Waymo and Pictures Online

Memes on Twitter are at least as important today as political cartoons of the 19th and 20th centuries. Two memes went viral this week, surrounding the events of protests in Los Angeles.  

The first meme reflects how Lord of the Rings is deeply embedded in American culture. Two million views means that most people don’t need the joke explained. (Part of the Lord of the Rings story is that the wise and powerful elves abandon chaotic Middle Earth for the safety of the Grey Havens. Similarly, the Waymo cars quietly drove themselves to safety away from Los Angeles after several had been vandalized and burned.)

I worry that The Lord of the Rings has made us too optimistic. Americans rarely tolerate stories that do not have happy endings. Has that made it hard for us to understand global events, or impaired our ability to accurately predict how most battles will end?

The next viral meme about the Waymos has two tweets to track. The originator of the joke got half a million views. Someone who added AI-generated images to the original text got half a million views as well.

The four quadrants form is a common meme format. Starting in the upper left, perhaps the best way to explain this is that a rigid socialist might resent Waymo as a symbol of Big Tech. At the very least, a socialist who wields state control might want to nationalize Waymo if there are going to be autonomous cars.

“Protect the Waymos” voices support for the police and traditional property rules. This is a joke, keep in mind, so it’s not meant to make perfect sense. The Libertarian Right might be more likely to support individuals protecting themselves with their own weapons as opposed to relying on the police state.

Compare the meme world to the news. I feel like this might become quaint soon, so here’s what it looks like to use the Google News search function.

The Los Angeles Times reports

The autonomous ride-hailing service Waymo has suspended operations in downtown Los Angeles after several of its vehicles were set on fire during protests against immigration raids in the area.

At least five Waymo vehicles were destroyed over the weekend, the company said. Waymo removed its vehicles from downtown but continues to operate in other parts of Los Angeles.

The flaming Waymo image is all over the news and internet. For one thing, people are interested in it because it’s real. This was supposed to be the year of deepfakes, and yet it’s mostly real images and real gaffes that are still making the news.

At this moment in time, most Americans do not yet have Waymo in their cities. Oddly enough, losing an inventory of several cars might be well worth the publicity the company is receiving. Two million viewers of the video of the little driverless cars making an orderly exit from Los Angeles might come away thinking driverless cars are safe and sensible.

Here are more posts from my long-standing interest in cartoons and internet culture.

Kyla Scanlon also felt like the little cars on fire was worth a newsletter post. She wrote

We scroll past the burning car to see arguments about whether the burning was justified, then scroll past those to see memes about the arguments, then scroll past those to see counter-memes. The cycle feeds itself!

Papers about Economists Using LLMs

  1. The most recent (published in 2025) is this piece about doing data analytics that would have been too difficult or costly before. Link and title: Deep Learning for Economists

Considering how much of frontier economics revolves around getting new data, this could be important. On the other hand, people have been doing computer-aided data mining for a while. So it’s more of a progression than a revolution, in my expectation.

2. Using LLMs to actually generate original data and/or test hypotheses like experimenters: Large language models as economic agents: what can we learn from homo silicus? and Automated Social Science: Language Models as Scientist and Subjects

3. Generative AI for Economic Research: Use Cases and Implications for Economists

Korinek has a new supplemental update as current as December 2024: LLMs Learn to Collaborate and Reason: December 2024 Update to “Generative AI for Economic Research: Use Cases and Implications for Economists,” Published in the Journal of Economic Literature 61 (4)

4. For being comprehensive and early: How to Learn and Teach Economics with Large Language Models, Including GPT

5. For giving people proof of a phenomenon that many people had noticed and wanted to discuss: ChatGPT Hallucinates Non-existent Citations: Evidence from Economics

Alert: We will soon have an update for current web-enabled models! It would seem that hallucination rates are going down but the problem is not going away.

6. This was published back in 2023. “ChatGPT ranked in the 91st percentile for Microeconomics and the 99th percentile for Macroeconomics when compared to students who take the TUCE exam at the end of their principles course.” (note the “compared to”): ChatGPT has Aced the Test of Understanding in College Economics: Now What?

