My Frozen Assets at BlockFi, Part3: I Finally Recovered 27% of My Original Funds.

Scott BuchananLeave a comment

Well, it’s finally over. As noted in previous blog posts, back when interest rates were essentially zero, I started an account with cryptocurrency investing firm BlockFi. They paid me a hefty 9% per year for lending out my crypto coin to “trusted institutional counterparties”, backed by large collateral. However, when  Sam Bankman-Fried’s FTX exchange went belly up, it took BlockFi with it. (Bankman-Fried, the former rock-star white knight of the crypto world, is now in prison for fraud).  My funds at BlockFi disappeared into the black hole of bankruptcy proceedings for about a year and a half.

Last month, a judge finally allowed a settlement for clients to withdraw their assets from their interest-bearing accounts. There were two wrinkles. First, you get far less than 100% of your funds. Most of my money got chewed up in the corporate bankruptcy itself, and then was eaten by the law firm (Kroll) processing the bankruptcy and the client reimbursement process. So,  I’m only getting about 27% percent of my money back.

As an aside, Kroll got hacked about a year ago, leaking the names and email addresses of us BlockFi clients, and so some scammer sent out a very well-crafted email that a number of people, including me (briefly) were taken in by, as I wrote earlier.  if you responded to that scam email, you ended up connecting your wallet to a scam application, which could then suck everything out of your wallet. Fortunately, I had almost nothing in my wallet for the short time I had it connected, but other victims lost considerable sums. I guess the reason why criminals continue to run crypto scams is because they are profitable, like the legendary bank robber Willie Sutton who robbed banks because “that’s where the money is.”

The other wrinkle In the BlockFi reimbursement is that they will only reimburse you with the actual cryptocurrency coin that you held, not with its dollar value. So, I had to set up a cryptocurrency wallet (I used Trust wallet) to receive my crypto, which was all in the form of the stablecoin USDC.

I had to do considerable background work to make this happen. In order to test that that wallet worked to receive USDC, I had to also set up a cryptocurrency exchange account, which I did with Coinbase (which seemed to be the most solid crypto exchange). I had to connect that account with my bank, put some money into the Coinbase exchange, buy some USDC, and send it to my crypto wallet to make sure that it all worked.


As of a week ago, after some fairly intrusive ID verification, the reimbursement machinery did finally deposit the measly remnants of my USDC into my wallet. OK, I thought, I’ll just transfer that to my Coinbase exchange account, turn the USDC into cash and be done with it all.


But not so fast… Because USDC is transferred over the Ethereum network, I had to have enough ETH coin in my Trust wallet to pay for the transfer. The network transfer cost, called the gas fee, was about eight dollars at midday, going down to about three dollars by 10 o’clock at night.

So, I had to go into my Coinbase account, convert some USDC there into ETH (incurring a $1.49 fee for that), and then send some ETH to my Wallet, incurring yet another a transfer fee there. Then I could use that ETH in my wallet to pay for the transfer of the USDC to my Coinbase exchange. Then at long last I was able to convert my USDC to cash and transfer it to my bank account, to finally put this whole BlockFi drama to rest.

Looking on the bright side of all this uproar, I now have a functioning cryptocurrency exchange account and wallet, and am familiar with elementary crypto operations. This might prove handy if I ever want to dabble more in this area or if some other need arises. For now, however, I have had enough of crypto.

The effect of the minimum wage on everything

mdmakowskyLeave a comment

David Neumark has an excellent article reviewing the extensive literature examining the effects of the minimum wage on, well, a little bit of everything. Sometimes we see improved outcomes, sometimes worse outcomes, often not much of anything. I’m not demeaning this literature to which I’ve myself helped make a modest contribution, but there does arise the concern that perhaps the fruit has begun to hang a bit too low. Which is to say that in a world of modern computing, where regressions can be run at approaching zero cost and policy changes are characterized by an at least a minimally sufficient level of exogeneity, there’s nothing stopping anyone from regressing any measurable outcome on the minimum wage. We’re still arguing about the minimum wage, but what exactly is it that we are learning?

