long term with a shrinking labor supply.
So all the things we see going on look quite concerning. Whether we watch Fox News or MSNBC, we see pretty much the same thing with just different interpretive packaging. However, seeing past the self-serving presentation in these media portrayals gives us a great microcosm for the bigger point I’m going to make in this post.
The extremely harsh intolerance for immigration is happening.3
The effect is a reversal of immigrant arrival trends as well as self deportation.
And yet still . . . Trump isn’t anywhere close to being on track to achieving his promise to deport all illegal immigrants.
Whether because of the physical impossibility of the task or the growing opposition to it, Trump is not achieving an immigrant-free United States. As beautiful/ugly as it is to us observing, it is just a big show. Please don’t take this as downplaying the impact. Many, many people are caught up in this circus with their lives being upturned drastically. All I am saying is Trump is once again playing to his naive base and (fortunately) stopping short of what he claims he is pursuing.
Notice that this isn’t TACO (Trump Always Chickens Out). That was a much better fit for tariffs, which is where this term of art emerged among investors. And even then (see below), I don’t think that is fully what is going on even there.
This is Trump Isn’t Actually Doing It (TIADI?), but that doesn’t make a catchy acronym. Still, he is doing something, and that must be reconciled for its impact.
I know this is difficult for many to fathom, but what if he isn’t Chairman Trump, Great Philosopher King as the NFT imagery claims him to be. What if he is just a simple con man? Many (supporters and opponents alike) would argue that he has to be more than that given the stature and accomplishments. So what if he is just a simple mob boss who has risen to power and is just getting while the getting is good? What if Trump isn’t an ideologically-driven mastermind, but simply is corrupt?
Hence, I want to suggest we aren’t in a TACO-based market. We are in a market grounded in TISC (Trump Is Simply Corrupt, pronounced “tisk” to help make this acronym stick).
Still not as catchy, but I think it is more fitting.
Look at the evidence:
Meme coins he and his family have personally benefited from financially and the same meme coins have been explicitly used to buy influence with Trump
The shakedown/extortion of higher ed (yes, they needed some comeuppance, and they needed to be reigned in for many bad policies, but good ends don't justify the means and bad ends certainly don't justify the means)
Say what you will about prior administrations' lack of transparency, this one is showing you the crime saving you the time discovering it.
Examining him deeper we find a failed businessman with a serious inferiority complex who desperately wants to be an elite. He has no idea why he would not be liked much less loved and has no idea what it takes to actually win and succeed—he mistakes the appearance of the end result for the means. He really took to heart the (non-replicable, pseudoscience conclusion) “fake it ‘til you make it” bit. In this sense he is the leader of a cargo cult—his followers don’t seem to know the difference between actually succeeding and looking successful.
He has no morally-guided gumption or ethical regard allowing him to tolerate any wrongdoing that benefits him in the least. This is the heart of his motivations. His technique is master bullshitter. His drive is aggrandizement.
Consider this very partial list of how this “conservative” leader is having the U.S. government interact with the private sector:
U.S. government take an ownership share in US Steel and Intel as well as other AI/tech companies
Either directly demanding or indirectly implying the need for general tributes from corporate leaders using company funds
Heavy-handed interventions into the labor market
Tariff taxes distorting outcomes including the large detriment of small U.S. companies
These are all his way of “succeeding” in business—a quest he never could approach legitimately throughout his career. He doesn't create value. He takes it like a mob boss.
All of this is terrible in its own right, but its implications for the broader economy are limited. At the very least those impacts are much, much less damaging than if all his threats and supposed policy views came to fruition.
This is how the market can price his policies so benignly. This is how the market’s reactions to on-going policy developments (including the daily flip flop) can be so seemingly neutral if not positive for (some) equities.
The big and powerful (S&P 500 and mega-caps especially) stand to benefit at least relatively in an environment that rewards the powerful, entrenched incumbents. Small caps are much more subject to tariff woes and much less able to buy influence and protection.
The bond market on the other hand must grapple with the risks that higher and higher debt poses. Afterall, Trump is leading us to new found highs (lows) in terms of government deficit spending. And here the market response is fairly appropriate.
Perhaps this helps explain high valuation premiums (stock prices that reflect paying a lot for current earnings) as well as relatively high interest rates that persist.
Rightfully, some would challenge that high stock valuations require high earnings growth, which is predicated upon a strong, growing economy. Many market participants are perhaps themselves engaged in a bit of faith-based reasoning hoping that the good in Trump’s economic policies will outweigh the bad. I’m thinking in regard to the extent that these policies benefit large U.S. companies. For this (admittedly) just-so story to be true it would have to mean that these companies benefit in an absolute sense. Relative benefit isn’t enough—losing less is still losing meaning large-cap stocks couldn’t command such absolutely high premiums that exist today.
