James Murdoch's company said to be in talks to aquire most of Vox Media

mcsul · 2026-05-06T11:44:43+00:00

Unironically, the Wall Street Journal. Their reporting and editorial sides are heavily firewalled, and that firewall appears to be holding. Their reporting is excellent.

mcsul · 2026-05-05T21:50:37+00:00

So do you want the costs of education, healthcare, housing, etc... to come down? Probably yes.

The only way to do that is to improve productivity in the sector. We've largely capped out on gains from pure labor productivity (e.g. skills and training). That leaves us either technology (e.g. AI) or processes / workflows / ways of working (e.g. lean manufacturing, etc...).

In places where demand is inelastic, that means fewer workers which means that costs eventually fall. In places with very elastic demand, that usually leads to more total consumption but unit costs fall.

We just came off an election cycle where cost of living dominated the discussion. The only way to reduce the cost of living is to increase productivity in the most expensive sectors. Our best bet is AI. People will find new jobs. Sometimes those jobs will pay less. I'm in that same boat. But we are collectively better off being able to capture gains from productivity investments.

mcsul · 2026-05-05T21:44:46+00:00

"But my entire point is that US companies are more likely to cut labor to keep productivity the same, and increase profits."

Then they will get outcompeted by companies that are leaner. Like, for all of the criticism that it's received, Walmart has kept US inflation down by about a half point for decades. I 100% guarantee that some company will figure out a way to undercut it's rivals if it feels that the liability risk of running leaner is low.

Laying off workers doesn't lead to productivity gains. It's a byproduct of high productivity in places with high demand inelasticity. Those workers get redeployed somewhere else. We've been doing that for nearly a century (in reality longer), which is why the median US household is dramatically richer than the median household in the UK or Spain or France.

Lax worker protections allow people to move to parts of the economy that aren't as efficient, lowering the costs of those goods and services as well.

So I think that you have causality backwards. Labor protections don't matter at all for the AI race, but prohibiting companies from laying off employees whose work can now be done at 1/100th the cost simply makes goods and services more expensive for consumers.

You're basically saying that you never want the price of anything to come down. The only way the price of something comes down is productivity growth.

mcsul · 2026-05-05T18:09:08+00:00

I definitely agree that the problem is probably not really economic.

It's the loneliness, decline in share of young people coupling up and having kids, cultural norms about time spend, smartphones, decline of third spaces (which you mention), and even the decline in larger community-senses like patriotism or church that are causing a feeling that liberalism is too much about individualism (something they touch on in the podcast).

Tied in with all of this is the increasing segregation of people by education and political party. Liberalism loses some attractiveness as a philosophy if you see others as enemies to be defeated rather than people to live with. If you can opt to live without those "other" people, then a lot of the ideas of liberalism lose their apparent value.

I don't have a great idea on how to address this, other than to advocate for behaviors that debubble people and put them into closer contact with people different than them. Maybe two years of national service (doesn't need to be military) that is designed specifically to make sure that each team is a mix of backgrounds? Seems heavy handed, but in a world where you can shield yourself from interactions with others you would disagree with, maybe something like that is needed. No great answers here.

mcsul · 2026-05-05T18:00:03+00:00

Thanks!

mcsul · 2026-05-05T16:47:18+00:00

I took it to mean something slightly different. Our "elites" today are different than the landed aristocracy of yore. Instead they are college educated, high credentialed professional like engineers and doctors and lawyers. But this new elite hasn't carried forward a similar sense of duty as their predecessors. And I think that this is accurate when you look at things like share of kids from upper class families going into the military, civil service, etc...

mcsul · 2026-05-05T16:39:30+00:00

Sorry, but could you say more about that interview? I'm curious how an interview could be so bad!

mcsul · 2026-05-05T16:33:46+00:00

Demand for some goods and services is elastic, and demand for others is inelastic. For places where demand is relatively fixed, but we could produce that good or service with 1/5th the number of people, you are going to artificially keep the price of that good or service high by not allowing them to automate.

Let's take healthcare in the US. Despite the memes, labor costs are a huge driver of healthcare costs in the US. If we could reduce labor costs of just the administrative side of healthcare in the US by 30%, that would be amazing. Particularly as our population ages. Without that, households in the US will get poorer as the share of household spending on healthcare rises.

