LA Wildfires

14 Jan · Let's Know Things

This week we talk about the Pacific Palisades, Hurricane Katrina, and reinsurance.

We also discuss developed property values, arsons, and the cost of disasters.

Recommended Book: The Data Detective by Tim Harford

Transcript

Natural disasters, whether we’re talking about storms or fires or earthquakes, or some combination of those and other often related issues, like flooding, can be incredibly expensive.

This has always been true, both in terms of lives and material damage caused, but also in terms of raw currency—the value of stuff that’s destroyed and thus has to be rebuilt, replaced, or in some rare cases partitioned off so that similar things don’t happen in the future, or because the space is just so irreparably demolished that it’s not cost effective to do anything with the land, moving forward.

The four most expensive natural disasters that we’ve been able to tally—so this doesn’t include historical disasters that are far enough back that we can’t really quantify the damage, due to an inability to directly compare, or insufficient data upon which to base such quantification—the top four that we can line up against other such disasters and compare the numbers for are all earthquakes.

The earthquake in Japan in 2011 that, in addition to causing a lot of damage unto itself, also caused the disaster at the Fukushima nuclear plant tops the list, with a cost at the time of around $360 billion, which would be nearly $490 billion in today’s dollars.

The second most expensive natural disaster is also an earthquake in Japan, this one hitting a region called Hanshin in 1995, causing about $200 billion worth of damage in mid-90s money, which would be about $400 billion, today, and the third was an earthquake not too long ago, the 2023 quake that struck along Turkey and Syria’s border, causing something like $160 billion in damage.

The fourth costliest natural disaster hit China in 2008, causing around $130 billion in damage, which is about $184 billion in today’s money.

These disasters also caused a lot of casualties and deaths; about 20,000 people died in that most-costly, nuclear-incident-triggering quake, while nearly 88,000 were killed in that fourth-most-costly, Chinese one.

The Great Hanshin quake, in comparison, lead to somewhere around 6,000 deaths: which is still just a staggering human loss, but it’s an order of magnitude less than in those other comparable disasters; which hints at the trend we see with these sorts of events—the scale of wounded and killed doesn’t necessarily correlate with the scale of costs associated with damaged and destroyed infrastructure and other assets.

The costliest natural disaster in US history, as of the first week of 2025, at least, was Hurricane Katrina back in 2005, which all but destroyed the city of New Orleans and much of the surrounding area, causing around $125 billion in damage, which is equivalent to about $195 billion, today, but it only led to around 1,400 deaths: again, all of those deaths absolute tragedies, and any disaster that causes that many deaths is an historical event. But looking at the raw numbers, that’s a shockingly low figure compared to the sum of the monetary damages tallied; it’s actually remarkable as few people died as they did, looking at this storm and it’s impacts through that lens.

What I’d like to talk about today is another natural disaster, this one ongoing as I record this, that looks primed to take the record of most-costly, in terms of money, US natural disaster from Katrina, and some of the implications of this disaster.

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Part of why disasters in the US, natural or otherwise, tend to result in fewer fatalities than those that occur elsewhere is that the US is a very wealthy country with relatively high-quality and widely dispersed infrastructure.

There are quibbles to be voiced about that claim, as many recent reports indicate that said infrastructure isn’t terribly well maintained, and that the country’s healthcare setup and relatively low pay and support for the sorts of people who save lives and rescue victims in the midst of such disasters raise questions about how long this will continue to be the case; some of these high-quality systems are somewhat fragile, in other words, and won’t always perform at the level they arguably should.

That said, in general, when need be, US government institutions—federal and regional—are capable of throwing money at issues until they mostly go away, and they have a lot of decent resources to leverage when need-be, as well. Americans in general also have reasonable amounts of resources to call upon, on average at least, when they need to flee town and stay elsewhere for a while until a storm subsides, for instance.

This is all on average, and we tend to see the gaps in that generality when disasters hit, and Katrina is a perfect example of this disaster illuminated dichotomy, as a lot of the country’s least well off people, who have arguably been let down by the system and their government in various ways, were unable to do what everyone else was capable of doing, and were thus stuck in ramshackle and dangerous accommodations, and in some cases weren’t rescued because of the nature of the infrastructure that was meant to help protect them, but which was ultimately incapable of doing so. Other people were shuttled by those entities to other parts of the country while the disaster was being handled, and some were never brought back—it was all a pretty big scandal.

Looking at the averages, though, the US tends to experience disasters that are more expensive in terms of money than lives because there’s more costly infrastructure in place, more valuable assets owned by pretty much everyone, compared to many other nations around the world, at least, and folks are generally capable of getting out of the way of stuff that might kill them—at least when we’re talking about things like storms and fires.

Case in point is the ongoing, as of the day I’m recording this, jumble of wildfires that are menacing, and in some cases demolishing, parts of the Greater Los Angeles area in Southern California.

As of the day I’m recording this, a day before this episode goes live, there are two primary fires still spreading, designated as the Eaton and Palisades fires, those names based on the regions in which they started to flare out of control, and several smaller ones called the Kenneth, Hurst, and Lidia fires.

The Palisades fire is currently the largest, having burned about 24,000 acres, followed by the Eaton, which has consumed around 14,000 acres. The Kenneth, Hurst, and Lidia fires have burned around 1,000, 800, and 400 acres, respectively.

That’s…not huge. Tens of thousands of acres is a decent sized plot of land, definitely, but for comparison, the Smokehouse Creek Fire that burned through parts of Texas and Oklahoma in 2024, and which became the largest wildfire in Texas history, consumed more than 1,100,000 acres.

The Park Fire, which plagued Northern California in mid-2024, is the state’s largest-ever arson-caused fire, and it consumed nearly half a million acres.

So a total of just of 40,000 acres or so for this new collection of fires is piddly, within that context.

The difference here is that both of those other fires consumed mostly, though not entirely, undeveloped land. And such land, while not value-less, is not the same kind of asset, in terms of dollars and cents, as heavily developed, with homes and businesses and electrical cables and roads and other such infrastructure, land tends to be.

These new, Southern California fires are smaller than those other, big-name wildfires, then, but they’re also consuming some of the most expensive real estate, and the properties and other assets build atop that real estate, in the world.

As of right now, the Kenneth and Lidia fires are completely contained, and the Hurst is getting there. The Eaton and Palisades fires, the two largest of the group, are still mostly uncontained, however, due in part to wild and dangerous winds that are making containment efforts difficult, in some cases preventing aerial efforts, and in others making conditions extra risky for people on the ground, due to the dynamic and quick-moving nature of things.

Given all of this, and again, given that these fires are burning homes worth tens of millions of dollars, located on coastal land that’s in some case worth around the same, it’s perhaps no surprise that analysts are already projecting that these fires could cause something like $50 to $150 billion in economic losses; and for comparison, the aforementioned Camp Fire in Northern California, which also consumed some fairly expensive homes and real estate, in addition to the undeveloped park land it consumed, only tallied about $30 billion in damage, all told, while the fires that hit Hawaii in 2023 added up to just $5.7 billion.

Of that $50-150 billion total, it’s estimated that around $20 billion will be covered by insurance, which represents a staggering loss for those without any, or without the proper insurance, but also potentially represents a huge loss for residents of California, as the state has an insurance of last resort scheme called the FAIR Plan, which is a privately run, but state-created entity that serves those who can’t find insurance via conventional, private insurers. And often, though not always this means those customers are in areas that are too expensive or too risky for traditional insurance companies to operate in.

In practice, that usually means insurers of last resort have a portfolio full of risky bets, and the plans they offer are more expensive than usual, and tend to provide less coverage and benefits than the conventional stuff.

In these sorts of situations, though, we have a whole lot of risky bets than have suddenly come up snake eyes, this FAIR Plan suddenly having to pay out billions of dollars to their customers in these risky areas. And between 2023 and 2024, the number of homes in the very expensive Pacific Palisades area, which is high-risk for wildfires, nearly doubled to around $6 billion of covered assets in that zip code, alone. It’s been estimated that the plan could have something like $24 billion in total losses from this cluster of ongoing fires.

The FAIR Plan isn’t government-funded: instead, if it runs out of money because of high levels of payouts, private insurance companies foot the bill, which will place further strain on those insurance companies, which are already expected to be staggered by losses across the region, but also then raises insurance prices for everyone in that area, moving forward, which could further inflate expenses for the state’s tens of millions of residents, while also possibly incentivizing businesses to move elsewhere, which would reduce taxflows to state coffers, and over time cause even more financial problems.

Reinsurance claims could muddle some of this math—reinsurance being basically insurance plans for insurance companies, bought from other, specialized insurance companies—as sufficient reinsurance coverage could help the FAIR Plan, and other insurers operating in these areas, weather the storm without being forced to raise prices excessively. But those companies, too, might then raise their reinsurance rates substantially, and those increases would then ripple across this same economic landscape.

Lots of potential long-term financial damage, either way, on top of the assets lost and damage caused directly, and of course, the human losses, which as of the day I’m recording this, totals 24 people confirmed killed, dozens of people missing, and a still unquantified number of injuries and lives completely, perhaps permanently disrupted or upended.

This whole situation—these fires—are complicated by many factors.

The climate is one, as 2024 was the hottest year on record, the first one we’ve experienced, as a species, above that now-famous 1.5 degrees celsius-beyond-pre-industrial-levels milestone. That figure will fluctuate day to day and even year to year due to all sorts of variables, but the big picture here is that the global water cycle has changed because global average temperatures have been nudged upward, and that’s causing a lot of upsets to local infrastructure and ecosystems that have always, since we’ve been here, at least, relied on that cycle functioning in a certain way, within a certain spectrum of operation.

Now that we’ve defied that spectrum, we’re finding ourselves with more extreme disasters of all kinds, but also more extreme and dangerous and damaging and deadly repercussions from those disasters, because the things we did to ameliorate them previously no longer work the same way, either.

So California, especially this part of California, has been even drier than usual, and the way the state used to prevent the spread of wildfires no longer works the way it used to work; a climactic issue compounded by issues with the systems we’ve clung to, despite the problems they’re meant to address having evolved substantially since they were originally developed and deployed.

This situation is also complicated by the fact that southern California, and especially the LA area, is a hotbed for global entertainment, and that means a lot of wealth concentration.

Lots of people scrambling to buy and build homes with beautiful coastal views, and the fact that these areas are high-risk for wildfires and increasingly other disasters, as well, doesn’t really matter, because rich people want to be in this area, around all this activity and wealth, and it’s generally understood that wealth can make you immune to these sorts of things, at least most of the time.

That immunity is no longer such a given, and that high concentration of expensive assets means that even a relatively small fire can cause a heck of a lot of damage in a relatively short time.

The same general collection of properties also means this region has a lot of landmarks that are at high-risk of destruction, and which are increasingly expensive to maintain and protect and repair, and it means the world is watching, to a certain degree—as celebrities flee their homes and influencers report the beat-by-beat of their evacuations—which in turn means there’s plenty of incentive to spread misinformation, either out of a desire to participate in the situation, or because of honest ignorance, or for political and ideological reasons: wanting to paint the local governance as incompetent, for instance.

At the moment, folks in the area are suffering from periodic power outages, largely due to local utilities shutting down some of their service areas in order to avoid starting new fires, their power cables and high winds sometimes sparking such things even in less pressure-cooker-like moments. And the air quality is absolutely abysmal, leading to localized health issues.

Some areas have run out of water, apparently due to issues with reservoir infrastructure, and one of the two firefighting planes the local authorities have been using to douse the fires when the wind conditions allow has been grounded for repairs, after colliding with an illegally flown drone, the operator of which was apparently a paparazzi trying to capture photos of celebrity homes, either being consumed by fire or somehow avoiding such a fate.

Again, this is a fast-moving story, and a lot is changing day by day, but at the moment it’s looking like this could become the most expensive natural disaster in US history, and while local authorities are making progress in halting these fires’ spread, the damage that’s been done has already been substantial, and could have a lot of knock-on effects, for individuals and for the state’s and country’s economy, for years to come.

Show Notes

https://en.wikipedia.org/wiki/Park_Fire

https://en.wikipedia.org/wiki/Smokehouse_Creek_Fire

https://www.washingtonpost.com/business/2025/01/09/los-angeles-wildfire-economic-losses/

https://en.wikipedia.org/wiki/California_FAIR_Plan

https://www.nytimes.com/2025/01/08/climate/california-homeowners-insurance-fires.html

https://www.sfchronicle.com/california-wildfires/article/fair-plan-insurance-losses-20025263.php

https://www.nytimes.com/interactive/2025/01/08/weather/los-angeles-fire-maps-california.html

https://www.wsj.com/finance/wildfire-insurance-homeowners-costs-3889531f

https://www.newyorker.com/news/the-lede/the-insurance-crisis-that-will-follow-the-california-fires

https://archive.ph/Inso5

https://www.npr.org/2025/01/09/nx-s1-5252837/will-there-be-enough-money-to-pay-out-insurance-claims-from-the-la-wildfires

https://www.washingtonpost.com/climate-environment/2025/01/09/california-wildfire-palisades-homeowners-insurance/

https://arstechnica.com/health/2025/01/public-health-emergency-declared-amid-las-devastating-wildfires/

https://apnews.com/article/los-angeles-wildfires-southern-california-c5826e0ab8db965cb2814132ff54ee6f

https://apnews.com/video/fires-wildfires-los-angeles-los-angeles-area-wildfires-california-574351467d2142ad958c212a0413ad96

https://www.reuters.com/world/us/san-fernando-valley-under-threat-los-angeles-fire-rages-2025-01-12/

https://www.wsj.com/us-news/los-angeles-wildfires-social-media-rumors-44d224b4

https://www.wsj.com/style/los-angeles-hollywood-fires-celebrities-homes-paris-hilton-d1e3a7de

https://www.vulture.com/article/hollywood-paparazzi-los-angeles-fire.html

https://www.theguardian.com/us-news/live/2025/jan/12/california-fires-death-toll-expected-rise-ucla-threatened-winds-latest-updates

https://www.reuters.com/business/environment/2024-was-first-year-above-15c-global-warming-scientists-say-2025-01-10/

https://www.nytimes.com/2025/01/09/us/los-angeles-fire-water-hydrant-failure.html?unlocked_article_code=1.oE4.OUQs.lcdCoSSeQBtL

https://www.axios.com/2025/01/11/los-angeles-fire-insurance-losses-billions

https://www.latimes.com/california/story/2025-01-08/palisades-fire-devastation-scope

https://www.washingtonpost.com/weather/2025/01/11/los-angeles-fires-california-updates-palisades-eaton-kenneth/

https://www.latimes.com/california/story/2025-01-09/drone-collides-with-firefighting-aircraft-over-palisades-fire-faa-says

https://www.nytimes.com/2025/01/11/us/los-angeles-calfire-firefighters.html

https://www.axios.com/2025/01/12/la-fires-climate-change-drought-extreme-weather

https://www.axios.com/2025/01/12/california-wildfires-loss-mental-health

https://www.nytimes.com/live/2025/01/12/us/los-angeles-fires-california

https://www.nytimes.com/2025/01/12/us/trump-los-angeles-fire-newsom-bass.html

https://en.wikipedia.org/wiki/Hurricane_Katrina

https://en.wikipedia.org/wiki/2008_Sichuan_earthquake

https://en.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_earthquakes

https://en.wikipedia.org/wiki/Great_Hanshin_earthquake

https://en.wikipedia.org/wiki/2011_T%C5%8Dhoku_earthquake_and_tsunami

https://en.wikipedia.org/wiki/List_of_disasters_by_cost

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit letsknowthings.substack.com/subscribe

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Chinese Emissions
27 Mai· Let's Know Things
This week we talk about greenhouse gases, renewable energy capacity, and China’s economy.
We also discuss coal power plants, natural gas, and gigatons.
Recommended Book: What If We Get It Right? by Ayana Elizabeth Johnson
Transcript
In 2024, global CO2 emissions hit a new all-time high of 37.8 gigatons, that figure including emissions from industrial processes, oil well flaring, and the combustion of fuel, like petroleum in a vehicle.
And for context, a gigaton is one billion metric tons, which is about 2.2 trillion pounds. A single gigaton is about the weight of 10,000 fully equipped aircraft carriers, it’s about twice the mass of all human beings on the planet, and it’s approximately the same mass of all non-human land-mammals on earth.
That’s one gigaton, and global CO2 emissions last year hit 37.8 gigatons; so quite a lot of carbon dioxide headed into the atmosphere, every year, these days.
That’s up about .8% from 2023 levels, and it resulted in an atmospheric CO2 concentration of about 422.5 parts per million, which is around 3 ppm higher than 2023, and 50% higher than pre-industrial levels. And again, for context, if we don’t want to experience global average temperature increases, more extreme weather, and disrupted water cycles, the general consensus is that we want to keep atmospheric CO2 levels at or below 350 ppm, and we’re currently at 422.5 ppm.
That said, while emissions grew last year, mostly because fuel combustion increased by around 1%, which overshadowed the decrease in industrial process emissions, which was down 2.3% for the year, emissions growth in 2024 was less than GDP growth; and that’s important because for a long time it was assumed that in order to grow global wealth, according to that metric for wealth, at least, more fossil fuels would need to be burned, because that was the pattern for a long time, industrial revolution, onward.
Beginning in the early 2000s, though, GDP growth and emissions growth diverged, and that decoupling has become more prominent as many wealthy nations, including the US, have upped the efficiency of many previously energy-hogging aspects of their economies—things like appliances and the aforementioned industrial processes—while also shifting a lot of energy generation away from massively polluting fuels like coal and oil, over to less-polluting fuels like gas, and non-polluting sources like solar and wind, and in some cases nuclear, as well.
This relationship varies significantly from country to country, and the benefits are mostly being seen in so-called advanced economies right now, as many poorer nations are still seeing increased emissions from more polluting power sources, generating electricity, and the growth in wealth leading to more people buying cars and scooters, many of which run on dirty fuels.
In the US, though, GDP has doubled since 1990, but CO2 emissions have dropped back down to around 1990 levels.
Which to be clear is still a whole lot, as Americans consume a lot of stuff and use a lot of energy, and there are a lot of people living in the US using all that energy and buying all that stuff. But it serves as a good example of this divergence, which we’re also seeing across the EU, where European economies, on average, are 66% larger than in 1990, and CO2 emissions are about a third lower than levels from that same year.
What I’d like to talk about today, though, is how this dynamic is playing out in China, a place with a staggeringly high population, a rapidly enlarging middle class, and a whole lot of energy needs.
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China is a renewable energy powerhouse.
It’s an energy of all kinds powerhouse, truthfully, but its development of renewable energy technologies, and its deployment of those technologies, has been truly remarkable, especially over the past decade or so.
China has more renewable energy capacity—mostly solar and wind—than the next 13 countries combined. The US comes in second place, but China has four-times as much renewable energy capacity than the US.
Despite that, though, because of China’s huge population and its remarkable wealth-spreading success story, having brought something like 800 million people out of poverty over the past 40 years, a lot of people in the country need a lot more energy, every year. Because as people make more money, they tend to use more electricity and heat, and they tend to buy more things, need bigger homes, and so on. All of which requires more energy.
So even though they’ve been building solar panels and wind turbines at a blistering rate, spreading these things all over the place, massively increasing their capacity for clean electricity, they’ve also been building more fossil fuel-burning power plants, especially coal power plants, and that’s made it the world’s biggest emitter of greenhouse gases; a little less than half of the country’s total installed generation capacity burns fossil fuels, which is a huge drop from even a handful of years ago, but because so much of the remaining fossil fuel stock is coal-burning, those energy assets account for an outsized portion of global emissions.
New, official data released by the Chinese government, so probably smart to take it with a grain of salt, though these sorts of numbers are usually more reliable than the economy-related numbers they put out, these days, but new data was crunched by Carbon Brief, and they found that March of 2024 was China’s most recent peak in terms of emissions, and since then, their emissions have dropped by 1%.
The drop might be accelerating, too, as they also found that new installations in the first quarter of 2025 dropped emissions by 1.6% compared to the same quarter in 2024, so they may be scaling up their renewables deployment efforts, which could lead to even more of a drop.
And remarkably, China’s power sector tallied an emissions drop of 5.8%, despite demand for power increasing by 2.5% that same period: which suggests that although China’s population is still wanting more electricity and stuff, the same energy, or rather, a bit more of it, now produces fewer emissions, which means the ratio of renewables to non-renewables in their grid is shifting further in renewables’ favor.
Now, as with many other countries, China is beginning to replace coal in some of their power plants with natural gas, instead of swapping them out for solar, wind, and nuclear. Which is absolutely better than coal, but gas still emits CO2 when burned, and there are entirely different problems associated with gas infrastructure, including leaky pipes than allow methane to seep into the atmosphere, which stays up there for a shorter duration than CO2, but is a lot more potent, in terms of heat-capture—so gas in better in some ways, especially short-term ways, than coal, and less polluting for people on the ground, too, but definitely not as good for long-term outcomes as renewables.
All that said, there’s some optimism here, as this is the first time this sort of peak and drop has been noted in China’s emission numbers in a context where that drop hasn’t been directly attributable to economic factors; the pandemic, for instance, where a lot less energy was needed, fewer people were driving, and thus there were far fewer emissions globally, for a while.
There’s a chance, though, that this trend could be disrupted by the burgeoning trade-war between the Trump administration and essentially everyone, but China in particular. The China-facing component of Trump’s tariffs has been mellowed for a few months, but is still significant at around 30% as of the day I’m recording this. And that could lead to a rewiring of global supply chains, but also a shift in what China manufacturers are producing, how they’re getting those goods to their destination.
Those shifting variables could lead to short-term or long-term changes in who’s producing what, how it’s being shipped, and thus, what sorts of energy expenditures we’ll see, and how that energy’s being produced, because of the peculiarities of those new, perhaps rapidly deployed, needs.
Show Notes
https://www.worldbank.org/en/news/press-release/2022/04/01/lifting-800-million-people-out-of-poverty-new-report-looks-at-lessons-from-china-s-experience
https://e360.yale.edu/features/china-renewable-energy
https://arstechnica.com/science/2025/05/analysis-shows-that-chinas-emissions-are-dropping-due-to-renewables/
https://www.carbonbrief.org/analysis-clean-energy-just-put-chinas-co2-emissions-into-reverse-for-first-time/
https://mn350.org/understanding350
https://www.iea.org/reports/global-energy-review-2025/co2-emissions
https://www.iea.org/commentaries/the-relationship-between-growth-in-gdp-and-co2-has-loosened-it-needs-to-be-cut-completely
https://wmo.int/media/news/record-carbon-emissions-highlight-urgency-of-global-greenhouse-gas-watch
https://www.carbonbrief.org/analysis-global-co2-emissions-will-reach-new-high-in-2024-despite-slower-growth/
https://ourworldindata.org/co2-emissions

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Coinbase Hack
20 Mai· Let's Know Things
This week we talk about kidnappings, ransoms, and bitcoin.
We also discuss crypto wealth, robberies, and memecoins.
Recommended Book: The Status Game by Will Storr
Transcript
In 2008, a white paper published by someone writing under the pen name Satoshi Nakamoto proposed a method for making a decentralized asset class called a cryptocurrency that led to the creation of bitcoin, which was implemented and began trading in 2009.
While there were other variations on this theme, and attempts to create something like a cryptocurrency previously, bitcoin is generally considered to be the first modern incarnation of this asset class, and its approach—using a peer-to-peer network to keep track of who owns what tokens on a publicly distributed ledger called a blockchain—led to the development of many copycats, and many next-generation cryptoassets based on similar principles, or principles that have been iterated in all sorts of directions, based on the preferences and beliefs of those assets’ founders.
In its early days, bitcoin didn’t make much of a splash and was considered to be kind of an anomaly, mostly interesting to a very small number of people who speculated about alternative currencies and how they might be developed and implemented in the real world, but as of mid-May 2025, the global market cap for all cryptocurrencies is $3.39 trillion, bitcoin accounting for more than $2 trillion of that total.
That said, there are tens of thousands of cryptocurrencies available, these days, though the majority of them have been formally discontinued or simply allowed to go fallow, becoming functionally inactive.
That’s partly the consequence of a surge in interest during the height of the COVID-19 pandemic, the price of bitcoin popping from just over $5,000 at the start of the pandemic to around $68,000 in late-2021.
Bitcoin and most of the other crypto-assets that sprung up during that tumultuous period then collapsed when the US Federal Reserve hiked interest rates, intending to temper inflation, which had the knock-on effect of reining in risky bets on things like seed-level startups and alternative assets classes, like crypto—bitcoin dropped to less than $17,000 in 2023, partly as a result of that move—but as inflation levels cooled and investors started to look for assets that might pay out big time again, there was another wave of crypto-asset launches, especially of the ‘meme coin’ variety, which basically means a crypto token that’s launched either as a joke, or to try to make some money off something that’s trending—the most famous meme coin is probably Dogecoin, which was originally released in 2013 as a joke, but then boomed in popularity and price during the pandemic.
Through it all, and well before most people knew what bitcoin or cryptocurrencies were, Coinbase has served as a central pillar of the crypto-asset ecosystem.
The company was founded in 2012 by a former Airbnb engineer as a crypto exchange: a place where you can swap crypto assets for other crypto assets, but importantly, where you can also sell those assets for real world money, or buy them for real world money.
And that’s what I want to talk about today, and more specifically a recent hack of Coinbase, and the potential implications of that hack.
—
In mid-May of 2025, Coinbase reported, in a legally required Securities and Exchange Commission filing, that their company was hacked, and that the hack may end up costing Coinbase between $180 and $400 million, all told.
According to that filing, Coinbase received an email from the hacker on May 11, saying that they’d obtained a bunch of information about Coinbase customers and their accounts, alongside other Coinbase documentation related to their account management systems and customer service practices. The hacker demanded $20 million from the company, which the company refused to pay.
Coinbase officials have been keen to note that passwords and private keys were not compromised in the hack, so the hackers couldn’t just log into someone’s account and empty their crypto wallets or the real-deal money they might be keeping there, but they did access names, addresses, phone numbers, and email addresses, alongside the last four digits of some users’ social security numbers, their government ID images, like drivers licenses and passports, and their account balances.
All of which isn’t as bad as passwords and private keys being stolen, but it’s not good, either. The hackers, or people working with them, have reportedly been launching phishing attacks against some of the higher net-worth individuals whose information was stolen, those attacks—which usually involve tricking victims into divulging other information, like passwords—made a million times easier because the folks doing the attacks had that stolen information.
What’s more, and this isn’t necessarily obvious from reading the pieces published about this hack, but it’s important context surrounding all of this, people who have a lot of money in crypto-assets are increasingly likely to be targeted for other sorts of crimes, compared to people with a lot of wealth in conventional assets, like money, homes, and stocks.
Case in point, in early May of this year, a trio of Florida teens kidnapped a man at gunpoint in Las Vegas, drove him to a remote desert area about an hour away, and then stole about $4 million in crypto and other digital assets, like NFTs.
They apparently waited for him at his apartment complex and when he pulled up, they threatened him, and said they had his dad, and would kill him if he didn’t get in their car, and then they got his account passwords and other information from him, once he was away from any possible help.
In Canada, back in early November of 2024, the CEO of a crypto company based in Toronto was kidnapped during rushhour, forced into the kidnappers’ vehicle and forced to pay a million dollars in ransom before he was released.
According to a security firm that specializes in protecting wealthy people with crypto-assets, that CEO’s kidnapping was the 171st instance of criminals using physical violence, including kidnapping, but also other types of robbery, to steal crypto assets; they also said there tend to be more such cases when the price of these assets is high.
Well, the price of a bitcoin is high right now, more than $103,000 per coin, as of the day I’m recording this, and France and other Western European nations are seeing a spate of kidnappings of high net-worth crypto-holders, some of which have resulted in mutilation, as was the case with a 60-year-old man who was kidnapped in broad daylight, at 10:30am in Paris—four men in ski-masks pushed him into the back of a delivery van, and his kidnappers demanded his crypto-millionaire son pay a ransom; they cut off the older man’s finger during the ordeal.
The kidnappers demanded something like 5-7 million euros, which wasn’t paid, and they were eventually captured by police. But law enforcement is seeing a lot of this sort of thing all over the world right now, people who made fortunes in crypto being kidnapped, and in some cases their friends and family, or partners, also being kidnapped, or kidnapped instead. Whatever the specifics, the person with the crypto-wealth is then hit up for a ransom.
Often, the people being targeted are known to be wealthy because their wealth, their gains in this particular asset market, is publicized.
The big concern amongst many people in the crypto-world right now, then, is that although the Coinbase hack didn’t result in lost passwords or keys, the information that was stolen, including the balance of users’ accounts, could make these users targets, giving anyone with access to this stolen data a list of people they might steal from, and information about where to find them, how to contact them, and how much they can probably hit them up for.
On top of that, they can see who has had large balances in the past, how much cash they sold their holdings for, and who maybe previously had large holdings on Coinbase, but then transferred those assets to a private wallet—so even if they don’t have large Coinbase balances, they possibly have large balances hidden on a harddrive somewhere.
Crypto wealth is generally considered to be easier to steal, and to get away with said theft, because of its very nature; it’s largely disconnected from traditional banking systems and many traditional banking regulations, and it’s often simpler to launder crypto assets than real money, converting bitcoin into stable coins into other coins before then converting those assets into real money, for instance.
So while Coinbase seems to be doing what they can to make their users whole, including paying back users whose information was lost in the breach, that information then used to phish them, successfully—so if you were conned out of money because the hackers got this information and then tricked you—Coinbase will pay you back what you lost.
But it’s not really possible to undo other, non-immediate damage, like the new level of threat some of these hacking victims maybe face, as the global economy gets weird, job security is iffy for many people in many industries, at best, and there’s this list of people who seem to have plenty of money, that money held in more-stealable-than-usual assets, alongside what amounts to a map to where they can be found, and all sorts of information that paints an incomplete, but potentially leveragable, portrait of their lives.
Show Notes
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001679788/000167978825000094/coin-20250514.htm
https://www.cnbc.com/2025/05/15/coinbase-says-hackers-bribed-staff-to-steal-customer-data-and-are-demanding-20-million-ransom.html
https://techcrunch.com/2025/05/15/coinbase-says-customers-personal-information-stolen-in-data-breach/
https://www.nytimes.com/2025/04/24/magazine/crybercrime-crypto-minecraft.html?unlocked_article_code=1.Hk8.UV7K.VEEqHFsUu24g&smid=url-share
https://www.yahoo.com/news/florida-teens-kidnap-las-vegas-200918594.html
https://www.cbc.ca/news/canada/toronto/kidnapping-toronto-businessman-cryptocurrency-1.7376679
https://www.theguardian.com/world/2025/may/04/french-police-investigate-spate-of-cryptocurrency-millionaire-kidnappings
https://www.advisor.ca/investments/market-insights/the-reasons-behind-bitcoins-surge/
https://www.statista.com/statistics/863917/number-crypto-coins-tokens/
https://www.forbes.com/digital-assets/crypto-prices/?sh=c86585d24785
https://en.wikipedia.org/wiki/Coinbase
https://en.wikipedia.org/wiki/Cryptocurrency
https://en.wikipedia.org/wiki/Bitcoin
https://www.sciencedirect.com/science/article/abs/pii/S0378437122005696
https://en.wikipedia.org/wiki/Meme_coin