In other words, the stock prices for large U.S. companies are VERY high today compared to any historical comparison or theoretical model. They can only be rationally priced this way if the future is VERY bright for them. And rationality has to be the starting point in our thinking. Markets are very efficient generally, and this is especially true of markets pricing large U.S. companies. To claim simply that this time is different is a very, very big claim requiring a lot of work on those making it.
From the bond market’s perspective there isn’t as much of a mystery since either a forecast of general economic growth or higher debt concerns would tend to push and keep interest rates up higher.
Somewhat alternatively if not at the same time, economically bad policies might not hold. When I first was drafting this post, I predicted what came to be this past Friday thinking: Perhaps the market is wisely pricing in that Trump will lose his appeal of the court’s decision against his ability to do all the tariff taxes that he has attempted to impose.
I was going to support it with this case in point where Cantor Fitzgerald was attempting to purchase the rights to tariff refunds from those companies who have had the taxes imposed upon them. I’m not sure if they got their deal, but if they did, last Friday was a good day for them.
Partially this would have been/was the market predicting that calamity will be avoided. Additionally, this would also be the market realizing that corruption is not nearly as costly as a moronic religious-like zeal to institute mercantilist policies that we’ve known were stupid for centuries.
In this story the market is relieved because corruption is cheaper than crazy. A thief can be bought off. An insane fanatic cannot.
Of course there could be other things going on. It is a big world after all. AI could be being priced in as an epic economic game changer. Perhaps DOGE will be a deregulatory miracle worker—although, it is hard to see how that only benefits mega firms if it even relatively benefits them at all. Remember how regulatory capture works—the biggest firms capture the regulator getting them to impose costs (regulation and other) on their potential rivals. But who knows?
And maybe I’m wrong on a more fundamental level. Perhaps tariffs are neutral to good and everyone else is slowly waking up to this after the initial (hypothetically incorrect) reactions. Perhaps stopping if not reversing immigrant flows is an economic boon. Perhaps I’ve even got it all wrong and there is not even any corruption going on. Or maybe graft and aggrandizement is beneficial to the economy from which that activity is flowing.
So take all of this with a grain of salt. It is just a story to try to reconcile what we see around us grounded in what has been settled economic science.
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For those in the Trump cult (and I use that advisedly with the points made in this post explicitly supporting it), this will be a head scratcher because they were told (lied to) repeatedly that it turns out immigrants were inappropriately getting welfare of all kinds including Social Security to the extent that they were a big part of the problem if not all of it. First tapping into the conspiracy-theory vulnerability of so many people and then maximizing it to the point of weaponization has got to be the biggest accomplishment of the rightwing. It has been a masterclass in achieving power by unlocking and coordinating this latent opportunity.
Trump supporters defend this as appropriate and desirable. Opponents feel the opposite, but regardless no one really denies that is the new policy stance.
And then there were none . . . I’ve completed my goal of having visited all 50 U.S. states within my life with my recent trip to Alaska.
Alaska was amazing. Stunning really. And it exceeded my high expectations.
Here are my notes from this amazing place arranged somewhat in chronological order.
We flew from OKC to Anchorage via Seattle on Alaska Airlines. Alaska Airlines continues to impress me in all regards. It is what Southwest used to be aside from the humor they used to bring.
The flight up was easy, which is a good introduction to a thing I learned—Alaska (the state as a place to visit) is much more accessible than I expected. Alaska is easy. While it seems other worldly, you are obviously still in the U.S.—same language, money, culture, etc. This last part is interesting and distinguishes Alaska from Hawaii somewhat. Both have their foreign and out-of-this-world aspects, but Hawaii beats you over the head with it at times and has a hostility that I never felt in Alaska.
Flying up having strategically selected the right, eastern-facing side of the plane, it is stunningly beautiful from the approach (yes, a lot of this is Canada).
Nearer to the ground it appears like another planet even though I had seen a lot of this from satellite views. The mud flats are as eerie from above as they are driving beside them. These were one of the few things that were spooky and scary in AK. Bears are not on this list (see below). What is on the list in addition to mud flats are the risk of running into a moose, the glacial lakes with their depth, temperature, and lack of life within, the >800,000 acre dead forest on the Kenai Peninsula (spruce beetle infestation in the 1990s), and the few and thus unexpected hours of darkness when one is near wilderness (which is constantly).
Anchorage:
At the same time obviously a far northern town/city and just another American urban spot.
Disturbing number of homeless—maybe the most per capita I've ever seen in a major city. This is probably exacerbated by the fact that if you are homeless (by choice or by circumstance), your only chance is in the big city. I’m sure Alaska’s Permanent Fund Dividend plays into this some as well as a helpful culture that comes from a harsh environment. The calm temperatures of the summer along with the long daylight probably plays into the complexity of the matter (see also the alcoholism note below).
Returning at the end of the trip cast it in a much better light with fun spots to visit and eat along with a more compete-city feel. There were many examples to give a much better impression (see below). Still, it was the only place in Alaska that I had a concern about crime.
