In the last election I gave as much money as I felt I could afford to D candidates, especially Harris. Didn't buy me much. This election, I'm not giving, at all, even though I understand that R's have a huge dollar advantage. If it's lots of money that wins elections, so be it. At least I can know that's how this country rolls - to the richest goes the future, and I'd better get used to it or leave. I have hope that this election will be different, and the big dollars will not determine the outcome. In which case, I will be gladdened and my hope for the future will return, at least a little.
With the billionaire tax - Prop 40 on the CA ballot - I'll vote yes, even though many/most of those I look to for guidance - health care workers, schools, Newsom- are against. It seems many of those against taxing the entire assets of the billionaires believe that eventually such a tax will open the door to taxing my savings account or home equity (which I don't believe), or will cause CA's billionaires to flee the state. So be it. If having to pay more of their billions (which, as you say, have reached the point where the only thing left to buy is power) causes them to uproot from their homes, with a home's many connections and sources of meaning, then au revoir, bros. We'll see how we do without you. (And, seems a bit like the abusive husband threatening to leave if he doesn't get that he wants, now!) Wonderful, though troubled, Cali might be less crowded without you. We''l loose jobs? You've already told us thousands of times that AI will do that.
The pieces of the pie as they are now is unsustainable, unjust, and unfree.
Bravo Alondra. The obscenely rich continue to threaten us that they will leave if we tax them. So be it, bye-bye. Let's see what happens. Because if we don't free ourselves from the oligarchs, we are no better off than when we were under a king. The concentration of power in this country is unsustainable and must be addressed. Let us start now.
The flip side of the "disruption" coin is disrespect, disrespect for paying your fair share and taking on your part to invest in society and build a better world for your kids. I get the impression many techbros work hard on making their kids rich but not on making the world a better place for them and others.
The United States has transitioned to a winner-take-all, non-linear economy—characterized by network effects, extreme wealth concentration, and "superstar" market dominance—the traditional Economics 101 (Econ 101) curriculum becomes significantly less relevant for describing the modern world, though it remains essential as a foundational toolkit. While the core analytical methods of Econ 101 still hold value, its foundational assumptions often fail to capture the dynamics of a non-linear economic reality.
Standard introductory economics is heavily built on 19th and 20th-century models of perfect competition and linear returns. A non-linear, winner-take-all economy breaks these models in several fundamental ways: Econ 101 teaches that as businesses grow, they face diminishing returns (higher costs and lower efficiency). In the digital and non-linear economy, tech giants and platform monopolies experience increasing returns to scale. The marginal cost of replicating software or a digital service is virtually zero, allowing a single dominant player to scale infinitely and crush competition. Traditional curriculum suggests that workers are paid based on their marginal productivity (the specific value they add). In a winner-take-all system, network effects dictate success. A software engineer at a trillion-dollar company isn't necessarily thousands of times more "productive" than one at a failed startup; rather, they are leveraging a non-linear platform that scales their output globally. Econ 101 spends a massive amount of time on perfect competition—where many small firms sell identical products and have no market power. Today’s dominant markets (search engines, social media, e-commerce, operating systems) naturally trend toward monopoly or duopoly, making perfect competition an increasingly abstract fantasy rather than a useful baseline. Linear economics assumes markets naturally self-correct toward a stable equilibrium. Non-linear economics is defined by path dependency and "tipping points," where early, often accidental advantages lock in a winner permanently, preventing the market from correcting itself.
Despite these massive blind spots, the curriculum cannot be discarded entirely. It serves as a necessary scaffold for higher-level economic thought: You cannot fully grasp why a non-linear market is "failing" or operating differently without first understanding the baseline mechanics of supply, demand, opportunity cost, and scarcity. The core Econ 101 maxim that "people respond to incentives" remains universally true. The incentives in a winner-take-all economy just lead to different behaviors (e.g., companies burning billions in venture capital to achieve monopoly status rather than trying to turn an immediate profit). While the tech and corporate landscape is non-linear, large swaths of the everyday economy—like local restaurants, construction, hair salons, and physical retail—still operate largely under standard, linear Econ 101 principles of supply, demand, and localized competition.
The standard Econ 101 curriculum is no longer adequate as a standalone map of the macroeconomic landscape. It acts more like learning Newtonian physics: it works perfectly well for basic, everyday objects, but completely breaks down when you try to apply it to the "quantum realm" of modern, digital, network-driven economies. For the curriculum to remain truly relevant, universities must rapidly shift their focus away from perfect competition models and integrate concepts of information economics, game theory, network externalities, and market power much earlier in the educational track.