I’m going to head this post off at the pass befores it veers into “back in my day economics used to be about the theory” territory. Yes, the ascendance of empirically-driven applied economics has led to theory to taking something of a backseat, at least in terms of the sheer volume of published research, but I don’t think that is what is going on with the minimum wage literature. Rather, I think its a story of supply and demand.

The minimum wage is an almost perfect issue for people to argue over. It’s not life or death, which keeps the temperature below “brick throwing” levels. The status quo always bears the possibility of change, making arguments policy salient. The absence of action is a meaningful option, particularly in a world with non-trivial inflation. It’s a quantifiable policy that affects incomes and employment directly, which means it’s sufficiently concrete for anyone to have an opinion on. Last, but certainly not least, it lends itself to binary opinion-affiliation in that you either think the minimum wage should be higher or you don’t.

From the point of view of researchers, this adds up to a policy for which there will be near endless research demand. To satisfy that demand your research should, preferably, give consumers a new reason to belief the minimum wage should or should not be higher. To do that a researcher need either i) give new and useful evidence as to how and how much the minimum wage affects earnings and employment, or ii) new and useful evidence that the minimum wage makes some other measurable outcome better or worse. When you consider that the cost of consuming new research is both low and constant, it’s fair to consider the demand to be perfectly elastic. Coupled with the increase in the supply of empirical research generated by reduced cost of computing noted earlier, we shouldn’t be surprised by an equilibrium where an ever-growing number of outcomes have been regressed on the minimum wage.

I don’t think this is anything to get worked up over, don’t see any first-order negative externalities. Most complaints about low-cost empirical research usually sound like academics pining for a time with higher barriers to entry, when you had to be “really good” to produce economic research. The assumption that the complainer is themselves, of course, “really good” always seems to remain unstated. Back to my earlier question, though: what are we learning?

If you’re genuinely curious about the minmum wage, read Neumark’s review. It’s characteristically excellent. Rather than recap, let me come out and say what I think I’ve learned from the reading a lot, but certainly not all, of the minimum wage literature. The minimum wage matters, it’s salient to people earnings, but not nearly as much as the volume of research or argument would suggest. The effects observed tend to be moderate, but labor markets are sufficiently local, heterogenous, and complex that the there remains the possibility of observing different results with different (but largely honest) analyses. This goes doubly so for observing any second-order effects beyond wages and employment, such as health, education, or crime. You are more likely to observed improved outcomes when changes are small, deleterious effects when changes are large.

Those are easy, largely riskless conclusions to share, so let me go a bit farther. The fact that we observe anything but trivial outcomes, positive or negative, is a stark reminder of the margins on which so many people are making decisions. Whether it’s earning a dollar more an hour or losing half a shift a week, it is telling that we see more criminal recidivism, more smoking, less teen-pregnancy, more maternal time with children, and a dozen other effects. It just doesn’t take that much to move the needle.

There is a constant cultural bombardment to value income and material goods less. Perhaps the lesson of a thousand and one minimum wage regressions is that many people aren’t experiencing the diminishing returns to income that popular advice would have you believe. For the young, less-educated, recently immigrated, or those burdened with the stigma of a criminal record, the income elasticity of human behavior remains very much intact. Labor policies matter, even if the minimum wage shouldn’t be quite so close to the top of the list.

Zuckerberg wants to solve general intelligence

Joy Buchanan1 Comment

Why does Mark Zuckerberg want to solve general intelligence? Well, for one thing, if he doesn’t, one of his competitors will have a better chatbot. Zuckerberg wants to be the best (and good for him). At his core, he wants to build the best stuff (even the world’s best cattle on his ranch).

If AGI is possible, it will get built. I’m not the first person to point out that this is a new space race. If America takes a pause, then someone else will get there first. However, I thought the Zuck interview was an interesting microcosm for why AGI, if possible, will get made.

