The Luddite Prophecy

Welcome to This Week’s Leyendecker View

You don’t get to be CEO by being the perfect mom, the perfect wife. You don’t. You do the best you can. It’s hard to make those sacrifices.
– Former Pepsi CEO and Chairman, Indra Nooyi

FAVORITE READS OF THE WEEK

What happened to music criticism?
One word: money.

Here come the new industrialists
USA manufacturing is coming back.

China tries to restore the sea
They’re not all evil.

FAVORITE PODCAST OF THE WEEK

The story behind the Genius Act
The All-In crew flesh out the MAGA story.

THINKING OUT LOUD

The Luddite Prophecy
Were they just ahead of their time?

Most everyone who has studied history and/or economics is familiar with the Luddite movement of the early 1800s.

In 1811 Nottingham, England, a textile mill owner installed mechanized textile machinery for the first time. The factory’s workers worried that this novel technology would destroy jobs, reduce their economic potential, and possibly even replace them. They organized, rioted, and demanded that the machines be destroyed. The movement descended into violence and eventually had to be put down by martial law. Since then, the term “Luddite” has been used to describe anyone who is opposed or resistant to technological change.

In a way, Luddites are right to worry. Sweeping technological change does destroy jobs. The mechanized loom did, in fact, destroy manual loom jobs—most forever. However, it created all kinds of new jobs: mechanized loom manufacturers, mechanized loom operators, on-site mechanized loom engineers and mechanics, coal mining to power the machines, finance and insurance to support the growing web of industrial commerce and more.

The machines could also produce far more output than humans could. These new economies of scale grew profits and new industries, which eventually trickled down to more jobs and increased wages, which then drove demand for even more output. And on and on. This is the story of the Industrial Revolution.

It can be easy to ignore the Luddites, to dismiss their concerns as foolish and in denial of historical realities. History shows that innovation has always created more jobs than it destroyed.

But I’m beginning to wonder if, when it comes to today’s technologies and artificial intelligence, the Luddites might actually be right this time.

With AI being thrust upon us, conversations abound about how it will destroy jobs. AI, in combination with all manner of hyper-efficient technologies today, seems to have a destructive path far broader and deeper than any technological advancement humans have ever seen.

There is overlooked evidence that suggests the fears of modern-day Luddites might have been well underway for decades.

Starting about 45 years ago, new technologies allowed US goods producers to move their factories to cheap-labor countries. And then ever advancing robotics showed up to make factories even more productive, further reducing US factory jobs.

As our factory jobs declined and moved overseas, our service jobs grew exponentially. The anti-Luddites will say this is proof positive that new technologies once again created more and new jobs—just in the service industries.

However, what those making this case fail to consider is the constant fiscal and monetary stimulus over the last 45ish years. All this money infused into our economic system offset losses from manufacturing jobs while artificially inflating demand that could support ever more service jobs.

At the same time, many industries were layered with ever more burdensome regulation, which constrains production, but it also creates regulatory compliance service jobs at companies. AI suggests there are between five and nine million (3% to 6% of all employment) private sector regulatory compliance jobs.

Now we have $37 trillion in government debt and all kinds of over-regulated and unproductive industries, like health care and education.

If our massive fiscal deficit spending, monetary stimulus and regulatory creep over the last 45ish years created and sustained a meaningful share of service jobs, then it has been masking a truth: Innovation may not always create more jobs than it destroys.

Every day, more articles are written about entire categories of jobs, both blue– and white-collar, AI may replace. Even if AI creates entirely new job categories we can’t yet foresee, could they possibly be enough to replace the potentially unprecedented numbers of jobs it destroys? Bake into the scenario that we know innovation alone did NOT create all the service jobs over the last 45ish years, and one has to wonder—

Were the Luddites of 1811 just ahead of their time? Will Luddite fears be realized today? Or have they already been? Have constant fiscal and monetary stimulus and ever more regulation in recent decades—not organic economic growth—been the primary drivers of the service jobs boom?

It’s hard to see how AI can create enough new jobs for all the jobs it’s poised to take. Maybe this is a failure of my imagination. Let’s hope it is.

THE RANDOMS

Tariffs on European consumer goods mainly hit the luxury market—autos, fashion, food and beverages. This makes European consumer tariffs a luxury tax, in essence a tax on rich Americans.

All the countries criticizing Israel’s Gaza aid effort should send their volunteers over to make it better. Don’t you think?

The New York Times just published a piece called “The Trouble With Wanting Men.” How’s that for some elite brainwashing? Now, according to the New York Times, it’s a given that men are unlikeable creatures. Maybe we need a new national holiday: Hate a Man Day!

What’s the solution if cyber criminals continue to be one step ahead of the software companies? Microsoft just got hacked, which is causing problems in Europe and the Middle East. The world of technology continues to get more and more complicated. Will AI fix this? Or will it make it worse? If worse, what’s our alternative, going back to an analog world?