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Energy Star
13 Mai· Let's Know Things
This week we talk about the NHTSA, CAFE standards, and energy efficiency.
We also discuss incentive programs, waste heat, and the EPA.
Recommended Book: Africa Is Not a Country by Dipo Faloyin
Transcript
In the United States, fuel-efficiency laws for vehicles sold on the US market are set by the National Highway Traffic Safety Administration, or NHTSA. They set the Corporate Average Fuel Economy, or CAFE standards by which vehicle-makers have to abide, and that, in turn, establishes the minimum standards for companies like Ford or Toyota making vehicles for this market.
That CAFE standard is paired with another guideline set by the Environmental Protection Agency that sets standards related to tailpipe emissions. The former says how many miles a vehicle should be able to travel on a gallon of fuel, while the latter says how much CO2, methane, and other pollutants can be legally emitted as that fuel is burnt and those miles are traversed.
These two standards address different angles of this issue, but work together to, over time, reduce the amount of fuel consumed to do the same work, and pollution created as that work is accomplished; as a result, if you’re traveling 50 miles today and driving a modern car in the US, you’ll consume a lot less fuel than you would have traveling the same distance in a period-appropriate car twenty years ago.
Back in the final year of the Biden administration, the president was criticized for not pushing for more stringent fuel-efficiency standards for US-sold and driven vehicles. The fuel economy requirements were increased by 2% per year for model years 2027 to 2031 for passenger cars, and the same 2% per year requirement will be applied to SUVs and other light trucks for model years 2029 to 2031.
This is significantly lower than a previously proposed efficiency requirement, which would have seen new vehicles averaging about 43.5 mpg by model year 2032—an efficiency gain of 18%. And the explanation at the time was that Biden really wanted to incentivize carmakers to shift to EVs, and if they weren’t spending their time and resources on fuel-efficiency tech deployment for their gas-guzzlers, which Biden hoped to start phasing out, they could spend more on refining their EV offerings, which were already falling far behind China’s EV models.
Biden wanted half of all new vehicles sold in the US by 2030 to be electric, so the theory was that fuel-efficiency standards were the previous war, and he wanted to fight the next one.
Even those watered-down standards were estimated to keep almost 70 billion gallons of gasoline from being consumed through the year 2050, which in turn would reduce US driver emissions by more than 710 million metric tons of CO2 by that same year. They were also expected to save US drivers something like $600 in gas costs over the lifetime of each vehicle they own.
Since current president Trump returned to office, however, all of these rules and standards have come into question. Just as when he was president the first time around, rolling back a bunch of Obama-era fuel-efficiency standards—which if implemented as planned would have ensured US-sold vehicles averaged 46.7 mpg by 2026, so better than we were expected to get by 2032 under Biden’s revised minimum—just as he did back then, Trump is targeting these new, Biden standards, while also doing away with a lot of the incentives introduced by the Biden administration meant to make EVs cheaper and more appealing to consumers, and easier to make and sell for car companies.
What I’d like to talk about today is another standard, this one far less politicized and widely popular within the US and beyond, that is also being targeted by the second Trump administration, and what might happen if it goes away.
—
In 1992, the US Environmental Protection Agency, under the endorsement of then-president George HW Bush, launched the Energy Star program: a voluntary labeling program that allowed manufacturers of various types of products to affix a little blue label that says Energy Star on their product, boxes, and/or advertising if their product met the efficiency standards set by this program.
So it’s a bit like if those aforementioned fuel-efficiency standards set for vehicles weren’t required, and instead, if your car met the minimum standards, you could slap a little sticker on the car that said it was more energy efficient than cars without said sticker.
A low bar to leap, and one that wasn’t considered to be that big a deal, either in terms of being cumbersome for product-makers, or in terms of accomplishing much of anything.
Energy Star standards were initially developed for the then-burgeoning field of personal computers and accessories, but in 1995 things really took off, when the program was expanded to include heating and cooling infrastructure, alongside other components for housing and other buildings.
From there, new product categories were added on a semi-regular basis, and the government agency folks running the program continued to deploy more technical support and testing tools, making it easier and easier for companies wanting to adhere to these standards to do so, relatively easily and inexpensively.
And to provide a sense of what was required to meet Energy Star standards in the days when they were really beginning to take off and become popular, in the early 2000s, refrigerators needed to be about 20% more efficient, in terms of electricity consumption, than the minimum legal standard for such things, while dishwashers needed to be 41% more efficient. Computers around that time, more specifically in 2008, were required to have an 85% efficiency at half load and something close to that at 20% and 100% power load—which basically means it they needed to use most of the energy they drew, and release less of it as waste-heat, which was a big issue for desktop computers at the time.
Energy Star TVs had to use 30% less energy than average, with more modern versions of the standard requiring they draw 3 watts or less while in standby mode, and a slew of 90s and early 2000s-era technologies, like VCRs and cordless home phones were required to use something like 90% less electricity than the average at the time.
This standard helped push the development of more energy efficient everything, as it was a selling point for companies making things for real estate developers, in particular. Energy-hogs like light fixtures, which cost a fortune to power if you’re thinking in terms of skyscrapers or just building a bunch of houses, became far more energy efficient after the folks in charge of buying the lighting for these projects were able to eyeball options and use the Energy Star label as a shorthand indication that the cost of operation for those goods would be far less, over time, than their competition; it was kind of pointless to buy anything else in many cases, because why would you want to spend all that extra money over time buying less-efficient fluorescent lights for your office buildings, especially now that it was so easy to see, at a glance, which ones were best in this regard?
And the same general consensus arrived on the consumer market not long after, as qualified lighting was something like 75% more efficient than non-qualified, legal-minimum-meeting lighting, and Energy Star verified homes were something like 20% cheaper to own.
It was estimated that US homeowners living in Energy Star certified homes saved around $360 million on their energy bills in 2016, alone, and another estimate suggests that US citizens, overall, have saved about half a trillion dollars over the past 33 years as a result of the program and the efficiency standards it encourages.
So this is a relatively lightweight program that’s optional, and which basically just rewards companies willing to put more efficient products on the market. They can use the little label if they live up to these standards, and that tells customers that this stuff will use less energy than other, comparable products, which in turn saves those customers money over time, and puts less strain on the US electrical grid.
This program, consequently, has been very popular, for customers, for the companies making these products—because by jumping through a few hoops, they can get some of their products certified, and that gives them a competitive advantage over companies that don’t do the same, and especially over companies selling cheaper goods from overseas, which tend to be a lot less efficient because of that cheapness—and it’s been popular for politicians across the political spectrum, because people who buy things and pay energy bills vote those politicians into office, and companies that make such goods hire lobbyists to influence their decisions.
All of which brings us to today, mid-May of 2025, a point at which the second Trump administration seems to be considering possibly getting rid of the Energy Star certification program.
Initial reports on the matter are seemingly well-sourced, but anonymous, as is the case with a lot of White House briefs right now, so some of this should be taken with a grain of salt, because of how it’s being reported and because this administration has flip-flopped a whole lot already, and on things much bigger and more prominent than this, since returning to office, so this could just go away after being reported upon, even if they actually intended to do it before that pushback.
But what seems to have happened is this:
In January of 2025, after returning to the White House, Trump’s administration put a big Trump supporter and Republican politician, Lee Zelden, in charge of the Environmental Protection Agency.
Zelden publicly holds a lot of standard Republican talking points, including what’s often called skepticism about climate science and vehement support of oil drilling, including fracking. He did say that climate change is a real issue that needs to be addressed during his EPA head confirmation hearing, however.
Under Trump’s second administration, many government agencies have been either completely done away with, or wiped out, in terms of funding and staff, so that they’re basically just zombie agencies at this point, and the EPA is an agency that Trump has historically not been a big fan of, and which he seems to be trying to rewire toward deregulation: so regulations like fuel efficiency standards are not good according to some strains of usually more conservative politics, and for some business owners, because these are additional rules they have to legally abide by, which costs them money.
And back in March of 2025 Zelden announced that the EPA would be pulling back on regulations related to power plants, would incentivize rather than disincentivize the production of oil and gas, would do away with a bunch of pollution-related standards, especially those related to coal power plants and how much pollution they can emit, and many other similar things, which—to shorthand all this—may be somewhat popular if you think climate change concerns are overblown and that it’s more important to keep coal mines operational than to keep streams and rivers clean, but which will generally look really, really bad if you’re any kind of environmentalist and/or are concerned about climate change.
The government also recently cut the EPA’s budget by 54.5%, dropping said budget back to where it was when Ronald Reagan was president. This cut, along with cuts to other agencies responsible for tracking dangerous weather, saving sea turtles, and keeping US National Parks clean and functional, will, according to the government, save US taxpayers $163 billion.
According to reports from a recent all-hands meeting of the EPA’s Office of Atmospheric Protection, Trump administration officials announced that that office would be dissolved, and that the Energy Star program would be eliminated.
Now, there’s a chance that this is just the result of the administration’s at times seemingly blind cutting of budgets, backtracking only when there’s sufficient pushback, and there’s a chance this is a continuation of a political moment a few years back when the Biden administration was considering doing away with Energy Star certification for gas ranges, the idea being that if it uses gas instead of electricity, it’s part of the problem, even if it’s more efficient than other ranges.
Republican politicians responded to lobbying efforts from the US gas industry and stirred that up into a big frenzy, to the point that people were vehemently defending their right to own a gas stove, which was never under threat, but that’s how these sorts of astroturfed moral panics work, and it could be that they’re looking to replicate some of that magic now, taking down a standard that they hope to frame as an example of liberal overreach, telling people that these things take away their right to choose what they want to buy, and how much energy or fuel to burn, even when that’s not actually true.
There’s also a chance, as I mentioned earlier, though, that this is just a trial balloon, and that once they realize there’s a decent amount of bipartisan support for this program, they’ll step back from this cut, and maybe even claim it for themselves, using it as an example of American exceptionalism: look how great American-made goods are, we’re more efficient than anybody else—not bad messaging at a time in which that kind of competitive language is popular with those in charge, though that competition might not be the real point of all this, at least for some of the people making some of these decisions, right now.
Show Notes
https://www.usatoday.com/story/news/nation/2025/05/09/trump-budget-cuts-environmental-programs/83441472007/
https://www.epa.gov/newsreleases/epa-launches-biggest-deregulatory-action-us-history
https://en.wikipedia.org/wiki/Lee_Zeldin
https://web.archive.org/web/20201214180957/https://www.energystar.gov/about/origins_mission/energy_star_overview/about_energy_star_residential_sector
https://web.archive.org/web/20161202012204/https://www.energystar.gov/index.cfm?c=about.ab_milestones
https://web.archive.org/web/20170622184250/http://www.dailytech.com/New+Energy+Star+50+Specs+for+Computers+Become+Effective+Today/article15559.htm
https://insideclimatenews.org/news/08052025/energy-star-program-could-be-eliminated-by-trump-administration/
https://cleantechnica.com/2025/05/10/energy-star-program-gets-the-kiss-of-death/
https://www.theverge.com/news/664670/water-energy-efficiency-standards-trump-dishwasher-washing-machine-showerhead-toilet
https://en.wikipedia.org/wiki/Energy_Star
https://edition.cnn.com/2025/05/06/climate/energy-star-trump
https://www.nytimes.com/2025/05/06/climate/epa-energy-star-eliminated.html
https://www.washingtonpost.com/climate-environment/2025/05/06/energy-star-program-epa-trump/
https://www.energy.gov/eere/buildings/energy-star
https://www.npr.org/2025/05/07/g-s1-64905/energy-star-program-cuts
https://apnews.com/article/trump-appliances-consumers-energy-efficiency-3b6100e001a2629dfea9be231f467841
https://www.reuters.com/article/business/environment/trump-finalizes-rollback-of-obama-era-vehicle-fuel-efficiency-standards-idUSKBN21I25R/
https://apnews.com/article/climate-trump-mpg-fuel-economy-standards-automakers-0ef9147a0c3874a50a194e439f604261
https://apnews.com/article/vehicle-fuel-economy-requirement-nhtsa-epa-85e4c3b7bbba9a9a9b7e5b117fe099bd
https://apnews.com/article/epa-electric-vehicles-emissions-limits-climate-biden-e6d581324af51294048df24269b5d20a
https://www.nhtsa.gov/laws-regulations/corporate-average-fuel-economy

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Model Context Protocol
6 Mai· Let's Know Things
This week we talk about the Marshall Plan, standardization, and USB.
We also discuss artificial intelligence, Anthropic, and protocols.
Recommended Book: Fuzz by Mary Roach
Transcript
In the wake of WWII, the US government implemented the European Recovery Program, more commonly known as the Marshall Plan, to help Western Europe recover from a conflict that had devastated the afflicted countries’ populations, infrastructure, and economies.
It kicked off in April of 1948, and though it was replaced by a successor program, the Mutual Security Act, just three years later in 1951—which was similar to the Marshall Plan, but which had a more militant, anti-communism bent, the idea being to keep the Soviets from expanding their influence across the continent and around the world—the general goal of both programs was similar: the US was in pretty good shape, post-war, and in fact by waiting to enter as long as it did, and by becoming the arsenal of the Allied side in the conflict, its economy was flourishing, its manufacturing base was all revved up and needed something to do with all the extra output capacity it had available, all the resources committed to producing hardware and food and so on, so by sharing these resources with allies, by basically just giving a bunch of money and assets and infrastructural necessities to these European governments, the US could get everybody on side, bulwarked against the Soviet Union’s counterinfluence, at a moment in which these governments were otherwise prone to that influence; because they were suffering and weaker than usual, and thus, if the Soviets came in with the right offer, or with enough guns, they could conceivably grab a lot of support and even territory. So it was considered to be in everyone’s best interest, those who wanted to keep the Soviet Union from expanding, at least, to get Europe back on its feet, posthaste.
So this program, and its successor program, were highly influential during this period, and it’s generally considered to be one of the better things the US government has done for the world, as while there were clear anti-Soviet incentives at play, it was also a relatively hands-off, large-scale give-away that favorably compared with the Soviets’ more demanding and less generous version of the same.
One interesting side effect of the Marshall Plan is that because US manufacturers were sending so much stuff to these foreign ports, their machines and screws and lumber used to rebuild entire cities across Europe, the types of machines and screws and lumber, which were the standard models of each in the US, but many of which were foreign to Europe at the time, became the de facto standard in some of these European cities, as well.
Such standards aren’t always the best of all possible options, sometimes they stick around long past their period of ideal utility, and they don’t always stick, but the standards and protocols within an industry or technology do tend to shape that industry or technology’s trajectory for decades into the future, as has been the case with many Marshall Plan-era US standards that rapidly spread around the world as a result of these giveaways.
And standards and protocols are what I’d like to talk about today. In particular a new protocol that seems primed to shape the path today’s AI tools are taking.
—
Today’s artificial intelligence, or AI, which is an ill-defined type of software that generally refers to applications capable of doing vaguely human-like things, like producing text and images, but also somewhat superhuman things, like working with large data-sets and bringing meaning to them, are developing rapidly, becoming more potent and capable seemingly every day.
This period of AI development has been in the works for decades, and the technologies required to make the current batch of generative AI tools—the type that makes stuff based on libraries of training data, deriving patterns from that data and then coming up with new stuff based on the prompting of human users—were originally developed in the 1970s, but the transformer, which was a fresh approach to what’s called deep learning architectures, was first proposed in 2017 by a researcher at Google, and that led to the development of the generative pre-trained transformer, or GPT, in 2018.
The average non-tech-world person probably started to hear about this generation of AI tools a few years later, maybe when the first transformer-based voice and image tools started popping up around the internet, mostly as novelties, or even more likely in late-2022 when OpenAI released the first version of ChatGPT, a generative AI system attached to a chatbot interface, which made these sorts of tools more accessible to the average person.
Since then, there’s been a wave of investment and interest in AI tools, and we’ve reached a point where the seemingly obvious next-step is removing humans from the loop in more AI-related processes.
What that means in practice is that while today these tools require human prompting for most of what they do—you have to ask an AI for a specific image, then ask it to refine that image in order to customize it for your intended use-case, for instance—it’s possible to have AI do more things on their own, working from broader instructions to refine their creations themselves over multiple steps and longer periods of time.
So rather than chatting with an AI to come up with a marketing plan for your business, prompting it dozens or hundreds of times to refine the sales copy, the logo, the images for the website, the code for the website, and so on, you might tell an AI tool that you’re building a business that does X and ask it to spin up all the assets that you need. From there, the AI might research what a new business in that industry requires, make all the assets you need for it, go back and tweak all those assets based on feedback from other AI tools, and then deploy those assets for you on web hosting services, social media accounts, and the like.
It’s possible that at some point these tools could become so capable in this regard that humans won’t need to be involved at all, even for the initial ideation. You could ask an AI what sorts of businesses make sense at the moment, and tell it to build you a dozen minimum viable products for those businesses, and then ask it to run those businesses for you—completely hands off, except for the expressing your wishes part, almost like you’re working with a digital genie.
At the moment, components of that potential future are possible, but one of the main things standing in the way is that AI systems largely aren’t agentic enough, which in this context means they need a lot of hand-holding for things that a human being would be capable of doing, but which they largely, with rare exceptions, aren’t yet, and they often don’t have the permission or ability to interact with other tools required to do that kind of building—and that includes things like the ability to create a business account on Shopify, but also the ability to access and handle money, which would be required to set up business and bank accounts, to receive money from customers, and so on.
This is changing at a rapid pace, and more companies are making their offerings accessible to specific AI tools; Shopify has deployed its own cluster of internal AI systems, for instance, meant to manage various aspects of a business its customers perch on its platform.
What’s missing right now, though, is a unifying scaffolding that allows these services and assets and systems to all play nice with each other.
And that’s the issue the Model Context Protocol is meant to address.
The Model Context Protocol, or MCP, is a standard developed by AI company Anthropic, and it’s open and designed to be universal. The company intends for it to be the mycelium that connects large language model-based AI to all sorts of data and tools and other systems, a bit like the Hypertext Transfer Protocol, or HTTP, allows data on the web to be used and shared and processed, universally, in a standardized way, and to dip back into the world of physical objects, how standardized shipping containers make global trade a lot more efficient because everyone’s working with the same sized boxes, cargo vessels, and so on.
The Universal Serial Bus standard, usually shorthanded as USB, is also a good comparison here, as the USB was introduced to replaced a bunch of other standards in the early days of personal computing, which varied by computer maker, and which made it difficult for those makers, plus those who developed accessories, to make their products accessible and inexpensive for end-users, as you might buy a mouse that doesn’t work with your specific computer hardware, or you might have a cable that fits in the hole on your computer, but doesn’t send the right amount of data, or provide the power you need.
USB standards ensured that all devices had the same holes, and that a certain basic level of data and power transmission would be available. And while this standard has since fractured a bit, a period of many different types of USB leading to a lot of confusion, and the deployment of the USB C standard simplying things somewhat, but still being a bit confounding at times, as the same shaped plug may carry different amounts of data and power, despite all that, it has still made things a lot easier for both consumers and producers of electronic goods, as there are fewer plugs and charger types to purchase, and thus less waste, confusion, and so on. We’ve moved on from the wild west era of computer hardware connectivity into something less varied and thus, more predictable and interoperable.
The MCP, if it’s successful, could go on to be something like the USB standard in that it would serve as a universal connector between various AI systems and all the things you might want those AI systems to access and use.
That might mean you want one of Anthropic’s AI systems to build you a business, without you having to do much or anything at all, and it may be capable of doing so, asking you questions along the way if it requires more clarity or additional permissiosn—to open a bank account in your name, for instance—but otherwise acting more agentically, as intended, even to the point that it could run social media accounts, work with manufacturers of the goods you sell, and handle customer service inquiries on your behalf.
What makes this standard a standout compared to other options, though—and there are many other proposed options, right now, as this space is still kind of a wild west—is that though it was developed by Anthropic, which originally made it to work with its Claude family of AI tools, it has since also been adopted by OpenAI, Google DeepMind, and several of the other largest players in the AI world.
That means, although there are other options here, all with their own pros and cons, as was the case with USB compared to other connection options back in the day, MCP is usable with many of the biggest and most spendy and powerful entities in the AI world, right now, and that gives it a sort of credibility and gravity that the other standards don’t currently enjoy.
This standard is also rapidly being adopted by companies like Block, Apollo, PayPal, CloudFlare, Asana, Plaid, and Sentry, among many, many others—including other connectors, like Zapier, which basically allows stuff to connect to other stuff, further broadening the capacity of AI tools that adopt this standard.
While this isn’t a done deal, then, there’s a good chance that MCP will be the first big connective, near-universal standard in this space, which in turn means many of the next-step moves and tools in this space will need to work with it, in order to gain adoption and flourish, and that means, like the standards spread around the world by the Marshall Plan, it will go on to shape the look and feel and capabilities, including the limitations, of future AI tools and scaffoldings.
Show Notes
https://arstechnica.com/information-technology/2025/04/mcp-the-new-usb-c-for-ai-thats-bringing-fierce-rivals-together/
https://blog.cloudflare.com/remote-model-context-protocol-servers-mcp/
https://oldvcr.blogspot.com/2025/05/what-went-wrong-with-wireless-usb.html
https://arxiv.org/html/2504.16736v2
https://en.wikipedia.org/wiki/Model_Context_Protocol#cite_note-anthropic_mcp-1
https://github.com/modelcontextprotocol
https://www.anthropic.com/news/integrations
https://www.theverge.com/2024/11/25/24305774/anthropic-model-context-protocol-data-sources
https://beebom.com/model-context-protocol-mcp-explained/
https://techcrunch.com/2025/03/26/openai-adopts-rival-anthropics-standard-for-connecting-ai-models-to-data/
https://techcrunch.com/2025/04/09/google-says-itll-embrace-anthropics-standard-for-connecting-ai-models-to-data/
https://en.wikipedia.org/wiki/Generative_artificial_intelligence
https://en.wikipedia.org/wiki/USB
https://www.archives.gov/milestone-documents/marshall-plan
https://en.wikipedia.org/wiki/Marshall_Plan
https://www.congress.gov/crs-product/R45079
https://www.ebsco.com/research-starters/history/marshall-plan
https://www.history.com/articles/marshall-plan

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India-Pakistan Tensions
29 Apr· Let's Know Things
This week we talk about British India, Kashmir, and water treaties.
We also discuss the global order, sovereignty, and tit-for-tat escalation.
Recommended Book: Power Metal by Vince Beiser
Transcript
When then British India was partitioned by the British in 1947, the country carved up by its colonialist rulers into two new countries, one Hindu majority, the Union of India, and one Muslim majority, the Dominion of Pakistan, the intention was to separate two religious groups that were increasingly at violent odds with each other, within a historical context in which Muslims were worried they would be elbowed out of power by the Hindu-majority, at a moment in which carving up countries into new nations was considered to be a solution to many such problems.
The partition didn’t go terribly well by most measures, as the geographic divisions weren’t super well thought out, tens of millions of people had to scramble to upend their entire lives to move to their new, faith-designated homelands, and things like infrastructure and wealth were far from evenly distributed between the two new regions.
Pakistan was also a nation literally divided by India, part of its landmass on the other side of what was now another country, and its smaller landmass eventually separated into yet another country following Bangladesh’s violent but successful secession from Pakistan in 1971.
There was a lot more to that process, of course, and the reverberations of that decision are still being felt today, in politics, in the distribution of land and assets, and in regional and global conflict.
But one affected region, Kashmir, has been more of a flashpoint for problems than most of the rest of formerly British India, in part because of where it’s located, and in part because of happenings not long after the partition.
Formerly Jammu and Kashmir, the Kashmir region, today, is carved up between India, Pakistan, and China. India controls a little over half of its total area, which houses 70% of the region’s population, while Pakistan controls a little less than a third of its land mass, and China controls about 15%.
What was then Jammu and Kashmir dragged its feet in deciding which side of the partition to join when the countries were being separated, the leader Hindu, though ruling over a Muslim state, but an invasion from the Pakistan side saw it cast its lot in with India. India’s counter-invasion led to the beginning of what became known as both the Indo-Pakistani war of 1947-1948, the first of four such wars, but is also sometimes called the first Kashmir war, the first of three, though there have been several other not-officially-a-war conflicts in and over the region, as well.
Things only got more complicated over the next several decades; China seized the eastern part of the region in the 1950s, and while some Kashmiris have demanded independence, both India and Pakistan claim the region as totally their own, and point at historical markers that support their claim—some such markers based on fact, some on speculation or self-serving interpretations of history.
What I’d like to talk about today is what looks to be a new, potentially serious buildup around Kashmir, following an attack at a popular tourist hotspot in the territory, and why some analysts are especially concerned about what India’s government will decide to do, next.
—
Early in the afternoon of April 22, 2025, a group of tourists sightseeing in a town in the southern part of Kashmir called Pahalgam were open-fired on by militants. 26 people were killed and another 17 were injured, marking one of the worst attacks on mostly Indian civilians in decades.
In 2019, Kashmir’s semiautonomous governance was revoked by the Indian government, which in practice meant the Indian government took more complete control over the region, clamping down on certain freedoms and enabling more immigration of Indians into otherwise fairly Muslim-heavy Kashmir.
It’s also become more of a tourist destination since then, as India has moved more soldiers in to patrol Indian Kashmir’s border with Pakistan Kashmir, and the nature of the landmass makes it a bit of a retreat from climate extremes; at times it’s 30 or 40 degrees cooler, in Fahrenheit, than in New Delhi, so spendy people from the city bring their money to Kashmir to cool off, while also enjoying the natural settings of this less-developed, less-industrialized area.
Reports from survivors indicate that the attackers took their time and seemed very confident, and that no Indian security forces were anywhere nearby; they walked person to person, asking them if they were Muslim and executing those who were not. Around 7,000 people were visiting the area as tourists before the attack, but most of them have now left, and it’s unclear what kind of financial hit this will have on the region, but in the short-term it’s expected to be pretty bad.
In the wake of this attack, the Indian government claimed that it has identified two of the three suspected militants as Pakistani, but Pakistan has denied any involvement, and has called for a neutral probe into the matter, saying that it’s willing to fully cooperate, seeks only peace and stability, and wants to see justice served.
A previously unknown group calling itself the Kashmir Resistance has claimed responsibility for the attack, and Indian security forces have demolished the homes of at least five suspected militants in Kashmir in response, including one who they believe participated in this specific attack.
The two governments have launched oppositional measures against each other, including Pakistan closing its airspace to Indian airlines and shutting down trade with its neighbor, and India shutting down a vital land crossing, revoking Pakistani visas, and suspending a 1960 treaty that regulates water-sharing along the Indus River and its tributaries—something that it’s threatened to do, previously, and which could devastate Pakistan’s agricultural sector and economy, as it basically regulates water that the country relies on for both human consumption and most of its crop irrigation; and for context, Pakistan’s agricultural sector accounts for about a forth of its economy.
So if India blocks this water source, Pakistan would be in a very bad situation, and the Pakistani government has said that any blockage of water by India would be considered an act of war. Over the past week, a Pakistani official accused the Indian government of suddenly releasing a large volume of water from a dam into a vital river, which made flooding in parts of Pakistan-held Kashmir a real possibility, but as of the day I’m recording this they haven’t closed the taps, as Pakistan has worried.
For its part, India wouldn’t really suffer from walking away from this treaty, as it mostly favors Pakistan. It serves to help keep the peace along an at times chaotic border, but beyond that, it does very little for India, directly.
So historically, the main purpose of maintaining this treaty, for India, has been related to its reputation: if it walked away from it, it would probably suffer a reputational hit with the international community, as it would be a pretty flagrantly self-serving move that only really served to harm Pakistan, its weaker arch-nemesis.
Right now, though, geopolitics are scrambled to such a degree that there are concerns India might not only be wanting to make such moves, whatever the consequences, but it may also be hankering for a larger conflict—looking to sort out long-term issues during a period in which such sorting, such conflict, may cause less reputational damage than might otherwise be the case.
Consider that the US government has spoken openly about wanting to take, by whatever means, Greenland, from the Danish, a long-time ally, and that it’s maybe jokingly, but still alarmingly, said that Canada should join the US as the 51st state.
These statements are almost certainly just braggadocio, but that the highest-rung people in the most powerful government on the planet would say such things publicly speaks volumes about the Wild West nature of today’s global order.
Many leaders seem to be acting like this is a moment in which the prior paradigm, and the post-WWII rules that moderated global behavior within that paradigm, are fraying or disappearing, the global police force represented by the US and its allies pulling inward, not caring, and in some cases even becoming something like bandits, grabbing what they can.
Under such circumstances, if you’re in a position of relative power that you couldn’t fully leverage previously, for fear of upsetting that global police force and tarnishing your reputation within that system they maintained, might you leverage it while you can, taking whatever you can grab and weakening your worst perceived enemy, at a moment in which it seems like the getting is good?
It’s been argued that Russia’s violation of Ukraine’s sovereignty may have helped kick-off this new paradigm, but Israel’s behavior in Gaza, the West Bank, and increasingly Syria, as well, are arguably even better examples of this changing dynamic.
While the Democrats and Joe Biden were in the White House, Israeli Prime Minister Netanyahu seemed to be mostly playing ball, at least superficially, even when he very clearly wasn’t—he did what he could to seem to be toeing rules-based-order lines, even when regularly stepping over them, especially in Gaza.
But now, post-Trump’s return to office, that line-toeing has almost entirely disappeared, and the Israeli government seems to be grabbing whatever they can, including large chunks of southwestern Syria, which was exposed by the fall of the Assad regime. The Israeli military launched a full aerial campaign against the Syrian army’s infrastructure, declared a 1974 disengagement agreement with Syria to be void, and though it initially said it would hold the territory it has taken temporarily, it has more recently said it would hold it indefinitely—possibly permanently expanding its country’s land mass at the expense of its neighbor, another sovereign nation, at a moment in which it felt it could get away with doing so.
It’s not clear that India has any ambitions on Pakistani territory, beyond what it holds in Kashmir, at least, but there’s a chance it sees this moment the same way the Israeli government does: as a perhaps finite moment during which the previous state of things, the global rules-based-order, no longer applies, or doesn’t apply as much, which suggests it could do some serious damage to its long-time rival and not suffer the consequences it would have, reputationally or otherwise, even half a year ago.
And India’s leader, Narendra Modi, is in some ways even better positioned than Israel’s Netanyahu to launch such a campaign, in part because India is in such a favorable geopolitical position right now. As the US changes stance, largely away from Europe and opposing Russia and its allies, toward more fully sidling up to China in the Pacific, India represents a potential counterweight against Chinese influence in the region, where it has successfully made many of its neighbors reliant on its trade, markets, and other resources.
Modi has reliably struck stances midway between US and Chinese spheres of influences, allowing it to do business with Russia, buying up a lot of cheap fuel that many other nations won’t touch for fear of violating sanctions, while also doing business with the US, benefitting from a slew of manufacturers who are leaving China to try to avoid increasingly hefty US tariffs.
If India were to spark a more concentrated conflict with Pakistan, then, perhaps aiming to hobble its economy, its military, and its capacity to sponsor proxies along its border with India, which periodically launch attacks, including in Kashmir—that might be something that’s not just tolerated, but maybe even celebrated by entities like China and the US, because both want to continue doing their own destabilizing of their own perceived rivals, but also because both would prefer to have India on their side in future great power disagreements, and in any potential future large-scale future conflict.
India is richer and more powerful than Pakistan in pretty much every way, but in addition to Pakistan’s decently well-developed military apparatus, like India, it has nukes. So while there’s a chance this could become a more conventional tit-for-tat, leading to limited scuffles and some artillery strikes on mostly military installations across their respective borders, there’s always the potential for misunderstandings, missteps, and tit-for-tat escalations that could push the region into a nuclear conflict, which would be absolutely devastating in terms of human life, as this is one of the most densely populated parts of the world, but could also pull in neighbors and allies, while also making the use of nuclear weapons thinkable by others once more, after a long period of that fortunately not being the case.
Show Notes
https://www.france24.com/en/asia-pacific/20250427-indian-pakistani-troops-exchange-fire-for-third-night-in-disputed-kashmir
https://www.france24.com/en/live-news/20250422-at-least-24-killed-in-kashmir-attack-on-tourists-indian-police-source
https://www.france24.com/en/asia-pacific/20250424-india-will-identify-track-and-punish-kashmir-attack-perpetrators-modi-says
https://www.nytimes.com/2025/04/27/world/asia/india-pakistan-kashmir.html
https://archive.is/20250426143222/https://www.reuters.com/world/india/india-pakistan-exchange-gunfire-2nd-day-ties-plummet-after-attack-2025-04-26/
https://www.nytimes.com/2025/04/24/world/asia/india-pakistan-indus-waters-treaty.html
https://www.nytimes.com/2025/04/23/world/asia/kashmir-pahalgam-attack-victims.html
https://apnews.com/article/india-pakistan-kashmir-attack-829911d3eae7cfe6738eda5c0c84d6ae
https://www.bbc.com/news/world-south-asia-11693674
https://en.wikipedia.org/wiki/Partition_of_India
https://en.wikipedia.org/wiki/Kashmir
https://en.wikipedia.org/wiki/Kashmir_conflict
https://en.wikipedia.org/wiki/Indo-Pakistani_war_of_1947%E2%80%931948

