Politics

Financial Costs of an AI Pause?

Posted by Peter on May 31, 2026
Posted in: Artificial Intelligence, Investing, U.S. Politics. Tagged: . 5 comments

I’ve analyzed the near-term economic effects of an AI pause, out of concern for my investments, and a desire to predict how strong political opposition to a pause is likely to be.

My median estimates: The S&P 500 will drop 27.8%. AI subsectors will drop 34-69%. Interest rates will rise at a much slower rate than would be the case without a pause.

The specific numbers depend on some fairly arbitrary assumptions. So please read this post in order to get a feel for how the results depend on the assumptions. I’ve tried to keep the assumptions reasonable, but some of them will prove to be wrong. My most controversial assumptions reflect an expectation that both markets and voters will be surprised at how powerful AI is, mainly in 2027.

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War Claude

Posted by Peter on March 2, 2026
Posted in: Artificial Intelligence, U.S. Politics. Tagged: . Leave a Comment

What a weekend. Two new wars in Asia don’t qualify as top news.

My first reaction to Hegseth’s conflict with Anthropic was along the lines of: I expected an attempt at quasi-nationalization of AI, but not this soon. And I expected it to look like it was managed by national security professionals. Hegseth doesn’t look like he’s trying to avoid the role of cartoon villain.

On closer inspection, it doesn’t look very much like nationalization. A significant part of what’s going on is bribery. OpenAI’s president donated $25 million to a Trump PAC. Dario supported Harris in 2024, and hasn’t shown signs of shifting his support. The speed with which the Department of War started negotiating with OpenAI suggests that rewarding OpenAI was one of their motivations. If Hegseth wanted to avoid the appearance of corruption, he’d have waited a bit, and pretended to shop around. But bribery seems to be currently legal, and advertising the benefits is likely to be good for business.

On the other hand, his attempts to look like he’s punishing Anthropic look sufficiently clumsy that I’m confused as to whether he wants them to be effective. He advertised Anthropic as both having the best AI and as having the most integrity. I’m pretty sure that’s good for Anthropic’s business.

The breadth of Hegseth’s proposed supply chain risk order is well in excess of what he can plausibly enforce. Polymarket predicts almost no net harm to Anthropic. I’m confused as to what Hegseth expects, and what will happen when his expectations bump up against reality.

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Defending the Rule of Law

Posted by Peter on January 26, 2026
Posted in: U.S. Politics. Leave a Comment

My response to the recent ICE killings has been to donate $7000 to the campaign of Senator Bill Cassidy.

Cassidy is a Republican who has called for a “full joint federal and state investigation” into the latest shooting. He also voted to convict Trump in the second impeachment trial. He faces strong opposition from a Trump-endorsed opponent in the primary.

The rule of law depends rather heavily on some Republicans standing up against Trump. Supporting Cassidy seems like the clearest way to encourage that.

Safety Net When AIs Take Our Jobs

Posted by Peter on December 31, 2025
Posted in: Artificial Intelligence, Economics, Investing, U.S. Politics. Tagged: , , . Leave a Comment

I’m analyzing what happens to the US economy in the short-term aftermath of the typical job being replaced by AIs and robots. Will there be a financial crisis? Short answer: yes.

This is partly inspired by my dissatisfaction with Tomas Pueyo’s analysis in If I Were King, How Would I Prepare for AI?.

Let’s say 50% of workers lose their jobs at the same time (around 2030), and they’re expected to be permanently unemployed. (I know this isn’t fully realistic. I’m starting with simple models and will add more realism later.)

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Beating China to ASI

Posted by Peter on December 3, 2025
Posted in: Artificial Intelligence, China. Tagged: , . Leave a Comment

Who benefits if the US develops artificial superintelligence (ASI) faster than China?

One possible answer is that AI kills us all regardless of which country develops it first. People who base their policy on that concern already agree with the conclusions of this post, so I won’t focus on that concern here.

This post aims to convince other people, especially people who focus on democracy versus authoritarianism, to be less concerned about which country develops ASI first. I will assume that AIs will be fully aligned with at least one human, and that the effects of AI will be roughly as important as the industrial revolution, or a bit more important.

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Red Heart

Posted by Peter on November 3, 2025
Posted in: Artificial Intelligence, Book Reviews, China. 1 comment

Book review: Red Heart, by Max Harms.

Red Heart resembles in important ways some of the early James Bond movies, but it’s more intellectually sophisticated than that.

It’s both more interesting and more realistic than Crystal Society (the only prior book of Harms’ that I’ve read). It pays careful attention to issues involving AI that are likely to affect the world soon, but mostly prioritizes a good story over serious analysis.

I was expecting to think of Red Heart as science fiction. It turned out to be borderline between science fiction and historical fiction. It’s set in an alternate timeline, but with only small changes from what the world looks like in 2025. The publicly available AIs are probably almost the same as what we’re using today. So it’s hard to tell whether there’s anything meaningfully fictional about this world.

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The Death of Cancer

Posted by Peter on August 1, 2025
Posted in: Book Reviews, Health, U.S. Politics. Tagged: . Leave a Comment

Book review: The Death of Cancer: After Fifty Years on the Front Lines of Medicine, a Pioneering Oncologist Reveals Why the War on Cancer Is Winnable–and How We Can Get There, by Vincent T. DeVita, and Elizabeth DeVita-Raeburn.

In my last review of a medical book, I was disappointed about the lack of explanation as to why medical advances get deployed much too slowly, particularly cancer treatments.

By some strange coincidence, the next medical book I read, published a decade earlier, provides some valuable insights into those problems.

This is a memoir of both luck and skill. DeVita is uniquely qualified to describe the origins of the war on cancer, due to a career that included diagnosing patients, running clinical trials, and serving as director of the National Cancer Institute.

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An Optimistic Scenario for Taiwan

Posted by Peter on July 16, 2025
Posted in: China. Tagged: . 1 comment

Mainland China seems committed to reasserting control over Taiwan within a few years, regardless of how much force is needed. Here’s my attempt at planning a non-disastrous scenario.

I have less expertise here than in my average blog post, so I encourage readers to question my guesses.

Blockade

In April of 2028, China launches a blockade of Taiwan. It surrounds the island with their navy, threatening to seize or sink any ship leaving Taiwan that doesn’t submit to Chinese inspections.

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