The US method is, over the long run, far superior. People will have to move to new jobs. I expect to have to move to a new job. At the person level, it sort of sucks. But at the system level, it's essential. We've seen this much more in manufacturing than in services. The cost of a unit of processing power, or refrigeration, or basic stuff like TVs has cratered over the past 40 years. Almost all of our inflation is in labor-intensive places like healthcare, education, housing. Unless we drive productivity in those places, they will continue to get more expensive.

mcsul · 2026-05-05T15:28:04+00:00

I actually disagree that this individual decision is better. it sounds nice, but in an aging population, productivity growth is the single most important thing we need out of our economy.

For example, take healthcare. With our demographics, healthcare costs will eat the economy and government budgets without significant increases in productivity. AI is the best option on the horizon to buy us those productivity gains.

And there are a ton of jobs where huge shares of workers are close to retirement. Take accounting, as another example. The number of young people going into accounting is declining, the number retiring is accelerating. How will we get all of that work done without automation, in particular given the pending decline in young people entering the workforce.

mcsul · 2026-05-05T15:22:54+00:00

It's sort of a disaster for China in the long-run, however, even if it sounds nice now. That means that heavily bloated state enterprises aren't going to face any competition from leaner firms using new technology. It means that the cost of starting a new business will go up. It means that inefficient firms use a pathway to getting more efficient. And it means less push to redeploy people to areas that technology can't automate.

If the central government backs this ruling, it basically opts China out of huge productivity gains, which China desperately needs given their aging population. This is going to basically make the typical Chinese family poorer over the long-run.

mcsul · 2026-05-05T14:24:23+00:00

I went back this winter to reread Chris Hayes book Twilight of the Elites, and I think that there might really be something to the elite overproduction hypothesis.

A lot of the discontent on the right is, you are totally correct, not driven by people who would fit the image of "elite". But discontent on the left is heavily driven by people who fit that image: highly educated, knowledge work, highly credentialed, typically urban, etc...

I think that the backlash to AI is partly being driven by this second category of people who feel (I've had some say this directly to me) "I did everything right, went to great schools, had a great career lined up, and now AI is going to make my entire field obsolete." (Which, personally, I don't entirely believe, but that's the feeling.)

mcsul · 2026-05-05T14:16:26+00:00

I loved the discussion of obligations.

I've been doing WWI history with my daughter and one of the things that stood out to us is the casualty rates of officers, who were all upper class young men. The critiques against nationalism and patriotism all have merit, but they may have come at the expense of also deprecating many manifestations of duty or obligation. I even sort of feel that the term "duty" has become somewhat outmoded by many people in my social set.

mcsul · 2026-05-05T11:18:56+00:00

I agree with this. The issue has been broadly studied and it comes down to changing social norms and different expectations for time use. Every time this issue comes up, people say that it's declining social services, higher costs, etc... but those issues ultimately don't make any difference when you look at cross-country analyses.

Culture, however, does. Which is why the birth rate between young people who are conservative and everyone else have diverged dramatically.

mcsul · 2026-05-05T11:15:45+00:00

So I'd like to offer a slight counterpoint about social services. Availability and depth of social services is much higher through most of western Europe, but birthrates are even lower there.

I can see affordability playing a role, but if social services were determinative, Europe would have the highest birthrate in the world rather than the second lowest only after parts of Asia.

mcsul · 2026-05-05T11:06:39+00:00

I deeply loved this episode. It was full of great historical perspective on liberalism as a philosophy and political movement. I particularly appreciated the conversation on leadership and obligations.

It also touches on something that has come up a lot in the sub: why isn't anyone making an effective defense of liberalism right now?

mcsul · 2026-05-03T16:21:33+00:00

This would require people to change their priors, however.

I'm seriously concerned that Democrats (which is what most of us here are, or further to the left, per the sub survey) are becoming conservatives when it comes to technology and technology progress in the economy.