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Creative Assets
22 Apr· Let's Know Things
This week we talk about AI chatbots, virtual avatars, and romance novels.
We also discuss Inkitt, Galatea, and LLM grooming.
Recommended Book: New Cold Wars by David E. Sanger
Transcript
There’s evidence that the US Trump administration used AI tools, possibly ChatGPT, possibly another, similar model or models, to generate the numbers they used to justify a recent wave of new tariffs on the country’s allies and enemies.
It was also recently reported that Democratic mayoral candidate Andrew Cuomo used AI-generated text and citations in a plan he released called Addressing New York’s Housing Crisis. And this case is a bit more of a slam dunk, as whomever put the plan together for him seems to have just copy-pasted snippets from the ChatGPT interface without changing or checking them—which is increasingly common for all of us, as such interfaces are beginning to replace even search engine results, like those provided by Google.
But it’s also a practice that’s generally frowned upon, as—and this is noted even in the copy provided alongside many such tools and their results—these systems provide a whole lot of flawed, false, incomplete, or otherwise not-advisable-to-use data, in some cases flubbing numbers or introducing bizarre grammatical inaccuracies, but in other cases making up research or scientific papers that don’t exist, but presenting them the same as they would a real-deal paper or study. And there’s no way to know without actually going and checking what these things serve up, which can, for many people at least, take a long while; so a lot of people don’t do this, including many politicians and their administrations, and that results in publishing made-up, baseless, numbers, and in some cases wholesale fabricated claims.
This isn’t great for many reasons, including that it can reinforce our existing biases. If you want to slap a bunch of tariffs on a bunch of trading partners, you can ask an AI to generated some numbers that justify those high tariffs, and it will do what it can to help; it’s the ultimate yes-man, depending on how you word your queries. And it will do this even if your ask is not great or truthful or ideal.
These tools can also help users spiral down conspiracy rabbit holes, can cherry-pick real studies to make it seem as if something that isn’t true is true, and it can help folks who are writing books or producing podcasts come up with just-so stories that seem to support a particular, preferred narrative, but which actually don’t—and which maybe aren’t even real or accurate, as presented.
What’s more, there’s also evidence that some nation states, including Russia, are engaging in what’s called LLM grooming, which basically means seeding false information to sources they know these models are trained on so that said models will spit out inaccurate information that serves their intended ends.
This is similar to flooding social networks with misinformation and bots that seem to be people from the US, or from another country whose elections they hope to influence, that bot apparently a person who supports a particular cause, but in reality that bot is run by someone in Macedonia or within Russia’s own borders. Or maybe changing the Wikipedia entry and hoping no one changes it back.
Instead of polluting social networks or Wikis with such misinfo, though, LLM grooming might mean churning out websites with high SEO, search engine optimization rankings, which then pushes them to the top of search results, which in turn makes it more likely they’ll be scraped and rated highly by AI systems that gather some of their data and understanding of the world, if you want to call it that, from these sources.
Over time, this can lead to more AI bots parroting Russia’s preferred interpretation, their propaganda, about things like their invasion of Ukraine, and that, in turn, can slowly nudge the public’s perception on such matters; maybe someone who asks ChatGPT about Russia’s invasion of Ukraine, after hearing someone who supports Russia claiming that it was all Ukraine’s fault, and they’re told, by ChatGPT, which would seem to be an objective source of such information, being an AI bot, that Ukraine in fact brought it upon themselves, or is in some way actually the aggressor, which would serve Russia’s geopolitical purposes. None of which is true, but it starts to seem more true to some people because of that poisoning of the informational well.
So there are some issues of large, geopolitical consequence roiling in the AI space right now. But some of the most impactful issues related to this collection of technologies are somewhat smaller in scale, today, at least, but still have the potential to disrupt entire industries as they scale up.
And that’s what I’d like to talk about today, focusing especially on a few recent stories related to AI and its growing influence in creative spaces.
—
There’s a popular meme that’s been shuffling around social media for a year or two, and a version of it, shared by an author named Joanna Maciejewska (machie-YEF-ski) in a post on X, goes like this: “You know what the biggest problem with pushing all-things-AI is? Wrong direction. I want AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes.”
It could be argued, of course, that we already have technologies that do our laundry and dishes, and that AI has the capacity to make both of those machines more efficient and effective, especially in term of helping manage and moderate increasingly renewables-heavy electrical grids, but the general concept here resonates with a lot of people, I think: why are some of the biggest AI companies seemingly dead-set on replacing creatives, who are already often suffering from financial precarity, but who generally enjoy their work, or at least find it satisfying, instead of automating away the drudgery many of us suffer in the work that pays our bills, in our maintenance of our homes, and in how we get around, work on our health, and so on.
Why not automate the tedious and painful stuff rather than the pleasurable stuff, basically?
I think, looking at the industry more broadly, you can actually see AI creeping up on all these spaces, painful and pleasurable, but generative AI tools, like ChatGPT and its peers, seem to be especially good at generating text and images and such, in part because it’s optimized for communication, being a chatbot interface over a collection of more complex tools, and most of our entertainments operate in similar spaces; using words, using images, these are all things that overlap with the attributes that make for a useful and convincing chatbot.
The AI tools that produce music from scratch, writing the lyrics and producing the melodies and incorporating different instruments, working in different genres, the whole, soup to nuts, are based on similar principles to AI systems that work with large sets of linguistic training data to produce purely language based, written outputs.
Feed an AI system gobs of music, and it can learn to produce music at the prompting of a user, then, and the same seems to be true of other types of content, as well, from images to movies to video games.
This newfound capacity to spit out works that, for all their flaws, would have previously requires a whole lot of time and effort to produce, is leading to jubilation in some spaces, but concern and even outright terror in others.
I did an episode not long ago on so-called ‘vibe coding,’ about people who in some cases can’t code at all, but who are producing entire websites and apps and other products just by learning how to interact with these AI tools appropriately. And these vibe coders are having a field day with these tools.
The same is increasingly true of people without any music chops who want to make their own songs. Folks with musical backgrounds often get more out of these tools, same as coders tend to get more from vibe coding, in part because they know what to ask for, and in part because they can edit what they get on the other end, making it better and tweaking the output to make it their own.
But people without movie-making skills can also type what they want into a box and have these tools spit out a serviceable movie on the other end, and that’s leading to a change similar to what happened when less-fiddly guns were introduced to the battlefield: you no longer needed to have super well-trained soldiers to defeat your enemies, you could just hand them a gun and teach them to shoot and reload it, and you’d do pretty well; you could even defeat some of your contemporaries who had much better trained and more experienced soldiers, but who hadn’t yet made the jump to gunpowder weapons.
There are many aspects to this story, and many gray areas that are not as black and white as, for instance, a non-coder suddenly being able to out-code someone who’s worked really hard to become a decent coder, or someone who knows nothing about making music creating bops, with the aide of these tools, that rival those of actual musicians and singers who have worked their whole life to be able to the same.
There have been stories about actors selling their likenesses to studios and companies that work with studios, for instance, those likenesses then being used by clients of those companies, often without the actors’ permission.
For some, this might be a pretty good deal, as that actor is still free to pursue the work they want to do, and their likeness can be used in the background for a fee, some of that fee going to the actor, no additional work necessary. Their likeness becomes an asset that they wouldn’t have otherwise had—not to be used and rented out in that capacity, at least—and thus, for some, this might be a welcome development.
This has, in some cases though, resulted in situations in which said actor discovers that their likeness is being used to hawk products they would never be involved with, like online scams and bogus health cures. They still receive a payment for that use of their image, but they realize that they have little or no control over how and when and for what purposes it’s used.
And because of the aforementioned financial precarity that many creatives in particular experience as a result of how their industries work, a lot of people, actors and otherwise, would probably jump at the chance to make some money, even if the terms are abusive and, long-term, not in their best interest.
Similar tools, and similar financial arrangements, are being used and made in the publishing world.
An author named Manjari Sharma wrote her first book, an enemies-to-lovers style romance, in a series of installments she published on the free fanfic platform Wattpad during the height of the Covid pandemic. She added it to another, similar platform, Inkitt, once it was finished, and it garnered a lot of attention and praise on both.
As a result of all that attention, the folks behind Inkitt suggested she move it from their free platform to their premium offering, Galatea, which would allow Sharma to earn a portion of the money gleaned from her work.
The platform told her they wanted to turn the book into a series in early 2024, but that she would only have a few weeks to complete the next book, if she accepted their terms. She was busy with work, so she accepted their offer to hire a ghostwriter to produce the sequel, as they told her she’d still receive a cut of the profits, and the fan response to that sequel was…muted. They didn’t like it. Said it had a different vibe, wasn’t well-written, just wasn’t very good. Lacked the magic of the original, basically.
She was earning extra money from the sequel, then, but no one really enjoyed it, and she didn’t feel great about that. Galatea then told Sharma that they would make a video series based on the books for their new video app, 49 episodes, each a few minutes long, and again, they’d handle everything, she’d just collect royalties.
The royalty money she was earning was a lot less than what traditional publishers offer, but it was enough that she was earning more from those royalties than from her actual bank job, and the company, due to the original deal she made when she posted the book to their service, had the right to do basically anything they wanted with it, so she was kind of stuck, either way.
So she knew she had to go along with whatever they wanted to do, and was mostly just trying to benefit from that imbalance where possible. What she didn’t realize, though, was that the company was using AI tools to, according to the company’s CEO, “iterate on the stories,” which basically means using AI to produce sequels and video content for successful, human-written books. As a result of this approach, they have just one head of editorial and five “story intelligence analysts” on staff, alongside some freelancers, handling books and supplementary content written by about 400 authors.
As a business model, it’s hard to compete with this approach.
As a customer, at the moment, at least, with today’s tools and our approach to using them, it’s often less than ideal. Some AI chatbots are helpful, but many of them just gatekeep so a company can hire fewer customer service humans, saving the business money at the customer’s expense. That seems to be the case with this book’s sequel, too, and many of the people paying to read these things assumed they were written by humans, only to find, after the fact, that they were very mediocre AI-generated knock-offs.
There’s a lot of money flooding into this space predicated in part on the promise of being able to replace currently quite expensive people, like those who have to be hired and those who own intellectual property, like the rights to books and the ideas and characters they contain, with near-free versions of the same, the AI doing similar-enough work alongside a human skeleton crew, and that model promises crazy profits by earning the same level of revenue but with dramatically reduced expenses.
The degree to which this will actually pan out is still an open question, as, even putting aside the moral and economic quandary of what all these replaced creatives will do, and the legal argument that these AI companies are making right now, that they can just vacuum up all existing content and spit it back out in different arrangements without that being a copyright violation, even setting all of that aside, the quality differential is pretty real, in some spaces right now, and while AI tools do seem to have a lot of promise for all sorts of things, there’s also a chance that the eventual costs of operating them and building out the necessary infrastructure will fail to afford those promised financial benefits, at least in the short term.
Show Notes
https://www.theverge.com/news/648036/intouch-ai-phone-calls-parents
https://arstechnica.com/ai/2025/04/regrets-actors-who-sold-ai-avatars-stuck-in-black-mirror-esque-dystopia/
https://archive.ph/gzfVC
https://archive.ph/91bJb
https://www.cnn.com/2025/03/08/tech/hollywood-celebrity-deepfakes-congress-law/index.html
https://www.npr.org/2024/12/21/nx-s1-5220301/deepfakes-memes-artificial-intelligence-elections
https://techcrunch.com/2025/04/13/jack-dorsey-and-elon-musk-would-like-to-delete-all-ip-law/
https://www.404media.co/this-college-protester-isnt-real-its-an-ai-powered-undercover-bot-for-cops/
https://hellgatenyc.com/andrew-cuomo-chatgpt-housing-plan/
https://www.theverge.com/news/642620/trump-tariffs-formula-ai-chatgpt-gemini-claude-grok
https://www.wsj.com/articles/ai-cant-predict-the-impact-of-tariffsbut-it-will-try-e387e40c
https://www.washingtonpost.com/technology/2025/04/17/llm-poisoning-grooming-chatbots-russia/

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Money Mules and Matchmakers
15 Apr· Let's Know Things
This week we talk about smishing, Huione, and scams.
We also discuss money laundering, the Cambodian government, and Tether.
Recommended Book: The Longevity Imperative by Andrew J. Scott
Transcript
The portmanteau ‘smishing’ combines SMS and phishing to refer to the practice of using text messages to trick the recipients of said messages into revealing information that allows scammers to access their victim’s accounts on various platforms.
One common variation of smishing, which I’ve seen a lot recently, personally, are messages purportedly from toll road operators that tell the recipient they’ve got an unpaid toll, and they need to follow a link that’s provided in order to pay it. If the person receiving that message follows the instructions, they’ll tend to land on a webpage that’s convincing enough, which looks like the sort of site you might go to if you’re paying that kind of toll, online, and you enter your payment information and are then either immediately charged for this fake toll, or that information is used in some more cohesive manner—maybe the card is stolen, maybe it’s added to a larger collection of data they have on you which is then leveraged for a larger payout.
This type of scam has become more common in recent years because of innovations deployed by what security researchers have called the Smishing Triad, which is a trio of mobile phishing groups operating out of China that seem to have refined their infrastructure and techniques so that messages they send via iMessage to iPhone users and RCS to Android users can bypass mobile phone networks and enjoy a nearly 100% delivery rate—which makes the name a little ironic, since these groups don’t use SMS to deliver these scam texts anymore, as those other methods of delivery are more reliable for such messages, these days.
The big innovation introduced by these groups, though, beyond that deliverability, is the productization of mobile phishing, which basically means they’ve packaged up applications that allow their customers, which are usually smaller-time phishing groups and individuals, to share links to convincing-looking copies of Paypal, Mastercard, Stripe, and CitiGroup payment sites, among others, including individual banks, and that makes knee-jerk payments from the victims receiving these texts more likely, and less likely to set of alarm bells in the minds those receiving them, because they look like just normal payment sites.
These pre-packaged scam assets also include regularly rotated web domains, which makes them less likely to trigger the recipient’s anti-scam software—their browser will be less likely to flag them as problematic, basically. And the Triad has hundreds of actual humans working desk jobs, worldwide, supporting their customer base, which again is a bunch of scammers that use this package of tools to try to steal money from their marks.
All of this is enabled, in part, by clever emulation software that allows Triad customers to leverage legit and legit-seeming phone numbers from a computer or phone, those devices then sending out around 100 messages per second, per device, to phone numbers in the targeted region. They’re able to do this on a budget because of the efficiency of the software acquired from the Smishing Triad, and the Triad stays just ahead of regulators and law enforcement by rapidly iterating their offerings, which in turn does the same for all of their customers—which grants the benefits of a larger institution to all these individual and smaller scam groups.
What I’d like to talk about today is another alleged backend for scammers, this one this more overt and public facing, and perhaps even more impactful because of its size and because of the nature of its offerings.
—
The Huione (hu-WAY-wahn) Group is a financial conglomerate primarily based in Cambodia, though it also has satellite offices in other countries, mostly in Southeast Asia.
Folks use the entity’s QR codes to pay for stuff all around Cambodia, from restaurant tabs to hotel bills to supermarket tallies, and it offers normal banking stuff like checking and savings accounts, alongside things like escrow services and a cryptocurrency exchange.
This is a company that buys billboards along major highways throughout the country and which has well-connected people in charge, including one of the Cambodian prime minister’s cousins, who is the director of a Huione company.
In addition to its many legitimate offerings, though, Huione has also been accused to providing a range of gray and blackmarket products and services to folks who are doing skeevy but partially legal things, alongside wholly criminal enterprises, like a human trafficking outfit in Myanmar and folks running large smishing schemes in other parts of Southeast Asia.
Huione’s primary offering for the criminal underworld though, is allegedly serving as a money laundering go-between.
If you run a smishing scammer network, or a group that kidnaps people and sell them into various types of modern slavery in Myanmar, you may have trouble using the money you earn for these efforts because they’re off-book, blackmarket sorts of income. You need to clean, to launder that money to make it seem legitimate, so that you can put it in banks or otherwise use it to pay for things like you would with normal, non-illegally earned money.
Money laundering matchmaker services maintain networks of what are called money mules, and these mules are sometimes individuals, and they’re sometimes shell companies with bank accounts or their own cryptocurrency wallets.
If you’re scamming people out of their money, you might use this type of service to connect you with a money mule, and you provide that mule’s bank or crypto account information to your victim—so when you receive a scammy text message and follow it to completing, the bank your money is sent to will probably be that of a mule, not the person or group doing the scamming.
So the victim transfers their money to that mule’s account, and the mule then moves said money from one account to another to another to another to another, eventually converting it into an asset like a cryptocurrency, once the path has been suitably muddled. They take their cut, which is often something like 15%, somewhere along the way, and you, their customer, the scammer, are handed neutralized, clean resources in the form of that cryptocurrency—which you can then convert into real money at some point—on the other end.
An entity like Huione makes money by connecting scammers and other criminals with mules, but also by serving as a guarantor on these transactions.
So this entity allegedly, via a network of Telegram channels it maintains, telegram being an anonymizing chat app similar to WhatsApp, it allows matchmakers to advertise on these channels, using thinly veiled language to promote their services, and Huione is able to make money selling ads to mules and other matchmakers who want to promote via these highly trafficked channels, one of which has more than 400,000 users—and they have many of these things, and that alone apparently brings in a fair bit of revenue, serving as a sort of hard-to-track Craigslist for this component of the scam economy.
The guarantor component of this digital bazaar means that Huione holds the transactions between scammer and mules in escrow, just like any other escrow service: they take the money and hold it until the service has been completed, at which point they release it, taking a small cut for the service of ensuring that no one gets ripped off—except for the original victim of the scam, of course.
The majority of these transactions are completed using Tether, which is a stablecoin that tries to peg its value to the US dollar, each token worth exactly one USD, rather than fluctuating like speculative crypto assets, like Bitcoin, and this allows everyone involved to maintain a veil of both feigned ignorance and anonymity, making it difficult to track who does what, how much money changes hands, and who gets paid and does the paying.
This setup allows Huione to claim ignorance any time someone accuses them of doing illegal stuff: after all, they can’t possibly be responsible for what all the entities using their services are up to, right? All everything is just muddled and anonymized enough to grant seeming truthfulness to that claim of ignorance.
Because of how all this is set up, most of what we know about this is the result of whistleblowing from insiders and leaked documents, alongside divulgences from security researchers who know how to get into these sorts of networks and who at times hack those involved in various ways.
And it seems, based on those divulgences and other gleaned knowledge, that Huione’s money laundering services, alone, have been linked to nearly $27 billion in cryptocurrency transactions since 2021—though that could be a significant undercount because of the blurry nature of this industry and the entities involved with it.
Thus far, Huione has never been targeted for sanctions by any government.
Tether took action to freeze some of its accounts after law enforcement officials flagged them for criminal behavior, and Telegram has closed some of those illicit, matchmaking channels, but it’s easy enough to set up new versions of both, while the escrow subsidiary of Huione, previously called Huione Guarantee, denies any connection to these activities and even changed its name to Haowang Guarantee in October of 2024, though that denial seems to be public-facing only: the escrow-providing company continues to claim that the larger Huione Group is one of its strategic partners and shareholders.
Huione also has its own matchmatching service, called Huione International Pay, which operates as a real-deal bank, but also does what all the other matchmakers do—it helps criminal enterprises shuffle their money around, taking a fee to provide them with clean money, usually in the shape of Tether crypto tokens, on the other end.
Though notably, Huione also recently launched their own stablecoin called USDH, alongside an in-house communication service called ChatMe and an array of mini-games that seem optimized for automation, which is another means of laundering money via what seems like gambling apps, allowing their clients to cut out the casinos that are sometimes used as part of the laundering process. All of which seems primed to internalize more of this process, slowly doing away with the need for Telegram and Tether and those casinos, which would seem to remove some of the risk associated with those external, uncontrolled-by-Huione, platforms.
Despite all this, this enterprise has been allowed to flourish and grow like it has, according to a threat analyst with the UN, at least, because of lax enforcement in Cambodia, and the conglomerate’s connections with the government and ability to say, basically, we’re legit, look, we’re just a bank, we can’t control what other people might do with our services. Their whole setup is obscure enough, too, that anyone who takes a close look at their entangled business structure quickly gets lost in its complexity and many tangles and dead-ends.
Some governments, including the Chinese government, have been cracking down on entities like Huione operating within their borders, but many such crackdowns are hobbled when they’re aimed at operations based in different countries, especially those with lax enforcement, like Cambodia.
Also worth noting is that if someone’s going to get caught, it’ll most likely be the mules, not the matchmakers or scammers, and that’s by design. It’s a bit like street-level drug dealers being more likely to be picked up by police than the folks running the larger drug enterprise of which they’re a part. Huione and other entities like it are largely insulated from major consequences, even if the mules who use their services periodically get caught in dragnets cast by law enforcement.
That said, the National Bank of Cambodia recently announced that it hasn’t renewed Huione’s license to operate its payment service in the country, the one that runs all those QR codes, because it didn’t meet renewal requirements. That happened in late-March of 2025, so pretty recently, though the company has already said that it will register its business in Japan and Canada, so it seems to be looking for a suitable plot of land on which to rebuild this component of its setup.
Many security researchers and law enforcement officials have warned that the time to crack down on Huione and similar conglomerates is now, because they’re currently reliant on partially exposed third-parties like Telegram and Tether. Once they successfully move those activities inward, they’ll be a lot more difficult to track, but also nearly impossible to shutter, unless there’s a significant change in the government and enforcement climate in the countries in which they’re based, which at this point at least, looks unlikely.
Show Notes
https://www.nytimes.com/2025/03/23/world/asia/cambodia-money-laundering-huione.html
https://www.wired.com/story/the-largest-illicit-online-marketplace-ever-is-growing-at-an-alarming-rate/
https://www.wired.com/story/pig-butchering-scam-crypto-huione-guarantee/
https://www.wired.com/story/interpol-pig-butchering-scams-rename/
https://www.propublica.org/article/casinos-cambodia-myanmar-laos-southeast-asia-fraud-cybercrime
https://krebsonsecurity.com/2025/04/china-based-sms-phishing-triad-pivots-to-banks/#more-70793
https://en.wikipedia.org/wiki/Mobile_phone_spam

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Trump's Tariffs
8 Apr· Let's Know Things
This week we talk about taxes, reciprocity, and recession.
We also discuss falling indices, stagflation, and theories of operation.
Recommended Book: The Serviceberry by Robin Wall Kimmerer
Transcript
Stagflation, which is a portmanteau of stagnation and inflation, is exactly what it sounds like: a combination of those two elements, usually with high levels of unemployment, as well, that can cause a prolonged period of economic sluggishness and strain that slows growth and can even lead to a recession.
The term was coined in the UK in the 1960s to describe issues they were facing at the time, but it was globally popularized by the oil shocks of the 1970s, which sparked a period of high prices and slow growth in many countries, including in the US, where inflation boomed, productivity floundered, and economic growth plateaud, leading to a stock market crash in 1973 and 1974.
Inflation, unto itself, can be troubling, as it means prices are going up faster than incomes, so the money people earn and have saved is worth less and less each day. That leads to a bunch of negative knock-on effects, which is a big part of why the US Fed has kept interest rates so high, aiming to trim inflation rates back to their preferred level of about 2% as quickly as possible in the wake of inflation surges following the height of the Covid pandemic.
Stagnant economic growth is also troubling, as it means lowered GDP, reduced future outlook for an economy, and that also tends to mean less investment in said economy, reduced employment levels—and likely even lower employment levels in the future—and an overall sense of malaise that can become a self-fulfilling prophecy, no one feeling particularly upbeat about where their country is going; and that’s not great economically, but it can also lead to all sorts of social issues, as people with nothing to look forward to but worse and worse outcomes are more likely to commit crimes or stoke revolutions than their upbeat, optimistic, comfortable kin.
The combination of these two elements is more dastardly than just the sum of their two values implies, though, as measures that government agencies might take to curb inflation, like raising interest rates and overall tightening monetary policy, reduces business investment which can lead to unemployment. On the flip-side, though, things a government might do to reduce unemployment, like injecting more money into the economy, tends to spike inflation.
It’s a lose-lose situation, basically, and that’s why government agencies tasked with keeping things moving along steadily go far out of their way to avoid stagflation; it’s not easily addressed, and it only really goes away with time, and sometimes a very long time.
There are two primary variables that have historically led to stagflation: supply shocks and government policies that reduce output and increase the money supply too rapidly.
The stagflation many countries experienced in the 1970s was the result of Middle Eastern oil producing nations cutting off the flow of oil to countries that supported Israel during the 1973 Yom Kippur War, though a sharp increase in money supply and the end of the Bretton Woods money management system, which caused exchange rate issues between global currencies, also contributed, and perhaps even more so than the oil shock.
What I’d like to talk about today is another major variable, the implementation of a huge package of new tariffs on pretty much everyone by the US, that many economists are saying could lead to a new period of stagflation, alongside other, more immediate consequences.
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A tariff is a type of tax that’s imposed on imported goods, usually targeting specific types of goods, or goods from a particular place.
Way back in the day these were an important means of funding governments: the US government actually made most of its revenue, about 90% of it, from tariffs before 1863, because there just wasn’t a whole of lot other ways for the young country to make money at the time.
Following the War of 1812, the US government attempted to double tariffs, but that depleted international trade, which led to less income, not more—gross imports dropped by 71%, and the government scrambled to implement direct and excise taxes, the former of which is the tax a person or business pays that isn’t based on transactions, while the latter is a duty that’s paid upon the manufacture of something, as opposed to when it’s sold.
Tariffs resurfaced in the following decades, but accounted for less and less of the government’s income as the country’s manufacturing base increased, and excise and income taxes made up 63% of the US’s federal revenue by 1865.
Tax sources have changes a lot over the years, and they vary somewhat from country to country.
But the dominant move in the 20th century, especially post-WWII, has been toward free trade, which usually means no or low tariffs on goods being made in one place and sold in another, in part because this tends to lead to more wealth for everyone, on average, at least.
This refocus toward globalized free trade resulted in a lot of positives, like being able to specialize and make things where they’re cheap and sell them where they’re precious, but also some negatives, like the offshoring of jobs—though even those negatives, which sucked for the people who lost their jobs, have been positive for some, as the companies who offshored the jobs did so because it saved them money, the folks who were hired were generally paid more than was possible in their region, previously, and the people consuming the resulting goods were able to get them cheaper than would otherwise be feasible.
It’s been a mixed bag, then, but the general consensus among economists is that open trade is good because it incentivizes competition and productivity. Governments are less likely to implement protectionist policies to preserve badly performing local business entities from better performing foreign versions of the same, and that means less wasted effort and resources, more options for everyone, and more efficient overall economic operation, which contributes to global flourishing. And not for nothing, nations that trade with each other tend to be less likely to go to war with each other.
Now that’s a massively simplified version of the argument, but again, that’s been the outline for how things are meant to work, and aside from some obvious exceptions—like China’s protection of its local tech sector from foreign competition, and the US’s protection of its aviation and car industries—it’s generally worked as intended, and the world has become massively wealthier during this period compared to before this state of affairs was broadly implemented, post-WWII; there’s simply no comparison, the difference is stark.
There are renewed concerns about stagflation in the United States, however, because of a big announcement made by US President Trump on April 2, 2025, that slapped substantial and at times simply massive new tariffs on just about everyone, including the country’s longest-term allies and most valuable trading partners.
On what the president called “Liberation Day,” he announced two new types of tariff: one is a universal 10% import duty on all goods brought into the US, and another that he called a reciprocal tariff on imports from scores of countries, including 15 that will be hit especially hard—a list that includes China, EU nations, Canada, and Japan, among others.
The theory of these so-called reciprocal tariffs is that Trump thinks the US is being taken advantage of, as, to use one example that he cited, the US charges a 2.5% tariff on imported cars, while the EU charges a 10% tariff on American cars imported to their union.
The primary criticism of this approach, which has been cited by most economists and entities like the World Trade Organization, is that the numbers the US administration apparently used to make this list don’t really add up, and seem to include some made-up measures of trade deficits, which some analysts suspect were calculated by AI tools like ChatGPT, as the same incorrect measures are spat out by commonly use chatbots like ChatGPT when they’re asked about how to balance these sorts of things. But the important takeaway, however they arrived at these numbers, is that the comparisons used aren’t really sensical when you look at the details.
Some countries simply can’t afford American exports, for instance, while others have no use for them. The idea that a country that can’t afford American goods should have astoundingly large tariffs applied to their exports to the US is questionable from the get-go, but it also means the goods they produce, which might be valuable and important for Americans, be they raw materials like food or manufactured goods like car parts, will become more expensive for Americans, either because those Americans have to pay a higher price necessitated by the tax, or because the lower-price supplier is forced out of the market and replaced by a higher-price alternative.
In short, the implied balance of these tariffs don’t line up with reality, according to essentially everyone except folks working within Trump’s administration, and the question then is what the actual motivation behind them might be.
The Occam’s Razor answer is that Trump and/or people in his administration simply don’t understand tariffs and global economics well enough to understand that their theory on the matter is wrong. And many foreign leaders have said these tariffs are not in any way reciprocal, and that the calculation used to draw them up was, in the words of Germany’s economic minister, “nonsense.” That’s the general consensus of learned people, and the only folks who seem to be saying otherwise are the one’s responsible for drawing these tariffs up, and defending them in the press.
Things have been pretty stellar for most of the global economy since free trade became the go-to setup for imports and exports, but this administration is acting as if the opposite is true. That might be a feigned misunderstanding, or it might be genuine; they might truly not understand the difference between how things have been post-WWII and how they were back in the 1800s when tariffs were the go-to method of earning government revenue.
But in either case, Trump is promising that rewiring the global order, the nature of default international trade in this way, will be good for Americans because rather than serving as a linchpin for that global setup, keeping things orderly by serving as the biggest market in the world, the American economy will be a behemoth that gets what it’s owed, even if at the expense of others—a winner among losers who keep playing because they can’t afford not to, rather than a possibly slightly less winning winner amongst other winners.
This theory seems to have stemmed from a 1980s understanding of things, which is a cultural and economic milieu from which a lot of Trump’s views and ideas seem to have originated, despite in many cases having long since been disproved or shown to be incomplete. But it’s also a premise that may be more appealing to very wealthy people, because a lot of the negative consequences from these tariffs will be experienced by people in lower economic classes and people from poorer nations, where the price hikes will be excruciating, and folks in the middle class, whose wealth is primarily kept in stocks. Folks in the higher economic echolons, including those making most of these decisions, tend to make and build their wealth via other means, which won’t be entirely unimpacted, but will certainly be less hurt by these moves than everyone else.
It’s also possible, and this seems more likely to me, but it’s of course impossible to know the truth of the matter right now, that Trump is implementing a huge version of his go-to negotiating tactic of basically hurting the folks on the other end of a negotiation in order to establish leverage over them, and then starting that negotiation by asking what they’ll do for him if he limits or stops the pain.
The US is expected to suffer greatly from these tariffs, but other countries, especially those that rely heavily on the US market as their consumer base, and in some cases for a huge chunk of their economy, their total GDP, will suffer even more.
There’s a good chance many countries, in public or behind closed doors, will look at the numbers and decide that it makes more sense to give Trump and his administration something big, up front, in exchange for a lessening of these tariffs. That’s what seems to be happening with Vietnam, already, and Israel, and there’s a good chance other nations have already put out feelers to see what he might want in exchange for some preferential treatment in this regard—early reports suggest at least 50 governments have done exactly that since the announcement, though those reports are coming from within the White House, so it’s probably prudent to take them with a grain of salt, at this point. That said, this sort of messaging from the White House suggests that the administration might be hoping for a bunch of US-favoring deals and will therefore make a lot of noise about initial negotiations to signal that that’s what they want, and that the pain can go away if everyone just kowtows a little and gestures at some new trade policies that favor the US and make Trump look like a master negotiator who’s bringing the world to heel.
There’s been pushback against this potentiality, however, led by China, which has led with its own, very large counter-tariffs rather than negotiating, and the EU looks like it might do the same. If enough governments do this, it could call Trump’s bluff while also making these other entities, perhaps especially China, which was first out the door with counter-tariffs and statements about not be cowed by the US’s bluster, seem like the natural successors to the US in terms of global economic leadership. It could result in the US giving away all that soft power, basically, and that in turn could realign global trade relationships and ultimately other sorts of relationships, too, in China’s favor.
One other commonly cited possibility, and this is maybe the grimmest of the three, but it’s not impossible, is that Trump and other people in his administration recognize that the world is changing, that China is ascendent and the US is by some metrics not competing in the way it needs to in order to keep up and retain its dominance, and that’s true in terms of things like manufacturing and research, but also the potential implications of AI, changing battlefield tactics, and so on. And from that perspective, it maybe makes sense to just shake the game board, knocking over all the pieces rather than trying to win by adhering to what have become common conventions and normal rules of play.
If everyone takes a hit, if there’s a global recession or depression and everything is knocked asunder because those variables that led to where we are today, with all their associated pros and cons, are suddenly gone, that might lead to a situation in which the US is hurt, but not as badly as everyone else, including entities like China. And because the US did the game board shaking, the US may thus be in a better position as everything settles back into a new state of affairs; a new state of affairs that Trump and his people want to be more favorable to the US, long-term.
There’s some logic to this thinking, even if it’s a very grim, me-first, zero-sum kind of logic. The US economy is less reliant on global trade than the rest of the G20, the wealthiest countries in the world; only about 25% of its GDP is derived from trade, while that number is 37% for China, 63% for France, and a whopping 88% for Germany.
Other nations are in a relatively more vulnerable position than the US in a less-open, more tariff-heavy world, then, and that means the US administration may have them over a barrel, making the aforementioned US-favoring negotiations more likely, but also, again, potentially just hurting everyone, but the US less so. And when I say hurting, I mean some countries losing a huge chunk of their economy overnight, triggering a lot more poverty, maybe stagflation and famines, and possibly even revolutions, as people worldwide experience a shocking and sudden decrease in both wealth and future economic outlook.
Already, just days after Trump announced his tariffs, global markets are crashing, with US markets on track to record its second-worst three-day decline in history, after only the crash of 1987—so that’s worse than even the crashes that followed 9/11, the Covid-19 pandemic, the debt crisis, and many others.
Foreign markets are doing even worse, though, with Hong Kong’s recently high-flying Hang Seng falling 13% in trading early this week, and Japan’s Nikkei dropping 8%.
Other market markers are also dropping, the price of oil falling to a pandemic-era level of $60 per barrel, Bitcoin losing 10% in a day, and even the US dollar, which theoretically should rise in a tariff scenario, dropping 0.1%—which suggests investors are planning for a damaging recession, and the US market and currency as a whole might be toxic for a while; which could, in turn, lead to a boom for the rest of the world, the US missing out on that boom.
There are also simpler theories, I should mention, that tariffs may be meant to generate more profits to help pay for Trump’s expanded tax cuts without requiring he touch the third-rails of Medicare or Social Security, or that they’re meant to address the US’s booming debt by causing investors to flee to Treasury bills, which has the knock-on effect of reducing the interest rates that have to be paid on government debt.
That flight toward Treasuries is already happening, though it seems to be primarily because investors are fleeing the market as stocks collapse in value and everyone’s worrying about their future, about stagflation, and about mass layoffs and unemployment.
It may be that all or most of these things are true, too, by the way, and that this jumble of events, pros and cons alike, are seen as a net-positive by this administration.
For what it’s worth, too, the US Presidency doesn’t typically get to set things like tariffs—that’s congress’ responsibility and right. But because Congress is currently controlled by Republicans, they’ve yet to push back on these tariffs with a veto, and they may not. There are rumblings within the president’s party about this, and a lot of statements about how it’ll ultimately be good, but that maybe they would have done things differently, but there hasn’t been any real action yet, just hedging. And that could remain the case, but if things get bad enough, they could be forced by their constituents to take concrete action on the matter before Trump’s promised, theoretical positive outcomes have the chance to emerge, or not.
Show Notes
https://www.everycrsreport.com/files/20060925_RL33665_4a8c6781ce519caa3e6b82f95c269f73021c5fdf.pdf
https://en.wikipedia.org/wiki/Tariff
https://www.washingtonpost.com/business/2025/03/31/tariffs-affect-consumer-spending/
https://www.wsj.com/tech/exempt-or-not-the-chip-industry-wont-escape-tariffs-a6c771db
https://www.wsj.com/economy/central-banking/goldman-sachs-lifts-u-s-recession-probability-to-35-ce285ebc
https://www.axios.com/newsletters/axios-am-9d85eb00-1184-11f0-8b11-0da1ebc288e3.html
https://apnews.com/article/trump-tariffs-democrats-economy-protests-financial-markets-90afa4079acbde1deb223adf070c1e98
https://www.wsj.com/economy/trade/trade-war-explodes-across-world-at-pace-not-seen-in-decades-0b6d6513
https://www.mufgamericas.com/sites/default/files/document/2025-04/The-Long-Shadow-of-William-McKinley.pdf
https://x.com/krishnanrohit/status/1907587352157106292
https://www.nytimes.com/2025/04/04/business/trump-stocks-tariffs-trade.html
https://www.nytimes.com/2025/04/05/opinion/trump-tariffs-theories.html
https://www.nytimes.com/2025/04/06/world/asia/vietnam-trump-tariff-delay.html
https://www.nytimes.com/2025/04/06/world/europe/trade-trump-tariffs-brexit.html
https://marginalrevolution.com/marginalrevolution/2025/04/why-do-domestic-prices-rise-with-tarriffs.html
https://www.foxnews.com/politics/how-we-got-liberation-day-look-trumps-past-comments-tariffs
https://www.pbs.org/wgbh/frontline/article/trumps-tariff-strategy-can-be-traced-back-to-the-1980s/
https://www.nytimes.com/2024/12/12/us/politics/trump-tv-stock-market.html
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf
https://economictimes.indiatimes.com/news/international/us/over-50-countries-push-for-tariff-revisions-will-donald-trump-compromise-heres-what-the-white-house-said/articleshow/120043664.cms
https://www.nytimes.com/2025/04/06/business/stock-market-plunge-investment-bank-impact.html
https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-07-25
https://www.wsj.com/world/china/china-trump-tariff-foreign-policy-6934e493
https://www.wsj.com/economy/in-matter-of-days-outlook-shifts-from-solid-growth-to-recession-risk-027eb2b4
https://asia.nikkei.com/Business/Markets/Asia-Pacific-stocks-sink-from-Trump-s-tariff-barrage-Hong-Kong-down-13
https://www.reuters.com/markets/eu-seeks-unity-first-strike-back-trump-tariffs-2025-04-06/
https://www.washingtonpost.com/politics/2025/04/07/trump-presidency-news-tariffs/
https://www.nytimes.com/2025/04/07/world/asia/china-trade-war-tariffs.html
https://www.bloomberg.com/news/newsletters/2025-04-07/global-rout-carries-whiff-of-panic-as-trump-holds-fast-on-tariffs
https://en.wikipedia.org/wiki/Stagflation
https://finance.yahoo.com/news/economists-fed-recent-projections-signal-120900777.html
https://en.wikipedia.org/wiki/1973_oil_crisis
https://en.wikipedia.org/wiki/Economic_stagnation