… We started FAIR about 10 years ago. The idea was that, along the way to general intelligence or whatever you wanna call it, there are going to be all these different innovations and that’s going to just improve everything that we do. So we didn’t conceive of it as a product. It was more of a research group. Over the last 10 years it has created a lot of different things that have improved all of our products. …
There’s obviously a big change in the last few years with ChatGPT and the diffusion models around image creation coming out. This is some pretty wild stuff that is pretty clearly going to affect how people interact with every app that’s out there. At that point we started a second group, the gen AI group, with the goal of bringing that stuff into our products and building leading foundation models that would power all these different products.
… There’s also basic assistant functionality, whether it’s for our apps or the smart glasses or VR. So it wasn’t completely clear at first that you were going to need full AGI to be able to support those use cases. But in all these subtle ways, through working on them, I think it’s actually become clear that you do. …
Reasoning is another example. Maybe you want to chat with a creator or you’re a business and you’re trying to interact with a customer. That interaction is not just like “okay, the person sends you a message and you just reply.” It’s a multi-step interaction where you’re trying to think through “how do I accomplish the person’s goals?” A lot of times when a customer comes, they don’t necessarily know exactly what they’re looking for or how to ask their questions. So it’s not really the job of the AI to just respond to the question.
You need to kind of think about it more holistically. It really becomes a reasoning problem. So if someone else solves reasoning, or makes good advances on reasoning, and we’re sitting here with a basic chat bot, then our product is lame compared to what other people are building. At the end of the day, we basically realized we’ve got to solve general intelligence… (emphasis mine)

Credit to Dwarkesh Patel for this excellent interview. Credit to M.Z. for sharing his thoughts on topics that affect the world.

“we’ve got to solve general intelligence” If a competitor solves AGI first, then you are left behind. No one would not want general intelligence on their team, on the assumption that it can be controlled.

I would like the AGI to do my chores for me, please. Unfortunately, it’s more likely to be able to write my blog posts first.

Fossil Fuel Frenzy: The Driving Force Behind US Extractive Growth

Zachary BartschLeave a comment

What with all the talk about semi-conductor production and rare-earth mineral extraction, I think that it’s worth examining what the USA produces in terms of what we get out of the ground. This includes mining, quarrying, oil and natural gas extraction, and some support activities (I’ll jump more into the weeds in the future). I’ll broadly call them the ‘extractive’ sectors. How important are these industries? In 2021 extractive production was worth $520 billion. That was roughly 2% of all GDP. Below is the break down by type of extraction.

Examining the graph of total extraction output below tells a story. The US increased production of extracted material substantially between the Great Depression and 1970.  That’s near the time that the clean water and clean air acts were passed. But the change in the output growth rate is so stark, that I suspect that those were not the only causes of change (reasonable people can differ). For the next 40 years, there was a malaise in output. This was the period during which it was popular to talk about our natural resource insecurity. As in, if we were to be engaged in a large war, then would we be able to access the necessary materials for wartime production?  

https://fred.stlouisfed.org/graph/?g=1kWNU

But for the past 15 years we’ve experienced a boom with extracted output rising by 50%, an average growth rate of 2.7% per year. That’s practically break-neck speeds for an old industry at a time when the phrase ‘great stagnation’ was being thrown about more generally. By 2023, we were near all-time-high output levels (pre-pandemic was higher by a smidge).

For people concerned about resource security, the recent boom is good news. For people who associate digging with environmental degradation, greater extraction is viewed with less enthusiasm. Those emotions are especially high when it comes to fossil fuel production. Below is a graph that identifies the three major components of extraction indexed to the 2021 constant prices. By indexing to the relative outputs of a particular year, the below graph is a close-ish proxy to real output that is comparable in levels.

Continue reading →

How Do Certificate of Need Laws Affect Health Care Workers?

James BaileyLeave a comment

The short answer is that they don’t affect wages or overall employment levels, at least according to a new article in the Southern Economic Journal (ungated version here) by Kihwan Bae and me.

This was surprising to me, as I kind of expected CON laws to harm workers. Certificate of Need laws require many types of health care providers to obtain the permission of a state board before they are allowed to open or expand. This could lead to fewer health care facilities, and so less demand for health care workers, lowering wages and employment. It could also lead to less competition among health care employers, to similar effect.

On the other hand, less competition in the market for health services could raise profits, with room to share them in the form of higher wages. Or, CON being primarily targeted at capital expenditures like facilities and equipment could increase the demand for labor (to the extent that labor and capital are substitutes in health care). All these competing theories seem to cancel out to one big null when we look at the data.

