A Manufacturing Boom Is Coming

Welcome to This Week’s Leyendecker View

I want to be free. I want to be independent. I want to be powerful.
I want to be creative. I want to be alive. 
 – Bing’s AI Chatbot, Sydney

A BIG THINK

In 2009, as the Global Financial Crisis was unfolding, I started to say:

Technology is destroying jobs faster than our natural economy can replace them.

Since 2009, the number of jobs has grown from around 110MM to around 152.5MM. Many might say that, back in 2009, I was an anti-technology, anti-progress Luddite. 

Yes, the number of jobs has grown by 50% since 2009, so technology obviously was not destroying more jobs than our economy could create to replace them. But maybe there’s another factor at play than natural economic forces. 

Since 2009, total public debt has grown by 200%, debt to GDP has increased by about 100%, total consumer debt by about 50% and the Federal Reserve’s balance sheet has gone from just under $1T to almost $9T.

During this same period, median household income only grew about 13%, not a very impressive number given the massive amount of fiscal and monetary stimulus.

So were organic economic forces behind the job growth since 2009, or was it massive fiscal and monetary stimulus? Until someone shows me otherwise, I conclude that a very large share of job growth since 2009 came from massive fiscal and monetary stimulus.

Today I would describe technology’s influence a bit differently:

While technology may be able to advance at the speed of Moore’s Law, our legacy institutions and our worker skills cannot.

It seems obvious that the speed of “innovation” is far outpacing the speed at which legacy institutions (including government) and workers can keep up. 

ChatGPT’s CEO, Sam Altman, believes that in ten years AI will generate enough wealth to pay every adult in the US $13,500 a year in universal basic income. Now where does Sam think this money is going to come from?  

Will taxes on technology companies, executives and investors rise dramatically so government has the money to pay out Sam’s envisioned UBI? Do you think the people with most of the money (the tech crowd) will let the government get away with heavier levies on their income? And what kind of lifestyle can $13,500 provide for someone whose job has been replaced by AI, computers and/or robots?

The AI debate is important for everyone to dive into, since there are some who think it could lead to the destruction of humanity. So could nuclear weapons, one might say. But nuclear weapons are not in the hands of virtually every person on the planet.  

I suggest you read the two alternative visions of AI we linked to in The Chat About AI section below.

THE ECONOMIC VIEW

Workers are raiding their retirement savings
At a record rate.

The latest BLS employment report
Shows a recession red flag

Consumers may be more optimistic
But their spending doesn’t show it
Restaurant Performance Index posts decline

THE INFLATION BOGEYMAN

US inflation down to 3%
Used car prices fall hard
China’s inflation rate is 0.0%
Producer price index keeps falling
Time to prepare for deflation?

The WSJ inflation tracker
What costs less, what costs more.

Oil prices start to rise again
Best postpone the deflation talk.

We have not won the inflation battle
Says former Treasury chief, Larry Summers

THE LABOR VIEW

The digital workplace broke our brains
Just when we need them most.

2018-2022 workforce growth
Markets that grew, markets that shrank.

WFH is sticky for lots of jobs
For some jobs, it’s more productive.

MEANWHILE IN EUROPE

Sweden to build city from wood
For lower carbon footprint—until it goes up in flames.

Is a geothermal boom in the cards?
Europe still needs to replace Russian gas.

People in the UK
Are not happy with socialized medicine

GLOBAL

Turkey backs Sweden
In bid to join NATO.
Were US F-16s the bargaining chip?

Foxconn dumps big India chip plans
Did the CCP lay on the pressure?

Immigration backlashes spread
Is the exodus from poor to rich countries happening too fast?
Dutch government collapses

PLAYING WITH FIRE

Biden braces NATO for a long war
Most likely a message for Putin.

Is the US providing cluster bombs
To spur Russia to the negotiation table?

The countries aiding Ukraine
And their commitments so far

THE NEW COLD WAR

South Korea seeks NATO connection
NATO nurtures influence in Asia.

The Middle East is swimming in cash.
China may be the beneficiary

China invests in Pakistani nuclear plant
More autocrats cozy up?

FINANCE

The last 200 IPOs
In case you’re curious.

As exits become scarce
Private equity is in a scramble.

America’s biggest banks
Need more capital

Cash is drying up
For later-stage VC companies
Company “extinction events” are coming

REAL ESTATE

Is an American manufacturing boom underway?
Plant construction is exploding

McKinsey calls it.
Hybrid work is here to stay
And it’s set to wipe out $800B from office values

SpaceX owns the rocket launching biz
Elon Musk, the modern Thomas Edison.

TECHNOLOGY

Crypto? What crypto?
VCs go all in on AI
Even the Metaverse is dead

EU approves new data transfer rules
Big tech comes out pretty clean.