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Vibe Coding
1 Apr· Let's Know Things
This week we talk about Studio Ghibli, Andrej Karpathy, and OpenAI.
We also discuss code abstraction, economic repercussions, and DOGE.
Recommended Book: How To Know a Person by David Brooks
Transcript
In late-November of 2022, OpenAI released a demo version of a product they didn’t think would have much potential, because it was kind of buggy and not very impressive compared to the other things they were working on at the time. This product was a chatbot interface for a generative AI model they had been refining, called ChatGPT.
This was basically just a chatbot that users could interact with, as if they were texting another human being. And the results were good enough—both in the sense that the bot seemed kinda sorta human-like, but also in the sense that the bot could generate convincing-seeming text on all sorts of subjects—that people went absolutely gaga over it, and the company went full-bore on this category of products, dropping an enterprise version in August the following year, a search engine powered by the same general model in October of 2024, and by 2025, upgraded versions of their core models were widely available, alongside paid, enhanced tiers for those who wanted higher-level processing behind the scenes: that upgraded version basically tapping a model with more feedstock, a larger training library and more intensive and refined training, but also, in some cases, a model that thinks longer, than can reach out and use the internet to research stuff it doesn’t already know, and increasingly, to produce other media, like images and videos.
During that time, this industry has absolutely exploded, and while OpenAI is generally considered to be one of the top dogs in this space, still, they’ve got enthusiastic and well-funded competition from pretty much everyone in the big tech world, like Google and Amazon and Meta, while also facing upstart competitors like Anthropic and Perplexity, alongside burgeoning Chinese competitors, like Deepseek, and established Chinese tech giants like Tencent and Baidu.
It’s been somewhat boggling watching this space develop, as while there’s a chance some of the valuations of AI-oriented companies are overblown, potentially leading to a correction or the popping of a valuation bubble at some point in the next few years, the underlying tech and the output of that tech really has been iterating rapidly, the state of the art in generative AI in particular producing just staggeringly complex and convincing images, videos, audio, and text, but the lower-tier stuff, which is available to anyone who wants it, for free, is also valuable and useable for all sorts of purposes.
Just recently, at the tail-end of March 2025, OpenAI announced new multimodal capabilities for its GPT-4o language model, which basically means this model, which could previously only generate text, can now produce images, as well.
And the model has been lauded as a sort of sea change in the industry, allowing users to produce remarkable photorealistic images just by prompting the AI—telling it what you want, basically—with usually accurate, high-quality text, which has been a problem for most image models up till this point. It also boasts the capacity to adjust existing images in all sorts of ways.
Case-in-point, it’s possible to use this feature to take a photo of your family on vacation and have it rendered in the style of a Studio Ghibli cartoon; Studio Ghibli being the Japanese animation studio behind legendary films like My Neighbor Totoro, Spirited Away, and Princess Mononoke, among others.
This is partly the result of better capabilities by this model, compared to its precursors, but it’s also the result of OpenAI loosening its policies to allow folks to prompt these models in this way; previously they disallowed this sort of power, due to copyright concerns. And the implications here are interesting, as this suggests the company is now comfortable showing that their models have been trained on these films, which has all sorts of potential copyright implications, depending on how pending court cases turn out, but also that they’re no long being as precious with potential scandals related to how their models are used.
It’s possible to apply all sorts of distinctive styles to existing images, then, including South Park and the Simpsons, but Studio Ghibli’s style has become a meme since this new capability was deployed, and users have applied it to images ranging from existing memes to their own self-portrait avatars, to things like the planes crashing into the Twin Towers on 9/11, JFK’s assassination, and famous mass-shootings and other murders.
It’s also worth noting that the co-founder of Studio Ghibli, Hayao Miyazaki, has called AI-generated artwork “an insult to life itself.” That so many people are using this kind of AI-generated filter on these images is a jarring sort of celebration, then, as the person behind that style probably wouldn’t appreciate it; many people are using it because they love the style and the movies in which it was born so much, though. An odd moral quandary that’s emerged as a result of these new AI-provided powers.
What I’d like to talk about today is another burgeoning controversy within the AI space that’s perhaps even larger in implications, and which is landing on an unprepared culture and economy just as rapidly as these new image capabilities and memes.
—
In February of 2025, the former AI head at Tesla, founding team member at OpenAI, and founder of an impending new, education-focused project called Eureka Labs named Andrej Karpathy coined the term ‘vibe coding’ to refer to a trend he’s noticed in himself and other developers, people who write code for a living, to develop new projects using code-assistant AI tools in a manner that essentially abstracts away the code, allowing the developer to rely more on vibes in order to get their project out the door, using plain English rather than code or even code-speak.
So while a developer would typically need to invest a fair bit of time writing the underlying code for a new app or website or video game, someone who’s vibe coding might instead focus on a higher, more meta-level of the project, worrying less about the coding parts, and instead just telling their AI assistant what they want to do. The AI then figures out the nuts and bolts, writes a bunch of code in seconds, and then the vibe coder can tweak the code, or have the AI tweak it for them, as they refine the concept, fix bugs, and get deeper into the nitty-gritty of things, all, again, in plain-spoken English.
There are now videos, posted in the usual places, all over YouTube and TikTok and such, where folks—some of whom are coders, some of whom are purely vibe coders, who wouldn’t be able to program their way out of a cardboard box—produce entire functioning video games in a matter of minutes.
These games typically aren’t very good, but they work. And reaching even that level of functionality would previously have taken days or weeks for an experienced, highly trained developer; now it takes mere minutes or moments, and can be achieved by the average, non-trained person, who has a fundamental understanding of how to prompt AI to get what they want from these systems.
Ethan Mollick, who writes a fair bit on this subject and who keeps tabs on these sorts of developments in his newsletter, One Useful Thing, documented his attempts to make meaning from a pile of data he had sitting around, and which he hadn’t made the time to dig through for meaning. Using plain English he was able to feed all that data to OpenAI’s Deep Research model, interact with its findings, and further home in on meaningful directions suggested by the data.
He also built a simple game in which he drove a firetruck around a 3D city, trying to put out fires before a competing helicopter could do the same. He spent a total of about $13 in AI token fees to make the game, and he was able to do so despite not having any relevant coding expertise.
A guy named Pieter Levels, who’s an experienced software engineer, was able to vibe-code a video game, which is a free-to-play, massively multiplayer online flying game, in just a month. Nearly all the code was written by Cursor and Grok 3, the first of which is a code-writing AI system, the latter of which is a ChatGPT-like generalist AI agent, and he’s been able to generate something like $100k per month in revenue from this game just 17 days, post-launch.
Now an important caveat here is that, first, this game received a lot of publicity, because Levels is a well-known name in this space, and he made this game as part of a ‘Vibe Coding Game Jam,’ which is an event focused on exactly this type of AI-augmented programming, in which all of the entrants had to be at least 80% AI generated. But he’s also a very skilled programmer and game-maker, so this isn’t the sort of outcome the average person could expect from these sorts of tools.
That said, it’s an interesting case study that suggests a few things about where this category of tools is taking us, even if it’s not representative for all programming spaces and would-be programmers.
One prediction that’s been percolating in this space for years, even before ChatGPT was released, but especially after generative AI tools hit the mainstream, is that many jobs will become redundant, and as a result many people, especially those in positions that are easily and convincingly replicated using such tools, will be fired. Because why would you pay twenty people $100,000 a year to do basic coding work when you can have one person working part-time with AI tools vibe-coding their way to approximately the same outcome?
It’s a fair question, and it’s one that pretty much every industry is asking itself right now. And we’ve seen some early waves of firings based on this premise, most of which haven’t gone great for the firing entity, as they’ve then had to backtrack and starting hiring to fill those positions again—the software they expected to fill the gaps not quite there yet, and their offerings suffering as a consequence of that gambit.
Some are still convinced this is the way things are going, though, including people like Elon Musk, who, as part of his Department of Government Efficiency, or DOGE efforts in the US government, is basically stripping things down to the bare-minimum, in part to weaken agencies he doesn’t like, but also, ostensibly at least, to reduce bloat and redundancy, the premise being that a lot of this work can be done by fewer people, and in some cases can be automated entirely using AI-based systems.
This was the premise of his mass-firings at Twitter, now X, when he took over, and while there have been a lot of hiccups and issues resulting from that decision, the company is managing to operate, even if less optimally than before, with about 20% the staff it had before he took over—something like 1,500 people compared to 7,500.
Now, there are different ways of looking at that outcome, and Musk’s activities since that acquisition will probably color some of our perceptions of his ambitions and level of success with that job-culling, as well. But the underlying theory that a company can do even 90% as well as it did before with just a fifth of the workforce is a compelling argument to many people, and that includes folks running governments, but also those in charge of major companies with huge rosters of employees that make up the vast majority of their operating expenses.
A major concern about all this, though, is that even if this theory works in broader practice, and all these companies and governments can function well enough with a dramatically reduced staff using AI tools to augment their capabilities and output, we may find ourselves in a situation in which the folks using said tools are more and more commodified—they’ll be less specialized and have less education and expertise in the relevant areas, so they can be paid less, basically, the tools doing more and the humans mostly being paid to prompt and manage them. And as a result we may find ourselves in a situation where these people don’t know enough to recognize when the AI are doing something wrong or weird, and we may even reach a point where the abstraction is so complete that very few humans even know how this code works, which leaves us increasingly reliant on these tools, but also more vulnerable to problems should they fail at a basic level, at which point there may not be any humans left who are capable of figuring out what went wrong, since all the jobs that would incentivize the acquisition of such knowledge and skill will have long since disappeared.
As I mentioned in the intro, these tools are being applied to images, videos, music, and everything else, as well. Which means we could see vibe artists, vibe designers, vibe musicians and vibe filmmakers. All of which is arguably good in the sense that these mediums become more accessible to more people, allowing more voices to communicate in more ways than ever before.
But it’s also arguably worrying in the sense that more communication might be filtered through the capabilities of these tools—which, by the way, are predicated on previous artists and writers and filmmakers’ work, arguably stealing their styles and ideas and regurgitating them, rather than doing anything truly original—and that could lead to less originality in these spaces, but also a similar situation in which people forget how to make their own films, their own art, their own writing; a capability drain that gets worse with each new generation of people who are incentivized to hand those responsibilities off to AI tools; we’ll all become AI prompters, rather than all the things we are, currently.
This has been the case with many technologies over the years—how many blacksmiths do we have in 2025, after all? And how many people actually hand-code the 1s and 0s that all our coding languages eventually write, for us, after we work at a higher, more human-optimized level of abstraction?
But because our existing economies are predicated on a certain type of labor and certain number of people being employed to do said labor, even if those concerns ultimately don’t end up being too big a deal, because the benefits are just that much more impactful than the downsides and other incentives to develop these or similar skills and understandings arise, it’s possible we could experience a moment, years or decades long, in which the whole of the employment market is disrupted, perhaps quite rapidly, leaving a lot of people without income and thus a lot fewer people who can afford the products and services that are generated more cheaply using these tools.
A situation that’s ripe with potential for those in a position to take advantage of it, but also a situation that could be devastating to those reliant on the current state of employment and income—which is the vast, vast majority of human beings on the planet.
Show Notes
https://en.wikipedia.org/wiki/X_Corp
https://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/
https://www.wired.com/story/doge-rebuild-social-security-administration-cobol-benefits/
https://www.wired.com/story/anthropic-benevolent-artificial-intelligence/
https://arstechnica.com/tech-policy/2025/03/what-could-possibly-go-wrong-doge-to-rapidly-rebuild-social-security-codebase/
https://en.wikipedia.org/wiki/Vibe_coding
https://www.newscientist.com/article/2473993-what-is-vibe-coding-should-you-be-doing-it-and-does-it-matter/
https://nmn.gl/blog/dangers-vibe-coding
https://x.com/karpathy/status/1886192184808149383
https://simonwillison.net/2025/Mar/19/vibe-coding/
https://arstechnica.com/ai/2025/03/is-vibe-coding-with-ai-gnarly-or-reckless-maybe-some-of-both/
https://devclass.com/2025/03/26/the-paradox-of-vibe-coding-it-works-best-for-those-who-do-not-need-it/
https://www.creativebloq.com/3d/video-game-design/what-is-vibe-coding-and-is-it-really-the-future-of-app-and-game-development
https://arstechnica.com/ai/2025/03/openais-new-ai-image-generator-is-potent-and-bound-to-provoke/
https://en.wikipedia.org/wiki/Studio_Ghibli

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Tesla Protests
25 Mär· Let's Know Things
This week we talk about Elon Musk, deportations, and the First Amendment.
We also discuss electric vehicles, free speech, and Georgia.
Recommended Book: Red Rising by Pierce Brown
Transcript
Greenpeace is a protest-focused, environmentalist nongovernmental organization that was originally founded in Canada in the early 1970s, but which has since gone on to tackle issues ranging from commercial whaling to concerns about genetic engineering, worldwide.
They have 26 independent organizations operating across nearly 60 countries, and their efforts are funded by a combination of grants and donations from individual supporters; and that’s an important detail, as they engage in a lot of highly visible acts of protest, many of which probably wouldn’t be feasible if they had corporate or government funders.
They piss a lot of people off, in other words, and even folks who consider themselves to be environmentalists aren’t always happy with the things they do. Greenpeace is vehemently anti-nuclear, for instance, and that includes nuclear power, and some folks who are quite green in their leanings consider nuclear power to be part of the renewable energy solution, not something to be clamped down on. The same is true of their other stances, like their protests against genetic engineering efforts and their at times arguably heavy-handed ‘ecotage’ activities, which means sabotage for ecological purposes, to making their point and disrupt efforts, like cutting down forests or building new oil pipelines, that they don’t like.
Despite being a persistent thorn in the side of giant corporations like oil companies, and despite sometimes irritating their fellow environmentalists, who don’t always agree with their focuses or approaches, Greenpeace has nonetheless persisted for decades in part because of their appreciation for spectacle, and their ability to get things that might otherwise be invisible—like whaling and arctic oil exploration—into the press. This is in turn has at times raised sufficient awareness that politicians have been forced to take a stand on things they wouldn’t have otherwise been forced to voice an opinion on, much less support or push against, and that is often the point of protests of any size or type, by any organization.
A recent ruling by a court in North Dakota, though, could hobble this group’s future efforts. A company involved in the building of the Dakota Access pipeline accused Greenpeace of defamation, trespass, nuisance, civil conspiracy, and other acts, and has been awarded about $667 million in damages, payable by Greenpeace, because of the group’s efforts to disrupt the construction of this pipeline.
The folks at the head of Greenpeace had previously said that a large payout in this case could bankrupt the organization, and while there’s still a chance to appeal the ruling, and they’ve said they intend to do so, this ruling is already being seen as a possible fulcrum for companies, politicians, and government agencies that want to limit protests in the US, where the right to assemble and peaceably express one’s views are constitutionally protected by the first amendment, but where restrictions on protest have long been used by government officials and police to stifle protests they don’t like for various reasons.
What I’d like to talk about today is another, somewhat unusual wave of protests we’re seeing in the US and to some degree globally right now, too, and the larger legal context in which these protests are taking place.
—
When US President Trump first stepped into office back in early 2017, there were protests galore, huge waves of people coming out to protest the very idea of him, but especially his seeming comfort with, and even celebration of, anti-immigration, racist, and misogynistic views and practices, including his alleged sexual abuse and rape of dozens of women, one of whom successfully took him to court on the matter, winning a big settlement for proving that he did indeed sexually assault her.
The response to his second win, and his ascension to office for another term in 2025, has been more muted. There have been a lot of protests, but not at the scale of those seen in 2017. Instead, the majority of enthusiasm for protest-related action against this administration has been aimed at Elon Musk, a man who regularly tops the world’s richest people lists, owns big-name companies like SpaceX and Tesla, and who has his own collection of very public scandals and alleged abuses.
One such scandal revolves around Musk’s decision to plow hundreds of millions of dollars into getting Trump reelected. As a result of that investment, he was brought into the president’s confidence, and now serves as a sort of hatchet-man via a pseudo-official agency called the Department of Government Efficiency, or DOGE.
Musk and his team have been jumping from government agency to government agency, conducting mass firings, harassing employees, hacking and by some accounts stealing and deleting all sorts of sensitive data, and generally doing their best to cause as much disruption as possible. Many of their efforts have been pushed back against, eventually, by courts, but that’s only after a lot of damage has already been done.
The general theory of their operation is ostensibly to cut costs in the US government, and though outside analysts and watchdogs have shown that they haven’t really managed to do that on any scale, and that their actions will probably actually add to the government’s deficit, not reduce it, Musk and Trump claim otherwise, and that’s enough for many people in their orbit. The unsaid purpose of this group, though, seems to be making the government so ineffective and hollow that businesses, like Musk’s and those of his friends, can step in and do things that were previously done by government agencies, and can reap massive profits as a consequence; folks having to pay more for what was previously provided by the government, and a bunch of rich folks profiting because they’re the only ones capable of providing such services, now that the agencies have been gutted.
The courts are still scrambling, as they move a lot slower than individuals with seeming authority and the support of a vindictive president can move, but this has already caused a lot of consternation across the political spectrum, and Musk, though popular with a certain flavor of Republican and far-right voter, has pissed off a lot of more conventional Republicans, in addition to pretty much every Democrat.
This is important context for understanding why the most vocal and enthusiastic protests in the US these first few months of 2025 have targeted Musk, and more specifically, Musk’s electric vehicle company, Tesla.
Tesla was once celebrated by the political left as the EV company that made EVs sexy and popular, at a time in which this type of vehicle was anything but.
Musk’s shift to the political far-right changed that, though, and the general theory of these protests is that Musk is mostly held financially afloat by Tesla’s huge market valuation: Tesla stocks are worth way more than those of other car companies, with a price multiple—how much the stock is worth, compared to how much business the company actually does, and how much their assets are worth—is more akin to that of a dotcom-era tech startup than a car company, the stock price valued at something like 120-times the apparent book value of the company.
So Musk, who owns a lot of Tesla stock, can basically borrow money against that stock, and this allows him to tap tens of billions of dollars worth of borrowed money on a whim, because the banks know he’s good for it. In this way he can inflate his supposed worth while also getting liquid cash whenever he needs it, despite not having to sell those stocks he owns.
This method of acquiring liquid wealth by leveraging non-liquid assets has allowed him to support Trump’s reascension, but it’s also allowed him to do things like buy Twitter, which he has renamed X and converted into a sort of voicebox for the right and far-right. It has also allowed him to do things like offer money to potential voters who are signed up to vote and who sign petitions that are supportive of far-right causes; which is not quite paying for votes, which is illegal in the US, but it is the closest thing to paying for votes you can get away with, and there’s still debate whether this is actually legal or not, but either way, until the courts catch on up this, too, he’s been able to influence vote outcomes to varying degrees because of that access to money.
Some of the biggest and most consistent protesting efforts in the post-second-term-Trump US have revolved around Tesla, its cars, and its dealerships, and the theory of operation here is that by protesting Tesla, you might be able to decrease the company’s market valuation, which in turn decreases Musk’s access to money. Less market value for the company means Musk can’t borrow as much money against it, and if he has less access to liquid wealth, to cash rather than stocks and other illiquid assets, he may become less relevant in the administration, and less capable of influencing elections across the country (and to some degree the world, as he’s throwing money at candidates he favors globally, now, too).
These protests have been traditional, in the sense of gathering peacefully outside Tesla dealerships, chanting slogans and carrying signs, but also of a more aggressive sort, including spraypainting Tesla vehicles, doing things to embarrass folks who own these cars, and in some few cases, setting them on fire or otherwise destroying them.
The general idea, again, is to make the brand toxic, which in turn should reduce sales, and that, ideally, for the protestors, would then reduce Musk’s access to money, which he is using to influence elections and other such activities and outcomes.
The administration has responded to these protests with a bizarre and, it’s generally agreed, pretty embarrassing car commercial for Tesla, held outside the White House, in which Trump claimed he was buying one, and told Americans to buy a car to support Tesla because it’s a wholesome American company.
Trump also recently said that he would consider people caught defacing Teslas or even just protesting the brand in non-destructive ways to be domestic terrorists, which is a pretty chilling thought, as some post-9/11 rules about how the government can treat terrorists are still on the books; calling someone a terrorist is a means of doing away with due process and human rights, basically, so this is a threat to go full violent authoritarian on people using their first amendment rights in ways this administration doesn’t like.
These protests are occurring within the context of another notable, protest-oriented storyline, one in which students who participated in protests against the US and Israel’s actions in Gaza at Columbia University in New York last spring have been arrested; one was on a visa to the US and was in the process of becoming a doctor—her visa has now been revoked—and the other, who has a green card, and who is thus a permanent US resident, and who has no criminal record, faces a case in immigration court in Louisiana, where he was shipped after being arrested by Immigration and Customs Enforcement, or ICE.
His hearing has been scheduled for April 8, and his lawyers are challenging both his detention and the government’s apparent efforts to make an example of him, trying to deport him and do away with his citizenship because he protested against the government’s actions.
The administration is claiming they can do this, and can do a bunch of other stuff, including deporting immigrants who they claim, without evidence, are members of a Venezuelan gang; they say there’s legal precedent that gives them the ability to deport enemy aliens, those who are antagonistic to the US and its government, basically—the same sort of rulings that were used to justify deporting anyone sympathetic to the communist party back in the mid-to-late 20th century.
This same concept is being floated to justify the deportation of some of the people who have protested against Israel’s and the US’s actions in Gaza, the accusation being that they are supporting Hamas and other organizations that have been declared terrorist organizations by the US, so when folks protest against these governments’ activities in the region, they’re also supporting the causes of terrorist organizations—which then arguably gives the US government the right to deport them, because they weren’t born in the US.
The legality of all this is still being debated and working its way through the court system, but the ultimate goal seems to be giving the administration the ability to deport whomever they like, and establishing that immigrants of any kind don’t have the free speech rights that natural born US citizens enjoy; which isn’t concretely established in law, and which these many efforts and court cases are meant to sort out more formally.
This administration has also shown itself to be just really antagonistic against any person or entity that defies or criticizes it, including journalistic entities, politicians, or protesting individuals; they’ve used lawsuits, executive orders, and a slew of other tools to legally punish, financially punish, and in many cases socially punish, telling their supporters that it would be a real shame if something happened to these people, seemingly aiming to scare their opponents, while also possibly sparking stochastic violence against them.
And this isn’t a US-exclusive thing.
In Georgia, the country not the state, the government is levying huge fines on people who protested against its pivot toward allying with Russia instead of moving toward the EU two years ago; they’re using a so-called “foreign agent bill” to accuse anyone who says or does something against the government of being paid by foreign entities, which in turn allows them to crack down on these people hard, while seemingly not violating their good, dedicated, patriotic citizens’ rights.
They’ve also started levying fines for the equivalent of about $16,000 on those who participate in protests that even briefly block traffic, which is one more way to asymmetrically hobble people and organizations that might otherwise cause a regime trouble; anyone who does these things in their favor can just have these fines waived or ignored.
We’re seeing similar things in Turkey and Hungary, right now, two other countries that have seen widescale protests and significant efforts by their governments to attack those protestors, to get them to stop. In some case these efforts backfire, leading to more and more substantial pushback by the population against increasingly aggressive and abusive regimes.
It’s impossible to know ahead of time which way things will go, though, and right now, in the US, most of these anti-protestor efforts are still young, as are the anti-Tesla, anti-Musk protests, themselves. One side or the other could be forced to pivot by judicial rulings—though this could also lead to a long-predicted constitutional crisis, in which the judges say the government can’t do something they want to do, and the government just ignores that ruling, creating an entirely different and arguably more substantial problem.
Show Notes
https://apnews.com/article/columbia-protests-immigration-detention-mahmoud-khalil-755774045e5e82849e3281e8ff72f26d
https://www.cnn.com/2025/03/21/middleeast/turkey-protests-erdogan-mayor-intl-latam/index.html
https://www.nytimes.com/2025/03/23/world/middleeast/turkey-ekrem-imamoglu-istanbul.html
https://www.nytimes.com/2025/03/22/world/middleeast/turkey-erdogan-democracy-istanbul-mayor-detention.html
https://en.wikipedia.org/wiki/2025_Turkish_protests
https://apnews.com/article/turkey-mayor-jailed-istanbul-f962743f724f00a318f84ffaed7f58de
https://www.nytimes.com/2025/03/22/us/politics/what-is-doge-elon-musk-trump.html
https://www.nbcnews.com/news/us-news/protesters-gather-tesla-showrooms-dealerships-denounce-elon-musk-doge-rcna197595
https://www.nytimes.com/2025/03/22/nyregion/columbia-trump-concessions-watershed.html
https://apnews.com/article/hungary-pride-ban-orban-lgbtq-rights-e7a0318b09b902abfc306e3e975b52df
https://www.bbc.com/news/articles/c5y0zrg9kpno
https://www.reuters.com/world/europe/hungarys-president-signs-law-banning-pride-parade-despite-protests-2025-03-19/
https://www.reuters.com/world/europe/hungarys-orban-vows-fast-crackdown-media-ngos-over-foreign-funding-2025-03-15/
https://www.cnn.com/2025/02/15/europe/georgia-protests-authoritarianism-fears-intl-cmd/index.html
https://www.amnesty.org/en/latest/news/2025/03/georgia-authorities-freeze-accounts-of-organizations-supporting-protesters-to-kill-the-peaceful-protests/
https://www.france24.com/en/live-news/20250323-georgia-cracks-down-on-pro-eu-protests-with-crippling-fines
https://www.nytimes.com/2025/03/23/nyregion/mahmoud-khalil-trump-allegations.html
https://www.nytimes.com/2025/03/23/us/politics/spacex-contracts-musk-doge-trump.html
https://www.theguardian.com/us-news/2025/mar/21/oil-protest-activism-greenpeace-dakota-pipeline-verdict
https://www.theguardian.com/us-news/2025/mar/19/greenpeace-lawsuit-energy-transfer-dakota-pipeline
https://www.cnn.com/2025/03/18/climate/greenpeace-lawsuit-first-amendment/index.html
https://www.pbs.org/newshour/nation/what-to-know-about-greenpeace-after-it-was-found-liable-in-the-dakota-access-protest-case
https://apnews.com/article/greenpeace-dakota-access-pipeline-lawsuit-verdict-5036944c1d2e7d3d7b704437e8110fbb
https://en.wikipedia.org/wiki/Greenpeace
https://en.wikipedia.org/wiki/Right_to_protest

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US Market Uncertainty
18 Mär· Let's Know Things
This week we talk about tariffs, consumer confidence, and trade wars.
We also discuss inflation, GDP, and uncertainty.
Recommended Book: A Brief History of Intelligence by Max S. Bennett
Transcript
On January 20, 2025, mere hours after being sworn into his second term in office as President of the United States, Donald Trump announced new 25% tariffs on most incoming goods from Canada and Mexico, accusing the two allies of failing to halt the flow of drugs and illegal migrants into the US. These tariffs would go into effect on February 1, he said, and they would be in addition to existing tariffs that were already in effect for specific import categories.
On that same day, he also speculated that he might impose a universal tariff on all imports, saying that he believed all countries, allies or not, were taking advantage of the US, and he didn’t like that.
Less than a week later, Trump announced that he would impose 25% tariffs on all good from Colombia, with immediate effect, and would double that tariff to 50% within a week. This appears to have been a punishment for the Colombian government’s decision to turn back planes full of immigrants the US government deported and sent their way, without approval from the intended recipient of those deported people, the Colombian government. There was a minor tiff between these governments, but the White House declared victory on the matter later that night, saying the tariffs would be held in reserve, implying they could come back at any time if their demands are not met.
An executive order implementing the threatened 25% tariffs on Canada and Mexico was signed on February 1, and a new 10% tariff on China went into effect the same day. Countermeasures were threatened by everyone involved, and after Trump published a social media post saying there would probably be economic pain for a while, his government agreed to a 30 day pause on tariffs for Mexico and Canada, while also threatening new tariffs against the European Union; another long-time US ally.
The new 10% tariff on Chinese imports went into effect on February 4, and China retaliated with its own counter-tariffs on US goods, including things like farm machinery and energy products. It also implemented new restrictions on the export of rare earth minerals to the US—a category of raw materials everyone is scrambling to secure, as they’re vital for the production of batteries and other fundamental technologies—and they launched a new antimonopoly investigation into Google, which deals with some Chinese companies.
On February 10, Trump reimposed a 25% tariff on all foreign steel and aluminum; a move that made US metal companies happy, but essentially all other US companies very unhappy, and in mid-February he threatened even more, broad, and vague tariffs on basically everyone, saying he’s doing what he’s doing in order to force companies to move manufacturing infrastructure back to the US, after decades of offshoring everything.
At the end of February, Trump said the delayed tariffs on Canada and Mexico would go into effect, as planned, on March 4, alongside those new 10% tariffs on China. On that day, Canada implemented its own counter-tariffs on the US to the tune of 25% on about $155 billion of US goods imported by the country.
Canada and Mexico send about 80% of their exports to the US market, so their economies are expected to be hit hard by this trade war. China, in contrast, only sends about 15% of its exports to the US, so the impact will be more tempered.
These three countries, though, are the US’s largest trading partners, collectively accounting for over 40% of US imports and exports. In addition to buying a lot of US goods, they also export the majority of things like oil, beer, copper wire, chocolate, and other goods that the US consumes; and the cost of tariffs are almost always passed on to the end-consumer, so higher tariffs on these sorts of goods mean raised prices on a lot of stuff across the economy.
On March 6, after a lot of back-and-forth with US automakers and with the Mexican and Canadian governments, a lot of the tariffs placed on goods from these countries were suspended, the US government denying that their withdrawal had anything to do with the US market, which was suffering in response to this wave of economic disruptions—though many tariffs were kept in place, and Trump said the US would still impose tariffs on all steel and aluminum imports beginning on March 12.
On the 12th, the EU and Canada announced a new wave of retaliatory tariffs against the US, though the European side said they would hold off on their implementation of these tariffs, waiting till April 1 to see what happens. The next day, Trump threatened a 200% charge on alcoholic products from the EU in response to their planned 50% tariffs on US whiskey and other products within their borders.
At the moment, as of mid-March 2025, a lot of these tariffs are still speculative, as it’s generally understood, from Trump’s bombastic approach to deal-making and his previous backtracking from these sorts of threats, that many of these tariffs could disappear, announced solely to provide leverage against those Trump wants to squeeze for more concessions and what he considers to be more favorable trade terms. Some of them could become concrete reality, though, and part of the issue here is that it’s nearly impossible to know which is which, because there also seems to be a larger effort to rewire the US and global economies by this administration—and that effort, plus the uncertainty caused by tariffs and similar actions, are leading to some pretty severe market upsets within the US, and resultantly around the world, as well.
And that’s what I’d like to talk about today: the impacts of these tariffs and other actions by this administration, so far, and what might happen next, based on currently available numbers and analysis.
—
Economies are ridiculously complex systems, and it’s impossible to say with 100% certainty what caused what, and to what degree things would be different had some other path been taken by those in control of various regulatory and economic levers.
That said, the nonpartisan Tax Foundation has estimated that just those first batch of proposed tariffs by the US government, not including impacts from foreign retaliations, which could be substantial, will reduce US GDP by about 0.4% and reduce total hours worked by the equivalent of 309,000 full-time jobs; so a lot less output, and a lot less overall productivity.
That’s on top of the estimated 0.2% long-term decrease in US GDP caused by the first Trump administration’s tariffs, which were maintained by the subsequent Biden administration.
These existing tariffs raised prices in the US and reduced both output and employment, which means the boom the US economy saw under the Biden administration might have been even boomier, had those tariffs been dropped. But now they’re more or less locked in, and these new tariffs will probably amplify their effect, near-term and long-term.
On top of that, the constant threats and pullbacks and seemingly off-the-cuff decisions to implement what amounts to all sorts of huge-scale taxes on a frenetic array of goods, including luxuries, but also some very fundamental things, like the metals we use to build and manufacture basically everything, is stoking uncertainty throughout the US and global economies.
That uncertainty has wide-ranging impacts, but one of the most direct consequences is that consumer sentiment in the US has nose-dived, as ordinary people worry about the combined impacts of tariffs, cuts to government programs, layoffs across government agencies, and new restrictions on immigration, which even ignoring the human element of such things can cause all sorts of issues across industries that rely on immigrant workers to stay afloat.
In mid-March of this year, US consumer sentiment hit 57.9, down from 64.7 in February. That’s the lowest its been since November of 2022, it’s down 27% from a year earlier, and it’s a lot lower than economist predictions for this month, which were set at 63.2.
Consumer sentiment tells us how people are feeling about the economy, about their potential to earn, and about where things are going. This influences how people spend, how they consume, and that in turn helps determine how the overall economy will go in the coming years, as people will be more likely to hunker down and save, taking as few risks as possible and making fewer purchases if they believe things will be rough; which in some cases can become a self-fulfilling prophecy, because those behaviors tend to shrink the economy, which leads to less output, fewer investments being made, more layoffs, and so on. That means a drop in consumer sentiment can make things bad even if they would otherwise be good, but if they’re bad already, they can become even worse because folks stop doing things that would improve the economy, out of self-preservation.
And that impact can be just as pronounced when things are weird and wobbly, rather than outright bad, as seems to be the case in the US at the moment.
There’s no firm evidence that the US economy is destined for a recession at this point, but the Russell 2000 index, which is made up of smaller companies than indexes like the S&P 500, and which is thus more prone to on-the-ground variables than its larger index kin, has dropped more than 16% since November, when it hit a new high on optimism about what the new Trump administration might do for businesses and the economy.
The S&P 500 also collapsed, though about half as much, and it rallied somewhat last week as investors bought the dip, scooping up stocks at lower prices following that drop. But there’s a lot of speculation that this might be a so-called dead cat bounce recovery—a moment in which a market seems to be recovering from a drop, but where it’s actually just bouncing up a little before heading back downward—and even this index, which is packed with corporations that are less susceptible to brief market wobbles than those in the Russell, might be heading for another downswing in the coming weeks, based on a lot of the economic numbers used to predict such things, at the moment.
One such metric is interest in alternative assets like gold, and the price of gold hit a new high last Friday, surpassing $3,000 per ounce for the first time ever.
That’s not something you tend to see when markets are healthy and people expect them to do well; if they are healthy and expected to surge rather than collapse, people tend to put their money in the market, not in shiny metals. But the shiny metals bet seems to be appealing right now, which hints at an even broader suspicion of the US economy than even that consumer sentiment and those bad market figures anticipate.
And the market figures have been bad. In just 3 weeks, beginning on February 19, the S&P alone lost more than $5 trillion in value.
The Atlanta Fed, which uses a fairly reliable model to predict future US GDP numbers, was predicting a healthy nearly 4% increase for the US’s GDP for the first quarter of 2025 back in late-January, early-February, but that prediction plummeted from positive 4% to negative 2.4% by early March.
That figure could still change, as it’s informed by data that don’t all arrive at the same time, but it’s still a staggering drop, and it reflects the impact of all these tariffs, but also all the destruction of government programs and agencies, the mass firings, and of course the uncertainty caused by all of these things in aggregate, alongside the impacts of said uncertainty on everyone at all scales, from trade partners to US-based small businesses to individual consumers.
So few people and institutions are happy about what’s happening right now, but it does look like, in the immediate future, at least, there are some beneficiaries of all this tumult.
Markets in China are flourishing, especially Hong Kong’s Hang Seng index, which is up more than 20% since Trump’s inauguration on January 20. And Europe’s market, which has struggled with stasis for years now, is up more than 4% over that same period.
Uncertainty about markets, but also military alliances, especially NATO, have pushed Germany—which has struggled since Russia invaded Ukraine, when their energy markets were utterly scrambled, which in turn hobbled their massive manufacturing base—Germany has unleashed a huge amount of government funds on their economy, and that big uptick in spending has helped basically the whole EU market grow. The German government has traditionally been tight-pocketed, but a declaration by the incoming Chancellor that they would do whatever it takes to both defend themselves and boost their economic outlook in the face of unreliable backing from their long-time ally, the US, has bolstered enthusiasm and optimism throughout the region, bringing EU nations closer together, increasing spending on all sorts of fundamentals, and bringing them closer to the Canadian government, as well.
The Chinese government has recently indicated they’ll be injecting a bunch of money and other types of support in their economy, as well, which creates a stark contrast with the US government, which seems to be refocusing on pulling government resources from across society and the economy, and spending mostly on tax cuts for the wealthiest people and biggest companies, instead.
The US government’s efforts to go America first, and not do anyone, even its longest-term, most reliable allies, any favors, or even trade in what might be considered a balanced way, thus seems to be scrambling US markets while simultaneously stoking those that are being cut off, unifying aspects of the rest of the world in antagonism against the US, while also providing them with incentive to reinvest in their own markets; which could be good for them long-term, making them less reliant on the US in all sorts of ways, but which seems pretty bad for the US in particular, short-term, and casts the US-dominated global order into disarray for the immediate future, with all sorts of consequences, economic and otherwise.
The degree to which this impacts Trump’s approval ratings has yet to be seen, as while his approval is collapsing, especially on the economy, right now, a lot of the most serious economic impacts are expected to fall hard on regions that most enthusiastically voted for him, and Republican talking points have already pivoted toward messaging that implies suffering for a while is good and patriotic.
That message might succeed and keep people on side even as their investments collapse and tariff-driven inflation hits their bottom-lines, or it might not. But it seems like the administration is ramping up for a version of austerity that doesn’t actually reduce the deficit, but instead takes a bunch of money from programs and investments that helped these areas, and moves it to other stuff that mostly helps fund tax cuts for wealthy allies of the administration—and that could come back to bite them, come election season.
All of this is also happening in parallel to the many political maneuverings of the administration and its opposition, though, and just recently the Republican-held congress was able to pass a funding bill, moving a lot more authority and control to the White House; so whatever the short-term approval numbers show, none of this seems to be having much of a negative impact on Trump’s control of government. That could change, though, over the course of the next year, leading into 2026’s midterm election, when the makeup of congress could be influenced by these and similar decisions.
Show Notes
https://www.reuters.com/markets/us/futures-rise-after-volatile-week-consumer-data-tap-2025-03-14/
https://www.wsj.com/economy/consumers/consumer-confidence-march-2025-drops-trump-trade-e7e0964d
https://www.axios.com/2025/03/15/economic-indicators-recession-risk
https://www.cnn.com/2025/03/14/investing/gold-price-today-3000-ounce-intl/index.html
https://www.cnbc.com/2025/03/14/us-stock-market-loses-5-trillion-in-value-in-three-weeks.html
https://www.nytimes.com/2025/03/14/business/russell-2000-bear-market.html
https://www.atlantafed.org/cqer/research/gdpnow
https://www.nytimes.com/2025/03/14/us/politics/stock-market-correction-trump-tariffs.html
https://www.nfib.com/wp-content/uploads/2025/03/NFIB-SBET-Report-Feb.-2025.pdf
https://www.nytimes.com/2025/03/14/your-money/car-shopping-trump-tariffs-cfpb.html
https://www.nytimes.com/2025/03/16/business/trump-sp-500-stocks-europe-china.html
https://archive.ph/GNPRf
https://www.realclearpolling.com/polls/approval/donald-trump/issues/economy
https://www.nytimes.com/interactive/2025/03/15/business/economy/tariffs-trump-maps-voters.html
https://www.nytimes.com/2025/03/15/us/politics/trump-spending-bill-government-shutdown.html
https://www.wsj.com/finance/stocks/investing-stocks-risk-strategies-trump-policies-c4a5d3d9
https://www.wsj.com/finance/currencies/trump-trade-tariffs-us-dollar-value-814cbe37
https://www.wsj.com/livecoverage/stock-market-today-dow-nasdaq-sp500-03-17-2025
https://www.politico.com/news/2025/03/16/wall-street-hoped-scott-bessent-would-keep-trump-in-check-he-had-other-ideas-00231771
https://www.businessinsider.com/wall-street-mergers-acquisitions-ipos-hiring-slumps-trump-tariffs-2025-3
https://www.politico.com/news/2025/03/14/trump-trade-wars-consumer-sentiment-00230833
https://archive.ph/fUKPs
https://www.nytimes.com/2025/03/13/business/economy/trump-tariff-timeline.html
https://www.nytimes.com/2025/03/14/business/energy-environment/trump-energy-oil-gas.html
https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