References          

Buchanan, J., Hill, S., & Shapoval, O. (2023). ChatGPT Hallucinates Non-existent Citations: Evidence from Economics. The American Economist69(1), 80-87. https://doi.org/10.1177/05694345231218454 (Original work published 2024)

Cowen, Tyler and Tabarrok, Alexander T., How to Learn and Teach Economics with Large Language Models, Including GPT (March 17, 2023). GMU Working Paper in Economics No. 23-18, Available at SSRN: https://ssrn.com/abstract=4391863 or http://dx.doi.org/10.2139/ssrn.4391863

Dell, M. (2025). Deep Learning for Economists. Journal of Economic Literature, 63(1), 5–58. https://doi.org/10.1257/jel.20241733

Geerling, W., Mateer, G. D., Wooten, J., & Damodaran, N. (2023). ChatGPT has Aced the Test of Understanding in College Economics: Now What? The American Economist68(2), 233-245. https://doi.org/10.1177/05694345231169654 (Original work published 2023)

Horton, J. J. (2023). Large Language Models as Simulated Economic Agents: What Can We Learn from Homo Silicus? arXiv Preprint arXiv:2301.07543.

Korinek, A. (2023). Generative AI for Economic Research: Use Cases and Implications for Economists. Journal of Economic Literature, 61(4), 1281–1317. https://doi.org/10.1257/jel.20231736

Manning, B. S., Zhu, K., & Horton, J. J. (2024). Automated Social Science: Language Models as Scientist and Subjects (Working Paper No. 32381). National Bureau of Economic Research. https://doi.org/10.3386/w32381

Fast Fashion quotes in Yale’s The Politic

A student reporter reached out to me for quotes about Fast Fashion. The article is now up:

Does the Devil Wear Fast Fashion?: Environmental Costs and Cultural Pushback

by Natalia Armas Perez

Ms. Armas Perez has written a current summary of the fast fashion landscape, including quotes from professors like me and industry executives.

Here’s one quote about me:

Joy Buchanan, an associate professor of Quantitative Analysis and Economics at Samford University, expanded on this idea: “Fast fashion is partly just a sign of a richer world. We can all have more of everything, including customized clothes.” In a world where clothing is cheaper than ever, the desire to reinvent oneself through fashion isn’t just encouraged—it’s expected. “Now that T-shirts are so cheap to make, it’s not surprising that people print them up for a single club event with little thought about the financial or environmental cost. Financially speaking, shirts are almost as disposable as plastic forks,” said Buchanan.

About the publication: The Politic is Yale’s undergraduate journal of politics and culture since 1947. The way people end up finding me to comment on this issue is my original piece for Cato from 2023.

EconTalk Extra on Daisy Christodoulou

I wrote an Extra for the How Better Feedback Can Revolutionize Education (with Daisy Christodoulou) episode.

Can Students Get Better Feedback? is the title of my Extra.

Read the whole thing at the link (ungated), but here are two quotes:

For now, the question is still what kind of feedback teachers can give that really benefits students. Daisy Christodoulou, the guest on this episode, offers a sobering critique of how educators tend to give feedback in education. One of her points is that much of the written feedback teachers give is vague and doesn’t actually help students improve. She shares an example from Dylan William: a middle school student was told he needed to “make their scientific inquiries more systematic.” When asked what he would do differently next time, the student replied, “I don’t know. If I’d known how to be more systematic, I would have been so the first time.” 

Christodoulou also turns to the question many of us are now grappling with: can AI help scale meaningful feedback?

Tariff Tilly (Satire)

Satire news shows are, in my opinion, one of the higher forms of art that my country has produced (and an example of our exports). “Meet Tariff Tilly, the perfect replacement for the 37 dolls your kid does not need” from The Daily Show

“Tariff Tilly” builds. There is even a comment on interest rates (addressed in my previous post).

In this house, we believe in economists writing about dolls. You can find more at https://economistwritingeveryday.com/?s=barbie or https://economistwritingeveryday.com/?s=dolls

Discuss AI Boom with Joy on May 12

I’m not just doing this to plug my own event. It’s also about the only thing on my mind after spending the week leading and moderating this timely discussion.