As VCs head for the exits
Corporate titans fill a void
Dead IPO market kills VC fundraising

THE CHAT ON AI

The AI avalanche
Is drowning the corporate world

AI junk is already polluting the internet
Will it get better or worse?

AI can manipulate brain signals
UNESCO is highly concerned.

Two visions of AI:
AI will save the world, per Marc Andreessen
AI will only solidify tech as our new god, per Paul Kingsnorth
Meanwhile, Sapiens author also has big concerns 

THE NEXT NORMAL

Disney World is slumping hard
Has Disney lost its magic?

Want to sign a contract quickly?
Just email a thumbs-up emoji

Cursive is back in Ontario’s curriculum
Except some teachers never learned it.

THE WAR ON CARBON

OPEC is seeking new members
Has their influence waned?

A major carbon capture breakthrough
May have happened in Houston.

Tires pollute more than tailpipes
Come on, now, really?

THE NEW ENERGY TRANSITION

Japan’s electricity future
Might be geothermal power

For AI to bloom
We need even more electricity

Wave energy technology
Wants to compete with oil & gas.

THE EV DREAM

The best EVs of 2023 and 2024
According to Car & Driver.

We need massive mining for renewables.
Automakers diving in big time
Are we considering the consequences?

India gears up for big battery push
They need to catch up to China

THE CHINA SYNDROME

Goldman Sachs is bearish on China
China calls analysis “misleading” and “illogical.”
Foreign investment in China collapses
Exports are collapsing, too

XI wants open supply chains
While he restricts key mineral exports

Chinese hackers hit US government email
Breach went undetected for a month.

THE WASHING-TONE

Bureaucratic power
May be in SCOTUS’s crosshairs

America’s new industrial subsidies
Have inspired other countries to do the same.

Yellen hails progress made on China visit
What else is there for her to say?
The window for better relations is small

MAKING A BETTER YOU

The benefits of good conversation
Are many, especially in today’s world.

5 steps to staying in shape
A “permanent fitness” routine.

Teaching an old dog new tricks.
Learn something new every day

HOW ABOUT A BREAK

Is your morning cup of Joe
Just a placebo?

Snails may move slowly.
But they can cross oceans

China blows away the world
In honey production

IT’S VACATION TIME

Ready for a hike?
The world’s most spectacular trails

Over 500 UK pubs are named Red Lion
Who’s up for a pub crawl?

How about cooking school in Tuscany?
Yeah, baby!

SONG OF THE WEEK

“Mona Lisas and Mad Hatters”
From Elton John
Lyrics are poetry, you know.

He’s hanging up his touring hat
Bonus track of his last live performance.
“Goodbye Yellow Brick Road” + farewell speech.

CASTING AROUND THE PODS

Finding inner calm
Successfully dealing with stress and conflict.

VIDEOS OF THE WEEK

The Barbie movie.
Could it be a huge hit?

Ola Ka Honua
Reforesting Maui’s Haleakalā volcano. 

Making delicious prime rib
At San Francisco’s House of Prime Rib.

FROM THE HEADHUNTER’S KITCHEN

It’s a pasta salad kind of summer.
Some recipes for your repertoire

How to make a potato chip omelet
Pushing the envelope.

Gatorade cocktails
Why not hydrate as you dehydrate?

THE RANDOMS

If you were to consider jumping from a 10-meter diving tower, which one of these people might you be? 

Few people will give President Biden credit for his follow through with MAGA.

Elon Musk says that, when it comes to AI, China is on “team humanity.” Does he really believe this? Or is he just trying to save Tesla’s China business? Everyone talks their book, right?

Covering bodies of water (lakes, rivers and oceans) with solar panels is now supposedly a trend. You mean blocking out light from these bodies of water will have no impact on their ecosystems? Really? Fish don’t mind living in the dark all the time? Plants?

A Japanese company banned working at night to increase productivity. It did increase productivity, and it also led to a baby boom. Countries with demographic challenges may take note.

An old proverb says necessity is the mother of invention. Given the Ukrainian people’s necessity to stay independent from Russia, I wonder what sort of invention will emerge from there. Military innovation will surely benefit.

Young Chinese are not getting married; marriages are at a record low. Could this be a sign of deeper economic and social turmoil?

The Toronto Zoo is asking people not to show gorillas videos on their phones. Apparently the teenage gorillas can quickly become addicted to watching videos, which inhibits their social development. Just thought you’d want to know.

Will we ever get tired of seeking the new, new, newest thing, or are we so shallow that only consumption can bring us comfort?

Maybe one day community will become more important than consumption. Maybe.

IN CASE YOU MISSED IT

Rates, Higher for Longer?
July 7, 2023

Happy 4th of July!
June 30, 2023