Economics: Weekly Summary (September 22-28, 2025)

Economics blogs felt noisy this week, like walking through a crowded market right before closing time. Prices, jobs, interest rates, AI, zoning, even a box of Weetabix got rolled into the mix. I would describe them as many small lights pointing at one big question: who’s really steering the economy when everything is short — time, money, chips, houses, and patience?

Rate Cuts, Fed Politics, and That Nasty Word: “Credibility”

The week kicked off with the Fed’s rate cut still echoing, and a slow burn about whether the central bank is calling its own shots or getting nudged by politics. Better than Random dug straight into it, naming Stephen Miran as the new FOMC voice and worrying aloud about expanding the Fed’s mandate to target “moderate long-term rates.” To me, it feels like a warning label on a prescription: do not mix monetary policy with fiscal headaches. Terms like fiscal dominance show up — that’s the vibe when the bond market becomes the boss and the Fed becomes the intern who can’t say no. The line here is simple but sharp: if the Fed tries to juggle too many goals, voters might get more inflation than patience.

On the other side, Mike "Mish" Shedlock ran multiple passes at the Fed story. One post had Miran calling for cuts all the way into the mid‑2s to protect jobs, clashing with more cautious folks like Alberto Musalem, who keep looking at the inflation scoreboard and frowning. Another Mish piece compared where the Fed says rates will be versus where markets price them by 2026 — a kind of “are we there yet?” shouted from the back seat while the driver isn’t fully sure of the route. Then came the BEA number: second‑quarter real GDP revised up to 3.8%. Nice headline. But the price indices got revised up too. I’d say the takeaway is classic: growth is better than expected, prices also a bit hotter than expected, and yet the job market is looking wobbly. That’s not a clean macro story; that’s a diner menu where everything comes with a side of caveats.

One more angle on the rate cut drama was less D.C., more street‑level. Mike "Mish" Shedlock again flagged that government transfer payments are now 19% of total personal income. That’s Medicare, Medicaid, SNAP, Social Security — not a small slice. If you combine that with the calls to cut rates faster, you get a picture that’s a little odd: heavy fiscal scaffolding paired with cheaper money and still not enough housing or secure jobs. It’s like patching potholes while repaving the same lane, and somehow the drive still rattles.

Price Stories: Groceries, Homes, Planes, Pills

Pricing power came up everywhere, and it wasn’t just inflation charts; it was real receipts.

• A surprisingly sticky bit was James O’Malley looking at Weetabix. Yes, really. A Labour MP’s viral short about big supermarket prices versus corner‑shop prices got the author poking at what’s “moral” in grocery economics. Convenience stores often look expensive, but also carry different cost structures and demand spikes — late night milk runs, Sunday hangover snacks, all that. The subtext felt familiar: basic goods come with markups tied to geography and timing. Paying for convenience isn’t a scandal; it’s the business model. Still, when household budgets are tight, that box on the shelf starts to feel like a referendum on fairness.

• Housing was the serious version of the same vibe. Mike "Mish" Shedlock showed existing‑home sales basically stuck — down 0.2% in August, a near‑three‑year stagnation. Prices keep rising though, 26 months running. NAR says high mortgage rates and thin inventory are the culprits, and maybe lower rates will help. Maybe. But if buyers need both lower rates and more inventory, that’s like saying you’ll go to the beach when it’s both sunny and not crowded.

• Flight prices got their turn way north of the usual routes. Gary Leff broke down why a 239‑mile coach flight in the Canadian Arctic can cost CAD$3,793.99. Specialized planes, tough conditions, few seats, scarce fuel, plus the constant juggling between cargo and people. If you’ve ever paid surge pricing for a rideshare at 2 a.m., this is that, but with snow, logistics, and no Plan B. Points redemptions can soften the blow. The economics here are brutal and honest: there’s no cheap way to move metal and people across ice.

• The tariff story felt like the big boy version of the grocery aisle. Naked Capitalism threw down a sharp critique of new tariffs: 100% on imported patented drugs, plus levies on trucks and furnishings. The punchline isn’t subtle — these hit consumers. If you’re managing a medicine shortage, whacking imports with a baseball bat doesn’t make pills appear faster. It sounded like a bad pharmacy sitcom: the patient’s waiting room gets louder, the shelves stay patchy, and the register dings higher anyway.