If you like to read and discuss with smart people, then you can make a free account in the Liberty Fund Portal. If you listen to this podcast over the weekend: Marc Andreessen on Why AI Will Save the World  (2023) you will be up to speed for our asynchronous virtual debate room on Monday May 12.

Keeping in mind the stark contrast between this and the doomers we discussed in the past week, here is Marc’s argument in a nutshell:

“The reason I’m so optimistic is because we know for a fact–as sort of one of the most subtle conclusions in all of science–we know for a fact that in human affairs, intelligence makes everything better. And, by “everything,” I mean basically every outcome of human welfare and life quality that essentially we can measure.”

When it’s put that way, it’s hard to disagree. Who would want less intelligence?

See more details on all readings and the final Zoom meeting in my previous post.

Another interesting bit by Marc:

“By the way, look: there’s lots of work happening that’s not being published in papers. And so, the other part of what we do is to actually talk to the practitioners.”

Even though it might seem strange to look to podcasts instead of published books and papers for cutting edge information, it really does seem like the story was told in human voices for the past 3 years. Dwarkesh was probably the best, but Tyler and Russ deserve credit as well for bringing these conversations out of the closed rooms and into the public domain.

Discuss AI Doom with Joy on May 5

If you like to read and discuss with smart people, then you can make a free account in the Liberty Fund Portal. If you listen to this podcast over the weekend: Eliezer Yudkowsky on the Dangers of AI (2023) you will be up to speed for our asynchronous virtual debate room on Monday May 5.

Russ Roberts sums up the doomer argument using the following metaphor:

The metaphor is primitive. Zinjanthropus man or some primitive form of pre-Homo sapiens sitting around a campfire and human being shows up and says, ‘Hey, I got a lot of stuff I can teach you.’ ‘Oh, yeah. Come on in,’ and pointing out that it’s probable that we are either destroyed directly by murder or maybe just by out-competing all the previous hominids that came before us, and that in general, you wouldn’t want to invite something smarter than you into the campfire.

What do you think of this metaphor? By incorporating AI agents into society, are we inviting a smarter being to our campfire? Is it likely to eventually kill us out of contempt or neglect? That will be what we are discussing over in the Portal this week.

Is your P(Doom) < 0.05? Great – that means you believe that the probability of AI turning us into paperclips is less than 5%. Come one come all. You can argue against doomers during the May 5-9 week of Doom and then you will love Week Two. On May 12-16, we will make the optimistic case for AI!

See more details on all readings and the final Zoom meeting in my previous post.

When Commitment Backfires: The Economics Behind Gang Tattoos and Changing Incentives

In economics, commitment devices are often seen as clever solutions to self-control problems—ways people can tie their future hands to avoid giving in to temptation. A smoker throws away their cigarettes, a dieter pays in advance for healthy meals, a student announces a deadline publicly so they can’t back out. The idea is that by limiting future choices, a person can force themselves to stick with a preferred long-term strategy. But commitment devices also show up in places far removed from personal productivity—and in some cases, they carry bad unintended consequences when the strategic landscape shifts.

Consider the case of gang tattoos, especially those associated with MS-13. For years, highly visible tattoos served as a powerful way to demonstrate loyalty to the group. These tattoos—sometimes covering the face, neck, or arms—weren’t just aesthetic. They signaled that the individual was fully committed to the gang. In economic terms, they functioned as a high-cost, hard-to-fake commitment device. By making oneself easily identifiable as a gang member, a person burned bridges to legitimate employment or life outside the gang. That might seem irrational at first glance, but it was often a rational decision in context. Within certain neighborhoods or prisons, that signal provided protection, status, and trust among peers. The visible commitment reduced the gang’s uncertainty about who was loyal and who might defect.

But the rules of the game changed. In March 2022, El Salvador launched an aggressive crackdown on gangs following a sharp spike in homicides. Under a sweeping “state of exception,” authorities suspended constitutional rights, arrested tens of thousands of people, and expanded prison capacity dramatically. Tattoos quickly became one of the easiest ways for police to identify and detain suspected gang members. News reports describe men being pulled from buses or homes not for current criminal activity, but simply because of the ink on their skin. In many cases, the tattoos were from years earlier—when the wearer had been young and immersed in a world where signaling loyalty felt necessary for survival. Now, those same signals serve as evidence in court or grounds for indefinite detention.