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Ukraine Conflict Implications
11 Mär· Let's Know Things
This week we talk about Euromaidan, minerals deals, and propaganda.
We also discuss European security, NATO, and the western-led world order.
Recommended Book: Storm Front by Jim Butcher
Transcript
In February of 2014, pro-Russian protests racked parts of southeastern Ukraine and Russian soldiers, their uniforms and weapons stripped of flags and other identifying markers, occupied another part of Ukraine called Crimea.
This was seemingly in response to Ukraine’s overthrow of its pro-Russian president, Viktor Yanukovych, who was toppled as part of the Euromaidan protests, which were themselves a response to Yanukovych deciding to aim for closer ties with Russia, rather than signing an association agreement with the EU, which would have committed Ukraine to several EU-oriented reforms, related to corruption, among other things, while also giving Ukrainians many new rights, including visa-free movement and access to the European Investment Bank, beginning a few years later, in 2017.
This sudden pivot away from the EU and toward Russia didn’t go down well with the Ukrainian public, which had repeatedly shown it wanted to lean toward the west, and the Euromaidan protests were focused on weeding out government corruption; the existing government was accused of being all sorts of corrupt, and had also been accused of human rights abuses and allowing Russian oligarchs undo influence at the highest rungs of power; Yanukovych was in Russia’s pocket, basically, and his overthrow made Russia worry that they would lose control of their neighbor.
So Russia moved in to take part of Ukraine, basically uncontested, both internally and externally—a lot of other governments made upset noises about this, but Russia gave itself cover by removing their flags from their personnel, and that gave them the ability to paint everything that happened as a natural uprising from within Ukraine, the people wanting freedom from their Ukrainian oppressors, and Russia was just supporting this cry to overthrow oppressive tyrants, because they’re very nice and love freedom.
For the next eight years, the Ukrainian government fought separatist forces, funded and reinforced by the Russian government, in the southeastern portion of their country, while Russia expanded their infrastructure in Crimea, which again, they stole from Ukraine early on, and where they previously leased vital naval facilities from Ukraine; and those facilities are assumed to be a big part of why all this went down the way it did, as without said naval facilities, they wouldn’t have a naval presence in the Black Sea.
Then, in February of 2022, after a multi-month buildup of troops and military hardware along their shared border, which they provided all sorts of excuses for, and which many commentators and governments around the world excused as just a bunch of saber-rattling, nothing to worry about, Russia launched a full-scale invasion of Ukraine, initially aiming for a blitzkrieg-like assault that was meant to take Ukraine’s capital city, Kyiv, and decapitate the country’s government within just days, at which point they could replace the government with someone who’s working for them, another puppet they controlled.
As of the day I’m recording this, in early March of 2025, the war is still ongoing, though. And in the years since it began, it’s estimated that more than a million people have been killed or injured, while entire cities across Ukraine have been leveled and tens of thousands of Ukrainian refugees have fled Russia’s forces as they’ve raped and pillaged and murdered their way across the Ukrainian countryside, those refugees leaving for destinations around the world, but creating a refugee crisis in nearby European nations like Poland and Germany, in particular.
There’s been a lot of back and forth in this conflict, Russia initially thought to have a massive upper hand, probably winning within days, as intended, but then Ukraine held fast, Russia redeployed its troops and armor, Ukraine got some remarkable counter-attacks in, and then Russia started to reset its economy to allow for a more drawn-out conflict.
As of early 2025, Russia is once against considered to have the upper-hand, and though Ukraine has been holding the line even in the most under-assault regions in the eastern portion of its territory, and has in recent weeks managed to take some Russian-held territory back, Russia’s comparably larger number of troops, its recent resupply of soldiers from North Korea, its larger economy and number of supply chains, and its relationships with entities like China and Iran, in addition to North Korea, all of which have been supplying it with things it needs to keep the war effort going, at length, have all conspired to put Ukraine on the back foot.
Additionally, Ukraine is struggling, after this many years of total war, to refill empty boots and make do with whatever their allies can and will offer them, in terms of money, weapons, but also the basics, like food and fuel. They’ve been able to shore-up some limited aspects of their economy, and have innovated like crazy when it comes to things like drones and other fundamentals of asymmetric, defensive warfare, but right now at least, the larger forces swirling around in the geopolitical realm are making life difficult for Ukraine, and for those who are still supporting them.
And that’s what I’d like to talk about today; the continuing conflict in Ukraine, but especially what’s happening on the sidelines, beyond the battle itself—and how those sideline happenings might lead to some fundamental changes in how Europe is organized, and the makeup of the modern world order.
—
At this point I’ve done probably half a dozen or more episodes on this conflict; it’s long-lasting, it’s big, it’s important locally, but also globally, and it’s been informing both geopolitical and economic outcomes since day one.
Today I’d like to talk about some recent happenings, most of them from the past few months, that could prove impactful on the eventual outcome of this conflict, and might even determine when that end of fighting arrives.
And at the center of these happenings is recently reelected US President Trump, who has always had a, let’s call it unusual, public appreciation for Russian President Putin, and the strongman image he and other global authoritarians wield, while at the same time not being a big fan of Ukrainian President Zelensky—perhaps in part because Trump called Zelensky back in 2019 to try to get him to come up with evidence supporting a debunked conspiracy theory about his opponent, Joe Biden’s administration, related to alleged impropriety in US-Ukrainian relations.
Zelensky could find no such evidence, and when he told Trump there was nothing to be found, Trump blocked payments on $400 million worth of military aid for Ukraine, holding it hostage until Zelensky came up with what he wanted. This became a big scandal only after the fact, and before it could be made public or became known by congress via a whistleblower complaint, Trump released the money. This led to a formal impeachment inquiry into Trump later that year, which led to his impeachment for abusing his power and obstructing Congress—but he was then acquitted by the Republican-led Senate.
This, it’s thought, may have colored Trump’s behavior toward Zelensky when the two men sat down, alongside several other US officials, including US Vice President JD Vance, to discuss a potential mineral deal between the US and Ukraine, which was based on an earlier deal that the Ukrainian government dismissed.
The original deal basically required that Ukraine exploit its mineral wealth and put half of the money it makes from those minerals into a fund that would be used to pay the US back for the military assistance it’s provided so far, to the tune of $500 billion; which is quite a lot more than the $175 billion or so the US has spent on this conflict since Russia invaded, only $128 billion of which has directly aided the Ukrainian government, as opposed to funding US activities associated with the war, or supporting other affected countries thereabouts.
So originally the US asked for more than double what’s been provided so far, in return, paid for by Ukraine’s mineral wealth, which includes a lot of the types of rare earth minerals that are vital for common modern technologies, like computers, batteries, and solar panels.
That didn’t fly, mostly because it didn’t contain a security guarantee for Ukraine—the US saying it would protect them if necessary, basically, in exchange for this huge sum of money—so the new deal asked for $500 billion be placed in a fund, and that fund would be jointly controlled by the US and Ukraine, the funds used to rebuild the country after the war.
50% of all revenues from Ukrainian natural resources newly exploited after the war, so not from existing mines and ports and such, would be put into this fund. Like the first time around, this deal didn’t include a security agreement from the US, but the general idea was that this fund would incentivize new investment in the area, and because Ukraine has a lot of unexploited mineral wealth, this could give the US a new source for these sorts of valuable raw materials that are currently mostly controlled by China, but which the US government is attempting to claim more of, now that it’s realized it’s way behind on locking down sources of these really important things.
At the meeting where this second deal was meant to be signed, though, Zelensky flying to the US to sit down with Trump to make it happen, the President and Vice President more or less verbally attacked Zelensky, criticizing him for not being more overtly grateful, and telling him he was wrong when he said that Russia started the war by invading Ukraine.
It was all pretty bizarre, and even folks in Trump’s own party seemed pretty puzzled by the whole thing, some of them calling it embarrassing, as Trump and Vance were basically parroting Putin’s propaganda that no one actually believes because they ignore easily verifiable facts.
In any event, this led to a lot of fallout between the US and Ukrainian governments, with Trump suggesting he would lean more heavily on Ukraine to get them to accept peace on Russia’s terms, because the Ukrainians couldn’t see reason and accept his version of reality, essentially.
Trump has also suggested that he’s been talking a lot with Putin, and that he believes Putin wants peace, and it’s time to end the war. Putin, for his part, has not seemed inclined to give up anything in order to achieve peace, and Russian attacks on Ukraine have increased in scale since Trump came into office, and even more so after talks about a supposed peace agreement began.
All of which has had implications on the ground.
In Ukraine, Ukrainian soldiers have had to operate with fewer resources, as Trump cut off additional funding and supply shipments, post-meeting. He recently ordered that the US not share intelligence with them, too, and they cut off the sharing of satellite imagery, which Ukraine has used to great effect to strike Russian targets from a distance.
This has also had implications across Europe, though, as while Ukraine is being invaded now, there are concerns that if Putin gets away with taking part or all of Ukraine, he’ll go for other previous Soviet assets, next, maybe starting with the Baltic nations—Estonia, Latvia, and Lithuania—and then tearing off chunks of Poland, Finland, or other neighbors that were previously part of the Soviet Union, like eastern Germany.
The European Union, despite a fair bit of warning about Trump’s stance on the issue, and the possibility that he would return to office, has been seemingly dumbstruck by Trump’s sudden pivot away from supporting Ukraine, and away from NATO more broadly, toward a stance that favors Russia, instead. European governments have been scrambling to come up with an aid package that will replace some of what the US would have given, and have started sharing more intelligence, as well, including satellite imagery.
It won’t be easy, though, as the US versions of these things, from monetary resources to eyes in the sky vastly outshine what even the combination of British, French, and German assets can offer—at least at this stage. And the US has traditionally handled the lion’s share of spending and building in these areas, shouldering the majority of NATO spending, because, well, it could, and that was a major premise of the post-WWII, western-led world order. The US said it would protect global capitalist democracies with its military might and nukes, if necessary, and European nations have been generally happy with this setup as it has generally allowed European governments to spend less money on their militaries and more on other stuff.
That state of affairs seems to have ended, or at the very least become too unreliable to bet on, though, so EU nations are attempting to fill in the gaps left by the suddenly less-reliable-seeming US government, not just for Ukraine, but for themselves, as well.
Poland’s president recently announced that he wants to develop nuclear weapons and wants every adult male to undergo military training, so the country can field an army 500,000-strong.
The French president has said he wants to extend his country’s nuclear umbrella—guaranteed deterrence, basically, using nuclear weapons—to the whole of the EU. France has far fewer nukes than the US and Russia, but this captures a sense of the moment in the Union, where a bunch of currently underfunded militaries are realizing they might not be able to rely on the US in a pinch. And while they collectively have a lot more people and resources than Russia, Russia is fully mobilized and has shown itself to be willing to attack sovereign nations, whenever it pleases, caring a lot less for the human lives it spends, in the process, than is typical in western-style democracies.
Even short of full-scale, out of nowhere invasions, Russia could pose a threat to European governments via asymmetrical routes. It’s been seemingly approving all sorts of espionage operations meant to increase immigration arrivals in European nations where immigration is already a hot-button issue, nudging politics to the far-right, and it’s allegedly been attacking infrastructure, in terms of hacking and just blowing stuff up, in order to sow discord and fear.
As I mentioned earlier, too, part of Germany was previously held by the Soviet Union, and that same part of the country has recently voted heavily in favor of the country’s furthest-right party, which wants stronger ties with Russia. So while conventional military issues are at the forefront of discussion, right now, Russia’s long history of asymmetric warfare is also getting a fair bit of attention, as it could conceivably use these groups as a casus belli to attack, carving off pieces of its European neighbors and slowly incorporating them into its sphere of influence, similar to what it did in Ukraine, beginning in 2014; if eastern Germany supports Russia, it could fund and in other ways support uprising efforts in these regions, creating chaos and potentially even breaking off separatist states that would pull those regions into Russia’s orbit.
It’s a tumultuous moment in this part of the world, then, in part because of the conflict that’s still ongoing—a much larger and more powerful nation having invaded its smaller, less-powerful neighbor. But it’s also tumultuous because of the implications of that conflict, especially if Russia comes out on top. If they win, there would seem to be a far greater chance of their deciding to keep the ball rolling, replicating a model that worked (without significant long-term consequences) across more neighboring nations.
And if they can do that before Europe reinforces itself—assuming that’s what the EU does, as it can be difficult to get a bunch of people with a bunch of at times competing interests to agree on anything, and even more so when said agreement involves both money and potentially sending civilians into harm’s way—if Russia can get there before a new, restructured and reinforced Europe emerges, we could see another, similar conflict soon, and this one could be even more successful than the last, if Russia tweaks its formula to make it more effective, and European governments succumb to war weariness, exhausted by the war in Ukraine, in the meantime.
Show Notes
https://www.cfr.org/article/how-much-us-aid-going-ukraine
https://en.wikipedia.org/wiki/Trump%E2%80%93Ukraine_scandal
https://www.csis.org/analysis/breaking-down-us-ukraine-minerals-deal
https://www.nytimes.com/2025/03/08/world/europe/ukraine-russia-north-korea-kursk.html
https://www.washingtonpost.com/world/2025/03/08/zelensky-trump-fallout-ukraine/
https://www.nytimes.com/2025/03/04/world/europe/ukraine-us-trump-military-support.html
https://www.nytimes.com/2025/03/06/us/politics/ukraine-zelensky-trump-russia.html
https://apnews.com/article/russia-ukraine-war-dobropillya-us-intelligence-3d0bad105a93933e9cdaca5cf31fcf74
https://mwi.westpoint.edu/no-substitute-for-victory-how-to-negotiate-from-a-position-of-strength-to-end-the-russo-ukraine-war/
https://www.reuters.com/world/europe/eu-leaders-cautiously-welcome-macrons-nuclear-umbrella-offer-2025-03-06/
https://www.nytimes.com/2025/03/07/world/europe/bulgarians-guilty-spying-russia-uk.html
https://www.politico.com/news/2025/03/08/europe-scrambles-to-aid-ukraine-after-us-intelligence-cutoff-00219678
https://www.bbc.com/news/articles/c9wpy9x890wo
https://www.cbsnews.com/news/keith-kellogg-ukraine-intelligence-sharing-pause/
https://www.bbc.com/news/articles/ce8yz5dk82wo
https://www.nytimes.com/2025/03/07/world/us-ukraine-satellite-imagery.html
https://www.bbc.com/news/articles/c05m907r39qo
https://www.nytimes.com/2025/03/07/us/politics/trump-russia-sanctions-tariffs.html
https://www.csis.org/analysis/ukraines-future-vision-and-current-capabilities-waging-ai-enabled-autonomous-warfare
https://www.politico.eu/article/donald-tusk-plan-train-poland-men-military-service-russia
https://www.euronews.com/my-europe/2025/03/08/poland-says-it-plans-to-give-every-adult-male-military-training
https://www.nytimes.com/2025/02/22/world/europe/ukraine-trump-minerals.html
https://apnews.com/article/ten-days-that-upended-us-support-for-ukraine-8930c01a15910a7ad8a7f7c7fac9ba3a
https://www.wsj.com/world/white-house-and-ukraine-close-in-on-deal-for-mineral-rights-e924c672
https://ca.finance.yahoo.com/news/ukraine-us-still-ironing-parts-191805611.html
https://www.reuters.com/business/us-could-cut-ukraines-access-starlink-internet-services-over-minerals-say-2025-02-22/
https://www.nytimes.com/2025/02/25/world/europe/ukraine-minerals-deal.html
https://www.cnn.com/2025/02/26/europe/ukraine-us-mineral-resources-deal-explained-intl-latam/index.html
https://www.spglobal.com/commodity-insights/en/news-research/latest-news/electric-power/122624-eu-moving-to-develop-infrastructure-for-nuclear-energy-expansion-officials
https://www.bloomberg.com/news/articles/2025-03-07/european-stocks-see-most-inflows-in-decade-amid-defense-splurge
https://www.nytimes.com/2025/02/10/business/ai-summit-paris.html
https://apnews.com/article/germany-ukraine-debt-brake-economy-military-spending-74be8e96d8515ddddd53a99a69957651
https://www.nytimes.com/interactive/2025/03/03/world/europe/ukraine-russia-war-drones-deaths.html?unlocked_article_code=1.2U4.b15Z.1EA4tDb_37Bq
https://www.nytimes.com/2025/03/10/world/europe/ukraine-russia-eastern-front-line.html
https://www.iiss.org/online-analysis/military-balance/2025/02/combat-losses-and-manpower-challenges-underscore-the-importance-of-mass-in-ukraine/
https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-march-7-2025
https://en.wikipedia.org/wiki/Euromaidan
https://en.wikipedia.org/wiki/European_Union%E2%80%93Ukraine_Association_Agreement
https://en.wikipedia.org/wiki/Russo-Ukrainian_War
https://en.wikipedia.org/wiki/Timeline_of_the_Russian_invasion_of_Ukraine_(1_January_2025_%E2%80%93_present)

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Blue Ghost Mission 1
4 Mär· Let's Know Things
This week we talk about Luna 2, soft-landings, and Firefly Aerospace.
We also discuss the private space launch industry, lunar landers, and regolith.
Recommended Book: The Mercy of Gods by James S.A. Corey
Transcript
In 1959, Luna 2, a Soviet impactor-style spacecraft, successfully reached the surface of the Moon—the first-ever human-made object to do so.
Luna 2 was very of its era; a relatively simple device, similar in many ways to the better-known Sputnik satellite, but getting a craft to the moon is far more difficult than placing something in orbit around Earth, in part because of the distance involved—the Moon is about 30-Earth’s from the surface of the earth, that figure varying based on where in its elliptical orbit it is at the moment, but that’s a good average, around 239,000 miles which is about 384,000 km, while Sputnik’s orbit only took it something like 359 miles, around 578 km from the surface. That’s somewhere in the neighborhood of 670-times the distance.
So new considerations, like fuel to get there, but also charting paths to the moon that would allow the human-made object to actually hit it, rather than flying off into space, and even figuring out whether craft would need to be designed differently if they made it out of Earth’s magnetic field, were significant hurdles that had to be leapt to make this mission a success; everything was brand new, and there were gobs of unknowns.
That said, this craft didn’t settle onto the moon—it plowed into it like a bullet, a so-called ‘hard landing.’ Which was still an astonishing feet of research and engineering, as at this point in history most rockets were still blowing up before making it off the launch pad, including the projects that eventually led to the design and launch of Luna 2.
The US managed their own hard landing on the Moon in 1962, and it wasn’t until 1966 that the first soft landing—the craft slowing itself before impact, so that some kind of intact device would actually continue to exist and function on the surface of the moon—was accomplished by the Luna 9.
The Luna 9 used an ejectable capsule that was protected by airbags, which helped it survive its 34 mph, which is about 54 kmh impact. This successful mission returned the first panoramic photographs from the surface of the moon, which was another notable, historic, incredibly difficult at the time feat.
A series of rapid-fire firsts followed these initial visits, including the first-ever crewed flight to the Moon, made by the US Apollo 8 mission in 1968—that one didn’t land, but it did circle the Moon 10 times before returning to Earth, the first successful crewed mission to the surface of the Moon made by the Apollo 11 team in 1969, and by the early 70s humans had made several more moon landings: all of them were American missions, as the US is still the only country to have performed successful crewed missions to the Moon’s surface, but the Apollo 11, 12, 14, 15, 16, and 17 missions all put people on the lunar surface, and then returned them safely to Earth.
The Luna 24, another Soviet mission launched in 1976, was the last big space race era mission to return lunar samples—chunks of moon rock and regolith—to earth, though it was a robotic mission, no humans aboard. And by many measures, the space race actually ended the previous year, in 1975, when Apollo and Soyuz capsules, US and Soviet missions, respectively, docked in orbit, creating the first international space mission, and allowing US astronauts and Soviet cosmonauts to shake hands, symbolically burying the hatchet, at least in terms of that particular, non-earthbound rivalry.
What I’d like to talk about today is a recent, successful soft landing on the lunar surface that’s historic in nature, but also contemporarily significant for several other reasons.
—
Firefly Space Systems was founded in the US in 2014 by a team of entrepreneurs who wanted to compete with then-burgeoning private space companies like SpaceX and Virgin Galactic by, like these competitors, reducing the cost of getting stuff into low Earth orbit.
They were planning to become profitable within four years on the back of the also-burgeoning small satellite industry, which basically means selling space on their rockets, which are capable of carrying multiple small satellites on what’s often called a ‘rideshare’ basis, to companies and agencies that were keen to launch their own orbital assets.
These smaller satellites were becoming increasingly popular and doable because the tech required was shrinking and becoming cheaper, and that meant you no longer needed a boggling amount of money to do basic research or to lob a communications satellite into orbit; you could spent a few million dollars instead of tens or hundreds of millions, and buy space on a rocket carrying many small satellites, rather than needing to splurge on a rocket all by yourself, that rocket carrying only your giant, extremely costly and large conventional satellite.
This path, it was hoped, would provide them the benefits of economies of scale, allowing them to build and launch more rockets, which in turn would bring the costs of such rockets and launches down, over time.
And the general concept was sound—that’s basically what SpaceX has managed to do, with mammoth success, over the past decade completely rewiring how the space launch industry works; their many, reusable rockets and rocket components, and abundant launches, many of which are used to lob their own StarLink in-orbit satellites into space, while also usually carrying smaller satellites provided by clients who pay to go along for the ride, bringing all of these costs down dramatically.
So that model is basically what Firefly was aiming for, as well—but the Firefly team, which was made up of folks from Virgin Galactic, SpaceX, and other industry entities was sued by Virgin Galactic, which alleged that a former employee who left them to work for Firefly provided Firefly with intellectual property and committed what amounts to espionage, destroying data and hardware before they left.
These allegations were confirmed in 2016, and some of Firefly’s most vital customers and investors backed out, leaving the company without enough money to move forward. A second lawsuit from Virgin Orbit against Firefly and some of its people hit that same year, and that left the company insolvent, its assets put up for auction in 2017.
Those assets were bought by an investment company called Noosphere Ventures, which relaunched Firefly Space Systems as Firefly Aerospace. They then reworked the designs of their rockets a bit and relocated some of the company’s research assets to Ukraine, where the head of Noosphere Ventures is from.
They picked up a few customers in the following years, and they leased a private launch pad in Florida and another in California. In 2021, they were awarded more than $90 million to develop exploration tech for the Artemis Moon program, which was scheduled for 2023 and was meant to help develop the US’s private space industry; NASA was trying out a model that would see them hire private companies to deliver assets for a future moon-based mission, establishing long-term human presence on the moon, over the course of several years, and doing so on a budget by basically not having to build every single aspect of the mission themselves.
That same year, the head of Noosphere Ventures was asked by the US Committee on Foreign Investment to sell nearly 50% of his stake in Firefly for national security reasons; he was born in Ukraine, and the Committee was apparently concerned about so much of the company’s infrastructure being located in a country that, even before Russia invaded the following year, was considered to be a precarious spot for security-vital US research and development assets.
This is considered to be something of a scandal, as it was implied that this Ukrainian owner was himself under suspicion of maybe being a Russian asset—something that seems to have been all implication and no substance, as he’s since moved back to Ukraine and has gone on to be something of a war hero, providing all sorts of tech and other resources to the anti-invasion effort.
But back then, he complied with this request, though not at all happily—and it sounds like that unhappiness was probably justified, though there are still some classified documents on the matter that maybe say otherwise; we don’t know for sure publicly right now.
In any event, he and Noosphere sold most of their stake in Firefly to a US company called AE Industrial Partners, and the following year, in 2022 it successfully launched, for the first time, its Alpha rocket, intended to be its core launch option for small satellite, rideshare-style customers.
The satellites placed in orbit by that first launch didn’t reach their intended height, so while the rocket made it into orbit, another launch, where the satellites were placed where they were supposed to go, actually happened in 2023, is generally considered to be the first, true successful launch of the Alpha rocket.
All of which is interesting because this component of the larger space industry has been heating up; SpaceX has dominated, soaking up most of the oxygen in the room and claiming the lion’s share of available contracts. But there are quite a few private space companies from around the world profitably launching rockets at a rapid cadence, these days. And many of them are using the same general model of inexpensive rideshare rockets carrying smaller satellites into orbit, and the money from those launches then funds their other explorations, ranging from government mission components like rovers, to plans for futuristic space stations that might someday replace the aging International Space Station, to larger rockets and launch craft that might further reduce the cost of launching stuff into space, while also potentially serving as in-orbit or off-planet habitations—as is the case with SpaceX’s massive Starship craft.
This is also notable, though, because Firefly launched a lander as part of its Blue Ghost mission, to the Moon on January 15 of 2025. That craft reached the moon, and successfully soft-landed there, on March 2 the same year.
This lander was partly funded by that aforementioned 2021 Artemis award by NASA—it ultimately received just over $100 million from the agency to conduct this mission—and it was launched atop a SpaceX Falcon 9 rocket, as the company’s own Alpha rockets don’t yet have the right specs to launch their lander, the Blue Ghost M1; which interestingly shared space in this rocket with another lander produced by a Japanese company called ispace, whose name you might recognize, as ispace managed to get a previous lunar lander, the Hakuto-R 1, to the moon in 2023, but communication was lost with the craft a few seconds before it was scheduled to land. It was confirmed later that year that the lander crashed; though again, even just getting something to the moon is a pretty impressive feat.
So this SpaceX rocket, launched in mid-January of 2025, had two competing lunar landers on it, one made by Firefly and one made by ispace. That latter lander is scheduled to arrive on the surface sometime in early May of this year, though that might change, based on all sorts of variables. But the former, Firefly’s Blue Ghost, successfully touched-down, soft-landing on the lunar surface on March 2.
There’s another lander from Intuitive Machines—the American company that can claim to be the first to successfully soft-land on the lunar surface, but whose first effort tipped over. Their new lander could arrive as soon as March 6, just days after Blue Ghost, and it’ll be aiming for an area just 100 miles from the moon’s south pole; an area that’s of particular interest because of water ice contained in permanently shadowed areas thereabouts, which could be vital for long-term human occupation of the moon.
So things are heating up on the lunar surface these days, but soft-landing something on the moon is still an accomplishment that few nations, much less private companies, have managed.
In the past decade alone, India, Russia, and a nonprofit based in Israel have attempted and failed to achieve soft-landings, and those aforementioned Japanese and US companies managed to soft-land on the moon, but their landers tipped over, limiting the amount of research they could conduct once there. China is the only nation to have successfully achieved this feat on their first attempt, and they benefitted from decades of preexisting research and engineering know-how.
And it’s not surprising that this is such a rare feat: in addition to the incredible distances involved, the Blue Ghost lander was traveling at around 3,800 mph, which is more than 6,100 kpm just 11 minutes before it landed. It then had to slow itself down, while also adjusting its orientation in order to safely land on an uneven, crater-paved moonscape; it slowed to the pace of a slow walk just before it touched down.
Science-wise, this lander is carrying tools that will help it measure the stickiness of regolith on different materials, that will allow for more precise measurements of the distance between earth and the moon, and that will help researchers study solar winds, radiation-tolerant technologies, and the moon’s mantle. It has equipment that allowed it to detect GPS and Galileo signals from earth, which suggests these satellites might be used by craft and rovers on the moon, for navigation, at some point, and it has a drill that will allow it to penetrate the lunar regolith up to nine feet deep, among several other project assets.
This has also served as a sort of proof of concept for this lander and mission type, as another Blue Ghost lander is scheduled to launch in 2026, that one aiming for the far side of the moon, with a third currently meant to head out in 2028, destined for a currently under-explored volcanic region.
The aggregate goal of these US missions, alongside the research tools they deliver, is to eventually start building-out and supplying the necessary infrastructure for long-term human occupation of the moon, culminating with the construction of a permanently crewed base there.
These sorts of ambitions aren’t new, but this approach—funding companies to handle a lot of the legwork, rather than keeping those sorts of efforts in-house, within NASA—is novel, and it arguably recognizes the nature of the moment, which is increasingly defined by cheaper and cheaper, and in most ways better and better offerings by private space companies, while those deployed by NASA are still really solid and impressive, but incredibly slow and expensive to develop and deploy, in comparison.
This is also happening at a moment of heightened geopolitical competition in space, and one in which private entities are equipping the nation states that would have traditionally dominates this industry.
China’s space agency has enjoyed a flurry of moon-related successes in recent years, and many of these missions have relied at least in part on efforts by private, or pseudo-private, as tends to be the case in China, companies.
Business entities from all over the world are also regularly making the satellites and probes and components of landers that make these things work, so solar system exploration and space travel are no longer the exclusive wheelhouses of government agencies—the private sector is becoming a lot more influential in this area, and that’s led to some novel security issues, alongside massive swings in influence and power for the folks running these companies: perhaps most notably SpaceX CEO Elon Musk’s increasing sway over governments and even inter-governmental conflict, due in part to his company’s space launch capabilities, and their capacity to beam internet down to conflict zones, earthside, via their StarLink satellite array.
So this is an area that’s heating up, both for earthbound and space-faring reasons, and the incentives and peculiarities of the private market are increasingly shaping the type of research and missions being conducted, while also changing the math of what’s possible, how quickly, and maybe even what level of risk is acceptable within a given mission or program.
Show Notes
https://www.cnn.com/science/live-news/moon-landing-blue-ghost-03-02-25/index.html
https://en.wikipedia.org/wiki/Hakuto-R_Mission_1
https://en.wikipedia.org/wiki/Hakuto-R_Mission_2
https://spacenews.com/ae-industrial-partners-to-acquire-stake-in-firefly-from-noosphere/
https://en.wikipedia.org/wiki/Artemis_program
https://en.wikipedia.org/wiki/Firefly_Alpha
https://www.nasa.gov/news-release/nasa-selects-firefly-aerospace-for-artemis-commercial-moon-delivery-in-2023/
https://www.theverge.com/2019/2/22/18234604/firefly-aerospace-cape-canaveral-florida-launch-site-slc-20
https://www.newscientist.com/article/dn25861-next-generation-of-space-cowboys-get-ready-to-fly/
https://apnews.com/article/moon-landings-failures-successes-545ea2f3ffa5a15893054b6f43bdbb98
https://www.nytimes.com/2025/03/01/science/blue-ghost-firefly-mission-1-moon-landing.html
https://en.wikipedia.org/wiki/Firefly_Aerospace
https://www.space.com/the-universe/moon/were-on-the-moon-private-blue-ghost-moon-lander-aces-historic-lunar-landing-for-nasa
https://www.bbc.com/news/articles/cd9208qv1kzo
https://www.reuters.com/technology/space/us-firm-fireflys-blue-ghost-moon-lander-locks-lunar-touchdown-2025-03-02/
https://www.nytimes.com/2025/02/26/science/intuitive-machines-second-moon-landing-launch-how-to-watch.html
https://en.wikipedia.org/wiki/Lunar_south_pole
https://www.livescience.com/space/the-moon/how-far-away-is-the-moon
https://en.wikipedia.org/wiki/Luna_2
https://en.wikipedia.org/wiki/Moon_landing
https://www.space.com/12841-moon-exploration-lunar-mission-timeline.html
https://en.wikipedia.org/wiki/Luna_24

