Yes, I hate AI. But my hatred is not passionate or pathological. I hate AI in the same way that many rock music fans hated disco, circa 1977.
Most of the AI applications that have been thrust at me as a consumer are merely useless, rather than actively harmful. They are solutions in search of problems. The proverbial nipples on the male anatomy.
Nevertheless, I’ve resigned myself to the fact that tech companies are going to force AI on us at every opportunity in the foreseeable future. The tech giants have over-invested billions in technologies that were overhyped from the get-go. Six- and seven-figure jobs are on the line at Microsoft, Meta, Amazon, and elsewhere. Lives are at stake. Vice presidents of something or the other could be thrown out on the street!
AI is not going away anytime soon. Even if you don’t want it. Even if it serves no practical end.
Mark Zuckerberg recently built a MASSIVE data center for META in Georgia
– There are residential homes just hundreds of yards away – It uses so much water, residents no longer have water pressure in their homes – Their sink water no longer works – Their toilets don’t fill with… pic.twitter.com/UvApRZniNt
AI is already making my life worse, with the vast tsunami of fake news articles, and fake art, and fake videos that are proliferating online.
But all those things are minor inconveniences, in the big scheme of things.
In Georgia, meanwhile, some homeowners are being inconvenienced by the AI gorilla at a whole other level of magnitude.
Mark Zuckerberg built a massive data warehouse facility outside Atlanta to power Meta’s AI engine. The facility uses so much water, that it has left many residential homes without adequate water pressure. Some residents (watch the above video), now have to rely on bottled water in their homes.
These poor folks in Georgia do have a reason to hate AI. With a passion.
And all of this, so that the rest of us can get more AI-generated fake content on Facebook.
The Trump administration has announced that it will suspend $2.2 billion in federal funding for Harvard University. This is the result of the university’s failure to comply with a number of the administration’s policy initiatives, regarding—among other things—DEI, merit-based hiring and admissions reforms, and the way campus protests are handled. At present, Harvard is digging in its heels, and the Trump administration is withholding money.
At the 85-day mark, the Trump administration’s policies have met with mixed reviews. Trump’s actions aimed at curbing illegal immigration and securing the border have been popular, albeit draconian at times. The administration’s declaration of “two genders” was largely seen as a curb on gender-bending ideology that had simply gone a few bridges too far.
By contrast, Trump’s actions on tariffs provoked widespread alarm last week—including among some Republicans in Congress, and Trump supporters in the heartland. Trump’s talk of annexing Greenland and making Canada the 51st state have been head-scratching. And while his renaming of the Gulf of Mexico was harmless, it’s difficult to see what that accomplished. (It reminded me of the left’s weird obsessions with politically correct nomenclatures.)
Trump has also gone after universities. Most of his ire is directed at the Ivy League schools. I’ve been reading over some of these debates, and at times I’ve been thinking, “Well, I don’t know about that one.”
The problem, for supporters of Harvard, is this: from the perspective of the rest of the country, Harvard has been a political monoculture since the late 1960s. The same could be said of Yale, Princeton, and other Ivy League institutions.
For that matter, academia had already tilted decidedly to the left in the 1980s, when I was a student at the University of Cincinnati. This was especially true in the liberal arts and the humanities. During the 1960s, the more left-leaning college students disproportionately gravitated toward academic careers. By the time I arrived on campus in the fall of 1986, they were in early middle age, and made up the core of the professorial ranks.
There is a sense among many Americans that our universities have become places of ideological and intellectual rot, and are among the many “swamps” that need to be “drained”. Yes, I realize that I’m painting a wide brushstroke here. But I experienced the closing of the academic mind for myself—forty years ago, and at a state university in Ohio.
The Ivy League, in particular, is not popular in the heartland. And it isn’t just the guys with gun racks in the rear windows of their pickup trucks who are scoffing at Harvard, Yale, etc. In recent years, corporate employershave soured on the Ivy League, too. Corporate employers have gradually discovered that ideologically stagnant universities, no matter how prestigious, don’t produce superior graduates. In practical terms, a graduate of the local community college might be a better hire.
Which brings us around to this whole notion of the anti-Trump “resistance”. I want a civil, intelligent anti-Trump resistance, just like I wanted a civil, intelligent, anti-Biden resistance. I have an equal distrust for social engineers on the left, and Bible-thumpers on the right. I don’t want either side to become too powerful. If different viewpoints compete in the marketplace of ideas, then hopefully we choose the best ones, and we land somewhere in the middle.