We drove south with a stop in Girdwood on our way to Homer. Thus, we rented a car—another mid-sized SUV. This time it was a Nissan Rogue. Of those I’ve rented as described in the Vermont post, this one was the cleanest dirty shirt. Still not great at all. The gear shifter is yet another counter intuitive design flaw. You flip it back to go into drive and push it forward for reverse as if that makes sense. Additionally, the car’s break hold, a feature I otherwise like, engages even in reverse. This means having to push the gas to get it to go rather than just idling providing locomotion—seems like a big safety issue. I do not recommend.
Enterprise Rent-A-Car was a winner as compared to the others I’ve used recently. I do recommend.
Our first true day was a Chugach Adventures’ Bears, Trains, & Icebergs (rafting) Tour. This was a lot of fun and recommended. The bears part was misleading but that’s okay because it was the only time we could see any as well as so many other animals. The conservation/rehabilitation park had up-close views of basically every animal Alaska has to offer. And you’d be quite lucky (or unlucky) to see almost any outside of it when it comes to the mammalian megafauna. This was not true of birds or sea life otherwise with sea otters being the most prevalent in the wild.
A short digression on bears. As I mentioned above, they really aren’t that scary a prospect. Yes, they can seriously maim or kill you. But they likely won’t even if encountered, and like I said you have to really get lucky/unlucky to find them outside of something like a visit to the remote Katmai National Park. And even there you’ll find that the brown bears aren’t that concerning generally. These include coastal brown bears in Katmai, et al. as distinguished from the other brown bear types of Kodiak—only found on Kodiak Island, which has about 12,000 human residents (but why?!?, well, according to the couple with young children who I met who live there working for the U.S. Coast Guard it’s “no big deal”)—and grizzlies, which are found further into the wilderness to the north. Yes, these coastal browns can get you, but they don’t hunt you. In fact these guys are fat and lazy preferring for food to jump in their mouths (salmon and berries). Black bears are a bit more concerning for their aggressiveness (but is that really just a mistaken impression from their likelihood of encounter). For them the advice is to fight back. Polar bears are more aggressive probably (my guess) because they are more desperate for food. Polar bears are nowhere near southern Alaska.
My brief day in Girdwood provided yet another piece of evidence to support what I'm now gonna consider a very good rule: ski towns have very good, competitive restaurant offerings. We stayed at the Girdwood Ski Inn, and I do recommend it. We ate at Basecamp, and there are several great looking places within walking distance.
Driving on to Homer after our rafting day, we got a real feel for what this part of Alaska offers:
Constantly stunning views
Some of the most beautiful rivers I’ve seen
So many panoramic moments
Almost impossible to grasp the enormity of Alaska's scale
I think a big part of my appreciation was how similar it seems to mid to late fall in Oklahoma—the best time to be in OK. The sun is at a low angle making for a prolonged “golden hour” effect. The air is crisp and cool.
Alaska is a mashup of otherworldly and common civilization. Branson meets Iceland or maybe the better analogue is Swizterland plus rural Scotland surrounding a New England fishing village (culture and scenery).
At the same time there is Americana tourism. While Bigfoot/Yeti kitsch was minimal, the food was surprisingly banal: Burgers, pizza, and BBQ along the roadside and in the tourist areas everywhere. There is great dining as mentioned below. Just don’t expect exotic (see below).
Thai and other massage offerings seemed out of proportion. I guess the rugged wilderness life brings muscle aches?
Everywhere without exception the people were polite, friendly, and appreciative—in sharp contrast with Vermont; perhaps this is due to the more heavily tourist-oriented economy or the natural result of people living in a relatively harsh natural environment. When the climate and nature is constantly trying to kill your tribe (humans), you tend to stick together.
The Homer Spit is underrated. And it is only part of the appeal of Homer.
We took a scenic ferry to Seldovia for an afternoon. One of the only two times we were cold—both were out on the water. The second was the marine ferry in Seward. And in both cases we could have avoided it by staying in the interior of the boat. This is a bigger point: Part of Alaska’s accessibility is that at least in August it was not cold at all. Cool yes, but it was very pleasant. A minor but still important reason we chose not to do a cruise was that I think it would have been cold most of the time or you’d be holed up inside missing the scenery.
This ferry was also one of the only times we encountered Alaska’s dreaded flies. But they were just a minor bother. In fact I would say for the entire trip there were nearly no bugs to speak of. I was unduly worried about biting flies and mosquitoes.
Bald Eagles everywhere—a thing they've told me my entire life was a near-mythical creature (yes, I know once they were quite endangered in the lower 48). To see them like I see common hawks and turkey vultures at home seems unreal. Homer was the peak for us seeing them, but this was true throughout our journeys.