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Coffee Inflation
25 Feb· Let's Know Things
This week we talk about arabica, robusta, and profit margins.
We also discuss colonialism, coffee houses, and religious uppers.
Recommended Book: On Writing and Worldbuilding by Timothy Hickson
Transcript
Like many foods and beverages that contain body- or mind-altering substances, coffee was originally used, on scale at least, by people of faith, leveraging it as an aid for religious rituals. Sufis in what is today Yemen, back in the early 15th century, consumed it as a stimulant which allowed them to more thoroughly commit themselves to their worship, and it was being used by the Muslim faithful in Mecca around the same time.
By the following century, it spread to the Levant, and from there it was funneled into larger trade routes and adopted by civilizations throughout the Mediterranean world, including the Ottomans, the Mamluks, groups in Italy and Northern Africa, and a few hundred years later, all the way over to India and the East Indies.
Western Europeans got their hands on this beverage by the late 1600s, and it really took off in Germany and Holland, where coffee houses, which replicated an establishment type that was popularized across the Muslim world the previous century, started to pop up all over the place; folks would visit these hubs in lieu of alehouses, subbing in stimulants for depressants, and they were spaces in which it was appropriate for people across the social and economic strata to interact with each other, playing board games like chess and backgammon, and cross-pollinating their knowledge and beliefs.
According to some scholars, this is part of why coffee houses were banned in many countries, including England, where they also became popular, because those up top, including but not limited to royalty, considered them to be hotbeds of reformatory thought, political instability, and potentially even revolution. Let the people hang out with each other and allow them to discuss whatever they like, and you end up with a bunch of potential enemies, and potential threats to the existing power structures.
It’s also been claimed, and this of course would be difficult to definitively prove, though the timing does seem to line up, that the introduction of coffee to Europe is what led to the Enlightenment, the Age of Reason, and eventually, the Industrial Revolution. The theory being that swapping out alcohol, at least during the day, and creating these spaces in which ideas and understandings and experiences could be swapped, without as much concern about social strata as in other popular third places, spots beyond the home and work, that allowed all sorts of political ideas to flourish, it helped inventions become realized—in part because there were coffee houses that catered to investors, one of which eventually became the London Stock Exchange—but also because it helped people organize, and do so in a context in which they were hyper-alert and aware, and more likely to engage in serious conversation; which is a stark contrast to the sorts of conversations you might have when half- or fully-drunk at an alehouse, exclusively amongst a bunch of your social and economic peers.
If it did play a role in those movements, coffee was almost certainly just one ingredient in a larger recipe; lots of variables were swirling in these areas that seem to have contributed to those cultural, technological, economic, and government shifts.
The impact of such beverages on the human body and mind, and human society aside, though, coffee has become globally popular and thus, economically vital. And that’s what I’d like to talk about today; coffee’s role in the global economy, and recent numbers that show coffee prices are ballooning, and are expected to balloon still further, perhaps substantially, in the coming years.
—
For a long while, coffee was a bit of a novelty outside of the Muslim world, even in European locales that had decently well-established coffeehouses.
That changed when the Dutch East India Company started importing the beans to the Netherlands in the early 17th century. By the mid-1600s they were bringing commercial-scale shipments of the stuff to Amsterdam, which led to the expansion of the beverage’s trade-range throughout Europe.
The Dutch then started cultivating their own coffee crops in colonial territories, including Ceylon, which today is called Sri Lanka, and the island of Java. The British East India Company took a similar approach around the same time, and that eventually led to coffee bean cultivation in North America; though it didn’t do terribly well there, initially, as tea and alcoholic beverages were more popular with the locals. In the late 18th century, though, North Americans were boycotting British tea and that led to an uptick in coffee consumption thereabouts, though this paralleled a resurgence in tea-drinking back in Britain, in part because they weren’t shipping as much tea to their North American colonies, and in part because they conquered India, and were thus able to import a whole lot more tea from the thriving Indian tea industry.
The Americas became more important to the burgeoning coffee trade in the mid-1700s after a French naval officer brought a coffee plant to Martinique, in the Caribbean, and that plant flourished, serving as the source of almost all of today’s arabica coffee beans, as it was soon spread to what is today Haiti, and by 1788, Haiti’s coffee plantations provided half the world’s coffee.
It’s worth remembering that this whole industry, the portion of it run by the Europeans, at least, was built on the back of slaves. These Caribbean plantations, in particular, were famously abusive, and that abuse eventually resulted in the Haitian revolution of 1791, which five years later led to the territory’s independence.
That said, coffee plantations elsewhere, like in Brazil and across other parts of South and Central America, continued to flourish throughout this period, colonialists basically popping into an area, conquering it, and then enslaving the locals, putting them to work on whatever plantations made the most sense for the local climate.
Many of these conquered areas and their enslaved locals were eventually able to free themselves, though in some cases it took a long time—about a century, in Brazil’s case.
Some plantations ended up being maintained even after the locals gained their freedom from their European conquerers, though. Brazil’s coffee industry, for instance, began with some small amount of cultivation in the 1720s, but really started to flourish after independence was won in 1822, and the new, non-colonialist government decided to start clearing large expanses of rainforest to make room for more, and more intensive plantations. By the early 1900s, Brazil was producing about 70% of the world’s coffee exports, with their neighbors—Colombia and Guatemala, in particular—making up most of the rest. Eurasian producers, formerly the only places where coffee was grown, remember, only made up about 5% of global exports by that time.
The global market changed dramatically in the lead-up to WWII, as Europe was a primary consumer of these beans, and about 40% of the market disappeared, basically overnight, because the continent was spending all their resources on other things; mostly war-related things.
An agreement between South and Central American coffee producing countries and the US helped shore-up production during this period, and those agreements allowed other Latin American nations to develop their own production infrastructure, as well, giving Brazil more hemispheric competition.
And in the wake of WWII, when colonies were gaining their independence left and right, Ivory Coast and Ethiopia also became major players in this space. Some burgeoning Southeast Asian countries, most especially Vietnam, entered the global coffee market in the post-war years, and as of the 2020s, Brazil is still the top producer, followed by Vietnam, Indonesia, Colombia, and Ethiopia—though a few newer entrants, like India, are also gaining market share pretty quickly.
As of 2023, the global coffee market has a value of around $224 billion; that figure can vary quite a lot based on who’s numbers you use, but it’s in the hundreds of billions range, whether you’re looking just at beans, or including the ready-to-drink market, as well, and the growth rate numbers are fairly consistent, even if what’s measured and the value placed on it differs depending on the stats aggregator you use.
Some estimates suggest the market will grow to around $324 billion, an increase of around $100 billion, by 2030, which would give the coffee industry a compound annual growth rate that’s larger than that of the total global caffeinated beverage market; and as of 2023, coffee accounts for something like 87% of the global caffeinated beverage market, so it’s already the dominant player in this space, and is currently, at least, expected to become even more dominant by 2030.
There’s concern within this industry, however, that a collection of variables might disrupt that positive-seeming trajectory; which wouldn’t be great for the big corporations that sell a lot of these beans, but would also be really bad, beyond shareholder value, for the estimated 25 million people, globally, who produce the beans and thus rely on the industry to feed their families, and the 100-110 million more who process, distribute, and import coffee products, and who thus rely on a stable market for their paychecks.
Of those producers, an estimated 12.5 million work on smaller farms of 50 acres or less, and 60% of the world’s coffee is made by people working on such smallholdings. About 44% of those people live below the World Bank’s poverty metric; so it’s already a fairly precarious economic situation for many of the people at the base-level of the production system, and any disruptions to what’s going on at any level of the coffee industry could ripple across that system pretty quickly; disrupting a lot of markets and local economies, alongside the human suffering such disruptions could cause.
This is why recent upsets to the climate that have messed with coffee crops are causing so much anxiety. Rising average temperatures, bizarre cold snaps, droughts, heavy and unseasonable rainfalls—in some cases all of these things, one after another—combined with outbreaks of plant diseases like coffee rust, have been putting a lot of pressure on this industry, including in Brazil and Vietnam, the world’s two largest producers, as of the mid-2020s.
In the past year alone, because of these and other externalities, the price of standard-model coffee beans has more than doubled, and the specialty stuff has seen prices grow even more than that.
Higher prices can sometimes be a positive for those who make the now-more-expensive goods, if they’re able to charge more but keep their expenses stable.
In this case, though, the cost of doing business is going up, because coffee makers have to spend more on protecting their crops from diseases, losing crops because of those climate issues, and because of disruptions to global shipping channels. That means profit margins have remained fairly consistent rather than going up: higher cost to make, higher prices for consumers, about the same amount of money being made by those who work in this industry and that own the brands that put coffee goods on shelves.
The issue, though, is that the cost of operation is still going up, and a lot of smallholders in particular, which again, produce about 60% of all the coffee made, worldwide, are having trouble staying solvent. Their costs of operation are still going up, and it’s not a guarantee that consumers will be willing to continue spending more and more and more money on what’s basically a commodity product; there are a lot of caffeinated beverages, and a lot of other types of beverage they could buy instead, if coffee becomes too pricy.
And at this point, in the US, for instance, the retail price of ground roast coffee has surpassed an average of $7 per pound, up 15% in the past year. Everyone’s expecting that to keep climbing, and at some point these price increases will lose the industry customers, which in turn could create a cascading effect that kills off some of these smaller producers, which then raises prices even more, and that could create a spiral that’s difficult to stop or even slow.
Already, this increase in prices, even for the traditionally cheaper and less desirable robusta coffee bean, has led some producers to leave coffee behind and shift to more consistently profitable goods; many plantations in Vietnam, for instance, have converted some of their facilities over to durian fruit, instead of robusta, and that’s limited the supply of robusta, raising the prices of that bean, which in turn is causing some producers of robusta to shift to arabica, which is typically more expensive, and that’s meant more coffee on the market is of the more expensive variety, adding to those existing price increases.
The futures markets on which coffee beans are traded are also being upended by these pricing issues, resulting in margin calls on increasingly unprofitable trades that, in short, have necessitated that more coffee traders front money for their bets instead of just relying on short positions that have functioned something like insurance paid with credit based on further earnings, and this has put many of them out of business—and that, you guessed it, has also resulted in higher prices, and more margin calls, which could put even more of them out of business in the coming years.
There are ongoing efforts to reorganize how the farms at the base on this industry are set up, both in terms of how they produce their beans, and in terms of who owns what, and who profits, how. This model typically costs more to run, and results in less coffee production: in some cases 25% less. But it also results in more savings because trees last up to twice as long, the folks who work the farms are much better compensated, and less likely to suffer serious negative health impacts from their labor, and the resultant coffee is of a much higher quality; kind of a win win win situation for everyone, though again, it’s less efficient, so up till now the model hasn’t really worked beyond some limited implementations, mostly in Central America.
That could change, though, as these larger disruptions in the market could also make room for this type of segue, and indeed, there has apparently been more interest in it, because if the beans are going to cost more, anyway, and the current way of doing things doesn’t seem to work consistently anymore, and might even collapse over the next decade if something doesn’t change, it may make sense, even to the soulless accounting books of major global conglomerates, to reset the industry so that it’s more resilient, and so that the people holding the whole sprawling industry up with their labor are less likely to disappear some day, due to more favorable conditions offered by other markets, or because they’re simply worked to death under the auspices of an uncaring, fairly brutal economic and climatic reality.
Show Notes
https://www.nytimes.com/2025/02/22/business/coffee-prices-climate-change.html
https://web.archive.org/web/20100905180219/https://www.web-books.com/Classics/ON/B0/B701/12MB701.html
https://www.jstor.org/stable/1246099?origin=crossref
https://www.theguardian.com/australia-news/2025/jan/07/coffee-prices-australia-going-up-cafe-flat-white-cost
https://www.bbc.com/news/articles/c5y37dvlr70o
https://www.nytimes.com/2024/12/28/business/coffee-prices-climate-change.html
https://markets.businessinsider.com/news/commodities/coffee-prices-food-inflation-climate-change-eggs-bank-of-america-2025-2
https://www.statista.com/statistics/675807/average-prices-arabica-and-robusta-coffee-worldwide/
https://www.ft.com/content/9934a851-c673-4c16-86eb-86e30bbbaef3
https://www.cnn.com/2024/08/01/business/your-coffees-about-to-get-more-expensive-heres-why/index.html
https://www.marketresearchfuture.com/reports/caffeinated-beverage-market-38053
https://www.grandviewresearch.com/industry-analysis/caffeinated-beverage-market
https://en.wikipedia.org/wiki/Coffee
https://en.wikipedia.org/wiki/English_coffeehouses_in_the_17th_and_18th_centuries
https://en.wikipedia.org/wiki/Coffeehouse
https://en.wikipedia.org/wiki/History_of_coffee
https://sites.udel.edu/britlitwiki/the-coffeehouse-culture/
https://www.openculture.com/2021/08/how-caffeine-fueled-the-enlightenment-industrial-revolution-the-modern-world.html

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Bird Flu
18 Feb· Let's Know Things
This week we talk about H5N1, fowl plague, and viral reservoirs.
We also discuss the CDC, raw milk, and politics.
Recommended Book: Nexus by Yuval Noah Harari
Transcript
In late-January of 2025, staff at the US Centers for Disease Control, the CDC, were told to stop working with the World Health Organization, and data, and some entire pages containing such data, and analysis of it, were removed from the CDC’s web presence—the collection of sites it maintains to provide information, resources, and raw research numbers and findings from all sorts of studies related to its remit.
And that remit is to help the US public stay healthy. It provides services and guidelines and funding for research and programs that are meant to, among other things, prevent injury, help folks with disabilities, and as much as possible, at least, temper the impacts of disease spread.
Its success in this regard has been mixed, historically, in part because these are big, complex, multifaceted issues, and with current technology and existing systems it’s arguably impossible to completely control the spread of disease and prevent all injury. But the CDC has also generally been a moderating force in this space, not always getting things right, itself, but providing the resources, monetary and otherwise, to entities that go on to do big, generally positive things across this range of interconnected fields.
Many of the pages that were taken down from the CDC’s web presence in late-January popped back up within a few weeks, and now, according to experts from around the world, these pages have been altered—some mostly the same as they were, but others missing a whole lot of data, while still others now contain misinformation and/or polemic. A lot of that misinformation and political talking points are related to things the recently re-ascendent Trump administration has made a cornerstone of its ideological platform, including anti-trans policies and things that cast skepticism on vaccines, abortion, birth control, and even information related to sexually transmitted infections.
Scientists doing research that is in any way connected to concepts like diversity, equality, and inclusivity—so-called DEI issues—have been forced to halt these studies, and research that even includes now-banned words in different contexts—words like gender, LGBT, and nonbinary—have likewise been halted, or in some cases banned altogether. Data sets and existing research that happen to include any reference to this collection of terms have likewise been pulled from the government’s publicly accessible archives; so some stuff actually connected to DEI issues, but initial looks into what’s been halted and cancelled shows that things like cancer research and other, completely non-political stuff, too, has been stopped because somewhere in the researchers’ paperwork was a word that is now not allowed by the new administration.
All of which is part of a much bigger story, one that I won’t get into right now, as it’s still evolving, and is very much it’s own thing; that of the purge of government agencies that’s happening in the US right now, at the apparent behest of the president, and under the management of the world’s wealthiest person, Elon Musk, via his task force, the Department of Government Efficiency, or DOGE.
This process and the policies underpinning it are facing a lot of legal pushback, even from other Republicans, in at least a few cases. But it’s also a story that’s evolving by the day, if not the minute, and the long-term ramifications are still up in the air; some are calling it the first move in an autogolpe, a coup from within, while others are calling it a hamfisted attempt to seem to be doing things, to be reducing expenses in the government, but in such a way that none of the actions will be particularly effective, and most will be countered by judicial decisions, once they catch up with the blitzkrieg-like speed of these potentially illegal actions.
There’s been some speculation that this will end up being more of an albatross around the neck of the administration, than whatever it is they actually hope to accomplish with it—though of course there are just as many potentially valid concerns that, again, this is a grab for power, meant to centralize authority within the executive, with the president, and that, in turn could make it difficult for anyone but a Republican, and anyone but a staunch ally of Trump and his people, to ever win the White House again, at least for the foreseeable future.
But right now, as all those balls are in the air and we’re waiting to see what the outcome of that flurry of activity will actually be, practically, I’d like to focus on one particular aspect of this culling of the CDC’s records, publicly available information, and staff.
What I’d like to talk about today is bird flu, and what we think we know about its presence in the US right now, and how that presence is being felt by everyday people, already.
—
What we colloquially call bird flu, or sometimes avian flu, or the avian influenza, if you’re fancy, is actually a subtype of influenza called Influenza A virus subtype H5N1, or just H5N1.
There have been many subtypes of bird flu over the generations, some of which have disappeared from the record (as far as we can tell, at least), while others are still tracked, but in animal populations in locations that make them low-risk, in terms of spreading beyond their host species.
We’ve been studying various types of bird flu since at least the late-1800s, when researchers in Italy started looking into a disease colloquially called “fowl plague,” because it was afflicting chicken and other poultry flocks. This wasn’t the first time something that seems like it was probably this disease afflicted flocks and was recorded as having done so, but it was the first time such a plague was differentiated from bacterial diseases that were also prevalent in such poultry communities, and thus they could say it was something distinct from, for instance, fowl cholera, which was also pretty common back then.
In the 1950s, it was confirmed that this avian flu was similar to flus that afflict humans, and in the 1970s, researchers figured out that the flus they were tracking in bird populations were diverse, in the sense that there were many subtypes, not just one universal disease.
Today, we know that this type of Influenza A virus, of which H5N1 is just one example, are super common in wild waterfowl, and they’ve achieved this commonality, in part, by living in their respiratory and gastrointestinal systems without negatively effecting their host. So the birds can fly around and eat and peck at things without even getting a case of the bird sniffles, which means they’re less likely to isolate from their kin, which means they’re more likely to spread it to all of their friends.
Waterfowl also tend to travel great distances, just as a matter of course, migrating across continents, in some cases, but in others simply flitting from lake to pond to puddle, looking for food.
Domesticated birds, like chicken and ducks that are kept for their eggs or meat, tend to catch bird flu either by socializing with their wild kin, or by coming into contact with their feces, or surfaces that have been contaminated by their feces.
In this way, traveling flocks of ducks and geese and seagulls, which maybe set down to get a drink or some food at a source of water in a bird meat facility, could infect a chicken directly, but just by flying overhead and pooping, they can do the same, as chickens will tend to peck around at the ground, and if that poop is somewhere nearby, boom, chicken infected, and then, in relatively short order, the whole coop is also infected.
There are vaccines that can protect chickens and other domesticated birds from avian flu, but because of how widespread H5N1 in particular is, it mutates rapidly, so these vaccines are not a silver bullet. On top of that, buying and administrating them costs poultry companies more money, and because they might administer a vaccine that hasn’t kept up with the mutations of the disease, that could end up being a sunk cost; so the money question sometimes keeps poultry providers from vaccinating their flocks, but even those who do apply this layer of protection don’t always benefit from the investment as much as they would like.
And birds that are thus infected spread the disease rapidly, but also tend to die in large numbers. The relatively chilled-out symptoms experienced by water fowl doesn’t always translate to other types of birds, so chickens will sometimes conk out pretty quickly, and on top of that, when bird flu gets into a poultry population and mutates within them, the new mutation of the disease might get out into the water fowl population, and that can then cause anywhere from mild flu symptoms to reliable death in those ducks and geese and such. So the version they have might be mundane, they give that mundane version to chickens, where it mutates into something else, and that new bird flu variant then goes back into the water fowl and, no longer mundane, kills them all.
So part of the problem here, as is the case with any virulent, quick-spreading, treatment-resistant pathogen with large wild reservoirs where it can survive even when the populations we’re tracking are cured or culled, is that this thing evolves just really quickly. And that means anything we do, vaccines, killing infected populations or potentially infected populations, dividing flocks into smaller, easier to manage and segment groups, generally doesn’t keep up with the emergence of new versions of the disease.
This can, in turn, result in new versions that spread even quicker, that are harder to detect, or which simply kill a lot faster.
It can also lead to mutations that spread more readily to and within other species, including mammals.
And that’s what seems to be happening in meat and dairy cattle, at the moment, in addition to some of the humans who work closely with birds and with cows.
There have been reports over the past couple of years of folks in the US coming into close contact with infected birds or cows contracting bird flu, or testing positive for bird flu antibodies, which means the disease hit them, but they either managed to fend it off or had it for a while, and then their immune system took care of it—even if they didn’t have symptoms.
Such infections, those we know about for certain, anyway, as opposed to having hints of suggestions of them, still seem to be relatively small in number. A recent study, which the CDC was eventually able to publish, after those pulled pages and hidden data sets started to come back online, indicates that of 150 cow veterinarians tested for evidence of bird flu infection, only three had such evidence.
That said, two of those three did not have any known exposure to bird flu-infected animals, and one didn’t even practice in a state with any known infections. So this is a mixed outcome; good, in a sense, that infection evidence in humans who come into contact with potentially infected animals isn’t more widespread, but alarming in the sense that those who did have such infection indicators were mostly doing work that wouldn’t seem to have put them at risk of infection, based on what our data tell us, and yet, they were put at such risk. Which suggests our sense of how widespread this thing has gotten is probably way, way off at this point; the official data on where bird flu is, and even what animals it’s infecting, is perhaps uselessly out of date in the US.
So at this point, the official CDC data say there have been 68 cases of bird flu in humans in the US since 2024, and one of those infections has resulted in death.
41 of those infections were the result of exposure to dairy cattle, 23 were from exposure to poultry farms or poultry meat production facilities, 1 was from another unspecified animal contact, and 3 were from unknown sources.
The major concern, here, is that these numbers suggest bird flu isn’t having a hard time moving from birds to other mammals to humans, at this point, so that aforementioned 68 cases in humans since 2024 could be a vast undercount; we might already be in the early days of a new pandemic, and we don’t realize it because we simply don’t have the data.
I think it’s worth noting, though, that the biggest bird-flu related threat, the biggest one we have data for, anyway, globally, is people who are coming into contact with infected animals, or in some cases consuming their meat or milk.
Most of the officially documented cases of bird flu in humans, since the early 2000s, have been in Southeast Asia, and there have been around 950 humans infections and just over 460 deaths caused by various types of bird flu since 2003, according to World Health Organization numbers; most of those deaths were in in the early 2000s.
So not a ton of either infections or death over that span of time, but that also means this disease has a fatality rate of something like 50% in humans; around half the people who contract it die. Which is not great. And that’s part of why the concern about this type of flu may to seem a little out of proportion to the recent infection numbers—if it mutates, evolving a version of itself that is transmissible between humans so that we see transmission similar to what we see in bird flocks, that would be very, very bad.
At the moment, though, even if something like that never manifests, poultry and dairy industries could suffer significant losses as a consequence of this animal-world pandemic, and to some degree, they already have. Especially those in the US.
This is spreading in flocks globally, to a limited degree, but US poultry, beef, and dairy industries are being absolutely clobbered by the dual impact of infections that are necessitating additional protections against infection, and the increasing number of mass-cullings—killing entire flocks, because one of their number has been infected—that have been necessary in recent years. This has put a lot of such companies out of business, and the amount of stock, of animals, that have had to be killed as a precautionary measure, to keep one or a few infections from spreading more widely, have been staggering.
Egg prices have been a semi-reliable indicator of inflation rates in the US for a long time, but the investments required and cullings committed have ballooned egg prices in recent months, hitting record highs and stoking outcries both within the industry, and amongst consumers who have seen average egg prices more than double between late-2023 and January 2025; and that’s when eggs have been reliably available on supermarket shelves, which hasn’t always been the case during this period.
On top of that, there are heightening concerns about bird flu in the egg, meat, and milk supply; US government agencies have said that cooking meat appropriately, to the recommended temperatures, kills pathogens, including bird flu, and the pasteurization of milk, which basically means rapidly heating it, briefly, to kill germs, has been shown to kill the bird flu virus. But a purity- or naturalism-based movement, often closely tied with the anti-vaccine movement, has seen a surge in popularity in the US, and many people who subscribe to that ideological have also become supporters of consuming raw milk, which isn’t pasteurized, and thus this virus, and other pathogens, can survive in it, potentially becoming a new vector of infection for humans.
So there’s a lot going on in the US government right now that’s making tracking such things difficult, and trusting the information even more so, in some cases. And that could remain the case, and could become even more muddled, based on the stated beliefs of some of the people who are being put in charge of these agencies, the studies they conduct, the things they track, and the information they divulge.
But at the base level, right now at least, it looks like bird flu has become a persistent reality within the US poultry and cattle industries, that most humans probably don’t have a lot to worry about, yet, but that this could change rapidly, if those industries aren’t able to get things back under control, as that would provide more viral reservoirs for this disease in which it can mutate, and reservoirs that are closer to large populations of humans than the wild waterfowl flocks that otherwise serve as the largest stockpile of these viral colonies.
Show Notes
https://www.nytimes.com/2025/01/23/nyregion/long-island-duck-farm-bird-flu.html?unlocked_article_code=1.rk4.oY1r.MEdP-NpwG4ow
https://doc.woah.org/dyn/portal/digidoc.xhtml?statelessToken=USHi9N-71EDqawTHVX0wYrVCjSlZ8B8vx8qFYu3Ngcw=&actionMethod=dyn%2Fportal%2Fdigidoc.xhtml%3AdownloadAttachment.openStateless
https://en.wikipedia.org/wiki/Avian_influenza
https://en.wikipedia.org/wiki/Influenza_A_virus_subtype_H5N1
https://www.cdc.gov/mmwr/volumes/74/wr/mm7404a2.htm
https://www.cdc.gov/bird-flu/situation-summary/index.html
https://www.npr.org/sections/shots-health-news/2025/02/13/nx-s1-5296672/cdc-bird-flu-study-mmwr-veterinarians
https://arstechnica.com/health/2025/02/h5n1-testing-in-cow-veterinarians-suggests-bird-flu-is-spreading-silently/
https://cdn.who.int/media/docs/default-source/wpro---documents/emergency/surveillance/avian-influenza/ai_20250131.pdf
https://www.washingtonpost.com/business/2025/02/15/bird-flu-influenza-eggs/
https://archive.ph/QDcZi
https://www.washingtonpost.com/dc-md-va/2025/02/15/return-to-office-mandate-trump-desks/
https://arstechnica.com/health/2025/02/the-country-is-less-safe-cdc-disease-detective-program-gutted/
https://arstechnica.com/health/2025/02/a-sicker-america-senate-confirms-robert-f-kennedy-jr-as-health-secretary/
https://www.npr.org/sections/shots-health-news/2025/02/06/nx-s1-5288113/cdc-website-health-data-trump
https://www.vox.com/future-perfect/399319/trump-cdc-health-data-removed-obesity-suicide
https://en.wikipedia.org/wiki/Centers_for_Disease_Control_and_Prevention

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Planetary Defense
11 Feb· Let's Know Things
This week we talk about DART, extinction events, and asteroid 2024 YR4.
We also discuss Bruce Willis, Theia, and the Moon.
Recommended Book: Exadelic by Jon Evans
Transcript
In the 1998 action flick Armageddon, an asteroid the size of Texas is nudged into a collision course with earth by a comet, and NASA only notices it 18 days before impact.
The agency recruits a veteran oil driller, played by Bruce Willis, to fly out to the asteroid and drill a hole in it, and to detonate a nuke in that hole, which should destroy it before it hits earth, which undetonated, that rock not broken up ahead of time, would wipe out everything on the planet. It’s a fun late-90s flick loaded with some of the biggest names of the era, so I won’t ruin it for you if you haven’t seen it, but the crux of the plot is that there’s a lot going on in space, and at some point there’s a chance one of these big rocks hurling around in the void will line up just right with earth’s orbit, and that rock—because of how fast things move in space—would hit with enough force to wipe out a whole lot of living things; perhaps all living things.
This film’s concept was predicated on historical events. Not the oilmen placing a nuke on a rogue asteroid, but the idea of an asteroid hitting earth and killing off pretty much everything.
One theory as to how we got our Moon is that an object the size of Mars, called Theia, collided with Earth around 4.5 billion years ago. That collision, according to some versions of the so-called “giant impact hypothesis,” anyway, could have brought earth much of its water, as the constituent materials required for both water and carbon based life were seemingly most prevalent in the outer solar system back in those days, so this object would have slammed into early earth, created a disk of debris that combined that early earth’s materials with outer solar system materials, and that disk would have then reformed into a larger body, earth, and a smaller body, the moon.
In far more recent history, though still unthinkably ancient by the measure of a human lifespan, an asteroid thought to be somewhere between 6 and 9 miles, which is about 10 to 15 km in diameter hit off the coast of what is today Mexico, along the Yucatan Peninsula, killing about 70% of all species on earth.
This is called the Chicxulub Event, and it’s believed to be what killed the dinosaurs and all their peer species during that period, making way for, among other things, early mammals, and thus, eventually, humans.
So that was an asteroid that, on the low end, was about as wide as Los Angeles. You can see why those in charge back in the 90s tapped Bruce Willis to help them handle an asteroid the size of Texas.
Thankfully, most asteroid impacts aren’t as substantial, though they can still cause a lot of damage.
What’s important to remember is that because these things are moving so fast, even though part of their material will be burnt up in the atmosphere, and even though they might not all be Texas-sized, they generate an absolutely boggling amount of energy upon impact.
The exact amount of energy will vary based on all sorts of things, including the composition of the asteroid , the angle at which it hits, and where it hits; an oceanic impact will result in a whole lot of that energy just vaporizing water, for instance, while a land impact, which is less common because a little more than 70% of the planet is water, will result in more seismic consequences.
That said, an asteroid that’s about 100 meters in diameter, so about 328 feet, which is a lot smaller than the aforementioned 6 to 9 mile asteroid—a 100 meter, 328 foot object hitting earth can result in a force equivalent to tens of megatons of TNT, each megaton equaling a million tons, and for comparison, the atomic bombs dropped on Hiroshima and Nagasaki at the end of WWII ranged from 15,000 to 21,000 tons of TNT, mere kilotons. So a 100 meter, 328 foot asteroid hitting earth could generate somewhere between a few hundred thousand and a few million atomic bombs’ worth of energy.
None of which would be particularly devastating on a planetary scale, in the sense that the ground beneath out feet would barely register such an impact. But the thin layer of habitable surface where most or all of the world’s life exists, certainly does. And that’s the other issue here, is that on top of even a relatively small asteroid being a city-killer, wiping out everyone and everything in a large area around where it strikes, it can also cause longer-term devastation by hurling a bunch of water and soil and detritus and dust and ash into the atmosphere, acting as a cloak around the planet, messing with agriculture, messing with growth patterns and other cycles for plants and animals; the water and heat cycles completely thrown off. All of which can cause other knock-on effects, like more severe storms in unusual places, periods of famine, and even conflict over scarcer resources.
What I’d like to talk about today is a recently discovered asteroid that is being called a potential city-killer, and which is raising alarms in the planetary defense world because of its relatively high likelihood of hitting earth in 2032.
—
Asteroid 2024 YR4 is thought to be around 130-300 feet, which is about 40-90m in diameter, and it has what’s called an Earth-crossing, or Apollo-type orbit. Asteroids with this type of orbit won’t necessarily ever intersect with earth, and some are incredibly unlikely to ever do so. But some relatively few of them, that we’re aware of, anyway, have orbits that periodically get really close to earth’s, to the point that even a small tweak to their orbit, caused by gravitational perturbances or maybe being nudged by something else in space, could put them on course to cause a lot of damage.
Global astronomical bodies keep tabs on these sorts of asteroids, and they keep an especially close eye on what are called PHAs, or potentially hazardous asteroids, because they are objects that are close-ish to Earth, are in orbits that could bring them even closer, perhaps even on an intersection path with earth at some point, and they have an absolute magnitude of 22 or brighter, which means they’re big enough to be fairly visible to our instruments, and that generally means they’ll be 500 feet or around 140m in diameter or larger, which puts them in the “will cause severe damage if it hits earth” category.
That latter component of the definition is important, as while the Chelyabinsk meteor that blew up in what’s called an air burst over southwestern Russia in 2013 caused a lot of damage—generating about 400-500 kilotonnes of TNT worth of energy, about 30-times the energy released by the atomic bomb that blew up Hiroshima, resulting in a shock wave that injured nearly 1,500 people sufficiently that they had to seek medical attention, alongside all the broken glass and thousands of damaged buildings caused by that shockwave (which in turn caused those injuries)—that meteor is considered to be pretty tame compared to what we would expect from a larger impact. It was only about 60 feet, around 18m in diameter.
That’s part of why asteroid 2024 YR4 is getting so much attention; it’s more than twice, maybe as much as five times that large, and current orbital models suggest that on December 22, 2032, it has a small chance of hitting earth.
Small is a relative term here, though, both in the sense that the exact likelihood figure keeps changing, and will continue to do so as we’re able to capture more data leading up to that near-future deadline, and in the sense that even very small possibilities that a city-killer asteroid will hit earth is something that we should arguably be worried about, out of proportion to the smallness of the statistical likelihood.
If you are told there’s a 1% chance you’ll die today, that means there’s a 99% chance you won’t, but that 1% chance is still really substantial in the context of living or not living.
Similarly, a 1% chance of a large asteroid impacting earth is considered to be substantial because that means a 1% chance that a city could be completely wiped out, along with all the maybe millions of people living in it, all the plants an animals in the region, too, and we could see all those aforementioned weather effects, atmospheric issues, and so on, for a long time into the future.
At the moment, as of the day I’m recording this, there’s a 2.2% chance this asteroid will hit earth on that day, December 22, 2032. Its likely impact zone, if it were to hit, stretches roughly along the equator, from just south of Mexico, across upper south america and the middle of africa, over to eastern India. If it’s on the larger side of current estimates, it’s possible that its blast could stretch for 31 miles in all directions from where it hits, because it’s a hard object the size of a large building traveling at around 38,000 miles per hour.
So just shy of 7 years, 11 months from now, which is around 2,870 days, that thing could plow into a span of earth that contains quite a few major cities—but it could also hit a stretch of ocean, causing a separate set of problems, ranging from tsunamis to borked weather patterns and loads of sun-concealing, globe-spanning cloud cover.
Again, though, the numbers here are weird because of the things they’re describing. Nearly 8 years is a long time in many ways, but if you’re staring down the barrel of a potentially city-killing asteroid, that begins to feel like not long at all; Bruce Willis only had 18 days, but he also lived in the world of Hollywood fantasy. In real life, spinning up that kind of mission takes a lot longer, and that’s after you settle on who’s going to pay for some kind of asteroid killing or deflecting program, how it’s going to work, and so on.
Fortunately for everyone involved, back in late-2022, NASA launched a project called the Double Asteroid Redirection Test, or DART, which entailed launching a spacecraft that rendezvoused with pair of asteroids with a known trajectory. That spacecraft shot an impacter, basically a little space bullet, at one of the asteroids, which allowed the craft, along with a supplementary satellite, to collect all sorts of data about what happened to the asteroid after it was hit.
The hope was that using this method, launching a craft that shoots space bullets at asteroids, we would be able to reduce the target asteroid’s orbit by 73 seconds, which is an orbital measurement. Instead, it shortened it by 32 minutes, which is way, way more, and generally considered to be a huge success beyond what the mission planners could have hoped for.
Not all of what was learned from the DART mission will be transferable to other possible missions, because asteroids have different compositions, have different spins and speeds, and some will be easier to hit than others, and to hit in a way that would move them beneficially: we want to move them away from a path that lines up with earth’s orbit, not in such a way that a strike becomes more likely.
But this success suggests that it may be possible to basically nudge asteroids away from a collision trajectory with our planet, rather than having to blow the things up with nukes, which would be a far more involved and dangerous undertaking.
We’ve also seen the costs associated with space launches drop dramatically over the past ten years, to the point where launching this sort of mission will cost a fraction of what it would have cost back in the 90s, which is fortunate, as historically governments have shown less enthusiasm for firing space bullets than for firing bullets planet-side, so if worse comes to worse, there’s a chance even a beneficent billionaire, maybe even a millionaire, could fund such a project in a pinch.
At the moment, it’s still overwhelmingly likely that asteroid 2024 YR4 will miss earth in 2032. A 2.2% chance of an impact is worrying, and we’ll hopefully start building the infrastructure we need to deflect such objects sooner rather than later, as even if we don’t end up using said craft this time around, it seems prudent to have those sorts of missions ready to go at a moment’s notice, should we someday find ourselves in an Armageddon situation, with only a few weeks before something really, really bad happens.
That said, even with today’s quite high likelihood, that still means there’s a 97.8% chance it won’t be anything to worry about. We should know a fair bit more by April of this year, after which point this asteroid will be really far away and thus trickier to see until 2028, when it loops back in our direction.
There would still be time to do something about it then, if warranted, but more time is typically better with this sort of thing—again, because we want to be sure any deflection attempt is successfully launched, but also that it deflects it away from us, not toward us. And our best bet to deflect would be during that 2028 close flyby, so it’s likely by April, or just after that, we’ll have some kind of decision by the folks in charge about whether to launch a deflection mission in 2028 or thereabouts.
All of which would be historic, but would also probably be a good idea and a worthwhile investment, wherever this specific asteroid’s path ends up taking it. As our space neighborhood is rich with these sorts of rocks and other astronomical bodies, and because, as our in-space sensory assets have become more numerous and sophisticated, we’ve been able to see just how lucky we are, that we haven’t had more horrible impacts, so far; there’s a lot of stuff flying around out there, and the moon probably helps by taking some of those bullets for us, but even with that extra layer of natural protection, we might want to play a more active role in managing our orbital neighborhood, soon, as it would be really embarrassing to have all this knowledge and these capacities, but to not be able to use them when we need them because we failed to plan ahead.
Update, February 24, 2025: Whew.
Show Notes
https://en.wikipedia.org/wiki/List_of_Earth-crossing_asteroids
https://cneos.jpl.nasa.gov/about/neo_groups.html
https://en.wikipedia.org/wiki/Chelyabinsk_meteor
https://x.com/Astro_Jonny/status/1886742128199336362
https://en.wikipedia.org/wiki/2024_YR4
https://www.nytimes.com/2025/02/08/science/asteroid-yr4-2024-impact-odds.html
https://www.usatoday.com/story/news/nation/2025/02/08/asteroid-hitting-earth-2032-nasa/78322607007/
https://en.wikipedia.org/wiki/99942_Apophis
https://science.nasa.gov/solar-system/asteroids/2024-yr4/
https://www.cbsnews.com/news/asteroid-2024-yr4-chance-hit-earth-what-to-know/
https://blogs.nasa.gov/planetarydefense/2025/02/07/nasa-continues-to-monitor-orbit-of-near-earth-asteroid-2024-yr4/
https://www.nasa.gov/news-release/nasa-confirms-dart-mission-impact-changed-asteroids-motion-in-space/
https://en.wikipedia.org/wiki/Double_Asteroid_Redirection_Test
https://science.nasa.gov/mission/dart/
https://www.space.com/nasa-dart-mission-dimorphos-didymos-asteroid-impact-reshaping
https://www.cnn.com/2024/02/27/world/nasa-dart-dimorphos-impact-scn/index.html
https://en.wikipedia.org/wiki/AIDA_(international_space_cooperation)
https://www.planetary.org/notable-asteroid-impacts-in-earths-history
https://en.wikipedia.org/wiki/Origin_of_water_on_Earth
https://en.wikipedia.org/wiki/Theia_(planet)
https://science.nasa.gov/earth/deep-impact-and-the-mass-extinction-of-species-65-million-years-ago/
https://en.wikipedia.org/wiki/Chicxulub_crater
https://www.lpi.usra.edu/publications/books/barringer_crater_guidebook/chapter_11.pdf
https://en.wikipedia.org/wiki/Armageddon_(1998_film)
https://www.history.com/news/7-major-asteroids-strikes-in-earths-history
https://en.wikipedia.org/wiki/Impact_event
https://world-nuclear.org/information-library/safety-and-security/non-proliferation/hiroshima-nagasaki-and-subsequent-weapons-testin
https://www.astronomy.com/science/earths-greatest-hits-a-history-of-asteroid-impacts/