But for those of you who would seek to mobilize opinion against the Trump administration: pick another rallying cry besides, “Remember Harvard’s $2.2 billion!” Don’t expect anyone who doesn’t live in one of the liberal coastal enclaves to rally around Harvard. That just isn’t going to happen.
The Trump administration has just announced that smartphones and computers will be exempted from the 145% China tariffs.
This is good news. Tariffs are certainly one way to shoot an otherwise healthy economy in the foot. Trump was about to blow off both feet with a double-barrel shotgun.
As I pointed out in an earlier post: Apple has screwed the pooch, anyway, in a manner of speaking, by placing the majority of its manufacturing in China. I’m not saying that they have to make all their products in Ohio. But making 90% of iPhones in a quasi-hostile state is textbook corporate tomfoolery.
And that’s not all. The iPhone production process (much as I love my new iPhone 16!) is also a textbook example of corporate greed. I recently read The One Device: The Secret History of the iPhone by Brian Merchant. As Merchant details in the book, Apple has become overly reliant on an outdated manual assembly process that literally cannot function without thousands of low-wage workers who are driven to extremes by tyrannical bosses in China-based supplier plants. (Read Merchant’s book for a detailed explanation of all this.)
Nevertheless, there is always a gap between what “should” be, and what is. Apple and other tech companies have been given a reprieve on China tariffs. They should use that reprieve to figure out how to make their products without relying on slave-wage labor. Have these highly paid, genius CEOs ever heard of automation, perchance?
I’m old enough to remember the heady days when China was “opened” to the West—back in the 1970s. Back then, American corporations believed that if they could just find a way to sell one widget to each of China’s one billion consumers—chop, chop!—riches would be theirs!
Shortly after that, China became a manufacturing base for American companies, thanks to the policies of Chinese leader Deng Xiaoping, and his special economic zones (经济特区). Under Deng, China became “the workshop of the world”.
Deng broke with Marxist-Leninist orthodoxy. He was fond of aphorisms like “To grow rich is glorious,” and “It doesn’t matter if a cat is black or white. What matters is: does the cat catch mice?”
Many people—me included, to the extent that I was paying attention—believed that China was going to become a much larger version of Japan or South Korea. Once the economic shackles of Marxism were set aside, we reasoned, liberal, Western-style democracy would naturally follow.
Then on June 3-4 1989, the Chinese Communist Party crushed a peaceful student protest in Tiananmen Square with tanks and AK-47s. The Beijing government massacred between 2,000 and 3,000 of its own citizens, many of them university students. I was a university student myself in 1989, so this one struck home. Had the circumstances of my birth been different, that might have been me.
Tiananmen Square should have been our first clue that the China of our wishful thinking was not the China of reality. We could easily have tempered our overly optimistic expectations and moderated our policies then.
But by then, the American business community was all-in on China. Yes, the Chinese government still maintained gulags and whatnot, but so what? Labor costs were cheap over there!
Then China became more militarily powerful, and the leadership changed. Deng Xiaoping, however much he repressed his own people, wanted peaceful relations with the West. But China’s new leadership, of which Xi Jinping is the latest incarnation, sought to apply the same heavy-handedness to foreign policy.
In April 2001, Chinese fighter planes forced a US Navy plane flying in international airspace to land on Hainan Island. The American crew was captured and detained for ten days. That incident got smoothed over, and was soon forgotten in the all-consuming shock and outrage over 9/11, which occurred about five months later. But still, another warning sign.
Then China unilaterally annexed portions of international waters in the South Pacific. This has brought China into near conflict with not only the USA, but also Japan, South Korea, the Philippines, Australia, and Vietnam.
As if that wasn’t enough, in the 35 years since the Tiananmen Square massacre, we’ve had numerous reports of Chinese spying, cyber attacks, and intellectual property theft.
Oh, and then there was COVID-19 in 2020. I’m not going to attempt to untangle that whole ball of bat intestines, but this was yet one more really bad thing that came out of China. At the very least, the Chinese Communist Party’s mishandling of the situation made the pandemic worse. (And that is the most charitable interpretation of the CCP’s role, among all the interpretations out there.)
The COVID-19 pandemic is now five years behind us. Many US, European, and Japanese companies have been “decoupling” from China over the past half-decade.
But not Apple. Over half of all Macs (MacBooks, iMacs, etc.) are still manufactured in China. Some 80% of iPads are made there. And 90 percent—almost all—iPhones are still Chinese-made.
Which brings us to the recent tariff brouhaha. As a former economics major, I’m no fan of tariffs. As a former employee of several Japanese companies, I have nothing against foreign corporations, foreign products, or foreign trade. (I drive a Toyota.) As a lifelong lover of foreign languages and cultures, I’m certainly no xenophobe.