We were told explicitly that they can't get people to work. It seemed more to be a lack of workers rather than a lack of willingness to be a worker. Regardless, local labor scarcity was taking a big toll on many shops and entire areas. And this was evident enough to us as well. One employer said she was hoping for guest worker program next year, but she wasn’t too optimistic. Tell me again: Alaska went for Trump by how much? 55% hmm... and these areas specifically even higher? hmm….
Speaking of limits . . . Surprisingly limited food variety: lots of fried fish but only halibut, cod, and clams. The only other fish are salmon varieties plus some (much less than expected) crab options and only here and there. Very little exotic game—beef burgers are everywhere. Just a few bison and one elk spotted on a single menu. Bison makes sense as the plains bison is farmed in the lower 48 while Alaska's wood bison is still very endangered (my question about hunting/farming them fell on the conservation park specialist's deaf ears; guess he doesn't know about supply and demand). Overall the surprising lack of exotics was perhaps just my ignorance/mistaken expectations. Upon further research this is because it is illegal in Alaska to serve wild game in a commercial restaurant. This means when you see things like "caribou" on a menu it is reindeer—a farmed animal.
As far as food prices went, it was hard to tell how much was a tourism premium versus Alaska remoteness premium. A quick search shows food away from home to be 48% more expensive in Anchorage than Norman, OK. The overall cost of living difference is estimated at only 33% more. Our Starbucks difference was only about 5% higher comparing an exact order to home, however. And that was at a small town location well outside of Anchorage. Cocktails were very similar to what I pay at home. Entrees were maybe 15-25% higher in my rough approximation . . . take that with a grain of salt.
Hard to get used to the daylight hours. Weird never seeing stars. Probably could have if the skies had been clear, but still that meant staying up well past midnight. Did see great views of the moon—weird seeing it from the vantage point that comes from an extremely northern latitude (third quarter with a near vertical line down it).
After three days in Homer, we reversed course (since there is only one highway) headed to Seward. First impressions of Seward weren’t quite as good, but those quickly abated. Seward was great.
We stayed at The Pilot House, which I recommend with slight reservation. Overall, it was fine to great. Getting there is a little rough (gravel road), and it is located VERY close to the sewage facility, but we only once for a very brief time smelled anything. It is just aesthetically nonideal even though you don’t see it at all from the property. The house was very accommodating, but it needed a couple of improvements (kitchen gear, bathroom door lock, etc.—small things).
The full-day (7.5 hour) marine life tour was the highlight, but the food in Seward was a close second.
Our third major destination after Seward was Summit Lake Lodge. I recommend for sure. Our meals here included the restaurant (breakfast was included, and we had one dinner) as well as the connected pizza/ice cream roadside diner.
This last stop was maybe the most relaxing part of a very relaxing journey—unplugged from the world in the best way. Each of the three locations I’ve highlighted could have easily accommodated a week's-long stay.
I purchased whiskey from a liquor store on three occasions. A similar but less than feared premium over home prices prevailed—maybe about ~20%. I was reminded that the high rates of alcoholism—blamed partially on the long nights during the long winter—are the reason for AK's very regimented alcohol laws including prominent and repetitive sign posts.
Had a last night in Anchorage to make the flight departure easier. This allows for a couple of Anchorage recommendations.
We stayed at the La Quinta, which was nice from a location and upheld-brand perspective, but it did have a big homeless concern with street people actively crossing the parking lot constantly. We were told by several staff to take everything out of our car and make sure it was locked. So, probably recommend?
Campbell Airstrip Trails (Beware the recent bear activity; yes, a little contradictory to my remarks above, but I never said they were always harmless.)
Earthquake Park (The 1964 earthquake still leave quite a mark on this part of Alaska including Seward—truly an amazing, terrible event.)
Did not account for all the fishermen (bringing back frozen fish in boxes) making the bag drop line sooooo looooong. The line did move fast taking only about 20 minutes. Alaska Air continues to be very good.
On that note, is the bag drop process part of how air travel is broken? Must we have this bottleneck plus the other option where we have a bad incentive from free carry-ons?
Overall Alaska summary: Beautiful and awe inspiring. Much more desolate than I expected. Not always in a bad way, but from the terrifying mud flats to the mountains and valleys with mostly only passive (plant) life, it is not a dense wildlife safari. It is a vast expanse on the edge of the world. More dessert than jungle for sure. Then again, I'm from the plains/south where summer outdoors means bugs (and animals) everywhere. It is easy to do logistically and WELL WORTH it despite the expense. Then again, it probably is fairly competitive in price to places comparable in experience.
GO NORTH TO ALASKA!
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It is good to shake things up. These three links certainly do that compared to my normal compendia.
We start with Adam Mastroianni giving us the harsh truth: We are all crazy people. Fortunately, he offers a solution to our nuttiness in the form of unpacking.