The biggest problems are that: (1) with Citizens United it’s a huge threat to democracy, as Elon can give more than all the working class people in most states and Zuckface & Elon’s sociopathic media platforms allow fake Russian accounts, massive slander, and AI generated fake video to poison our politics
(2) It’s a huge threat to our children’s and our mental health as the tech bros do nothing in the face of evidence that their platforms and AI bots inflict mental health issues on our kids and even encourage them to commit suicide, but they have so much money neither party can just go after them for fear of #1
(3) it’s a fundamental threat to our national security. With carried interest loophole, buy, borrow & die smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes, Maltese IRAs www.npr.org/2026/05/27/nx-s1-5835164/malta-tax-evasion-avoidance-loophole?, and countless other loopholes the rich lobby for constantly combined with Trump slashing IRS audit staff, more of our income is shifting to people who don’t pay taxes as our debt and interest payments spiral to banana republic levels. Combined with Congress rewarding high cost defense contractors who prioritize spreading subcontracts across key congressional districts and maximizing prices, our debt situation threatened our ability to keep up with China’s much lower cost per unit military growth.
Having lots of money lets you buy some votes, as noted, but the votes of the politicians already in power are also bought, and may be much more important (we call this lobbying, I think). Thus we create a spiral in which lots begets more--greater power, greater control, more money. The imbalance increases and will eventually lead to instability. To say the ground is shifting under our feet is not more apocalyptic than to say that AI will kill us all.
I wish everyone would watch Richard Wilkinson’s 2011 TED talk, in which he shows with mind blowing scattergrams that not only does inequality make a population worse off, even the wealthy are worse off. About half of all money is in the hands of the relatively few who fall short on ideas about how to use it for good, while the other half would do much better. https://www.ted.com/talks/richard_wilkinson_how_economic_inequality_harms_societies
companies "holding off on hiring so they can [have dry powder to] invest in AI" -Stacey Vanek Smith in the final minutes of the podcast
What a loaded concept, and for several companies likely a true one.
The stock market bases the price on what they expect to come, and companies base hiring somewhat likewise. Whether expectations eventually get met...we'll only find out in retrospect.
One other thing. Good point that these uber wealthy blokes aren’t paying taxes so why should we care if they leave the country. They’re receiving enormous benefits from being here. Government contracts and the like. High returns on investments such as lobbying efforts and campaign contributions. They’re being shortsighted with these efforts at dismantling the various programs that benefit the rest of us. Or maybe that dystopian system of AI is the one they’re counting on? If so, ultimately not much to lord over.
1. Wait. An Atlantic journalist got to watch all of The Simpson’s as an assignment?
2. Selecting one’s boss by showing up for an interview with an iced coffee reminded me of my H.S. History teacher back in the 70’s who claimed to have selected his wife by spilling a milkshake on the lap of each of his dates. His wife was the one date who agreed to a second date. 🤣
3. Okay, now here’s the real question. Justin, you spoke about labor share of income dropping substantially at the beginning of this podcast but then later on spoke of workers making a whole lot more now. For both is those to be true, then the pie is a whole lot bigger, which is true. But now we’re back to whether or not it’s a bad thing for the labor share of income to be lower. The answer is likely in the details, I’m sure. But maybe this is something you could expand on?
4. Is the answer to money = political power necessarily to limit money, ie, wealth? Couldn’t we limit money in politics? Corruption is present either way. I personally think both options are good ideas. At the very least, this idea that wealth beyond a certain point has no purpose other than to skew the world to favor a few over the rest is important.
Iced coffee in job interviews debate...key word is interview...communication and discussion. Quality of discussion about the iced coffee can tip the scale when qualifications are equal among candidates. The coffee becomes a vehicle for discussion between interviewee and interviewer. Valuable information can be gained for both to decide if job is a good fit. Justin sort of went there.
Justin, a marketing tip. Your Substack, at least to me, is much more complex to navigate than, how to say this?, that Nobel laureate, whose last name begins with K’s Substack. PK provides a (more or less) reliable Single feed each day. You challenge people to bounce around a bit more. speaking as your mother, of course you are worth bouncing around for. But speaking as a lazy Liberal wannabe, the simplicity of PK‘s Substack is more appealing in terms of top of my choice than yours. Streamline, streamline, streamline. So that I will be motivated to more consistently drink from your fount of wisdom. Remember, you are, of course lying to be the next Paul Krugman in terms of, let’s call it what it is, Econ popularization. So, learned from the master, if not substance, which should of course be your own particular contribution, at least form.
I will dig into your analysis more, but right away it occurred to me that it was precisely this issue of the evolution of the "organic composition of capital (wealth)" and its tendency to concentrate out of the masses over time that was the main contradiction identified by Karl Marx in the 1860s.
