Greg Ip

You look at the stock market, right?

Almost all that run up towards records in the last few weeks is led by the so-called Magnificent Seven or the other semiconductor stocks that are sharing in this AI glow.

So the aggregate numbers are being held up by this AI boom or bubble, if you want to call it.

But everything else underneath the surface looks kind of like

flat-ish.

And so, yeah, that leads me to this probably somewhat unpopular or out of consensus view that if the AI boom went bust, which I am not predicting, it wouldn't be that terrible.

I mean, the economy would still be growing.

And honestly, all that wealth that's been created by AI, it mostly went to a small number of people.

The average person cares much more about their wages than their wealth, and their wages would probably not be affected.

Yeah, yeah.

So I'm pretty optimistic, I think, about the rest of the year, especially given that we seem to have the job creation machine kicking in again.

Now, I'd say the big asterisk in that picture, though, is the situation in Iran and with oil.

And ever since this war began back at the end of February, the assumption about by economists and most experts is that it would be brief and then oil would fall back from 100 a barrel to like 80, 70 or 60.

And that's not happened.

People have gotten more negative about that.

And so that's what makes me a little bit nervous is that the longer we go without a real resolution to this problem, the bigger the burden on consumers and the harder it will be for the economy to grow at a decent rate.

Any type of layoff announcement is typically seen by markets as being a sign of weaker demand.

But when you announce layoffs because of your greater efficiency, that is seen actually as a good sign.

Artificial intelligence is very good at writing code.

So there is certainly some replacement happening.