The Coffee Beans Procedure is a way of doing what psychologists call unpacking. Our imaginations are inherently limited; they can’t include all details at once. (Otherwise you run into Borges’ map problem—if you want a map that contains all the details of the territory that it’s supposed to represent, then the map has to be the size of the territory itself.) Unpacking is a way of re-inflating all the little particulars that had to be flattened so your imagination could produce a quick preview of the future, like turning a napkin sketch into a blueprint.1
When people have a hard time figuring out what to do with their lives, it’s often because they haven’t unpacked.
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When you fully unpack any job, you’ll discover something astounding: only a crazy person should do it.
Do you want to be a surgeon? = Do you want to do the same procedure 15 times a week for the next 35 years?
Do you want to be an actor? = Do you want your career to depend on having the right cheekbones?
Do you want to be a wedding photographer? = Do you want to spend every Saturday night as the only sober person in a hotel ballroom?
If you think no one would answer “yes” to those questions, you’ve missed the point: almost no one would answer “yes” to those questions, and those proud few are the ones who should be surgeons, actors, and wedding photographers.
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Some of you guys wake up at 5am to make almond croissants, some of you watch golf on TV, and some of you are willing to drive an 80,000-pound semi truck full of fidget spinners across the country. There are people out there who like the sound of rubbing sheets of Styrofoam together, people who watch 94-part YouTube series about the Byzantine Empire, people who can spend an entire long-haul flight just staring straight ahead. Do you not realize that, to me, and to almost everyone else, you are all completely nuts?
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That’s certainly true for me, anyway. I never unpacked any job I ever had before I had it. I would just show up on the first day and discover what I had gotten myself into, as if the content of a job was simply unknowable before I started doing it, a sort of “we have to pass the bill to find out what’s in it” kind of situation. That’s how I spent the summer of 2014 as a counselor at a camp for 17-year-olds, even though I could have easily known that job would require activities that I hated, like being around 17-year-olds. Could I have known specifically that my job would include such tasks as “escorting kids across campus because otherwise they’ll flee into the woods” or “trying to figure out whether anyone brought booze to the dance by surreptitiously sniffing kids’ breath?” No. But had I unpacked even a little bit, I would have picked a different way to spend my summer, like selling booze to kids outside the dance.
It’s no wonder that everyone struggles to figure what to do with their lives: we have not developed the cultural technology to deal with this problem because we never had to. We didn’t exactly evolve in an ancestral environment with a lot of career opportunities. And then, once we invented agriculture, almost everyone was a farmer the next 10,000 years. “What should I do with my life?” is really a post-1850 problem, which means, in the big scheme of things, we haven’t had any time to work on it.
Next is Erik Hoel in Part 2 of his Field Notes for a Child’s Codex: More Lore of the World.
Walmart
Walmart was, growing up, where I didn’t want to be. Whatever life had in store for me, I wanted it to be the opposite of Walmart.
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Now, as a new parent, Walmart is a cathedral. It has high ceilings, lots to look at, is always open, and is cheap. Lightsabers (or “laser swords,” for copyright purposes) are stuffed in boxes for the taking. Pick out a blue one, a green one, a red one. We’ll turn off the lights at home and battle in the dark. And the overall shopping experience of Walmart is undeniably kid-friendly. You can run down the aisles. You can sway in the cart. Stakes are low at Walmart. Everyone says hi to you and your sister. They smile at you. They interact. While sometimes patrons and even employees may appear, well, somewhat strange, even bearing the cross of visible ailments, they are scary and friendly. If I visit Walmart now, I leave wondering why this is. Because in comparison, I’ve noticed that at stores more canonically “upper class,” you kids turn invisible. No one laughs at your antics. No one shouts hello. No one talks to you, or asks you questions. At Whole Foods, people don’t notice you. At Stop & Shop, they do. Your visibility, it appears, is inversely proportional to the price tags on the clothes worn around you. Which, by the logical force of modus ponens, means you are most visible at, your very existence most registered at, of all places, Walmart.
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Cicadas
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After digging out of their grave, where they live, to reach the world above, where they die, cicadas next molt, then spend a while adjusting to their new winged bodies before taking to the woods to mate. Unfortunately, our house is in the woods. Nor is there escape elsewhere—drive anywhere and cicadas hit your windshield, sometimes rapid-fire; never smearing, they instead careen off almost politely, like an aerial game of bumper cars.
We just have to make it a few more weeks. After laying their eggs on the boughs of trees (so vast are these clusters it breaks the branches) the nymphs drop. The hatched babies squirm into the dirt, and the 17-year-cycle repeats. But right now the saga’s ending seems far away, as their molted carapaces cling by the dozens to our plants and window frames and shed, like hollow miniatures. Even discarded, they grip.
“It’s like leaving behind their clothes,” I tell your sister.
“Their clothes,” she says, in her tiny pipsqueak voice.