In the last election I gave as much money as I felt I could afford to D candidates, especially Harris. Didn't buy me much. This election, I'm not giving, at all, even though I understand that R's have a huge dollar advantage. If it's lots of money that wins elections, so be it. At least I can know that's how this country rolls - to the richest goes the future, and I'd better get used to it or leave. I have hope that this election will be different, and the big dollars will not determine the outcome. In which case, I will be gladdened and my hope for the future will return, at least a little.
With the billionaire tax - Prop 40 on the CA ballot - I'll vote yes, even though many/most of those I look to for guidance - health care workers, schools, Newsom- are against. It seems many of those against taxing the entire assets of the billionaires believe that eventually such a tax will open the door to taxing my savings account or home equity (which I don't believe), or will cause CA's billionaires to flee the state. So be it. If having to pay more of their billions (which, as you say, have reached the point where the only thing left to buy is power) causes them to uproot from their homes, with a home's many connections and sources of meaning, then au revoir, bros. We'll see how we do without you. (And, seems a bit like the abusive husband threatening to leave if he doesn't get that he wants, now!) Wonderful, though troubled, Cali might be less crowded without you. We''l loose jobs? You've already told us thousands of times that AI will do that.
The pieces of the pie as they are now is unsustainable, unjust, and unfree.
Bravo Alondra. The obscenely rich continue to threaten us that they will leave if we tax them. So be it, bye-bye. Let's see what happens. Because if we don't free ourselves from the oligarchs, we are no better off than when we were under a king. The concentration of power in this country is unsustainable and must be addressed. Let us start now.
The flip side of the "disruption" coin is disrespect, disrespect for paying your fair share and taking on your part to invest in society and build a better world for your kids. I get the impression many techbros work hard on making their kids rich but not on making the world a better place for them and others.
"And, seems a bit like the abusive husband threatening to leave if he doesn't get that he wants, now!"-Alondra Good point!
The United States has transitioned to a winner-take-all, non-linear economy—characterized by network effects, extreme wealth concentration, and "superstar" market dominance—the traditional Economics 101 (Econ 101) curriculum becomes significantly less relevant for describing the modern world, though it remains essential as a foundational toolkit. While the core analytical methods of Econ 101 still hold value, its foundational assumptions often fail to capture the dynamics of a non-linear economic reality.
Standard introductory economics is heavily built on 19th and 20th-century models of perfect competition and linear returns. A non-linear, winner-take-all economy breaks these models in several fundamental ways: Econ 101 teaches that as businesses grow, they face diminishing returns (higher costs and lower efficiency). In the digital and non-linear economy, tech giants and platform monopolies experience increasing returns to scale. The marginal cost of replicating software or a digital service is virtually zero, allowing a single dominant player to scale infinitely and crush competition. Traditional curriculum suggests that workers are paid based on their marginal productivity (the specific value they add). In a winner-take-all system, network effects dictate success. A software engineer at a trillion-dollar company isn't necessarily thousands of times more "productive" than one at a failed startup; rather, they are leveraging a non-linear platform that scales their output globally. Econ 101 spends a massive amount of time on perfect competition—where many small firms sell identical products and have no market power. Today’s dominant markets (search engines, social media, e-commerce, operating systems) naturally trend toward monopoly or duopoly, making perfect competition an increasingly abstract fantasy rather than a useful baseline. Linear economics assumes markets naturally self-correct toward a stable equilibrium. Non-linear economics is defined by path dependency and "tipping points," where early, often accidental advantages lock in a winner permanently, preventing the market from correcting itself.
Despite these massive blind spots, the curriculum cannot be discarded entirely. It serves as a necessary scaffold for higher-level economic thought: You cannot fully grasp why a non-linear market is "failing" or operating differently without first understanding the baseline mechanics of supply, demand, opportunity cost, and scarcity. The core Econ 101 maxim that "people respond to incentives" remains universally true. The incentives in a winner-take-all economy just lead to different behaviors (e.g., companies burning billions in venture capital to achieve monopoly status rather than trying to turn an immediate profit). While the tech and corporate landscape is non-linear, large swaths of the everyday economy—like local restaurants, construction, hair salons, and physical retail—still operate largely under standard, linear Econ 101 principles of supply, demand, and localized competition.
The standard Econ 101 curriculum is no longer adequate as a standalone map of the macroeconomic landscape. It acts more like learning Newtonian physics: it works perfectly well for basic, everyday objects, but completely breaks down when you try to apply it to the "quantum realm" of modern, digital, network-driven economies. For the curriculum to remain truly relevant, universities must rapidly shift their focus away from perfect competition models and integrate concepts of information economics, game theory, network externalities, and market power much earlier in the educational track.
