Derek Thompson

I'm also looking at the fact that like,

You know, construction jobs are declining.

Mining jobs are declining.

Manufacturing jobs are declining in America, despite the fact that the tariffs are nominally about reindustrialization.

It almost feels to me, Paul, like AI is like this star that is pulling in all of these resources gravitationally from throughout the economy.

In your own words, and hopefully I got you started along the right track, how do you see AI spending warping the 2025 economy?

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?