Adios, Human Intelligence

Welcome to This Week’s Leyendecker View

Our world is coming unhinged, and we seem incapable of coming together to respond.
– António Guterres, UN Secretary-General

A BIG THINK

Adios, human intelligence.

The news this last week that ChatGPT can now create images made me wonder what illustrators are now going to do for work. Of course, the world of illustration won’t succumb to AI overnight, but let’s not forget that ChatGPT came on the scene less than a year ago. Now it can put illustrators out of business.

Not long ago I saw this article suggesting that the British lack the qualities needed to survive the post-industrial age. It made me wonder how many people, companies and countries lack the qualities to survive the post-industrial age. I guess we first have to be able to predict the future accurately to understand what skills and qualities are needed to survive it. Good luck with that.

What does it mean to be post-industrial anyway? If the post-agricultural age was the industrial age, then it would appear the post-industrial age is the information age, or the technology age—the age where AI puts illustrators and others out of work. But there’s a really big difference between these two macro-economic transitions.

The industrial age created higher-paying physical labor jobs. The agricultural worker moved from the field to the factory, earning higher wages along the way. But the technology age is not creating better-paying physical labor jobs. At best, it’s creating higher-wage technology jobs, and now AI is now threatening a whole host of those very jobs.

As suggested in a previous TLV, despite the amazing technological progress we have made since the 1980s, real labor wages have barely budged. At the same time, all manner of mental and physical health challenges have risen measurably. 

So over the last forty years, government debt to GDP has exploded to mitigate the economic and social damage that have coincided with the technological age. Imagine how our debt to GDP is going to grow even more and maybe even faster as AI works its “magic” at, likely, an exponential rate of innovation.

The innovations of the technological age may have enriched some people, but the benefits have eluded a large section of our population. A great number of Americans can no longer afford a house or a car. 

Workers are now even more worried about their futures. The auto and Hollywood union strikes tell us so. What’s most interesting here is that one union represents physical workers, while the other represents service workers. So now we have both physical labor and service labor concerned about their futures.

And with AI, it seems obvious we are about to experience something even more socioeconomically challenging.

Exactly why is artificial intelligence now seemingly more interesting and more important than human intelligence?  

Are humans of no more value to the masters of today’s technologies, other than to serve them a cappuccino, fix their meals and/or clean their bathrooms? Is AI going to create an even wider spread between the have-mores and the have-lesses?

All this leads me to conclude that…

While technology may be able to advance according to Moore’s law, our legacy infrastructures, institutions and workers cannot. 

What are the consequences when technology pushes society too far over its skis?

THE ECONOMIC VIEW

The Fed isn’t backing down
Are more interest rate rises coming?
Wall Street would not like it.
Higher rates for longer, maybe forever
Leading economic indicators keep falling

Federal government debt hits $33T
Celebrate, celebrate, dance to the music!

Student loan repayments resume
Will this be a drag on our economy?

THE INFLATION BOGEYMAN

Paul Krugman says inflation is low.
If you exclude the things people buy

Lessons from the history of inflation
It generally doesn’t go away easily.

The Fed’s new challenge?
The price of oil

THE LABOR VIEW

Jobless claims at lowest of the year
The job market remains resilient.

American labor has a big problem.
It isn’t productive enough
Commuting to work could be the culprit

The hot new post-MBA job?
Acquire and run a small company

The workplace shroom boom
Elon Musk and Sergey Brin do it.

MEANWHILE IN EUROPE

German bankruptcies rising sharply
Tough duty in Europe.
Corporate sustainability reporting is here.
Germany wants to exempt its small businesses

European governments pitch to citizens.
Want to buy our debt?

Where the EU exports its waste
Can’t live up to their own green standards?

GLOBAL

Mexico cartels lure more recruits
Do the cartels control Mexico?

Ghana seeks its 17th IMF bailout since 1957
Should it merge with another country?

Oil has been Colombia’s biggest export.
But cocaine is about to top it

PLAYING WITH FIRE

Wheat prices fall
Russia has a bumper crop.

Poland backs off Ukraine support
There’s a tiff on ag products going on.

Russian oil & gas revenue is rising
They have plenty of other buyers than Europe.

GEOPOLITICAL UNRAVELING

Chinese jets aren’t just circling Taiwan
They’re practicing.

China may build nuclear plant for Turkey
Not the US, not Europe, but China.

Russia and Iran get cozier
Russia and China get cozier, too
China cozies up to Argentina
Does the West have its head in the sand?

FINANCE

Goldman raises $15B
To buy into struggling PE funds.
PE has some tough choices to make
As distressed portfolio companies surface.

The number of PE investors
May shrink measurably over the next decade

The tech trade is showing cracks
Could be time for a re-pricing.

Treasury yields at 16-year high
Conservative savers finally get some relief.

REAL ESTATE

Housing affordability is dismal
Will wages rise to help?

SF office buildings are finally selling
At steep discounts.

Mortgage rates top 7%
Everyone knows they’ll come down, right?

TECHNOLOGY

Donate your brain to tech.
Neuralink is looking for volunteers
Just hope you don’t have the monkey experience

MIT says social media is polluting society
You don’t say, eh?

