Derek Thompson

It's such an interesting interpretation because the story that we tell is that trade with China took our jobs.

The China shock, as economists like David Autour call it, moved manufacturing to China, and that is what's hollowed out the Rust Belt.

You're saying, yes, trade with China might have been a factor at the margins, but also the telecom build-out took capital once allocated to manufacturing and moved it to tech.

And what's so interesting about that is if you fast forward to the 2020s, Trump is trying to reverse the China shock with the high tariffs, but we're recreating the capital shock with AI serving as the new telecom.

So rather than reverse the conditions that led to the decline of manufacturing, the Trump administration is ironically recreating those conditions in a way that's hurting manufacturing even more with all of this money moving toward AI and away from traditional manufacturing.

It's such an interesting idea.

What about the energy piece of this?

So electricity prices are already rising.

This revolution in a way is just getting started.

And these data centers are incredibly energy thirsty.

How much do you think is this is going to result in energy inflation that becomes a

an economic consumer and even political problem that these data centers are essentially seen as a lever on electricity inflation such that you've got, you know, your average Joe saying, why is my economy essentially a temple to AI?

And all it does is make it harder for me to keep my child's room 69 degrees while she's sleeping.

Like how is that going to play out?

So what's the reasonable prediction here?

If consumers are going to, I think,

start to be much more explicitly nimby about the construction of local data centers.

If they see these data centers as essentially, not just, you can either say it, stealing energy or basically a very clear lever on raising energy prices.

The data centers have enormous political power of their own, enormous economic power of their own.

These are large, rich companies that can spend a lot, pay a lot maybe for that energy.