#34
There’s a lively debate among AI researchers and economists as to whether AI progress can push GDP growth into double-digit territory. Many researchers think >10% annual growth is within reach; many economists remain skeptical. But one point both camps tent to miss is that we can still get much richer even if headline growth stays roughly where it is today.
When AI drives down the price of the goods and services we buy, our real purchasing power jumps, even though those cheaper items will account for a smaller slice of measured GDP.
This should make you all very optimistic about the future.If AI makes much of everyday life cheaper, where do the freed-up dollars go, and how do we invest ahead of that shift? My first answer, unsurprisingly, is “into great real estate.” Thanks to NIMBY-enforced scarcity, a meaningful share of those extra dollars will chase better homes in better locations.
Bitcoin is another solid bet as its scarcity and durability stand in stark contrast to the churn we’re likely to see in the major public equity indices. If AI delivers on a fraction of its promise, we should expect it to eat business models and erode corporate moats. Bitcoin, however, is bitcoin.On a Ross Douthat podcast episode, Peter Thiel argued that we’re all obsessed with AI because it’s “the only game in town,” and further evidence as such of his Great Stagnation thesis. I think that underplays AI’s nature as a general-purpose technology.
AI isn’t a narrow cone of progress, walled off from the rest of the economy, the way consumer software arguably was over the past decade. It’s more like electricity, an enabling layer that’s about to permeate and accelerate almost everything else.
If it’s not obvious yet that the Great Stagnation is over, it will be very soon.My partners and I have launched a regular breakfast meeting for Toronto midrise developers. It’s a great opportunity for us all to swap notes, contacts, and war stories. Charlie Munger had it right: “It’s good to learn from your mistakes. It’s better to learn from other people’s mistakes.”
I stumbled upon a Twitter chart this morning that tracks public opinion on New York City’s new cordon-pricing zone, rolled out last summer. When the $15 toll was first floated, barely a third of voters thought it was a good idea. A year in, multiple polls now put support north of 40 percent and climbing, while opposition has slipped below parity.
What changed? The policy worked! Rush hour travel speeds are now up almost 10 percent.
It’s a good reminder that good policy delivers tangible benefits and that voters, eventually, reward it. Politicians shouldn’t let a few months of bad headlines scare them off reforms that pay long-term dividends. Design the policy well, stick to it, and let the results provide any needed vindication.