• For a palate cleanser, Political Calculations asked: how much metal fits into $10,000? Gold fits into a cute 1.69‑centimeter cube; aluminum becomes a 1.12‑meter beast. It’s a fun little Prices 101 lesson you can hold in your hand, at least if you’re strong enough to hug a cube of aluminum the size of a small coffee table.

China Watch: Emissions, Involution, and Misread Policy

Two posts, different angles, same drumbeat: something in China’s economy feels heavy.

Political Calculations used CO₂ signals to argue that China’s slowdown is still on, pointing to a drop in atmospheric CO₂ accumulation since late 2024. Activists might credit renewables, but the author says don’t skip the tariff war and property crisis. That’s a gutsy proxy — economics through the smoke stack — but it lines up with the headlines: exports struggling, real estate stuck, local governments counting coins. If you want a simple image: the factory lights are on, just dimmer than usual.

Then Angelica Oung explained “involution,” which I’d describe as the economic version of running faster to stand in the same place. Extreme competition, thinner margins, the snake eating its tail. Price wars that don’t feel smart, but also don’t stop. To me, it feels like a stressed shopkeeper dropping prices because the other guy did, only to realize the neighborhood can’t support both. The post nudges at a bigger point: people outside China misread industrial policy by thinking output equals strength; sometimes output equals exhaustion. Worth a careful read if your mental model of China is still “cheap labor, endless growth.” That map is out of date.

There was also a sidebar about the broader tech‑power balance. Alex Wilhelm zoomed out to the U.S.–China tech chessboard — Nvidia’s big bets, TikTok wheeling, and the weird dance between billionaires, regulators, and national strategies. I’d say the moral is fuzzy but important: the future of compute isn’t just who has the best chips; it’s who controls the bottlenecks — fabs, GPUs, data centers — and who gets paid when the music stops.

Jobs, Layoffs, and the AI Capital Spending Puzzle

The week had a lot of nervous talk about work. Not just the number of jobs, but what jobs are even for.

Mike "Mish" Shedlock walked through tech layoffs centered on Seattle. The numbers sound numbing at this point — 2025 has seen hundreds of layoffs, totaling roughly 145,000 people. The sign of the times is what happens next: highly qualified folks applying for lower‑wage roles, hospitality and retail getting resumes from former engineers, and the city facing a $146 million revenue gap because restaurants and shops aren’t ringing up enough receipts. Add that to the perception that companies now use AI to replace “human light” tasks, and it feels like a slow weather front settling in.

Meanwhile, the AI build‑out looks massive and a little mysterious. Dave Friedman asked the awkward question: will all this AI capex actually pay back? Data centers, power deals, GPUs — the spend curve is steep and slippery. The post puts the flashlight on a historical pattern: the infrastructure usually wins, not necessarily the flashy top layer. In power grids, the regulated monopoly eats first. In telecom, the pipe owners did just fine. In AI, who’s the pipe? The chip makers, the power providers, maybe the fiber owners. I’d say this is the kind of argument you bookmark before a portfolio rebalance.

Right next to that sits Gojiberries on GPU pricing. Standard rental lists don’t tell sellers how much buyers really value the compute. Auctions — uniform price or pay‑as‑bid — might fix that, at least partly. But humans shade bids, markets are messy, and capacity is spiky. If you’ve ever tried to buy Taylor Swift tickets and felt like the website was laughing at you, that’s kind of the GPU market right now. Cloud providers are trying to stop leaving money on the table, and that story always ends with someone paying surge pricing.

Then Jakob Nielsen went “future of work” but with a concrete tone. Transformative AI could push productivity so high that routine knowledge work becomes cheap, and only “genius” work — the knotty, weird stuff — pays. The timeline is uncomfortably near: 2028 to 2033 for real change. UX people get a little homework: build systems that make human work feel meaningful even as machines do more of the easy tasks. There’s a term in there — “Cognitive Fugue” — which sounds artsy, but the idea is kitchen‑sink simple: when human labor loses its obvious price tag, how do you give it purpose? That’s not an HR memo; that’s an economic redesign problem.

Two weekend wrap posts stitched all of this together like a Sunday paper. Paul Kedrosky flagged a slump in the H100 index and that strange story about teen reading habits falling — which sounds unrelated until you realize attention is the real resource now. Otakar G. Hubschmann talked reproducibility problems in LLMs, corporate tension in AI teams, and how the college brand is slowly deflating under skills‑based hiring. It reads like a caution sign: the future arrives before the receipts, and the receipts don’t always match the sales pitch.