The biggest problems are that: (1) with Citizens United it’s a huge threat to democracy, as Elon can give more than all the working class people in most states and Zuckface & Elon’s sociopathic media platforms allow fake Russian accounts, massive slander, and AI generated fake video to poison our politics
(2) It’s a huge threat to our children’s and our mental health as the tech bros do nothing in the face of evidence that their platforms and AI bots inflict mental health issues on our kids and even encourage them to commit suicide, but they have so much money neither party can just go after them for fear of #1
(3) it’s a fundamental threat to our national security. With carried interest loophole, buy, borrow & die smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes, Maltese IRAs www.npr.org/2026/05/27/nx-s1-5835164/malta-tax-evasion-avoidance-loophole?, and countless other loopholes the rich lobby for constantly combined with Trump slashing IRS audit staff, more of our income is shifting to people who don’t pay taxes as our debt and interest payments spiral to banana republic levels. Combined with Congress rewarding high cost defense contractors who prioritize spreading subcontracts across key congressional districts and maximizing prices, our debt situation threatened our ability to keep up with China’s much lower cost per unit military growth.
Good point. They don't call them "Beltway bandits" for nothing.
Having lots of money lets you buy some votes, as noted, but the votes of the politicians already in power are also bought, and may be much more important (we call this lobbying, I think). Thus we create a spiral in which lots begets more--greater power, greater control, more money. The imbalance increases and will eventually lead to instability. To say the ground is shifting under our feet is not more apocalyptic than to say that AI will kill us all.
I wish everyone would watch Richard Wilkinson’s 2011 TED talk, in which he shows with mind blowing scattergrams that not only does inequality make a population worse off, even the wealthy are worse off. About half of all money is in the hands of the relatively few who fall short on ideas about how to use it for good, while the other half would do much better. https://www.ted.com/talks/richard_wilkinson_how_economic_inequality_harms_societies
companies "holding off on hiring so they can [have dry powder to] invest in AI" -Stacey Vanek Smith in the final minutes of the podcast
What a loaded concept, and for several companies likely a true one.
The stock market bases the price on what they expect to come, and companies base hiring somewhat likewise. Whether expectations eventually get met...we'll only find out in retrospect.
One other thing. Good point that these uber wealthy blokes aren’t paying taxes so why should we care if they leave the country. They’re receiving enormous benefits from being here. Government contracts and the like. High returns on investments such as lobbying efforts and campaign contributions. They’re being shortsighted with these efforts at dismantling the various programs that benefit the rest of us. Or maybe that dystopian system of AI is the one they’re counting on? If so, ultimately not much to lord over.
1. Wait. An Atlantic journalist got to watch all of The Simpson’s as an assignment?
2. Selecting one’s boss by showing up for an interview with an iced coffee reminded me of my H.S. History teacher back in the 70’s who claimed to have selected his wife by spilling a milkshake on the lap of each of his dates. His wife was the one date who agreed to a second date. 🤣
3. Okay, now here’s the real question. Justin, you spoke about labor share of income dropping substantially at the beginning of this podcast but then later on spoke of workers making a whole lot more now. For both is those to be true, then the pie is a whole lot bigger, which is true. But now we’re back to whether or not it’s a bad thing for the labor share of income to be lower. The answer is likely in the details, I’m sure. But maybe this is something you could expand on?
4. Is the answer to money = political power necessarily to limit money, ie, wealth? Couldn’t we limit money in politics? Corruption is present either way. I personally think both options are good ideas. At the very least, this idea that wealth beyond a certain point has no purpose other than to skew the world to favor a few over the rest is important.
Iced coffee in job interviews debate...key word is interview...communication and discussion. Quality of discussion about the iced coffee can tip the scale when qualifications are equal among candidates. The coffee becomes a vehicle for discussion between interviewee and interviewer. Valuable information can be gained for both to decide if job is a good fit. Justin sort of went there.
I will let you do the obvious spellcheck.
Justin, a marketing tip. Your Substack, at least to me, is much more complex to navigate than, how to say this?, that Nobel laureate, whose last name begins with K’s Substack. PK provides a (more or less) reliable Single feed each day. You challenge people to bounce around a bit more. speaking as your mother, of course you are worth bouncing around for. But speaking as a lazy Liberal wannabe, the simplicity of PK‘s Substack is more appealing in terms of top of my choice than yours. Streamline, streamline, streamline. So that I will be motivated to more consistently drink from your fount of wisdom. Remember, you are, of course lying to be the next Paul Krugman in terms of, let’s call it what it is, Econ popularization. So, learned from the master, if not substance, which should of course be your own particular contribution, at least form.
I will dig into your analysis more, but right away it occurred to me that it was precisely this issue of the evolution of the "organic composition of capital (wealth)" and its tendency to concentrate out of the masses over time that was the main contradiction identified by Karl Marx in the 1860s.