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Against our will the Bourbon Brood has scheduled something in our calendar, 17 years out, shifting the future from abstract to concrete. When the cicadas return, you will be turning 21. Your sister, 19. Myself, already 55. Your mother, 54. Your grandparents will, very possibly, all be dead. This phase of life will have finished. And to mark its end, the cicadas will crawl up through the dirt, triumphant in their true ownership, and the empty nest of our home will buzz again with these long-living, subterranean-dwelling, prime-calculating, calendar-setting, goddamn vampires.
Last is Scott Sumner (sorry, not sorry about another Sumner link this weekend). Here he is writing on the mid 1960s when music went supernova:
“It’s just boomer nostalgia.” Maybe, but I first started listening to music in the 1970s. Back in 1975, I might have cited 1971 as the best year. It’s only much later that I came to view the mid-60s as the key period. At that time, I was 10 years old and living in a non-musical household with no record player. Very little pop music was on TV. I had no idea that songs like Tomorrow Never Knows and Visions of Johanna even existed, and if I’d heard them I might not even have recognized them as being music.
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OK, so what makes the mid-60s special? Lots of things. This was when global population growth peaked at 2.1%, the highest rate in human history, and given current trends that fact will continue to be true for centuries to come. This was when the Great Inflation began, which is the event that more than any other shaped my views on economics. But today I’ll focus on pop music, specifically the roughly 14 months between the date when the Rolling Stones released the single Satisfaction (6/4/65) and the date when the Beatles released the album Revolver (8/5/66). Barely more than a single year.
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Indeed 5 of the 6 albums I’ve mentioned so far are in the top 32 of all time, and 4 of those 5 are in the top 11. All 5 were issued within a 14-month period. Even if you think its boomer nostalgia, why are they so bunched up in such a short period of time?
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But that’s not all!
Mick Jagger and Keith Richards are also an outstanding songwriting duo.
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Paul Simon is another all-time great songwriter, and his first big hit (The Sound of Silence) came out in January 1966.
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The Byrds invented folk rock, and put out three albums during that period.
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The Who came out with the album My Generation, and its title track might be regarded as the very first punk rock song.
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Even this almost absurd cornucopia of riches overlooks all the singles that were not included on albums. Today, artists who wrote songs like Satisfaction and Positively 4th Street would not leave them off their albums. During this period the Beatles released We Can Work It Out, Day Tripper, Paperback Writer, and Rain as singles. (Listen to Ringo’s drumming on Rain.) Imagine how good Rubber Soul and Revolver would be with those songs added. Dylan left great songs like She’s Your Lover Now off Blonde on Blonde, and didn’t even bother releasing it as a single. They were tossing away songs that would be a crowning achievement of most pop songwriters.
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I haven’t even mentioned Motown. Marvin Gaye, Otis Redding The Temptations, The Supremes, the Four Tops, Martha & the Vandellas, Stevie Wonder, and Aretha Franklin. Many all time classic Motown songs that you still hear on the radio or in movie soundtracks came from the mid-1960s.
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Who can ever forget how Wong Kar Wai used California Dreaming (from December 1965) in the 1994 film Chungking Express? (Amazingly, the best French New Wave film was produced in Hong Kong.) Garage rock began in April 1966 with the song Wild Thing.
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Beginning around 1965, the pop music industry changed. Instead of performers, pop music began to be dominated by singer-songwriters. (In the 21st century, performers have come back into style.)
So how does one become a successful singer-songwriter? The answer is simple, be born in an English-speaking country in the early 1940s. The world has about 8 billion people. Roughly one half of 1% of the world’s population was born in English speaking countries like America, Canada, the UK and Jamaica, between the years of 1940 and 1945.
Pop songwriters born between 1940 and 1945 include: John Lennon, Paul McCartney, Bob Dylan, Paul Simon, Brian Wilson, Lou Reed, Mick Jagger & Keith Richards, Pete Townsend, Joni Mitchell, Neil Young, Van Morrison, Ray Davies, Smokey Robinson, Carole King, Bob Marley, Lamont Dozier & Brian Holland, and Randy Newman. That’s 17 of Rolling Stone’s all time top 30 songwriters, and 10 of the top 12. What’s the second best 6-year stretch of songwriters? I don’t know, who finished second to Secretariat in the Belmont Stakes?
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Occasionally, I stop by at a trendy independent coffee shop, to check out one of their new flavored concoctions. I always have the same problem. The young barista asks me some questions, and I cannot make out what she is saying. It’s a combination of the young woman speaking fast, me being a bit hard of hearing (too much rock music), and me not anticipating questions like whether I want oat milk, or whether I want the latte hot or cold. I feel like an old fossil amongst all the young people looking cool as they work on their laptops.
But then the music comes on and it’s from the mid-1960s. Ah ha! Maybe I’m not hopelessly uncool after all. Twenty years ago when sitting in a Starbucks, the music might also have been from the 1960s. But probably not from the 1940s. And forty years ago the music might also have been from the 1960s, but almost certainly not from the 1920s. And 60 years ago the music might also have been from the 1960s, but certainly not from 1905.
The post is a masterpiece.