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US Protectionism
4 Feb· Let's Know Things
This week we talk about tax hikes, free trade, and the madman theory of negotiation.
We also discuss EVs, Canada, and economic competition.
Recommended Book: How Sanctions Work by Narges Bajoghli, Vali Nasr, Djavad Salehi-Isfahani, and Ali Vaez
Transcript
On January 20, 2025, the 45th President of the United States, Donald Trump, was inaugurated as the 47th President of the US following a hard-fought election that he ultimately won by only a little bit in terms of the popular vote—49.8% to 48.3%—but he won the electoral vote by a substantial margin: 312 to opponent Kamala Harris’ 226.
Trump is the oldest person in US history to assume the country’s presidency, at 78 years old, and he’s only the second US president to win a non-consecutive term, the first being Grover Cleveland back in 1893.
This new Trump presidency kicked off even before he officially stepped into office, his people interviewing government officials and low-level staff with what have been called loyalty tests, to assess who’s with them and who’s against them, including questions about whether they think the previous election, which Trump lost to former president Biden, was rigged against Trump—a conspiracy theory that’s popular with Trump and many of his supporters, but for which there’s no evidence.
There was also a flurry of activity in Israel and the Gaza Strip, last minute negotiations between then-president Biden’s representatives gaining additional oomph when Trump’s incoming representatives added their heft to the effort, resulting in a long-pursued ceasefire agreement that, as of the day I’m recording this at least, still holds, a few weeks after it went into effect; hostages are still being exchanged, fighting has almost entirely halted between Israeli forces and Hamas fighters in Gaza, and while everyone involved is still holding their breath, worried that the whole thing could fall apart as previous efforts toward a lasting ceasefire have, negotiations about the second phase of the three-phase ceasefire plan started yesterday, and everything seems to be going mostly according to plan, thus far.
That said, other aspects of the second Trump presidency have been less smooth and less celebrated—outside of the president’s orbit, at least.
There have been a flurry of firings and forced retirements amongst long-serving public officials and employees—many seemingly the result of those aforementioned loyalty tests. This has left gaps in many fundamental agencies, and while those conducting this purge of said agencies have claimed this is part of the plan, and that those who have left or been forced to leave are part of the alleged deep state that has it in for Trump, and who worked against him and his plans during his first presidency, and that these agencies, furthermore, have long been overstaffed, and staffed with people who aren’t good at their jobs—so these purges will ultimately save the government money, and things will be restructured to work better, for some value of “better,” anyway.
There have been outcries about this seeming gutting of the system, especially the regulatory system, from pretty much everyone else, national and international, with some analysts and Trump opponents calling this a coup in all but name; doing away with the systems that allow for accountability of those in charge, basically, and the very structures that allow democracy to happen in the country. And even short of that, we’re seeing all sorts of issues related to those empty seats, and could soon see consequences as a result of the loss of generational knowledge in these agencies about how to do things; even fairly basic things.
All of which has been accompanied by a wave of revenge firings and demotions, and threats of legal action and even the jailing of Trump opponents. In some cases this has included pulling security details from anyone who’s spoken out against Trump or his policies in the past, including those who face persistent threats of violence, usually from Trump supporters.
On the opposite side, those who have stuck by Trump, including those who were charged with crimes related to the January 6 incursion at the US Capitol Building, have been pardoned, given promotions, and at times publicly celebrated by the new administration. Some have been given cushy jobs and promotions for the well-connected amongst his supporters; Ken Howery the partner of venture capitalist and owner of government contractor Palantir, Peter Thield, and close ally of serial CEO and enthusiastic Trump supporter Elon Musk, was recently made ambassador to Denmark, for instance.
Some of these moves have caused a fair bit of chaos, including a plane colliding with a military helicopter, which may have been the result of understaffing at the FAA, alongside an executive order that froze the funding of federal programs across the country.
That executive order has been blocked by judges in some areas, and the Trump administration has since announced that they’ve rescinded the memo announcing that shutdown, but the initial impact was substantial, including the closure of regional Social Security, Medicare, and Medicaid infrastructure, and the halting of government funded research and educational programs.
Lots of people had their livelihoods threatened, lots worried they wouldn’t be able to afford necessary medical procedures or be able to pay their bills, and many people worried this might cause the country to lose ground against competitors in terms of scientific and technological development, while also leading to some pretty widespread negative health outcomes—the government has also pulled health data, so information about disease spread and even pandemics is now inaccessible, further amplifying that latter concern.
And that’s just a very abbreviated, incomplete summary of some of the actions Trump’s administration has taken in its first two weeks back in office; part of a desire on their part to hit the ground rolling and get rid of elements that might stand in their way as they fundamentally change the US system of government to better match their ambitions and priorities.
What I’d like to talk about today, is a specific focus of this new administration—one that was a focus of Trump’s previous administration, and to a certain degree Biden’s administration too: that of US protectionism, and the use of tariffs against perceived enemies; but also, in Trump’s case, at least, against long-time allies, as well.
—
On February 2 of 2025, Trump posted about tariffs on the twitter-clone he owns, Truth Social. And I’m going to quote the post in full, here, as I think it’s illustrative of what he intends to do in this regard in the coming months.
“The “Tariff Lobby,” headed by the Globalist, and always wrong, Wall Street Journal, is working hard to justify Countries like Canada, Mexico, China, and too many others to name, continue the decades long RIPOFF OF AMERICA, both with regard to TRADE, CRIME, AND POISONOUS DRUGS that are allowed to so freely flow into AMERICA. THOSE DAYS ARE OVER! The USA has major deficits with Canada, Mexico, and China (and almost all countries!), owes 36 Trillion Dollars, and we’re not going to be the “Stupid Country” any longer. MAKE YOUR PRODUCT IN THE USA AND THERE ARE NO TARIFFS! Why should the United States lose TRILLIONS OF DOLLARS IN SUBSIDIZING OTHER COUNTRIES, and why should these other countries pay a small fraction of the cost of what USA citizens pay for Drugs and Pharmaceuticals, as an example? THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE — AND THE RESULTS WILL BE SPECTACULAR!!!”
So there are several things happening there, probably the most fundamental of which is the claim that other countries, including the US’s allies, like Canada and Mexico, are taking advantage of the US when it comes to trade. This post followed Trump’s signature of an executive order that applied a 25% tariff on all Canadian and Mexican imports, and a 10% tariff on all Chinese imports.
A tariff is basically a tax on certain goods brought into a country from other countries.
So the US might impose a tariff on Chinese cars in order to keep those cars from flooding US markets and competing with US- and European-made models. And that’s what the US did under the first Trump, and then the Biden administration—it imposed a 100% border tax on electric vehicles from China, the theory being that these cars are underpriced because of how the Chinese economy works, because of how workers there are treated, and because the Chinese government subsidizes many of their industries, including the EV industry, so their cars are quite good and sold at low prices, but they got that way because they’re competing unfairly, according to this argument. Chinese cars sold at their sticker price on the US market, then, might kill off US car companies, which is not something the US government wants.
Thus, the price on Chinese EVs is effectively doubled on the US market, and that, on a practical level, kills that competition, giving US carmakers cover until they can up their game and compete with their foreign rivals.
The usual theory behind imposing tariffs, then, if you’re doing so for ostensible competitive reasons, at least, is that slapping an additional tax on such goods should allow local businesses to better compete against them, because that additional tax raises prices, and that means local offerings have a government-provided advantage. This can help level a perceptually imbalanced playing field, or it can rebalance things in favor of brands in your country.
In reality, though, tariffs often, though not always, become a tax on customers, not on the companies they’re meant to target.
Chinese vehicles have had trouble coming to the US for other reasons beyond price, including a change in safety standards that would be regulatorily required, and a slew of advantages provided to US companies beyond the hobbling tariffs enforced on their foreign competition. But other goods come into the US market from all over the place, and when there’s a tariff of say 10 or 25%, that tax is generally just tacked on to the sticker price on the US market, and US consumers thus pay more for something they might have otherwise bought more cheaply, sans tariffs.
This creates an effective tax within various industries in the US economy, and it generally has an inflationary effect, as a consequence; things become more expensive, so the money people earn doesn’t go as far.
So the new Trump administration announced a new 10% tariff on all Chinese goods, and 25% tariffs on goods from Canada and Mexico, though energy products like oil from Canada will only face a 10% tariff.
China has already lobbed a bunch of counter-tariffs at the US over the past few administrations, and it suggested it would add more to the tally in response to this new flat tariff, and now Canada and Mexico are rattling the same sabers, saying they won’t stand by while their neighbor, with the world’s biggest economy, elbows them out, causing possibly substantial damage to their local businesses that export goods to the US.
The Canadian government has said it will apply 25% tariffs on $155 billion of American goods, including things like orange juice and appliances, those tariffs phased in over the next three weeks. And the Mexican government has said they’ll do similar things, without giving specific details, as of yet.
That means US manufacturers, companies that make stuff that ends up being sold in Canada and Mexico, could soon see comparable tariffs on their goods sold in those markets. That, in turn, could lead to significant economic consequences for such companies, but also everyday people living in all the affected countries, because of that inflationary effect—that effective tax on all of these goods.
So even without those counter-tariffs, these new tariffs from the Trump administration against Canada, Mexico, and China to are expected to cause some real damage to the US economy, and to normal Americans. The Tax Foundation has estimated that they’ll shrink US economic output by .4% and increase taxes by $1.2 trillion between 2025 and 2034, which on a micro-scale represents an average household tax increase of about $830 in 2025, alone; an extra $830 out of pocket per household on average because of these punishments that are ostensibly aimed at other countries, to try to get them to do things Trump wants them to do.
Most of that $1.2 trillion tax increase is just from the Mexico and Canada tariffs: $958 billion of it, in fact. And during his first term in office, Trump’s tariffs imposed about $80 billion worth of new taxes on American households in a single year, from 2018 to 2019—which isn’t the same as just hiking taxes, but it amounts to the same outcome; and when compared to straight-up tax hikes, this represents one of the largest tax increases in several decades.
Biden kept most of Trump’s tariffs from his first administration in place when he stepped into office, and Biden added some of his own, too: especially on strategically vital tech components like computer chips, and next-step product categories like electric vehicles. And the net-impact of these tariffs on the US economy is generally considered to be mostly negative, in terms of practical tax hikes and its inflationary impact, but also in terms of reduced economic activity and employment.
Trade wars can sound pretty tough and often serve as nationalistic red meat when reported upon, but most economists consider them to be the legislative equivalent of shooting oneself in the foot; completely open, free trade comes with downsides, as well, including the potential for a nation like China to dump products at low prices in foreign markets, putting local manufacturers out of business, then raising their prices once they’ve soaked up all the oxygen.
But trade conflicts often result in a lot of downsides for everyday, tax-paying citizens, have long-term negative effects on businesses, and can also stoke inflation, causing secondary and tertiary negative effects that are hard to tamp down, later.
Knowing this, many analysts have speculated that Trump might be using these tariffs as a sort of shot across the bow, wanting to renegotiate all sorts of agreements with enemies and allies, alike, and using the madman theory of negotiation, trying to convince those on the other side of the eventual negotiation that he’s not in his right mind and is willing to burn it all down, wounding himself and his country in order to take out those who he feels have wronged him, if he doesn’t get what he wants.
There’s a chance this could work for him, and his many threats and implied threats have already led to a whole lot of cowtowing and cancelled lawsuits against him and his people, even from folks and entities that have previously been staunchly against Trump and everything he stands for.
There’s also a good chance that these other governments will see whatever it is he’s demanding from them as a small price to pay to get back to something approaching normal relations with the US, and normal dealings with the US’s economy.
His demands so far, though, have mostly revolved around seeming specters; he’s alleging insufficient efforts aimed at drug imports into the US, and that both Mexico and Canada are enabling all manners of money laundering and transnational crimes; allegations that both countries deny, but which probably aren’t the point to begin with. These accusations are generally being seen as a means of forcing these tariffs through without the usual process, which would take a while and present the opportunity for government systems to derail or weaken them, which happened to some of the tariffs Trump wanted to hurl at other governments during his first administration.
So those seeming rationales might be primarily justifications to force these tariffs through, and it could be that the tariffs are meant to be negotiating leverage first and foremost, going away as soon as he gets what he wants—whatever that actually is.
That said, it’s also been speculated that a manman-theory-style false threat that’s seen to be a false threat—hardcore, arguably nonsensical tariffs against allies, for instance—may not serve their purpose, because everyone knows they’re false. That may mean those on the other end of them, if they hold their ground and are willing to suffer a little, could make it out the other side without giving too much away, the US suffering more, and thus, the president eventually giving up, coming up with justification for shifting to a new strategy but mostly just trying to lower inflation levels he raised, and bring life back to a stock market that he collapsed.
Either way, it looks like there’s a pretty good chance a lot of established norms and folkways will be trampled over the next few years, possibly with good reason, if you support the ends of this administration, at least, though by some indications maybe because of a fundamental misunderstanding of how economics works at this scale, or maybe for different reasons entirely: part of that larger plan to disrupt and demolish aspects of the US system of governance, making way for replacements that are more to the current administration’s liking.
Note: after recording this episode, but before it went live, the Chinese tariffs went into effect, but the tariffs against Mexico and Canada (and those countries’ counter-tariffs) were paused. More information: https://www.nytimes.com/live/2025/02/04/us/trump-tariffs-news#here-are-the-latest-developments
Show Notes
https://www.npr.org/2024/05/06/1248065838/cheap-chinese-evs-us-buy-byd-electric-vehicles
https://ustr.gov/usmca
https://www.axios.com/2025/02/01/trump-cfpb-rohit-chopra-fired
https://www.axios.com/2025/02/02/trump-netanyahu-gaza-ceasefire-hostage-deal
https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/
https://taxfoundation.org/blog/trump-tariffs-impact-economy/
https://www.axios.com/2025/01/03/biden-blocks-us-steel-nippon-japan
https://truthsocial.com/@realDonaldTrump/posts/113934450227067577
https://www.washingtonpost.com/business/2025/01/02/biden-blocks-nippon-us-steel-deal/
https://www.axios.com/2025/01/03/nippon-steel-us-steel-sue-biden
https://restofworld.org/2024/china-tech-tariffs-which-countries-will-impose/
https://www.nytimes.com/live/2025/02/02/us/trump-tariffs
https://www.nytimes.com/2025/02/02/business/trump-tariffs-china.html
https://apnews.com/article/trump-tariffs-trade-china-mexico-canada-inflation-753a09d56cd318f2eb1d2efe3c43b7d4
https://www.reuters.com/business/trump-stretches-trade-law-boundaries-with-canada-mexico-china-tariffs-2025-02-02/
https://www.theverge.com/news/600334/trump-us-tariffs-imported-semiconductors-chips
https://www.uschamber.com/international/u-s-chamber-tariffs-are-not-the-answer
https://www.bbc.com/news/articles/c627nx42xelo
https://www.axios.com/2025/02/01/trump-canada-mexico-tariffs
https://www.bloomberg.com/news/articles/2025-02-02/mexico-pledges-retaliatory-tariffs-against-us-while-calling-for-cooperation?embedded-checkout=true
https://www.cbsnews.com/news/what-are-tariffs-trump-canada-mexico-what-to-know/
https://www.wsj.com/opinion/donald-trump-tariffs-25-percent-mexico-canada-trade-economy-84476fb2
https://english.elpais.com/international/2025-02-02/from-cartels-to-terrorists-trump-imposes-a-new-paradigm-on-mexico-in-the-war-on-drugs.html
https://www.theguardian.com/us-news/live/2025/feb/02/canada-mexico-china-donald-trump-trade-tariffs-us-politics-live
https://budgetlab.yale.edu/research/economic-and-fiscal-effects-trump-administrations-proposed-tarrifs
https://www.nytimes.com/2025/01/31/us/trump-freeze-blocked.html
https://en.wikipedia.org/wiki/2024_United_States_presidential_election
https://apnews.com/article/israel-palestinians-hamas-war-news-ceasefire-hostages-02-01-2025-bb560151db1437d0b35ac1d568457a46
https://www.axios.com/2025/02/01/trump-moves-missed-plane-crash-dei
https://apnews.com/article/trump-tariffs-dei-federal-workers-plane-crash-733303f2c808834f4cc4b30dfaf308a7
https://apnews.com/article/trump-federal-grants-pause-freeze-e5f512ae6f1212f621d5fa9bbec95e08

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DeepSeek AI
28 Jan· Let's Know Things
This week we talk about OpenAI, the Stargate Project, and Meta.
We also discuss o1, AGI, and efficiency.
Recommended Book: The Shortest History of Economics by Andrew Leigh
Transcript
One of the bigger news items these past few weeks, in terms of the numbers involved, at least, was an announcement by US tech company OpenAI that it will be starting a new company called the Stargate Project, which will boast a total $500 billion-worth of investment, the first $100 billion of which will be deployed immediately.
All that money will be plowed into artificial intelligence infrastructure, especially large-scale computing clusters of the kind required to operate AI systems like ChatGPT, and the funds are coming from OpenAI itself, alongside SoftBank, Oracle, and MGX, with Arm, Microsoft, and NVIDIA also involved as technology partners.
It’s a big, beefy enterprise, in other words, and the fact that this has been in the works since 2022, it’s official announcement seemingly held back so that newly returned US President Trump could announce it as part of his administration’s focus on American infrastructure and AI dominance, didn’t dim the glow of the now-formal announcement of what looks to be a truly audacious bet on this collection of technologies, doubts about the players involved having the money they’ve promised ready, notwithstanding.
That said, this is far from the only big, billions and tens of billions-scale wager in this space right now.
Last year, Microsoft announced a $30 billion infrastructure fund, in collaboration with BlackRock, and earlier in January of 2025, Google’s CEO said that his company would spend about $80 billion on the same, separate from their commitment to Stargate.
Meta’s CEO Mark Zuckerberg recently divulged that the company would spend somewhere between $60-65 billion on capital expenditures, mostly on AI, in 2025—that’s up about 70% from 2024 spending.
And last December, xAI CEO Elon Musk announced that his company had just raised a fresh $6 billion to build-out more compute infrastructure; and his role at the head of that company is assumed to be part of why he trash-talked the aforementioned Stargate effort, though there’s also a long-simmering animus between him and OpenAI CEO Sam Altman, and the fact that everyone seems to be trying to get in good with Trump—which is probably part of why many of these announcements are happening right now: Trump is in the position to king-make or cripple their respective efforts, so whomever can get in good with him, or best with him, might have an advantage in what’s become a very expensive knife-fight in this most rapidly burgeoning of tech investment loci.
There’s a reason there’s so much money flowing to this space, announcements aside, right now, too: the chatbots that’ve emerged from the GPT, LLM era of AI systems are impressive and useful for many things, and AI powered bots could even replace other sorts of user interfaces, like search engines and apps, with time.
But there are also some more out-there efforts that are beginning to bear fruit.
AI is helping Google’s DeepMind team discover new materials at an astonishing rate—including both the discovery and the testing of their properties, stage.
AI systems are also being used to accelerate drug discovery and trial design, and a company (backed by OpenAI’s Altman) is trying to extend human life by a decade using exactly this process.
Meta has a new tool that enables real-time speech and text translation between up to (depending on the type of translation being done) 101 different languages, and we’re even seeing AI systems meant to detect and track small, otherwise overlooked infrastructure issues, like potholes, at a local level.
And to be clear, this is far from a US government and US-based tech company effort: government agencies, globally, are scrambling to figure out how to regulate AI in such a way that harms are limited but research, investment, and innovation isn’t hampered, and entities all over the place are plowing vast wealth into these projects and their related infrastructure; India’s Reliance Group recently announced it will build what could become the world’s biggest data center, planned to go into operation within two years—a project with an estimated price tag of somewhere between $20-30 billion. And that, all by itself, would more than triple the country’s data center footprint.
So this scramble is big but also global, and it’s partly motivated by the gold rush-like desire to be first to something like artificial general intelligence, or AGI, which would theoretically be capable of doing basically anything a human can do, and possibly better.
That could, depending on the cost of developing and running such a system, put a lot of humans out of work, scrambling the world and its economy it all sorts of ways, and causing untold disruptions and maybe even havoc. That chaos could be very good for business, however, for whomever is able to sell this new commodity of labor to everyone else, replacing most or all of their employees with digital versions of the same—each one cheaper than a comparable human would be to perform the same work.
What I’d like to talk about today, though, is a challenge to the currently dominant theory of operation in this industry, and why a new family of AI models is sending many of the tech world’s biggest players into a panic.
—
A lot of the news coming out of the AI world, at the moment, is focused on what are called agents, or agentic AI.
An AI agent is a system that can operate with agency: it can do things on its own. So you could have one of these systems, something you might engage with like a chatbot, but one capable of taking complex instructions, and you could tell it to find the best e-bike for your use case, and it would then take your info, your context, your needs into consideration, do a bunch of research, and maybe even buy and set up the delivery of the bike for you, with limited check-ins required on your part.
A truly agentic AI would operate as sort of a personal assistant, capable of doing anything a human personal assistant would be able to do—sans the physical body, of course—though that could come later.
This is generally seen as a step on the path toward AGI, and perhaps even AI superintelligence, which would be AGI that’s massively smarter and better at everything than any human, all of which also moves these things from the realm of “tool to be wielded by humans”, toward something more like a robot that can do all the things it’s supposed to do, without a human present; a different category of product and service.
This type of AI, with this level of capability, is generally considered to be really expensive to make—to train, in the industry parlance—and to use, because of how much computing power is required to run the code required to leverage these sorts of smarts.
In 2020, ChatGPT-3 cost somewhere between $2-4 million to train. Its successor, ChatGPT-4, which was deployed in 2023 cost more like $75-100 million.
That’s a lot more money. The model is a lot more powerful, granted, but the scaling laws that have seemed to be at play in this space, the increase in cost between generations of AI, have suggested that getting another capability leap comparable to what we saw between ChatGPT-3 and 4 would cost something like a billion dollars, and even that might give us a jump, but not the same staggering growth in performance that we saw between those generations.
The are arguments to be made that the size and type of dataset matter, here, and that the culling of said datasets, and how the models are tuned to use the data and respond to things are also vital, perhaps as much or more so than the initial training.
Companies like OpenAI have also figured out all sorts of ways to wring more performance out of less training and compute, including things like allowing the AI to reference other sources—basically doing a web search or checking wikipedia and similar references, in addition to knowledge that already exists in its training dataset—or allowing them to “think” longer, giving them more time to work through a problem or task, which tends to lead to better results, even with weaker—in terms of training and compute power—systems.
Ultimately, though, most of these companies seem to be assuming that more money churned into more infrastructure and compute capability will be necessary, to make these things better at doing science and solving global problems, at maybe running military campaigns-scale issues, but also at replacing humans as employees—creating more agentic, ultimately, they hope, AGI-level systems.
So that’s a big part of why there’s so much money sloshing around in the AI world right now: all these companies want to build the biggest, baddest model, they would love to develop AGI and put everyone out of work, and they assume that more money will equal more potency, so if they don’t start building now, they risk being left behind in a couple of years when all their competitor’s snazzy new assets are available and powering their AI systems—which could allow their competitors to get there first, and there’s a general assumption that it’s important to be first or close to first on this, as truly AGI-level, or beyond AI could theoretically allow them to refine their own systems faster, which could secure them a permanent lead over their opposition, moving forward.
Though the US is generally considered to be in the prime position in that particular race, so far, China has been investing a lot in this space, as well, and many of their investments have been similar to those of their Western competitors; dropping lots of money on the issue, building big infrastructure, and so on.
They’ve been hindered quite a lot by Western, especially US, sanctions, though, and that’s made it more difficult, not impossible, but more time-consuming and expensive for them, to get the highest-end chips optimized for AI systems, like those made by NVIDIA.
This has forced them to take some different approaches to their international peers, and while many of those approaches still involve huge price tags and build-outs, some of them have instead focused on a less-celebrated aspect of the industry: that of smaller models that are a lot more efficient, achieving gains that are out of proportion to their training and operating costs.
Case in point are the new DeepSeek R1 models, which are a collection of AI models that were cheap to make, released free for public use and editing, and which seem to beat OpenAI’s o1 reasoning models—which are very much not free, and which were a lot more expensive to develop—on some of the most widely used performance benchmarks.
These models apparently cost something like 3-5% what OpenAI spent on its o1 model, a mere $5.6 million, and again, they’re free to use, but also open source, so anyone who wants to build their own business or new AI atop them can do so; and their API costs are more than 90% lower than o1’s, so it’s also a lot cheaper to use these models for development purposes than OpenAI’s options.
This isn’t the first time a Chinese company has taken a look at what folks are doing in the west and then massively undercut their efforts by amplifying the efficiency many fold. Also, again, there’s a constraint on Chinese companies’ ability to get the latest and greatest AI hardware, which incentivizes this path of development, and they also have a super competitive tech industry in China, which tends to force a lot of their sub-industries, like batteries and solar panels, to iterate rapidly and push costs as low as functionally possible.
This family of models was made as kind of a side project by someone who’s been competing within that somewhat brutal evolutionary context, and the rest of the world, by comparison, just hasn’t had the same forcing functions influencing its development path—so this level of efficiency with this level of performance has been, up to this point, unheard of. And as a result, these DeepSeek models have sent the US and other western tech industries into a tizzy.
And it makes sense that these people would be panicking: they have spent, and are intending to continuing spending heavily on next-gen AI infrastructure, and this type of model, trained for basically nothing, demonstrating this level of performance? It calls all those investments into question, even to the point that some commentators—without evidence, so there’s no reason to believe this is the case—have wondered out loud if this might be some kind of psyop by China to kill the US’s AI industry, basically making it look like a bad investment, if these kinds of results can be achieved so inexpensively elsewhere.
Again, that’s almost certainly not what’s happening here, but these models have reportedly landed like a live hand grenade in the offices of the US AI industry, with folks in big tech companies frantically trying to figure out how DeepSeek does what it does, and then surreptitiously copying whatever they can to try to get ahead of this, build their own version of the same and maybe work those findings into their planned investments.
Meta in particular has apparently been on edge about this, as they’ve tried to own the free, open AI model space with their Llama family of AI models; which have been generally well received, but apparently DeepSeek’s earlier model, v3, was already messing with their heads, surpassing what they were able to do with llama, and this new family, the R1 family, has them worried they won’t be able to hold onto that position, and might not even be able to compete, despite their tens of billions of dollars worth of investment.
What’s more, something this effective and efficient can be run by a lot of companies that would otherwise have had to rely on entities like OpenAI and Meta, which have the computing infrastructure—all those big buildings they’re constructing at a frantic rate and high cost—to handle the larger models.
Non-AI companies that want to use these systems, though, could theoretically just buy their own, smaller setup and run their own AI, in-house, which would alleviate some security concerns related having all that stuff processed off-site, but it would also almost certainly be cheaper over the long-term, compared to just paying someone like Google or OpenAI for their services, forever.
All of this has resulted in a fair bit of volatility in the US stock market, which has been heavily reliant on AI-oriented tech stocks for growth over the past year, with NVIDIA in particular taking a hit, due to the possibility that heavyweight chips might not be vital to creating high-end AI systems.
There are downsides to DeepSeek, of course, perhaps most obviously that this model, having come from China, is laden with censorship about exactly the sorts of things you would expect: Tianammen Square, China’s government and it’s many well-documented abuses, and so on. There could be more issues, too, that the folks who look into such things will discover after spending more time with this family of AI, though thus far, the response has generally been very positive, even with those caveats.
Either way, this challenges the assumption that the US or any other country can stifle another nation’s, or group’s, AI ambitions with hardware sanctions.
It also suggests that, if this general approach could be replicated, we may see a lot more models that are cheap and easy to run, but which are also effective enough for a lot of those next-step, higher-end utilities. And that would allow AI to spread a lot more quickly, more people being able to wield more powerful tools, while also potentially doing away with many of the moats—the defendable, unique value propositions—these larger tech companies assumed they would have by building and controlling the pricy infrastructure they assumed would be necessary to spin-up AI systems of that calibre.
Show Notes
https://www.microsoft.com/en-us/research/story/ai-meets-materials-discovery/
https://semianalysis.com/2025/01/23/openai-stargate-joint-venture-demystified/
https://openai.com/index/announcing-the-stargate-project/
https://techcrunch.com/2025/01/24/stargate-will-use-solar-and-batteries-to-power-100b-ai-venture/
https://www.ft.com/content/4541c07b-f5d8-40bd-b83c-12c0fd662bd9
https://www.politico.com/news/2025/01/23/trump-staff-musk-conflict-00200311
https://www.nytimes.com/2024/12/24/technology/elon-musk-xai-funding.html
https://www.cnbc.com/2025/01/22/trump-had-phone-call-with-openais-sam-altman-last-week.html
https://www.whitehouse.gov/presidential-actions/2025/01/removing-barriers-to-american-leadership-in-artificial-intelligence/
https://apnews.com/article/trump-ai-artificial-intelligence-executive-order-eef1e5b9bec861eaf9b36217d547929c
https://restofworld.org/2025/global-ai-regulation-big-tech/
https://www.wsj.com/tech/ai/meta-spending-ai-facebook-data-centers-9452a88f
https://www.reuters.com/technology/meta-invest-up-65-bln-capital-expenditure-this-year-2025-01-24/
https://www.bloomberg.com/news/articles/2025-01-23/billionaire-mukesh-ambani-plans-world-s-biggest-data-center-in-india-s-gujarat?embedded-checkout=true
https://www.bloomberg.com/news/articles/2025-01-24/apple-enlists-company-veteran-kim-vorrath-to-help-fix-ai-and-siri?embedded-checkout=true
https://www.ft.com/content/25a473ea-9f87-474a-8729-bc5287df853a
https://spectrum.ieee.org/machine-translation
https://techcrunch.com/2025/01/24/elevenlabs-has-raised-a-new-round-at-3b-valuation-led-by-iconiq-growth-sources-say/
https://www.bloomberg.com/news/articles/2025-01-24/vc-lightspeed-bets-big-on-ai-megadeals-backing-anthropic-xai-mistral
https://www.ft.com/content/7dcd4095-717e-49f8-8d12-6c8673eb73d7
https://www.nytimes.com/2025/01/23/technology/ai-test-humanitys-last-exam.html
https://every.to/chain-of-thought/we-tried-openai-s-new-agent-here-s-what-we-found
https://www.platformer.news/openai-operator-ai-agent-hands-on/
https://techcrunch.com/2025/01/23/openai-launches-operator-an-ai-agent-that-performs-tasks-autonomously/
https://www.axios.com/2025/01/19/ai-superagent-openai-meta
https://blog.google/technology/google-deepmind/google-gemini-ai-update-december-2024/
https://arstechnica.com/ai/2025/01/china-is-catching-up-with-americas-best-reasoning-ai-models/
https://www.macrumors.com/2025/01/27/deepseek-ai-app-top-app-store-ios/
https://www.statista.com/chart/33114/estimated-cost-of-training-selected-ai-models/
https://sherwood.news/tech/a-free-powerful-chinese-ai-model-just-dropped-but-dont-ask-it-about/
https://www.axios.com/2025/01/17/deepseek-china-ai-model
https://www.nytimes.com/2025/01/23/technology/deepseek-china-ai-chips.html
https://archive.ph/WMUbb
https://x.com/pmarca/status/1882719769851474108
https://venturebeat.com/ai/tech-leaders-respond-to-the-rapid-rise-of-deepseek/
https://archive.ph/vDsQ4
https://archive.ph/CrbGO
https://x.com/nealkhosla/status/1882859736737194183
https://x.com/samfbiddle/status/1882882950368473161
https://x.com/samfbiddle/status/1882884223008493887