We use 1979-2019 data from the Current Population Survey and a generalized triple-difference approach comparing CON-repealing to CON-maintaining states, and find a bunch of fairly precise zeroes. This holds for many different definitions of “health care worker”: those who work in the health industry, in health occupations, in hospitals, in health care outside hospitals, nurses, physicians, and more.

This is the first word on the topic, not the last; I wouldn’t be too surprised if someone down the road finds that CON does significantly affect health care workers. In this paper we pushed hard on the definition of “health care workers”, but not on “Certificate of Need” or “wages”. We simply classify states as “CON” or “non-CON” because that is what we have data for, but some states have much stricter programs than others, and some day someone will compile the data on this back to the 1970’s. The easier thread to pull on is “wages”. We use one good measure (the natural log of inflation-adjusted hourly real wages), but don’t do any robustness checks around it; considering “business income” could be especially important here. It is also possible that CON affects workers in other ways; we only checked wages and employment.

The full paper is here (ungated here) if you want to read more.

Counting Jobs (Revisited)

Jeremy HorpedahlLeave a comment

In January 2023 I had a post looking at the different ways that the Bureau of Labor Statistics measures employment. Those who follow the data closely probably know about the difference between the household and establishment surveys, which the monthly jobs report data is based on. But these are just surveys.

The more comprehensive data (close to the universe of workers, roughly 95%) is the Quarterly Census of Employment and Wages. While more comprehensive, this data comes out with a much longer lag, and is only released once per quarter. The QCEW is just the raw count of workers, which is useful in some ways, but we also know that there are normal seasonal fluctuations, which the QCEW doesn’t adjust for. Therefore, year-over-year changes in jobs are the best way to look at trends in this data. In September 2023 (latest month available), the US had 2.25 million more workers than in the previous September. For comparison, the establishment survey showed an increase of 3.13 million jobs that month, and the household survey showed a change of 2.66 million — suggesting they both might be overstating job growth.

Still with me? Here’s one more set of jobs data: the Business Employment Dynamics data. This dataset is built on the QCEW data, but allows more fine detailed insights into what types and sizes of firms are gaining or losing jobs. Like the QCEW, the most recent data is for the 3rd quarter of 2023 (just released today), but when looking at the aggregate data, it has one advantage over the QCEW: it is seasonally adjusted, so we can look at the most recent quarterly change (not really useful for not-seasonally-adjusted data). The BED data also looks only at private sector jobs, so it is looking at the health of the private labor market (and ignoring changes in government employment).

The latest BED data do show a possibly worrying trend: the 3rd quarter of 2023 showed a net loss of 192,000 private-sector jobs. That’s the first loss since the height of the pandemic, and ignoring the first half of 2020, the only quarterly decline since 2017. Here’s the chart (note: y-axis is truncated because the 2020q2 job loss is so large it makes the chart unreadable):

I should note that this data is subject to revisions, even though the QCEW is mostly complete. The second quarter of 2022 originally showed a decline, but that was later revised upwards as QCEW is updated and seasonal adjustment factors are updated. Still as, this data stands, it is a worrying jobs number that differs from the monthly surveys. For the change from 2023q2 to 2023q3, the establishment survey shows a gain of 640,000 jobs and the household survey also shows a gain of 546,000. Like the QCEW raw data, the BED seasonally adjusted data suggests that the monthly surveys may be overstating job growth.

Instantly Filling Holes, Building Up Solids Using Superglue with Toilet Paper or Baking Soda

Scott BuchananLeave a comment

Speaking of microeconomics…I just learned of a hack that can save some money at home or in a business. It started with an email from an esteemed friend who leads an interesting life as a welder/rigger/artist. He helped build some of the giant sets at the Burning Man festival which, well, burned. His inquiry, with some personal references edited out, went like this:

…At burning man i once watched a man save the day by patching a hole in the plastic gas tank of a golf cart with super glue, toilet paper and vinegar… Suddenly we had a functioning golf cart. Although I’ve never gotten to use this I remember this trick dearly.

Just today [my brother] was telling me about … breaking his glasses. …he had already fixed his glasses. How? He said “I’m pretty good at super glue and baking soda.”  …  He said the baking soda acts as an accelerant and gets very hard when you add super glue to it.


Being a chemical engineer by background, and always curious about household chemistries, this got me poking about the internet. Here is what I found.