As a favor to yourself, read all three of these links, please.
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A lot of economic experts, most financial market participants, and basically all business journalists get most of the following wrong. So if you find this surprisingly insightful if not downright contradictory to what you’ve been told, know you’re in good broad company.
I believe that the Great Recession was caused by a tight money policy during 2008. Probably fewer than 1% of economists agree with me. Most blame the housing slump and the subsequent banking crisis.
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I claim the Fed could have and should have continued steering the economy along a 5% NGDP growth path. Their failure to do so caused the Great Recession. My critics raise two objections.
One argument is that the housing slump and banking crisis were severe real shocks that would have caused a recession even if NGDP had kept growing at 5%, just as Covid likely would have caused a recession even with sound monetary policy. But before the tight money began, housing had been slumping for nearly two years (during 2006 and 2007) without any significant negative effect on the broader economy. And the post-Lehman banking crisis was largely caused by a recession that began nine months earlier and was itself caused by tight money. More a symptom than a cause.
In a counterfactual where the Fed kept spending growing at 5%/year, the banking crisis would have been far milder, analogous to the March 2023 banking crisis when Silicon Valley Bank and First Republic Bank both failed. Many economists thought this smaller crisis would slow the economic recovery, but it did not. Economists tend to overestimate the importance of real shocks. Today, the 2023 banking crisis is largely forgotten. As an aside, the initial Trump tariffs might have been a severe enough real shock to have caused a mild recession, even if the Fed maintained 4% or 5% NGDP growth. The new reduced tariffs will be unlikely to cause a recession unless the Fed fails to maintain adequate spending growth.
Along similar lines, the 1929 stock market crash is more famous than the 1987 crash, even though the latter was almost identical in magnitude, occurred much more recently, and occurred at a time when far more Americans owned stocks. The explanation is simple. After the 1987 crash, the Fed adjusted monetary policy to keep NGDP growing at a steady rate. The economy not only avoided another Great Depression, there was no economic slowdown at all. The 1987 crash shows that the Fed can and should adjust monetary policy to prevent financial turmoil from impacting the broader economy.
The entire post is very valuable reading not just because it gives insights into deeper thinking about that period of economic history but also because it shows how, as Sumner says,
Monetary economics is a sort of Alice in Wonderland world, where nothing is quite what it seems. Low interest rates can represent easy money, but usually they do not. Quantitative easing can represent easy money, but usually it does not. Because monetary policy operates in such a counterintuitive fashion, it often gets misinterpreted. If a tight money policy is misjudged as easy money, it will not be surprising that economists become pessimistic about the prospects for easy money to stimulate the economy.
The simplistic narratives that continue widespread today range from half-baked stories that don’t add up (or stand up to the scrutiny of the data) to continuations of the motivated reasoning that arose in the midst of the chaos back then. These too don’t stand up to scrutiny. In all cases defenders of them either deny the logical/evidential problems or simply keep adding epicycles to keep their theories theoretically alive.
So it was unsurprising when Sumner needed a follow-up post a few days later.
Commenters cited a myriad of things that went wrong with our financial system in the lead-up to what came to be called the “Global Financial Crisis.” But my post wasn’t about the GFC, it was about the Great Recession. The post focused on showing how the Great Recession was caused by tight money, not by the financial crisis. I don’t doubt that The Big Short is full of fascinating observations about our financial system, but that wasn’t the topic of the post.
Here’s an analogy. During February and March of 1933, the US experienced that worst banking crisis is US history. Many banks remained shut down for much of 1933. So how did the economy do? Industrial production rose 57% between March and July 1933, the fastest rate in US history. That’s because the US also had the most expansionary monetary policy in US history—a sharp devaluation of the dollar after more than 50 years of pegging at $1 = 1/20.67 ounces of gold. Monetary policy drives the business cycle, not financial turmoil.
If you read my critics, you would have assumed that the economy did poorly during March through July 1933. You would also assume that there’s nothing that monetary policymakers could have done with thousands of banks shut down and interest rates stuck at zero. Neither statement is true. Monetary stimulus more than offset the worst banking crisis in history.
The GFC was not the Great Recession; they were two distinct events.
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So why not just say, “The Fed should have done more”, a claim that many would agree with, and indeed a proposition endorsed by Ben Bernanke in his post-Fed memoir? Why be so provocative?
My goal here is to move thinking about monetary policy from the widespread impression that it consists of a series of gestures that might or might not “fix problems” to a perception that it’s more like a captain steering an ocean liner.
Bus drivers don’t fix steering problems, they try to avoid creating problems by driving sensibly. I believe it would be very helpful if the Fed were to stop thinking in terms of fixing problems, and instead focus on refraining from creating problems. I’d like to see central banks take ownership over the value of money, and by implication the broader nominal aggregates, because their monopoly on base money gives them a responsibility that they cannot dodge.