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Gaza Peace Deal
21 Jan· Let's Know Things
This week we talk about October 7, the Gaza ceasefire plan, and Netanyahu.
We also discuss Hamas, Qatar, and the new US administration.
Recommended Book: Witch King by Martha Wells
Transcript
On October 7, 2023, the militant group Hamas launched a sneak attack from the Israeli occupied Gaza Strip against Israel itself, killing about 1,200 people and taking just over 250 hostages.
Israeli forces were caught stunningly unaware by this, but shortly thereafter, Israel launched a counterattack into Gaza, sweeping through the Strip, with both on the ground incursions of tanks and troops, and with seemingly endless air raids and missile strikes, ostensibly to clear out Hamas fighters and find their leadership, but the net impact of this, on top of Hamas’ organization being substantially degraded, was the reductiond entire cities to rubble and the displacement almost the entirety of the Gazan population—something like 2.3 million people, most of whom have been living on the streets or in ramshackle encampments, without reliable sources of food, water, or shelter, as aid shipments from elsewhere have been held back by Israeli forces, for more than a year.
Gaza’s Health Ministry estimates that more than 46,000 Palestinians and other Gazan residents have been killed as a result of the fighting over the past 15 months, with more than double that, nearly 110,000 wounded. The Israeli military says they’ve killed more than 17,000 militants over the course of their invasion, though both sources are biased and are operating from incomplete numbers, so these figures are all considered to be suspect at this point, if probably in the right general ballpark, in terms of orders of magnitude.
The hostages taken by Hamas during that initial attack into Israel have remained a tricky issue throughout this conflict, as Hamas leaders have continuously used them as bargaining chips and at times, human shields, and the Israeli government has regularly reassured the hostages’ families that they’re focused on returning those captives home safely—but they’ve done this while also, in many cases, seemingly doing the opposite; focusing on taking out Hamas and its leadership, first and foremost, to the point that Israeli forces have seemingly killed many of the hostages they’re attempting to rescue, because they went in after a Hamas leader or bombed a neighborhood into oblivion without first checking to see who was in that neighborhood.
This stance has in some cases been incredibly inconvenient for the Israeli government, as the families of the hostages have in some cases been at the center of, or even sparked, some of the large protests against the Israeli government and its actions that have become a fixture of Israeli life since this war started.
Prime Minister Netanyahu and his military leaders have been a particular focus of this internal ire, but the Israeli government in general has been targeted by seemingly endless public acts, meant to show civilian discontent with how they’re doing things.
Since that day when Hamas attacked Israel in October of 2023, this war has expanded to encompass not just Israel and Hamas, but also other militant groups, like the Houthis operating out of Yemen, and Hezbollah, operating out of Southern Lebanon, just on the other side of Israel’s northern border.
All three groups are supported, in terms of training, weapons, and money, by Iran’s government, and they’ve helped Iran sustain a collection of proxy conflicts throughout the region for years, without Iran ever having to get directly involved.
These relationships and that sponsoring of these groups has allowed Iran to exert its influence throughout the Middle East and beyond, including into the Red Sea, which typically serves as a vital international shipping channel, but because of regular attacks against shipping vessels by the Houthis from Yemen, the whole of the global supply chain has been disrupted, all sorts of things becoming more expensive and goosing already high inflation levels, because of the longer routes and thus, more expensive shipping costs that have become necessary in an era in which this channel is dangerous to traverse.
This dynamic, of Iran playing puppetmaster with its proxies throughout the Middle East, has shifted a fair bit over the course of this war, as these attacks, on Israel and other entities in the region, have attracted counterattacks by Israel and their allies, including the US, and that in turn has left Hezbollah all but destroyed—a series of brazen decapitation attacks by Israeli forces basically wiping out the whole of the group’s upper ranks and resource stockpiles within a matter of days. They’ve also destroyed much of Hamas’ local infrastructure and leadership, and the Houthis, while attracting a lot more attention and prestige for their efforts in the Red Sea, have also seen their capacity to operating more broadly degraded by the presence of a swelling, and increasingly aggressive, anti-Houthi fleet.
All of which has significantly diminished Iran’s reach, and its capacity to move pieces on the board. Attacks directly against Iran by Israel, too—which were met with remarkably ineffective counterattacks—have likewise destroyed infrastructure, but perhaps more importantly substantially reduced Iran’s credibility as a true force in the region; they’re still a huge military power, in other words, but unless something changes, like their military managing to develop a nuclear weapon, they’re no longer considered force they were at the beginning of all this; their weakness at range, in particular, makes them look downright ineffectual compared to pretty much all the other military powers in the region, right now.
This has also, arguably, made them a less appealing ally for Russia. And though the two nations recently announced a new defense pact, this pact was seemingly signed because both nations recently lost a valuable supplicant state in Syria, which saw its Assad government toppled not long ago—the new government not clearly aligned with either of them, and perhaps even oppositional to them.
This pact was made from a place of relative weakness, then, not strength, and its dictates are pretty limited: no mutual defense clause, no formal alliance. It’s basically meant to indicate that the two nations won’t actively help anyone else attack the other from their territory, which is about as noncommittal as these sorts of agreements get.
To Russia, still, then, Iran is more or less a provider of drones and rockets, not a peer or even true regional power. And that’s partly the result of the weakness Iran has shown in the face of repeated Israeli aggression toward them, during this conflict.
This conflict has also shaped global politics, as people on the political left, in particular, have tended to rally for innocent Gazan civilians, while those on the right have tended to support Israel’s (also conservative) government, and it’s decision to conduct the war as it has.
This may have nudged the recent US presidential election in Trump’s favor, and other campaigns have likewise been at least minutely affected by this issue, and its polarizing, at times fracturing impact on left-leaning parties in particular.
What I’d like to talk about today, though, is what looks to be the beginning of the end of this conflict, and what a newly negotiated ceasefire between the involved parties entails.
—
The events I breezed through in the intro paint a far from complete picture of what’s happened during this war; it’s been big, expansive, expensive, and brutal, and has fundamentally changed the geopolitical setup of the region, and in some ways the world, as well.
Just as potentially wide-reaching is the ceasefire that’s been negotiated and, as of the day I’m recording this at least, one day after it officially came into effect, is so far still active, and which seems primed to nudge things away from active conflict and toward some new state of affairs in the region.
So let’s jump in and talk about the details of this ceasefire.
Governments have been shipping diplomats to the region since this thing broke out, all wanting to polish their reputation as peacemakers and reliable intermediaries, and all trying to formalize something like this, some kind of lasting peace, pretty much from the day Hamas launched that sneak attack, but even more so after Israel began pummeling Gaza to dust.
And Qatar has been a focal point for these peace efforts from the get-go, enjoyinf some initial success in helping the two groups establish a four-day ceasefire in late-November 2023, that period later extended by several days, so that in total 100 Israeli hostages were freed in exchange for the freedom of 240 Palestinian women and children who were being held in Israeli jails.
Qatar has been building its reputation for these sorts of negotiations, and Egypt joined in, partly for the same reputational reasons, but also because Israel’s invasion has come dangerously close to their shared border, and there have been concerns that displaced Palestinians might be forced across that border by Israel’s attack, creating a humanitarian crisis within Egypt that would have been expensive and disruptive in many ways.
The worst case version of that concern didn’t materialize, but Egypt maintained its involvement in the peacemaking process, working with representatives from the US and Qatar, the former a staunch ally of Israel, the latter on good terms with Hamas, even housing some of their leaders, to keep negotiators from Hamas and Israel talking.
Throughout the war, these and other involved parties have generally supported a three-phase ceasefire proposal, which would begin with a ceasing of hostilities, followed by the release of all Israeli hostages being held in Gaza and a bunch of Palestinians being held in Israeli prison, and following that, if everything goes according to plan, the establishment of a permanent ceasefire, which would see Israel pulling its forces from Gaza and the beginning of a reconstruction process in the Strip—which again, has had many of its most populous cities leveled, completely unlivable, at this point, while almost all of its population has been living on the streets and in camps, without things like power, water, or electricity.
This plan sounds pretty straightforward, on its face, but the specifics are fuzzy, and the negotiation has thus been fraught, and any implementation is inherently riddled with diplomatic landmines and other perils. And this is part of why previous versions of this ceasefire agreement have been hamstrung. Back in mid-2024, Netanyahu halted progress on what seemed to be an acceptable to everyone version of the plan, saying he wouldn’t support any resolution that ended the war, only one that implemented a partial ceasefire, and that seemed to be a political move on his part. But throughout the negotiation process, there have been a lot of good faith concerns and disagreements, as well, so this has been a slow, frustrating grind for those involved.
Pressure from those aforementioned involved parties, though, and almost certainly Israel’s successes on the ground against all those Iranian proxies, and Iran, itself, seems to have led to the right combination of circumstances that even Netanyahu has indicated it’s probably a good time for a ceasefire.
There have been murmurs, unconfirmed at this point, that freshly reelected US President Trump pressured Netanyahu to move in this direction, and that this new pressure from the incoming administration, which has long been on friendly terms with Netanyahu’s people, combined with those other, existing pressures, might have been what sealed the deal; and is probably why all this has coincided with Trump’s recent inauguration.
Whatever the specifics of the genesis of this agreement, though, there was finally enough appetite for a three-stage ceasefire to come together, and the resulting plan was approved by Israel’s security cabinet, and then the government’s full cabinet, on January 17, 2025. The other parties were already on board, so this was enough to move the thing forward.
This plan, which was officially implemented a few days before this episode goes live, on January 19, 2025, will start with a 42-day pause in fighting that will see Israeli forces leave Gaza, pulling back to a buffer zone along the periphery of the Strip. This will allow civilians to return to what’s left of their homes, while also enabling the import and distribution of a whole lot more aid deliveries, which have been hampered by those Israeli forces up till this point.
There will be a complete ceasefire from this point forward, if everything goes according to plan, and a bunch of hostages will be released—33 Israeli civilians and female soldiers freed by Hamas, and some larger number of Palestinian prisoners held by Israel released, in exchange, a portion of that total number released each week at regular intervals.
Shortly after the first stage’s implementation, the Rafah crossing that divides Gaza and Egypt will also be reopened to allow sick and wounded people to leave the Strip, though it’s not clear at the moment if control of that crossing, which is currently held by Israeli forces, will be returned to the Palestinians soon, at a later stage, or at all.
After that six week period, the second stage will focus on the exchange of the remaining Israeli hostages, alive and dead, and the release of a proportionate number of Palestinians prisoners; though prisoners who have been convicted of murder will be released to prisoners in other countries, rather than back into Gaza or the West Bank.
Israel would also completely withdraw from Gaza, at this point, though Israel’s cabinet hasn’t yet voted on this specific condition, and far-right members of that cabinet have said they’re not in favor of this, so it could end up being a sticking point.
This second stage currently has an unknown duration, which is another complexity that could ultimately trip things up, as an inability to agree upon the end of a stage could keep the next one from ever happening, without technically derailing the agreement as a whole.
The third stage, if and when we get there, could last a long time, even years, and it would include an exchange of the dead bodies of hostages and Hamas members that haven’t yet been returned, while also kicking off a three- to five-year reconstruction period that would see the Strip being rebuilt under international supervision.
This is also when some kind of Palestinian governance will need to be reestablished in the Strip. Though while many international players want the Palestinian Authority, which governs the Israeli-occupied West Bank, to retake control of Gaza—they governed the area previously, but were booted by Hamas back in 2007—Israel isn’t in favor of PA leadership being reintroduced to the region, so that’s another point of contention that could derail things before the whole of the peace process can play out.
The thing to watch, right now, is whether these first six weeks go as planned, with the first several dozen hostages successfully returned to their families by Hamas, and a far larger number of Palestinian prisoners released by Israel, in exchange.
There should be a full-on ceasefire for the duration of this process, and that ceasefire should become permanent along the way, with Gazan civilians able to move freely and return to their homes, throughout. About 600 truckloads of aid scheduled is to arrive each day, too, which is up from around 18 truckloads, pre-agreement. That should help stabilize the humanitarian catastrophe that’s been simmering on the ground for more than a year—though to be clear, this is a stabilization to still dire circumstances, not a return to anything close to normal for those afflicted.
From there, it’s a question as to whether Israel sticks to its agreement to limit its forces to the buffer zone, and whether the specifics of that pull-back, the negotiations for which have been scheduled for February 4, end up working for everyone, including those aforementioned hawks in Netanyahu’s cabinet.
We may also see Hamas unable to provide as many living hostages as claimed, which already happened once during that previous exchange back in November of 2023, which could disrupt this new exchange process, and possibly serve as justification for one side or the other to backtrack on promises made and conditions to which they’ve committed.
So it’s possible that things will go smoothly, that no one will be perfectly happy, but everyone will be generally satisfied—which is what tends to happen with a well negotiated ceasefire of this kind.
Israel seems to be in a good spot to lock in their winnings, basically, having hobbled their primary enemies in the region and apparently gotten away with committing some seemingly serious atrocities that have been condemned by all sorts of international bodies—those atrocities maybe swept under the rug as one more incentive to basically get them to stop, which is a benefit other victors in similar conflicts have historically enjoyed.
Hamas also seems to still exist, if in a far diminished form, and as soon as the ceasefire was implemented, they started fanning their people across Gaza, establishing a sort of police force—the message apparently being “we’re still here and in charge,” and they might be hoping this de facto governance will sway things in their favor, put control and the ability to strike Israel in the future back in their hands, no matter who the international community eventually decides should take official control of the region.
At the same time, it’s also possible that one side or the other might use this ceasefire as cover, doing what they need to do to keep it afloat and technically still in motion, while basically preparing for their next antagonistic effort against their enemies.
Other facets of this process, like what’s happening in the north, where the Lebanese government has insisted Israeli forces leave the southern portion of their country by January 26, could complicate things; Hezbollah has agreed, as part of this ceasefire plan, to pull its forces back to a point about 20 miles from the country’s border with Israel, but there are still weapons caches belonging to either Hezbollah or some other militant organization in that part of Lebanon, according to UN peacekeepers.
It’s possible that some small violation on some component of this larger plan, purposeful or not, could give one of the involved justification for perpetuating some aspect of this conflict; and that’s true now, at the very beginning, but it’s also true later on, even after a permanent ceasefire has technically been signed, and full-on war has officially stopped.
Show Notes
https://www.timesofisrael.com/these-are-the-33-hostages-set-to-be-returned-in-phase-one-of-the-gaza-ceasefire/
https://apnews.com/article/gaza-ceasefire-negotiations-mediators-3a646fe5606d87db767e8a434f7a5f74
https://www.nytimes.com/2025/01/16/world/middleeast/israel-gaza-strikes-ceasefire.html
https://www.aljazeera.com/news/2025/1/15/what-do-we-know-about-the-israel-gaza-ceasefire-deal
https://www.theguardian.com/world/2025/jan/19/how-will-the-gaza-ceasefire-and-hostage-deal-work
https://responsiblestatecraft.org/gaza-ceasefire-2670859688/
https://www.propublica.org/article/biden-blinken-state-department-israel-gaza-human-rights-horrors
https://jacobin.com/2025/01/ceasefire-deal-gaza-israel-hamas/
https://www.nytimes.com/2025/01/18/world/middleeast/israel-gaza-ceasefire.html
https://www.wsj.com/world/middle-east/shattered-homes-uncertain-fates-israels-hostage-families-anxiously-await-reunion-865cc923
https://www.nytimes.com/2025/01/17/world/middleeast/gaza-returning-home-after-war.html
https://www.nytimes.com/live/2025/01/19/world/israel-hamas-gaza-ceasefire#heres-what-to-know-about-the-cease-fire
https://www.aljazeera.com/news/2025/1/18/israel-must-withdraw-from-lebanon-by-january-26-deadline-president-aoun?traffic_source=rss
https://apnews.com/article/israel-cia-fbi-telegram-eb0215277fc5f521f9ee2efa4da70adc
https://www.bbc.com/news/articles/cy5klgv5zv0o
https://en.wikipedia.org/wiki/Israel%E2%80%93Hamas_war
https://apnews.com/article/israel-palestinians-hamas-war-news-01-09-2025-ffae654d619e8e848e2ceda8576e8fe5
https://www.aljazeera.com/news/2025/1/18/iran-russia-analysis-syria-setback

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LA Wildfires
14 Jan· Let's Know Things
This week we talk about the Pacific Palisades, Hurricane Katrina, and reinsurance.
We also discuss developed property values, arsons, and the cost of disasters.
Recommended Book: The Data Detective by Tim Harford
Transcript
Natural disasters, whether we’re talking about storms or fires or earthquakes, or some combination of those and other often related issues, like flooding, can be incredibly expensive.
This has always been true, both in terms of lives and material damage caused, but also in terms of raw currency—the value of stuff that’s destroyed and thus has to be rebuilt, replaced, or in some rare cases partitioned off so that similar things don’t happen in the future, or because the space is just so irreparably demolished that it’s not cost effective to do anything with the land, moving forward.
The four most expensive natural disasters that we’ve been able to tally—so this doesn’t include historical disasters that are far enough back that we can’t really quantify the damage, due to an inability to directly compare, or insufficient data upon which to base such quantification—the top four that we can line up against other such disasters and compare the numbers for are all earthquakes.
The earthquake in Japan in 2011 that, in addition to causing a lot of damage unto itself, also caused the disaster at the Fukushima nuclear plant tops the list, with a cost at the time of around $360 billion, which would be nearly $490 billion in today’s dollars.
The second most expensive natural disaster is also an earthquake in Japan, this one hitting a region called Hanshin in 1995, causing about $200 billion worth of damage in mid-90s money, which would be about $400 billion, today, and the third was an earthquake not too long ago, the 2023 quake that struck along Turkey and Syria’s border, causing something like $160 billion in damage.
The fourth costliest natural disaster hit China in 2008, causing around $130 billion in damage, which is about $184 billion in today’s money.
These disasters also caused a lot of casualties and deaths; about 20,000 people died in that most-costly, nuclear-incident-triggering quake, while nearly 88,000 were killed in that fourth-most-costly, Chinese one.
The Great Hanshin quake, in comparison, lead to somewhere around 6,000 deaths: which is still just a staggering human loss, but it’s an order of magnitude less than in those other comparable disasters; which hints at the trend we see with these sorts of events—the scale of wounded and killed doesn’t necessarily correlate with the scale of costs associated with damaged and destroyed infrastructure and other assets.
The costliest natural disaster in US history, as of the first week of 2025, at least, was Hurricane Katrina back in 2005, which all but destroyed the city of New Orleans and much of the surrounding area, causing around $125 billion in damage, which is equivalent to about $195 billion, today, but it only led to around 1,400 deaths: again, all of those deaths absolute tragedies, and any disaster that causes that many deaths is an historical event. But looking at the raw numbers, that’s a shockingly low figure compared to the sum of the monetary damages tallied; it’s actually remarkable as few people died as they did, looking at this storm and it’s impacts through that lens.
What I’d like to talk about today is another natural disaster, this one ongoing as I record this, that looks primed to take the record of most-costly, in terms of money, US natural disaster from Katrina, and some of the implications of this disaster.
—
Part of why disasters in the US, natural or otherwise, tend to result in fewer fatalities than those that occur elsewhere is that the US is a very wealthy country with relatively high-quality and widely dispersed infrastructure.
There are quibbles to be voiced about that claim, as many recent reports indicate that said infrastructure isn’t terribly well maintained, and that the country’s healthcare setup and relatively low pay and support for the sorts of people who save lives and rescue victims in the midst of such disasters raise questions about how long this will continue to be the case; some of these high-quality systems are somewhat fragile, in other words, and won’t always perform at the level they arguably should.
That said, in general, when need be, US government institutions—federal and regional—are capable of throwing money at issues until they mostly go away, and they have a lot of decent resources to leverage when need-be, as well. Americans in general also have reasonable amounts of resources to call upon, on average at least, when they need to flee town and stay elsewhere for a while until a storm subsides, for instance.
This is all on average, and we tend to see the gaps in that generality when disasters hit, and Katrina is a perfect example of this disaster illuminated dichotomy, as a lot of the country’s least well off people, who have arguably been let down by the system and their government in various ways, were unable to do what everyone else was capable of doing, and were thus stuck in ramshackle and dangerous accommodations, and in some cases weren’t rescued because of the nature of the infrastructure that was meant to help protect them, but which was ultimately incapable of doing so. Other people were shuttled by those entities to other parts of the country while the disaster was being handled, and some were never brought back—it was all a pretty big scandal.
Looking at the averages, though, the US tends to experience disasters that are more expensive in terms of money than lives because there’s more costly infrastructure in place, more valuable assets owned by pretty much everyone, compared to many other nations around the world, at least, and folks are generally capable of getting out of the way of stuff that might kill them—at least when we’re talking about things like storms and fires.
Case in point is the ongoing, as of the day I’m recording this, jumble of wildfires that are menacing, and in some cases demolishing, parts of the Greater Los Angeles area in Southern California.
As of the day I’m recording this, a day before this episode goes live, there are two primary fires still spreading, designated as the Eaton and Palisades fires, those names based on the regions in which they started to flare out of control, and several smaller ones called the Kenneth, Hurst, and Lidia fires.
The Palisades fire is currently the largest, having burned about 24,000 acres, followed by the Eaton, which has consumed around 14,000 acres. The Kenneth, Hurst, and Lidia fires have burned around 1,000, 800, and 400 acres, respectively.
That’s…not huge. Tens of thousands of acres is a decent sized plot of land, definitely, but for comparison, the Smokehouse Creek Fire that burned through parts of Texas and Oklahoma in 2024, and which became the largest wildfire in Texas history, consumed more than 1,100,000 acres.
The Park Fire, which plagued Northern California in mid-2024, is the state’s largest-ever arson-caused fire, and it consumed nearly half a million acres.
So a total of just of 40,000 acres or so for this new collection of fires is piddly, within that context.
The difference here is that both of those other fires consumed mostly, though not entirely, undeveloped land. And such land, while not value-less, is not the same kind of asset, in terms of dollars and cents, as heavily developed, with homes and businesses and electrical cables and roads and other such infrastructure, land tends to be.
These new, Southern California fires are smaller than those other, big-name wildfires, then, but they’re also consuming some of the most expensive real estate, and the properties and other assets build atop that real estate, in the world.
As of right now, the Kenneth and Lidia fires are completely contained, and the Hurst is getting there. The Eaton and Palisades fires, the two largest of the group, are still mostly uncontained, however, due in part to wild and dangerous winds that are making containment efforts difficult, in some cases preventing aerial efforts, and in others making conditions extra risky for people on the ground, due to the dynamic and quick-moving nature of things.
Given all of this, and again, given that these fires are burning homes worth tens of millions of dollars, located on coastal land that’s in some case worth around the same, it’s perhaps no surprise that analysts are already projecting that these fires could cause something like $50 to $150 billion in economic losses; and for comparison, the aforementioned Camp Fire in Northern California, which also consumed some fairly expensive homes and real estate, in addition to the undeveloped park land it consumed, only tallied about $30 billion in damage, all told, while the fires that hit Hawaii in 2023 added up to just $5.7 billion.
Of that $50-150 billion total, it’s estimated that around $20 billion will be covered by insurance, which represents a staggering loss for those without any, or without the proper insurance, but also potentially represents a huge loss for residents of California, as the state has an insurance of last resort scheme called the FAIR Plan, which is a privately run, but state-created entity that serves those who can’t find insurance via conventional, private insurers. And often, though not always this means those customers are in areas that are too expensive or too risky for traditional insurance companies to operate in.
In practice, that usually means insurers of last resort have a portfolio full of risky bets, and the plans they offer are more expensive than usual, and tend to provide less coverage and benefits than the conventional stuff.
In these sorts of situations, though, we have a whole lot of risky bets than have suddenly come up snake eyes, this FAIR Plan suddenly having to pay out billions of dollars to their customers in these risky areas. And between 2023 and 2024, the number of homes in the very expensive Pacific Palisades area, which is high-risk for wildfires, nearly doubled to around $6 billion of covered assets in that zip code, alone. It’s been estimated that the plan could have something like $24 billion in total losses from this cluster of ongoing fires.
The FAIR Plan isn’t government-funded: instead, if it runs out of money because of high levels of payouts, private insurance companies foot the bill, which will place further strain on those insurance companies, which are already expected to be staggered by losses across the region, but also then raises insurance prices for everyone in that area, moving forward, which could further inflate expenses for the state’s tens of millions of residents, while also possibly incentivizing businesses to move elsewhere, which would reduce taxflows to state coffers, and over time cause even more financial problems.
Reinsurance claims could muddle some of this math—reinsurance being basically insurance plans for insurance companies, bought from other, specialized insurance companies—as sufficient reinsurance coverage could help the FAIR Plan, and other insurers operating in these areas, weather the storm without being forced to raise prices excessively. But those companies, too, might then raise their reinsurance rates substantially, and those increases would then ripple across this same economic landscape.
Lots of potential long-term financial damage, either way, on top of the assets lost and damage caused directly, and of course, the human losses, which as of the day I’m recording this, totals 24 people confirmed killed, dozens of people missing, and a still unquantified number of injuries and lives completely, perhaps permanently disrupted or upended.
This whole situation—these fires—are complicated by many factors.
The climate is one, as 2024 was the hottest year on record, the first one we’ve experienced, as a species, above that now-famous 1.5 degrees celsius-beyond-pre-industrial-levels milestone. That figure will fluctuate day to day and even year to year due to all sorts of variables, but the big picture here is that the global water cycle has changed because global average temperatures have been nudged upward, and that’s causing a lot of upsets to local infrastructure and ecosystems that have always, since we’ve been here, at least, relied on that cycle functioning in a certain way, within a certain spectrum of operation.
Now that we’ve defied that spectrum, we’re finding ourselves with more extreme disasters of all kinds, but also more extreme and dangerous and damaging and deadly repercussions from those disasters, because the things we did to ameliorate them previously no longer work the same way, either.
So California, especially this part of California, has been even drier than usual, and the way the state used to prevent the spread of wildfires no longer works the way it used to work; a climactic issue compounded by issues with the systems we’ve clung to, despite the problems they’re meant to address having evolved substantially since they were originally developed and deployed.
This situation is also complicated by the fact that southern California, and especially the LA area, is a hotbed for global entertainment, and that means a lot of wealth concentration.
Lots of people scrambling to buy and build homes with beautiful coastal views, and the fact that these areas are high-risk for wildfires and increasingly other disasters, as well, doesn’t really matter, because rich people want to be in this area, around all this activity and wealth, and it’s generally understood that wealth can make you immune to these sorts of things, at least most of the time.
That immunity is no longer such a given, and that high concentration of expensive assets means that even a relatively small fire can cause a heck of a lot of damage in a relatively short time.
The same general collection of properties also means this region has a lot of landmarks that are at high-risk of destruction, and which are increasingly expensive to maintain and protect and repair, and it means the world is watching, to a certain degree—as celebrities flee their homes and influencers report the beat-by-beat of their evacuations—which in turn means there’s plenty of incentive to spread misinformation, either out of a desire to participate in the situation, or because of honest ignorance, or for political and ideological reasons: wanting to paint the local governance as incompetent, for instance.
At the moment, folks in the area are suffering from periodic power outages, largely due to local utilities shutting down some of their service areas in order to avoid starting new fires, their power cables and high winds sometimes sparking such things even in less pressure-cooker-like moments. And the air quality is absolutely abysmal, leading to localized health issues.
Some areas have run out of water, apparently due to issues with reservoir infrastructure, and one of the two firefighting planes the local authorities have been using to douse the fires when the wind conditions allow has been grounded for repairs, after colliding with an illegally flown drone, the operator of which was apparently a paparazzi trying to capture photos of celebrity homes, either being consumed by fire or somehow avoiding such a fate.
Again, this is a fast-moving story, and a lot is changing day by day, but at the moment it’s looking like this could become the most expensive natural disaster in US history, and while local authorities are making progress in halting these fires’ spread, the damage that’s been done has already been substantial, and could have a lot of knock-on effects, for individuals and for the state’s and country’s economy, for years to come.
Show Notes
https://en.wikipedia.org/wiki/Park_Fire
https://en.wikipedia.org/wiki/Smokehouse_Creek_Fire
https://www.washingtonpost.com/business/2025/01/09/los-angeles-wildfire-economic-losses/
https://en.wikipedia.org/wiki/California_FAIR_Plan
https://www.nytimes.com/2025/01/08/climate/california-homeowners-insurance-fires.html
https://www.sfchronicle.com/california-wildfires/article/fair-plan-insurance-losses-20025263.php
https://www.nytimes.com/interactive/2025/01/08/weather/los-angeles-fire-maps-california.html
https://www.wsj.com/finance/wildfire-insurance-homeowners-costs-3889531f
https://www.newyorker.com/news/the-lede/the-insurance-crisis-that-will-follow-the-california-fires
https://archive.ph/Inso5
https://www.npr.org/2025/01/09/nx-s1-5252837/will-there-be-enough-money-to-pay-out-insurance-claims-from-the-la-wildfires
https://www.washingtonpost.com/climate-environment/2025/01/09/california-wildfire-palisades-homeowners-insurance/
https://arstechnica.com/health/2025/01/public-health-emergency-declared-amid-las-devastating-wildfires/
https://apnews.com/article/los-angeles-wildfires-southern-california-c5826e0ab8db965cb2814132ff54ee6f
https://apnews.com/video/fires-wildfires-los-angeles-los-angeles-area-wildfires-california-574351467d2142ad958c212a0413ad96
https://www.reuters.com/world/us/san-fernando-valley-under-threat-los-angeles-fire-rages-2025-01-12/
https://www.wsj.com/us-news/los-angeles-wildfires-social-media-rumors-44d224b4
https://www.wsj.com/style/los-angeles-hollywood-fires-celebrities-homes-paris-hilton-d1e3a7de
https://www.vulture.com/article/hollywood-paparazzi-los-angeles-fire.html
https://www.theguardian.com/us-news/live/2025/jan/12/california-fires-death-toll-expected-rise-ucla-threatened-winds-latest-updates
https://www.reuters.com/business/environment/2024-was-first-year-above-15c-global-warming-scientists-say-2025-01-10/
https://www.nytimes.com/2025/01/09/us/los-angeles-fire-water-hydrant-failure.html?unlocked_article_code=1.oE4.OUQs.lcdCoSSeQBtL
https://www.axios.com/2025/01/11/los-angeles-fire-insurance-losses-billions
https://www.latimes.com/california/story/2025-01-08/palisades-fire-devastation-scope
https://www.washingtonpost.com/weather/2025/01/11/los-angeles-fires-california-updates-palisades-eaton-kenneth/
https://www.latimes.com/california/story/2025-01-09/drone-collides-with-firefighting-aircraft-over-palisades-fire-faa-says
https://www.nytimes.com/2025/01/11/us/los-angeles-calfire-firefighters.html
https://www.axios.com/2025/01/12/la-fires-climate-change-drought-extreme-weather
https://www.axios.com/2025/01/12/california-wildfires-loss-mental-health
https://www.nytimes.com/live/2025/01/12/us/los-angeles-fires-california
https://www.nytimes.com/2025/01/12/us/trump-los-angeles-fire-newsom-bass.html
https://en.wikipedia.org/wiki/Hurricane_Katrina
https://en.wikipedia.org/wiki/2008_Sichuan_earthquake
https://en.wikipedia.org/wiki/2023_Turkey%E2%80%93Syria_earthquakes
https://en.wikipedia.org/wiki/Great_Hanshin_earthquake
https://en.wikipedia.org/wiki/2011_T%C5%8Dhoku_earthquake_and_tsunami
https://en.wikipedia.org/wiki/List_of_disasters_by_cost

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