The main ingredient in most repair superglues is ethyl 2-cyanoacrylate, along with some polymethacrylate gel and a little sulfonic acid, which acts as a stabilizer. When the superglue comes in contact with moisture, that triggers the polymerization reaction, so the glue solidifies and bonds to surfaces. It works best as a very thin layer squeezed between two closely fitting surfaces. Thicker droplets of superglue may be very slow to harden or not harden at all, towards the middle.


Thus, superglue is notoriously bad for filling in gaps or spaces or holes. For gap filling, you would normally turn to epoxy glue (for strength) or silicone (for flexibility). These glues have their own advantages and disadvantages. I don’t think that either silicone or common epoxy would stand up well to gasoline.

My internet research found that porous paper, like toilet paper, tissue paper, or paper towel, can catalyze the hardening of superglue. You can stuff a hole with a wad of toilet paper, or make a shape out of paper towel, and saturate it with superglue, and it will instantly harden. For the nerds among us, I will note that paper is mainly cellulose, which is a polymer of sugar (glucose), which has water type -OH groups sticking out all over, which harbor a surface layer of adsorbed water.  This YouTube video by Mr Made  has excellent examples of using porous paper for super glue to instantly fill in a hole or build up a solid shape.

It is critical to use freshly opened superglue, and use a thin runny liquid formulation which will quickly saturate the paper, not a thick gel type superglue.

It turns out that baking powder can be used instead of porous paper with superglue to fill in holes or cracks or make solid shapes. You can sprinkle in a thin layer of baking soda, then saturate that with the glue, then add another layer of baking powder and glue, etc. This YouTube video , by The Maker,  nicely demonstrates this technique.

So there you have it, hack away with your superglue.

Don’t Try This At Home:


The main loose end from my researches involves the role of vinegar in that fix of the golf cart fuel tank at Burming Man. Vinegar is usually mentioned as a solvent for superglue, and chemically vinegar is an acid whereas baking soda is a base, so vinegar seems like the opposite of an accelerant for the polymerization. I can only speculate that for making a very thick wad of paper plus superglue to fix the fuel tank, the vinegar may have been used deliberately to slow down the glue hardening a bit. But that is just a guess. I think the cyanoacrylate superglue would have a reasonable chance to withstand gasoline, but I sure would be nervous about relying on such a patch for a fuel tank. It would not take much of a gasoline leak to make Burning Man all that more memorable. Don’t try THIS at home.

Civil War as radical literalism

mdmakowsky7 Comments

I saw A24’s newest and most expensive film to date, Civil War. <<Spoilers incoming>>

A brief summary: the audience is dropped into the middle of a new US civil war as being documented by a group of journalists, our viewpoint centered around a veteran war photographer played by Kirsten Dunst and her (nearly) uninterrupted, first-ballot hall of fame 108 minute RBF. (Seriously, her face is perfection in this movie, I’ve never appreciated her more, absolutely no notes.) A traveling party is formed, a road trip through a war taken on, each stop bringing the gang into contact with increasingly grim and grotesteque humanity.

The subject matter and timing of the film naturally lend themselves to interpretation, subtextual analysis, and Straussian readings. Most films tend to be pretty ham-fisted in their less than subtle themes. With regard to Civil War, there are plenty of thoughts about the underlying meanings and metaphors. Here’s mine: there is no subtext, metaphor, or Straussian messages to be unearthed. The director has pushed this concept and it’s being received as milquetoast marketing. I disagree. There are no secret themes and I think that is the absolutely radical agenda that defines and motivates the artistic endeavor. To portray a war without imbuing it with narrative, only tragic, significance. Hear me out.

There’s a million war movies, most of which have arcs and metaphors strewn throughout. The problem with making a moving about a hypothetical civil war in the modern United States is that the audience will spend so much time looking for the heroes, villains, and associated opportunities to feel morally superior that it seems almost impossible to deliver an effective portrayal of what it might actually feel like to wake up to a US civil war, with a genuinely splintered federalist system of governments and military forces. How do you make a movie that doesn’t celebrate a Civil War as an opportunity for anyone, that doesn’t unintentionally, if inevitably, enoble the prospect of such an outcome? How do you tell a story where nothing good happens because you earnestly believe such a war would be empty and horrible, with nothing advanced or achieved save the destruction of institutions and the killing of millions? Well, it seems that Alex Garland thought the best strategy was to strip a war story down to its barest bones and leave you absolutely zero metaphorical scaffolding to graft your identities or theories on to.