But only a fool of a CEO would approach China nowadays as American executives did 40 years ago. There are scores of reasons why any American company should have long ago begun its decoupling from the People’s Republic.
Yes, that is difficult. But to paraphrase Lance Ito, that’s why Apple CEO Tim Cook and other CEOs make the big bucks. Tim Cook’s annual compensation is now $74 million.
Any B-school student with a few economics classes under his or her belt could come up with the idea of reducing costs by basing manufacturing in a low-cost country like China. The process of decoupling from China is much more difficult, and requires a lot more creativity and innovation—the sort of task for which a CEO might be paid $74 million per year.
I might also mention that I’m an Apple devotee. I either own, or have owned, all the major Apple product lines. I’ve owned at least three iPods and two iPads. I’m now on my fourth iPhone. I’ve had multiple MacBooks and iMacs.
We have been told that an iPhone made anywhere but China (or a similar low-cost country) will cost $3,500. I call bullshit. Innovate, automate, figure out a way to do it more cheaply. For better or worse, that is now Tim Cook’s job. We’ll see if he can finally earn that $74 million. He should have foreseen this day long ago.
We knew that the Democrats were going to come out against Trump’s tariff banzai charge.
Never mind that Democrats were the champions of tariffs in the 1980s and 1990s. Since Trump’s victory last November, Democrats have been searching for an issue, grasping at straws. Until this week’s tariff shock in the markets, the Democrats had been stuck with unpopular albatrosses like transgender primary education and free government phones for Venezuelan gang members.
Now, with the stock market going to hell, the Democrats may have finally found their issue. And this time, it’s one that reality-attached Americans actually care about: 58 percent of us have some direct exposure to the stock market.
We also knew that libertarian-minded Republicans like Rand Paul would raise the alarm. Tariffs contradict a hundred years of sound economic theory, about which Senator Paul knows a lot. (I don’t want to assume that President Trump hasn’t read the works of Adam Smith or Milton Friedman; but I wouldn’t want to lay money on such a bet, either.)
But now there are real cracks in the MAGA wall. Senator John Kennedy, a Louisiana Republican who is possibly to the right of President Trump, yesterday described the president as “the pit bull who caught the car”, where this tariff fight is concerned.
In an earlier interview on CNN, Kennedy had stated that however this shakes out, Donald Trump is responsible for the outcome. When asked, “Do you think this is Donald Trump’s economy now?”, Kennedy replied, “Oh, I think it is. There’s no question.”
HUNT: Do you think it's Donald Trump's economy now?
SEN. JOHN KENNEDY: Oh, I think it is. No question. I think once he decided to add the tariffs, clearly he will be held responsible, as he should. pic.twitter.com/TriJBDDhDL
The upshot of all this is that President Trump has a short window of time to either accomplish his aims, or to start backpedaling. If he does neither, then he will face a revolt from within his own party.
There are many Republican politicians who have been eager to ride Donald Trump’s coattails to power. Far fewer will be interested in riding his coattails to defeat and ignominy. Not even the most MAGA Republican believes that the party can survive a Trump-induced financial crisis for very long.
Over this past weekend I saw several anti-DOGE protests in my neck of the woods. These were admittedly small. But I live in an Ohio county that went for Donald Trump by a 67 percent margin in 2024. This is Trump Country, by any measure.
In recent weeks, Elon Musk has eviscerated the federal government, radically downsizing some agencies, while eliminating others.
Musk’s proponents claim that he is performing a necessary surgery on a bloated federal bureaucracy. His detractors argue that he is cutting essential government functions—including some related to national security (!)—in order to fund tax cuts for billionaires.
So which side is correct?
We might start by examining historical precedent. President Trump is not the first POTUS to take pruning shears to the government. Nor is this a purely partisan issue. Major government downsizings occurred under both Reagan (Republican) and Clinton (Democrat).
On the other hand, government payrolls were expanded under Nixon and George W. Bush, both Republicans.
There are various reasons why government downsizing can be necessary—and desirable. The private sector, after all, downsizes, rightsizes, and reorganizes all the time. We can all name private-sector business entities that were thriving twenty years ago, but which don’t exist today. Should a government agency, once created, be sacrosanct?
And then there is our national debt: currently $36.56 trillion. It is no exaggeration to say that the United States faces a debt emergency.
***
But anyway: back to historical precedent. On August 10, 1993, President Bill Clinton signed the Omnibus Budget Reconciliation Act of 1993 into law. The newly elected president was alarmed at the growing federal deficit, which was then a mere $290 billion—a fraction of its current size.