Often, I personally run into well-credentialed and experienced people making this mistake of thinking the Great Recession = the Global Financial Crisis. I’m sure I’ve actually conflated the two myself on occasion.
Beyond that, though, I don’t make the mistake of thinking the GFC cause the recession. And I’ve understood since early on (from reading Sumner among others) that the Fed was the major culprit in the recession and contributor to the GFC indirectly (tight monetary policy) and directly (crafting TBTF bailouts, failing to then bailout Lehman). And yes, the Congress and U.S. Treasury deserve a lot of blame on the direct part of the GFC’s magnitude.
Of course, bad policy doesn’t stop even when it finally specifically stops. There are always knock-on effects. Loyal readers know where I’m heading next—Housing Policy.
Clowns to the left of us (whose cruelties are, blessedly, procedurally limited by the rule of law), jokers to the right (exacting cruelties at the whim of a dictator), and here we are, stuck in the middle.
I’m bad at politics. I’m probably bad at attracting readers, too. Insulting people isn’t good public relations. But I don’t know what else to call this.
The leftist critics of the Abundance agenda that like these bills are similar to people who can believe in 2025 that lending standards are still too loose. They are too far gone to be reasoned with. You don’t win policy debates by explaining to people that they are prejudiced. So, how do you approach a topic that is entirely driven by prejudice? You have to hope that everyone else can add up to 50.1% of the votes to defeat it. I think that’s where you have to put your efforts. And, I think you have to be very careful trying to find common cause with activists that are drawn to these bills, even if they are otherwise YIMBYs.
That means that these bills will never go away. We just have to hope to stop as many of them as possible for as long as possible. I’m afraid that with the passage of time, that seems like a guaranteed losing proposition. Texas passed many great YIMBY reforms this session. There were 4 bills filed to limit single-family landlords. They all failed to advance. But there were 4 of them.
Note that his post was written before Zohran Mamdani’s victory in the NYC primary. So if any thing, the momentum signal is stronger.
The moral crusade to fix housing policy by exorcising all the demons has brought us to the last boss—Wall Street Investors. How unironic that we’ve circled back to them since that is where much of the GFC moral panic arose in the first place.
As Erdmann discusses, somehow we are going to make housing cheaper and more available by . . . making owners sell it and, therefore, jeopardize the housing future for current tenants. If the tenants couldn’t buy housing and instead had to rent it in the first place, how are they better off by these transactions forced upon their landlords?
Note how this will gain traction within the corridors of NIMBY nonsense regarding the undesirability of renters. That makes this Bootleggers and Baptists story really just a tale of Dumb and Dumber.
Not all mistakes in housing policy are quite so easy to foresee. Lurking behind every public policy is the terrifying gingivitis! known as unintended consequences.
As a result, sellers who thought they would save money by paying, say 3%, to their own agent and 0% to the buyer’s agent faced a lot of problems they didn’t anticipate. When buyers discover this arrangement, more than likely it’s time to move onto another listing that pays their agent. A smaller pool of buyers will translate into fewer offers and lower home prices. This explains the lack of change in the commission structure a year later. The traditional 3%-3% split seems to be an equilibrium towards which the market naturally gravitates.
Indeed, the largest change from last year is that the plaintiff lawyers got massively rich. The plaintiff’s lawyers walked away with a third of the settlement- $208 million- and the estimated 50 million affected homeowners will pocket $8 on average, if they bother to apply for past damages.
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The NAR is not an all-powerful oligopoly, contrary to The New York Times reporting. Companies like Open Door and Redfin often pay commissions closer to 2% but they are not that popular, with less than 1% of the market. For sale by owner (FSBO) is another option for every homeowner. Most pass because they will get a lower home price, and more hassle in selling their home. The FSBO market share hit an all-time low of 7% in 2023 according to NAR statistics.
In other words, even though there are alternatives, most buyers and sellers aren’t seeing the value proposition. Any hungry new real estate company could enter the market paying lower commission splits, yet this is rare. More than 9 in 10 home buyers and sellers apparently prefer the traditional approach of having a highly personal interaction with an agent from a trusted real estate company.
The reason: Buyers and sellers got a reminder that agents provide value that is both tangible and intangible, and often difficult for newcomers to foresee. They have connections to reputable service providers, checking on everything from plumbing to roofing, understand the fair market value of a home relative to other homes in the area, and provide intuition on the negotiating position of the buyer or the seller.
In addition, there are intangibles that include an agent navigating a client’s idiosyncratic tastes that may differ from the spouse, local environment, style of the home, and much more.
By attempting to shut down important information about disclosing commissions on MLS, the unintended consequence of the NAR lawsuit could have been a decline in new homeowners, unable to come up with cash payments for their agents. Luckily, the market innovated with information hacks that helped these prospective homeowners dodge a bullet.
Among many attributes, each of the stories above share what can be summed up in a pithy lesson: Attempting to script free market outcomes is not the same thing as allowing free market outcomes.
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