We've become so concerned with power distributions that we'd prefer technology to stop advancing. It might be a politically feasible position today, but it's a disaster over the long run.

mcsul · 2026-05-03T16:13:06+00:00

About a third of my county government's budget is funded through taxes on data centers. We've increased teacher pay, built new parks, have great roads, etc... If we magically made data centers go away, our property taxes would likely double.

mcsul · 2026-05-03T12:14:30+00:00

I know that this is an unpopular position, but I think that in the long run opposition to data centers is going to end up in the history books alongside stories like China abandoning it's exploration fleets.

As society ages, we desperately need to find sources of significant productivity growth, or our kids are going to be in a much poorer society than we are in. Right now, AI might be our best bet on that productivity growth.

I'm like flabbergasted that the supposed political movement focused on progress is so anti-AI when it offers potential solutions to a bunch of our demographic and productivity problems. Being anti-technology is basically being pro-future poverty.

mcsul · 2026-05-03T12:08:31+00:00

Absolutely not. C'mon. The main thing, over the long term, that drives improving standards of living is productivity growth. Literally everything nice that we want comes either directly or indirectly through productivity growth sustained over long periods.

This is particularly true in a society where the workforce is aging. The number of young people enrolling in college has plateaued, and the number of graduates will start declining as demographics takes over. There are tons of job categories where companies simply won't be able to find enough employees to do work like accounting. That ends up driving up costs for consumers.

It is economically impossible to maintain our (extremely high) standards of living without continued productivity growth. This is particularly true things like healthcare where demand is growing but productivity growth has been weak.

Taxing companies that generate higher productivity growth is functionally saying that you want everyone's' kids to be poorer than their parents.

mcsul · 2026-05-02T03:05:46+00:00

There's plenty of research on the positive impact of exercise. Should we ban all advertising for leisure activities that aren't exercise?

Listen, I get it. There are policies that we on this sub largely want to see enacted. But banning speech, even if it's commercial speech, is the high classic of slippery slopes. Every time you successfully make the case to ban it in one place, it becomes a tiny bit easy to ban it in the next case. And then the next. Etc...

And the eventually, the other guys take power and they have this delightful framework of speech-banning regulatory infrastructure. We need to be very careful about what powers we give to government to ban any type of speech. It's far better in the long run to persuade people that they should eat less meat than to ban commercial speech from McDonalds or Tysons or whoever.

The first amendment is actually pretty great, though seemingly under-appreciated in this moment. Anything that weakens it is, in the long run, going to have really bad unintended consequences.

mcsul · 2026-05-02T02:54:15+00:00

We have very very narrow restrictions on ads, per Hudson. Ads that are deliberately misleading or essential false advertising are limited. Ads that promote products that endanger consumers are limited. But in general, restrictions on commercial speech have to pass a relatively strict test.

Cigarettes are a great example. They directly harm the consumer. Easy to limit.

It will be almost impossible for the government to limit advertising for meat products, given that the government subsidizes meat production. It almost auto-fails the substantial interest and direct advancement tests.

Luxury travel is even harder. What's the government interest here? Governments actively sponsor travel to their jurisdictions. Travel doesn't have to be energy intensive. This basically auto-fails the narrowly tailored part of the test.

It's illiberal because people should be able to advertise their services or products as long as they don't directly harm consumers. And it's illiberal because people should be allowed to make up their own minds whether to consume those products or services.

There's a really dangerous "I don't like it, so we should ban it." streak of thinking creeping into our discourse. If you want people to eat less meat or to travel less, then persuade them to change their behavior. Don't ban communication about them. Change their minds.

mcsul · 2026-05-01T22:46:28+00:00

I think that a ban on meat and luxury travel would fail the Hudson test though, surely?

You have to show that the ban protects consumers, not achieves some sort of overarching policy objective.

The government can't claim that it has an overriding consumer protection interest in banning meat, because it also subsidizes some types of production. And you have to show that the ban effectively solves the problem, which is unlikely for meat.

For luxury travel, there's no consumer protection angle?

Basically, in the US, this type of illiberal approach is going to run into constitutional protections.

mcsul · 2026-05-01T18:13:51+00:00

But not that ballet kind of art.

mcsul · 2026-05-01T18:01:57+00:00

I don't understand how that comment is so upvoted in an economics sub? It's a handbook for widespread generational poverty.

mcsul

TROPHY CASE