The 1993 omnibus bill included a mix of tax increases and federal spending cuts. It therefore found detractors on both sides of the political continuum. But the Clinton administration took advantage of a Democratic majority in Congress to push the bill through.
Naysayers said that the omnibus bill’s tax increases would be a drag on the economy. There were also complaints about cuts to government services and benefits.
But when Bill Clinton left office in 2001, the economy was booming, and Clinton had transformed the federal deficit into a federal surplus. Unemployment dipped below 4 percent—and that was mostly from a booming private sector.
***
Throughout the spring and summer of 1993, Clinton explained his case to the American people respectfully, with plenty of numbers, and copious charts and graphs. He emphasized the shared pain of his deficit reduction efforts. (Taxes were increased on the wealthiest 1.2 percent of Americans, and certain business deductions—such as deductions for business meals—were scaled back.)
The Trump administration, by contrast, has accompanied the government cuts not with business increases on the wealthy, but with a sweeping set of tariffs that will be paid by consumers. A regressive tax, essentially.
President Trump has entrusted the government cuts to Elon Musk, a tech billionaire who once smoked weed on the Joe Rogan Podcast. Musk claims that he is cutting billions in waste and saving taxpayers trillions of dollars. Perhaps he is. But where is the data? Where is the oversight? Where are the economists and the management experts who might lend the effort some credibility, via third-party corroboration? (Or at the very least, a hint of a sanity check?)
And then there is the tone of the whole thing. Everyone knows seniors who are dependent on Social Security and Medicare. Most of us also know a government employee or two. My grandmother retired from the EPA in 1983, after a decades-long career with what used to be called the “civil service”. One of my former classmates currently works for the IRS. (As of right now, he still has his job.)
To describe these people as “parasites” or “freeloaders”—as has often been done in the rightwing media—is completely the wrong message and completely the wrong tone.
***
We almost certainly do need to make significant cuts to the size of our federal bureaucracy. But these cuts should be better explained, and there should be some sense of checks-and-balances, a public confidence that this involves more than Elon Musk looking at an agency, and giving it a thumbs-up or a thumbs-down.
The cuts should be approached with methodology and seriousness, in other words: the sort of methodology and seriousness that would have accompanied a similar restructuring, under either a Democratic or Republican administration of the past. The sort of methodology and seriousness that would accompany a similar restructuring in any large private-sector enterprise.
Most of all: the process needs to be better explained. No one is sure that Elon Musk is applying any methodology or seriousness at all. Hence the alarm over what is being done, even in some corners of Trump Country.
The debate over tariffs is not a new one. It precedes, and lies in the background of the American Civil War. The British Empire’s policy of mercantilism was a key factor in the lead-up to the American Revolution.
It should therefore be no surprise to learn that tariffs, free trade, protectionism, import quotas, etc….that whole ball of wax…was the subject of debate during the 1980s, too.
At that time, the specific source of concern was the Japanese automotive industry, which was making strong inroads into the American market. American cars, meanwhile, sold poorly in Japan.
There were various reasons for the imbalance. In the 1970s and 1980s, Detroit-made automobiles were plagued by numerous quality problems. (The joke was that you didn’t want to buy a UAW-made car that rolled off the assembly line on a Monday or a Friday.)
Japanese cars, meanwhile, were comparatively cheap, high-quality, and fuel-efficient. The oil crisis eased somewhat during the 1980s, but Americans still had an appetite for vehicles that could go far on a single gallon of gas (which then cost around a dollar).
In those days, it was the Democrats who made the case for tariffs, import quotas, and protectionism. President Reagan and the Republicans resisted. The above video is President Reagan’s April 25, 1987 radio address on that very subject.
The differences between Ronald Reagan and Donald Trump are too many to enumerate here. But it’s safe to say that Ronald Reagan would have disagreed with President Trump’s recently unveiled tariff policy.
There is more than one side to the tariff issue, of course. I’ve made the case against tariffs on this blog, based on what I learned as an economics major many years ago. I also raised an important counterpoint: that globalization has exacerbated the widening inequalities between the working class and the managerial class here in the USA.
This debate will continue over the coming weeks and months, as the results of President Trump’s tariff policies become apparent. Trump’s plan may work; but the preponderance of historical and economic data suggests otherwise.
One thing is clear, though: neither the Democrats nor the Republicans represent what they did in the 1980s. For evidence, one need look no further than the current tariff debate.
As I stated earlier this week, I have my doubts about the tariffs that the president rolled out yesterday. As a former economics major, I am also aware of the economic arguments against tariffs. (So please do not feel obligated to send me a copy-and-pasted treatise on the subject. I almost certainly know more about it than you do.)