Continue reading

Understanding Inflation and Interest Rates

Anyone who teaches Macroeconomics knows that these concepts are hard for people to understand at first.

A clip about inflation has been making the rounds.

Transcripts provided by CNN show the following

CNN NewsNight with Abby Phillip
Aired April 17, 2025 – 22:00 ET

ABBY PHILLIP, CNN ANCHOR

BATYA UNGAR-SARGON, AUTHOR, HOW THE ELITES BETRAYED AMERICA’S WORKING MEN AND WOMEN

CHARLOTTE HOWARD, EXECUTIVE EDITOR, THE ECONOMIST

PHILLIP: Jerome Powell is the head of the Fed and has a mandate to keep inflation low and employment high. So if there are, you know, macroeconomic things that are happening in the economy that make it very difficult for him to do that, you don’t think he’s going to comment?

UNGAR-SARGON: Do you know what would have really helped? What would be a really good idea right now to help bring down inflation and make sure that things keep running smoothly? It’s dropping interest rates. Why doesn’t he do that?

PHILLIP: Why doesn’t he do that?

HOWARD: So interest rates, if you were to drop interest rates, you would stoke inflation.

GPT expands on Howard’s point: “Dropping interest rates would not lower inflation—in fact, it typically makes inflation worse.

Interest rates are a key tool the Federal Reserve uses to manage inflation. When rates are lowered, it becomes cheaper to borrow money. This encourages people and businesses to take out loans, spend more, and invest more, which increases demand for goods and services.

But when demand rises faster than supply can keep up, prices go up—that’s inflation.

So, in a time of high inflation, cutting interest rates would likely make the problem worse, not better. The Fed raises interest rates to make borrowing more expensive, which slows down spending and cools demand, helping to bring inflation under control.”

Recall that the United States achieved disinflation starting in 2022, largely due to the Federal Reserve’s aggressive interest rate hikes. Tyler calls the disinflation America’s triumph.

As for the commentariat, a diverse array of economists ranging from the Keynesian Paul Krugman to many conservative economists recognized that rate increases and disinflation were necessary and had to be done with promptness and fortitude. And so credibility reigned.

Research on Big Questions April 2025

I’m working on a new paper with Bart Wilson. We might have a draft to release soon.

  1. https://economistwritingeveryday.com/2023/03/25/discrepancy-in-views-about-music-pirating/  In that post, I pointed out that the estimates reported in journals for the effect of pirating on music revenues range from almost 0% to almost 100%. There is room for new empirical work. Not often is the range of the estimates that big.
  2. My coauthor Bart Wilson did an interesting podcast episode for the Curious Task in 2020.

https://thecurioustask.podbean.com/e/ep-64-bart-wilson-%e2%80%94-is-the-idea-of-property-universal/

Episode: Bart Wilson — Is The Idea of Property Universal? 

I’m providing a rough transcription of the part that stood out to me, because he identified a prime big unanswered question. This is around minute 7 of the episode.

Host: Why is [the Property Species] an interesting topic deserving of a book?

Bart Wilson: “So, I work with primatologists… and I would talk to them about what I’m working on with my laboratory experiments on property. They would say, ‘Oh yeah. Dolphins do that, too, or baboons. … scrub jays re-cache their food if another scrub jay is watching them so they are protecting themselves against theft… so property is all over the animal kingdom. And then I’m also working with my colleague in the English department. In the humanities, property is a very narrow thing, something Western European. It’s very modern. And, so, in one part of the academy property is this broadly natural phenomenon and in another part of the academy it’s very local: only some humans have it. And so, as a social scientist…”

Bart identified a gap in understanding. Property cannot be both common to all animals and rare among humans. In his book The Property Species he spans that gap by claiming (spoiler alert) that property is common to all humans and only humans. Human language is an important piece of that story. No other animal can wield complex symbolic language.

In our new paper (manuscript forthcoming) we’ll be investigating how humans use symbolic language to describe nonrivalrous digital resources.