We can only hope that ridiculous Epstein narratives signal the conspiracy-theories-about-everything moment is peaking. Has the world really been run by a coordinated cabal of child molesters?

And while we’re on the subject of ridiculousness, when will the “look at me, look at me, look at me, look at me” era finally come to an end?

The children of people covered in tattoos are likely going to turn out to be church-going Christian conservatives. Not many kids want to be like their parents.

Every day, I review the stories in the Wall Street Journal, the New York Times, the Financial Times, Bloomberg and numerous non-mainstream news sources. Lately, when I look at the “Big Four” mainstream media news sources, I keep wondering how and why they all seem to have turned into the National Enquirer.

At dinner a few nights ago, a friend blurted out: “You can’t do wrong the right way.” I’m still trying to figure out this statement, but it seems there’s something here to ponder.

ECONOMIC NEWS

Economy

Applications for unemployment keep falling
Leading economic indicators decline
What’s up with beef inflation?
Obamacare insurers want double-digit hikes
Where inflation is hitting the hardest

Labor

McKinsey’s CEO guide to AI
CEOs admit AI will wipe out jobs
22 new jobs AI could create
AI is starting to affect employment

The Lone Star

Start-up creates product from fossil fuel carbon
Texas archeologists make big find
More better-for-you soda from Austin

BUSINESS

Finance

A new PE boom, flipping assets to themselves
Credit downgrades are growing
Will stablecoins threaten banks?
Could crypto destroy credit cards?

Real Estate

Is housing deflation on its way?
Atlanta’s growth streak has ended
Bill seeks easier backyard cabin financing

Tech

Microsoft security patch fails
Intel tries to save itself
New robots that feed off other robots
Amazon is scamming you
Windows 95, the peak of PC technology

AI

AI has destroyed search click-throughs
The AI relationship revolution is here
Netflix using AI to cut costs
AI will make cybercrime easier

Energy Transition

AI causing record high power prices
Welcome to the gas-powered electricity boom
Renewables are terrible for our electric grid
Newsom wants more oil drilling in CA

THE NATION

The Washing-Tone

Big changes in US Ag Department
Have the Ivies sinned?
Government contractors getting squeezed
Rural hospitals win big in BBB
School choice, a Democrat conundrum

Tariffs

Corporate America picking up tariff costs
VW pledges huge investment in US
Japan to invest big in the US
China lifts rare earth export curbs

Social Trends

US fertility hits new low
Protein is the new fad
VR is a growing spa trend

GEOPOLITICS

Global

Trump embraces Africa
UK and India sign trade deal
Thailand and Cambodia close to war
The 50 most self-sufficient food countries
Japan’s rice prices double

Europe

Macron thinks he’s an influencer
The EU might be a tariff loser
UK politics is fragmenting

Ukraine

Putin’s army has lost face
A sky full of killer drones
Russia keeps hammering Ukraine
Trump wants NATO to support Ukraine
Germany supports Ukraine in NATO

Syria, the Key

Syria is secretly reshaping its economy
Saudi Arabia is trying to help
The US is trying to help
Turkey and Syria sign military agreement

Gaza

US, Israel pull back from Hamas talks
Gazans are finished with Hamas
Iran continues uranium enrichment
Why is Gaza aid a mess?

China

China’s investment in Hong Kong surges
Is China playing the EU?
China has built too many data centers
Belt-and-road investments hit a record

War Creep

The US has a missile shortage
UK and Turkey sign Eurofighter deal
Step-change is coming to war
US and India agree on 10-year defense deal

MAKING A BETTER YOU

Mind
Get more quiet time.

Pleasure isn’t always a good thing
How to find the good in the bad
A life-saving boredom

Body
Get more outside time.

Exercise fights depression and anxiety
The health benefits of sunshine
How to exercise when it’s humid

FUN STUFF

Let your hair down, baby! Even if you’re all alone.

The Extraordinary

We may be able to regrow teeth soon
135-year-old tortoise fathers a baby
Orcas bringing food to a human

Music That Found Us

This music will change your day
The most intriguing musicians of 2025
The Alehouse Boys play Henry Purcell
Imagine Dragon’s “Bones”

Worth a Watch

Weapons, a new horror classic.
Who’s ready for Happy Gilmore 2?
Washington Black, a defiant, joyful fable.
Four Letters of Love with Brosnan and Bonham.

It’s Vacation Time

Everyone wants to go to Japan
How about a road trip to Mark Twain’s home?
Niche themed cruises are on the rise

The Yum Yums

The bread is better in Europe
The different types of ceviche
The best fish for ceviche
The different types of gazpacho

PARTING THOUGHTS

In the end, your professional achievements don’t matter. In the end, all that really matters—all you really have—is the people you love. Not your job, not your career, not your awards, not your money, not your stuff.
– Author Dave Barry in his new book, Class Clown

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