That said, there is a counterargument. There is a counterargument for almost everything. And this one is worth considering: my 1984 running shoes.
In 1984, I began to run high school track and cross country. I needed a pair of specialized running shoes. While there have been some enhancements over the past 40 years, the basic technology of running shoes has remained the same. Running shoes aren’t like computers.
My brand-named running shoes (either Nike or New Balance) cost $29.99 in 1984. That’s about $92 in 2025 money, and about what a similar pair of shoes would cost today.
But here’s the thing: my 1984 shoes had a MADE IN THE USA tag.
Nowadays, most running shoes are made in Vietnam, Indonesia, etc.
So what the heck happened?
Here’s what happened: large corporations like Nike started paying much less for labor when they shipped production overseas. Their inflation-adjusted prices largely stayed the same. Their profits increased.
Where did those profits go?
How about CEO pay?
CEO pay has risen by more than one thousand percent since 1978. In 2020, CEOs were paid 351 times as much as the average worker. Pay has also increased substantially for other members of the managerial and shareholder class.
In other words, it could be that in the age of globalization, corporations like Nike are underpaying for labor, and overpaying for management. By this logic, reshoring overseas production would restore a balance of compensation between the working class and the managerial class. (Note: No one is suggesting that CEOs should be paid the same as factory workers. But should CEOs earn 350 times more than the average worker?)
Ironically, this is similar to arguments that pro-labor Democrats made in the 1980s, back when Republicans were the champions of free trade, and the cheerleaders of the “global economy”.
Like everything else concerning economic theory, this argument is also made ceteris paribus, or “all else remaining the same”. Will reshoring production mitigate wealth inequality in America? I don’t know.
What I do know is this: in 1984, companies like Nike and New Balance figured out how to profitably manufacture running shoes in the USA, without charging $400 for a pair of shoes.
If they could do it in 1984, why can’t they do it now?
In the fall of 1988 I was twenty years old, and a new economics major at the University of Cincinnati.
I was not a new college student. I had entered university in the fall of 1986 as an English major, then switched to biology, before settling on economics. But anyway, there I was: taking Microeconomics 101 in the fall of 1988.
One of the broad themes of the class was that government bureaucrats and social engineers meddle with the economy at their peril—and the peril of the citizenry. For example, we learned that rent controls, popular among progressives, have the effects of reducing both the quantity and the quality of available housing.
We learned about tariffs, too. Tariffs are often popular for ideological reasons, or when there is a sense that domestic producers have difficulty competing.
Tariffs are not without their positive side. They do benefit a small number of domestic producers and workers. But these limited benefits come at a significant cost.
Tariffs raise prices on foreign-made goods for the obvious reason: this price increase is a direct outcome of the tariff. But tariffs raise prices on domestic-made products, too. This second price increase occurs because domestic producers suddenly face a less competitive environment. All they have to do is maintain their prices just below the artificially raised prices of the tariffed, foreign goods.
A tariff is a tax on consumers, and a wealth transfer device. When tariffs are enacted on foreign steel—to cite one example—consumers pay the “tax” of higher prices. Part of this benefit goes to the government, and part of it serves as a subsidy to domestic steel manufacturers. The government, in other words, is forcing consumers to send more of their money to domestic steel producers than would have been the case without the tariff.
Tariffs can also lower quality (because of reduced competition) and lower aggregate demand (because of higher prices). Tariffs are not a tool for mass, shared prosperity.
I want to emphasize that none of this is cutting-edge economic knowledge. I learned all of this almost 37 years ago, as a twenty-year-old college student. The ill effects of tariffs, are—quite literally—Economics 101.
What is astounding is that we have come to a point where the people running our government seem not to grasp the basics of economics. Yes, I’m talking about the Trump administration.
Is it possible that the basic economic theory I was taught in 1988 is wrong? Anything is possible. But it’s highly unlikely. Moreover, the stated motives for the Trump administration’s tariffs—a 19th-century version of mercantilism in which Americans only manufacture, and purchase nothing from abroad (not even raw materials)—strikes me as ahistorical and utopian. It is based on ideology, not economics.
This is rather like the Biden administration’s previous efforts to force all of us to drive electric cars, even when we didn’t want them. But given the scope of the upcoming tariffs, the Trump administration’s efforts to direct economic behavior from on high could prove far more catastrophic.
If you don’t believe me, consult any economics textbook. Consult Thomas Sowell’s Basic Economics. All of these sources will tell you the same thing.
The Trump administration’s tariff plan is not sound economics, and it is certainly not conservatism. It would be best described as a reckless exercise in wishful thinking.