Do we need an FCC for big tech?
Elizabeth Warren thinks we do

THE CHAT ON AI

ChatGPT can now create images
So long, illustrator jobs.

The AI revolution has arrived
More billions for billionaires?

AI was just given a test for human creativity.
And it beat the test

THE NEXT NORMAL

Here comes the college crisis.
More are on the verge of closing

Once a struggling ecosystem
The coast off Long Island is teeming with fish

Oregon legalizes psilocybin access
Lots of people are ready to trip out.
MDMA (ecstasy) is a good PTSD treatment
Suggests new study.

THE WAR ON CARBON

Big companies struggle to meet climate promises
Maybe they need to jack up prices.
UK needs to backtrack on their commitments

Thousands in NYC protest fossil fuels
Probably not a single scientist or economist among them.
RFK, Jr. pledges to ban fracking

No scientist or economist here, either.
Now he’s backtracking

THE NEW ENERGY TRANSITION

China controls the solar market.
Is this a security risk for the US?

California needs $370B electricity investment
To meet exploding electricity growth.

EU worries about China’s green future
Like China cares what the EU thinks?
Plus Europe needs China’s critical minerals

THE EV DREAM

Turkey wants a Tesla factory
Will Israel want one, too?

EV batteries from recycled materials
Might be close to a reality.

The China EV price war
Might be coming to an end

THE CHINA SYNDROME

China’s economy may get better.
But foreign investors don’t care

The housing crisis gets worse
Real estate is the Godzilla of China.

China sanctions US defense makers
For selling arms to Taiwan.

China’s economic woes
May be worse than Japan’s lost decades.

THE WASHING-TONE

Another government shutdown soap opera
Come on, man, our debt is only $33 TRILLION!

Biden gives work permits
To 470,000 Venezuelan illegal immigrants.
So here come more migrants!

While Washington was negotiating with Iran
They were selling more and more oil

MAKING A BETTER YOU

Forest bathing is for everyone
Here’s how to do it.

The science of meditation
Is still evolving.

Get healthier with NEAT
Non-exercise activity thermogenesis.

HOW ABOUT A BREAK

The US loves unusual sports.
Are we ready for gravy wrestling?

The top 20 franchises to consider
If this is something that appeals.

Americans’ views on marriage
Most people are way for it.

TAKE SOME TIME OFF

Interested in carbon-neutral vacations?
What you need to know

50 potential new World Heritage Sites.
Here’s what’s on the list

Want to see fall foliage turn?
These are the top 10 spots
Here are 6 scenic fall drives

SONG OF THE WEEK

“Rocky Top”
The Cotton Pickin Kids covering the Osborne Brothers.
Ding dang durn, they is special!
Lyrics are poetry, ya know.

Bonus track:
“Boil Them Cabbage Down”

CASTING AROUND THE PODS

The All-In crew interviews Larry Summers
When will inflation subside? And what about a soft landing?

VIDEOS OF THE WEEK

The Tiny Worlds Inside Puddles
An entire microworld at our feet.

The early bird and the night owl
Is one more productive?

Priscilla teaser.
Her Elvis story, as told by Sofia Coppola.

FROM THE HEADHUNTER’S KITCHEN

A supermarket rotisserie chicken
Can feed you for a week with these recipes

The best cookbooks coming out soon
Just in time for the holiday season.

Want awesome breakfast potatoes?
Then cook them in bacon grease

THE RANDOMS

The early bird may get the worm, but the night owl gets the field mouse. Which has more nutritional value per unit of effort?

I was just thinking of what the world would be like if tomorrow we banned all oil and gas. It reminded me of the movie, A Day Without a Mexican.

One of the biggest problems humans seem to have is the inability to understand what we need to do and then to go do it. Fear and routine regularly get in the way.

There’s an interesting data point I noticed in a WSJ op-ed about the auto workers strike. While the US autoworker is currently making $75,000 to $80,000 a year, the median annual wage at Tesla is $34,000 a year. Elon Musk is not just a genius. He must also be a god to get people to work for him at this pay level. You think people in the US can live a comfortable life at that wage? Maybe they all have stock options.

The Walter Isaacson interview in last week’s TLV about the mind and ways of Elon Musk got me thinking…What are my demons, and how might they influence my superpowers? Wait, I got superpowers? 

With the UAW demanding higher wages, with Tesla way out front in EV sales and brand recognition, and with the coming onslaught of cheap Chinese EVs, not to mention all the coming European models, how will US automakers survive? Oh yeah, Washington will give them more subsidies and eventually restrict Chinese imports.

Whatever deal union auto workers make with the auto companies, it will probably be their last. With the need for fewer parts in EVs plus the rise of robotics, the number of auto worker jobs is only going to shrink. Kind of feels weird to say, but auto workers today look like the buggy makers of yesteryear. Where will their replacement jobs come from? Starbucks and Chipotle?  Let’s hope reshoring of manufactured goods provides those replacement jobs.

Outstanding student loans currently stand at about $1.7T. Who let this happen? Why did it happen?

IN CASE YOU MISSED IT

Mexico Blows by China
September 15, 2023

Don’t Count Out China
September 7, 2023