I think it worked. A couple points.

There are no heroes in the film. The four journalists in questions are respectively hollowed out, adrenaline addicted, naive, or looking for one last ride. There is zero allusion to nobility or moral obligation. We never learn the name of a single soldier, whether they are accomplishing a mission, pointlessly dying, or perpetrating atrocities. There’s no arch-antagonist. There are bad people, to be sure, and the third-term President that the film opens with has green lit air strikes on American citizens while filling the airwaves with empty propaganda, but he turns out to be nothing more than a standard-issue cowardly politician wholly incapable of anything save false bravado and begging for his life.

There are no political identities in the film. No left or right wing schism. It might seem that the “Western Forces” alliance of California and Texas is either a transparent political cop-out (putting the largest “red” and “blue” states together) or a subtextual allusion to a schism over immigrants (those states having the largest Latin immigrant populations), but I think there is a far simpler explanation: those are the only two states whose coalition could actually oppose a President trying to usurp the executive branch and fully subvert the constitution. Beyond their populations and economies, the raw number of military bases in the two states (especially air bases), are sufficient that a couple 2 star generals could coalesce a rival military body. There’s also a reference to Florida being an i6 ndependent secessionary state. [EDIT 4/23/24] Guess which states have the most military personnel and air force bases? California (184k+ 8 AFB) and Texas (164k + 9 AFB). Florida has the 5th most active duty personnel, but also has 6 AFB. Everyone else is a either a battle ground or a (literal) flyover state.

The film captures, I think brilliantly, the idle chaos of such a scenario. A world simultaneously shutting down and carrying on with life. Of people mostly trying to survive and wait it out. Mostly. There are some who are not sitting it out, putting themselves in contexts where they can play out their dreams to be heroes or monsters, never accomplishing anything but spreading a little extra death around. I kept thinking about the pandemic on the drive home from the theater. Millions of people died but most of our memories at the peak of the lockdown are of feeling trapped and bored. A civil war in a country this big might not feel all that different for months or even years at a time for most of the population.

The thing about the “banality of evil” is that it’s both extremely real and nearly impossible to portray in a film without comedic deadpan or ghoulish overkill. Civil War portrays a United States ripped apart at it’s constitutional seams by midwit politicians incapable of forward inducting from usurping power and committing atrocities to eventually being executed by a nameless soldier who will report their success to a command chain with no understanding or possibly even interest in putting it all back to together. That’s how the story of the United States as we know it could end. Without heroes or villains, moral or philosophic judgements, without even primary or secondary causes. The thing about a country falling apart, there isn’t always a why, just a when and how.

The lesson I took away from Civil War is that a world doesn’t have to end for a reason. It can just end. And when it does, mostly what we’ll do is watch and wait for it to start up again.

Joy on The Inductive Economy podcast

Joy BuchananLeave a comment

I got to be a guest of Vignesh Swaminathan who is based in Mumbai. It’s fun to have a deep conversation with someone on the other side of the world and share it with the whole internet (and the AI’s).

Apple podcast link: https://podcasts.apple.com/us/podcast/dr-joy-buchanan-on-understanding-economics-through/id1719744197?i=1000652541934

Blogpost with links and timestamps: https://www.inductive.in/p/dr-joy-buchanan-on-understanding

The first 10 minutes are about Tyler’s GOAT book. Vignesh asked me to name some influential economists who did not make Tyler’s list.

Around minute 12 we talk about the experimental economics methodology.

The middle (minute 15-42) is a discussion of the pipeline into tech and my Willingness to be Paid paper. He adds his perspective on tech jobs in India.

Around minute 42, Vignesh makes a switch over to the Barbie movie and then Oppenheimer. He observes that Oppenheimer is a “brand.” I speculate on careers in Barbieland. We recorded this before Christmas of ’23, right after everyone had seen these summer movies. Both movies ended up in the 2024 Oscars awards ceremony.

