The Trump tariff regime is premised on limiting imports into the U.S. Perversely, this reduces the Treasurys that foreigners buy. That, and a dollar down by 10% since Donald Trump took office (not against the yen) is a deliberate attempt to make imports more expensive—one reason inflation is still more than 3% and the 10-year is at 5%. Mr. Bessent has been jumping through hoops with short-term fixes that don’t work.
Desmond Lachman reports this about Scott Bessent:
Rufus Miles, an American government administrator, famously said that where you stand on an issue depends on where you sit. This aphorism seems all too true of Treasury Secretary Scott Bessent. As a young man, Bessent made his reputation and fortune as one of George Soros’s traders by taking advantage of governments’ economic policy mistakes. Today, as treasury secretary, he is committing the same sort of economic policy mistakes that other economic policymakers have made. That is creating the trading opportunities for today’s hedge fund traders that he was once so ready to exploit.
“‘It’s awful’: How tariffs, soaring fuel costs and higher interest rates are squeezing American companies.” (HT Scott Lincicome)
Adjusting for population, California has more than 16 times as many social-assistance outfits as Florida and five times as many unsheltered homeless people. And Californians wonder why homelessness keeps increasing even as the government keeps spending more to combat it.
Democratic lawmakers in Sacramento are asking voters in November to approve another $11.25 billion in state borrowing to finance more “affordable” housing, even though they acknowledged during hearings this spring that the state wasn’t doing enough to track how homeless money is spent.
In April 2024, California’s auditor reported that the state had spent $24 billion on some 30 programs to combat homelessness over the preceding five years yet lacked “information on the ongoing costs and outcomes of its homelessness programs.”
Simultaneously, more than a decade of regulatory pressure forced Fannie Mae and Freddie Mac to lower their underwriting standards — a shift that soon infected the entire industry. The Community Reinvestment Act, federal agencies, and the Department of Housing and Urban Development all pushed for reduced mortgage underwriting standards. More people were able to buy a home — even if they couldn’t afford it.
If teachers unions put as much effort into improving test scores as dodging accountability, students in New York’s public schools would have markedly better chances for success in life.
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The Progressive Policy Institute, a center-left think tank, found recently that stronger presence of teacher unions in a state is negatively correlated with the adoption of literacy programs.
What’s more, outside the domain of mathematics, some things might be fundamentally irreducible to the satisfying absolutes of numbers. This may now count as heresy in certain quarters, but it’s what the ancients knew: “Our discussion will be adequate if it has as much clarity as the subject matter can sustain,” wrote Aristotle in his Nicomachean Ethics. Politics, morality, and human action “admit of much dispute and variability.” They are fundamentally unpredictable: It is as silly to apply mathematical proof to an ethical deliberation as it is to vote in Congress on the surface area of a cube.
Perhaps this is why the forecasts of our most supposedly hyper-rationalist intellectuals keep falling so embarrassingly flat, and why they persist in making new ones just the same. In 1992, Al Gore wrote that “up to 60 percent of the present population of Florida may have to be relocated” — according to some predictions — “in the next few decades.” Florida has remained firmly in place, but that didn’t stop Al Gore from making equally self-assured — and wrong — declarations in his 2006 documentary, An Inconvenient Truth.
AI is not a Segway, and Dario Amodei is by no means as far off the mark as Al Gore. Deep learning technology has already revolutionized many industries, and its effects on us — for good and ill — will likely continue to be profound. Now that AI leaders across the industry are raising concerns about an imminent spike in the dangers and capacities of the technology, it makes sense to take those concerns seriously.
But not to take them as gospel. It would lower the temperature of the current AI conversation substantially if we could recall that neither Amodei, nor Sam Altman, nor Elon Musk, nor you, nor I — no, not even the angels, but only the Father in Heaven — know the future with anything like mathematical certainty.
This is America, after all, and we don’t govern ourselves by the certainties of very intelligent people, even if those certainties come with equations attached. Choosing a reasonable and wise path forward is not merely a matter of crunching numbers but of public debate, moral reasoning, and level-headed deliberation based on our best current knowledge and inherited wisdom. Anything more or less than that is beneath us.