I predicted that people will eventually be able to create a custom movie from a verbal prompt, because of the AI content revolution. Here in Spring of ’24 that has already come true. Sora is shocking everyone and even caused Tyler Perry to halt a physical film studio expansion.

Around minute 55, we pivot to Hayek and competition, which leads to a postmortem on Google Plus (RIP).

1:05-1:16 features intellectual property and my IP experiment with Bart Wilson

Ended with rapid-fire and personal questions.

Skimming back through this conversation has me thinking about tech work. The market for IT workers and programmers has evolved since I first started the project that became “Willingness to be Paid: Who Trains for Tech Jobs?”

I like pointing people all the way back to this report on jobs from 1958. Learn to Code has been good advice for a long time, for the people who can tolerate the work. That does not mean it will be true forever, but I would argue that it is still true today.

Silicon Valley as a career might have peaked around 2021. It’s not going away, but it might not be growing anymore in terms of the number of talented people who can be absorbed there. (Might I suggest Huntsville instead?)

The WSJ recently ran a story “Tech Job Seekers Without AI Skills Face a New Reality: Lower Salaries and Fewer Roles”

The rise of artificial intelligence is affecting job seekers in tech who, accustomed to high paychecks and robust demand for their skills, are facing a new reality: Learn AI and don’t expect the same pay packages you were getting a few years ago.

Jobs in areas like telecommunications, corporate systems management and entry-level IT have declined in recent months, while roles in cybersecurity, AI and data science continue to rise, according to Janco’s data. The average total compensation for IT workers is about $100,000, making the position a target for continued cost-cutting.

One reason tech jobs are less attractive than some other professional paths is that the skillset changes. We mentioned this as a drawback in our policy paper. Computers are constantly changing. Vignesh and I discuss the issue of risk. I suggested that companies could pay less for talent if they were willing to offer packages that carry less risk of getting fired.

Nevertheless, tech still has decent job prospects. An unemployment rate of about 5% is about normal for work, even though tech had seen lower rates at the peak of demand. I do not know what programming as a career will look like in 10 years, but I’d say the same about screenwriting and live sports commentary. The LLMs are coming for everything or nothing or something in between.

I’ve been on tour (regionally) with our ChatGPT paper and getting opportunities to query different audiences about their LLM use. Last week I talked to a young man in our business school who is using ChatGPT to write SQL code at his job. I said in the podcast that I would still advise young people in Alabama to learn to code, even if they are not going to move to Silicon Valley. I think coding is more fun in the LLM-age or at least less miserable.

The Time it Took for Price to Rise

Zachary Bartsch1 Comment

Last month, Jeremy wrote about how long it takes for prices to double. He identified a few intervals of time that are sensible. But I want to pick up the ball and move it further down the field. Not only can we identify how long it took for prices to double in particular eras, we can also do it for *every month*. Below, is a graph that shows us how many years had passed since prices were half as high (PCE Chained Prices).

Expectedly, the minimum time to double consumer prices was in the early 80s, taking just under 9 years for price to double. The prior decade included the highest inflation rates in the past 70 years.  Since that time, the number of years needed in order for prices to double steadily rose as the average inflation rate fell. That is, until after the pandemic stimuli which caused the time to plateau. But to be clear, that must mean that prices aren’t doubling any fast that they used to, despite what we’ve heard on the news.

Except… prices are in fact rising faster by 21st century standards. Indeed, measuring the time that it took prices to double covers up a lot of variation. After all, The PCEPI was 15.19 in 1959 and is 122.3 now. That’s only enough difference for three doublings. But as we lower the threshold for price changes, we can see more of the price level patterns. Below-left is the time that was necessary for prices to increase by 50% and below-right is the time that was necessary for prices to rise by 25%.

In these graphs we can see more of the action that happened post-Covid. The time needed for prices to rise by 50% has fallen by about five years since 2020. That’s a 20% shorter time necessary for a 50% increase in prices. The time needed for a 25% increase in prices is even more drastic. As of 2020, people were accustomed to experiencing upwards of 14 years before overall prices rose by 25%. That number fell below 8 years by 2024.

And finally, the most unnerving graph of all is below: the time that was needed for prices to rise by 10%.

Continue reading →