Housing, Zoning, and the Geography of Who Gets to Live Where

If you want one thread that cuts across wages, policy, and cities, Kevin Erdmann kept tugging at it. His pitch is blunt: the Northeastern population slide isn’t about the weather or vibes; it’s the housing shortage. Zoning laws choke supply, and high‑income families do the math and skip New York for Dallas or similar markets. People love to romanticize urban gravitas — museums, subways, bagels — but if the rent eats your future, you’ll Uber to the airport. To me, it feels like the most avoidable mess. You can add apartments; you can’t add coastline.

That pair nicely with the slow‑bleed in existing‑home sales noted earlier. Rates help, sure. But zoning is the lock, and the key is stuck in a drawer somewhere between NIMBY and City Council.

Canada and Argentina: Two Kinds of Policy Shock

Dougald Lamont had a productive week in the “policy reality check” department. First, a pointed critique of Canada’s industrial slump. Rather than rehash Wolf Street’s graphs, he zoomed to what he thinks are the real culprits: household debt and a real estate bubble crowding out productive investment. The fix he calls for is big — a wartime‑style strategy to rebuild manufacturing. Not tiny tax levers, but industrial policy with teeth. There’s a throwback to WWII mobilization, not as nostalgia but as scale. If you’re Canadian and tired of the “just cut red tape” duet, this one will feel like a stiff coffee.

Then he turned to Argentina, and it’s spicy. The line is that Javier Milei’s libertarian experiment is clashing with reality, and U.S. support looks political, not economic. Austerity has a long track record of shrinkage before stability, and sometimes the stability never arrives. Pair that with Naked Capitalism featuring Matt Stoller’s praise for their coverage — and his jab at Milei’s narrative — and you get a chorus: the ideology is neat; the grocery bill is not.

Education, Wealth, and Which Way Causation Runs

A few posts stepped back from the news cycle and poked the bigger questions.

Bryan Caplan looked at Qatar’s Education City and said the quiet part out loud: education didn’t make Qatar rich; fossil fuels did. The causation mostly runs from GDP to degrees, not the other way around. He calls the project a vanity play, and whether you agree or not, it’s a useful ice bath after endless “invest in education” platitudes. Education’s good — but as an economic engine, it’s often oversold.

Brett Scott revisited Modern Monetary Theory like a referee who’s tired of a bad argument. MMT critics from left and right often attack a caricature. The post for dummies version goes something like: states that issue their own currency don’t “run out” the way a household does; taxes don’t fund spending so much as create demand for money and manage inflation. To me, it feels like an attempt to force everyone to admit that money is politics wrapped in accounting. Whether you buy it or not, it soils the tidy story that government is just a big family budget. It’s not, and never was.

Rob Henderson got into status ladders with Louise Perry. Not GDP charts, but it matters: downward mobility hurts more than people want to admit, especially among elites who were raised to think success is the baseline. Pair that with globalization and the rise of resume tournaments, and you see why people feel brittle even when the numbers aren’t horrifying. The psychological stuff isn’t fluff. It changes how people consume, vote, and quit.

Energy, Salt, and the Old Tricks We Still Use

Incautious Optimism wrote about salt with a kind of winking seriousness. Salt as a time machine — preserving food, preserving wealth, transporting both across seasons. The jump to oil is natural: energy is the modern salt, the thing that collapses distance. There’s a hopeful nudge about taking time off the hamster wheel, but tucked inside is a practical idea: industries are always trying to bend time and space. Cold chain logistics, medical gear, cars — it’s the same wish, just shinier. If you like tracing the lineage from spice routes to server racks, this one scratches that itch.

Meanwhile, back on policy turf, James O’Malley flagged the UK‑US nuclear energy tie‑in and chatted with Last Energy UK’s CEO. The tone was measured: exciting headline, complicated details. Nuclear always wears a big promise coat. But as with AI capex, the who‑gets‑paid part depends on regulation, timelines, and whether your reactors show up on time and on budget. Keep your eye on capacity factors and financing terms, not just the ribbon‑cutting.

Fraud, Oligarchy, and who’s Managing the Managers

Zev Shalev brought back William K. Black’s “control fraud” playbook from the S&L crisis. CEOs using their own firms as crime engines — making terrible loans on purpose, booking fake profits, paying big bonuses, dumping losses on taxpayers. It’s a time capsule that doesn’t feel old. When markets go frothy and balance sheets go creative, this script gets dusted off. If your fraud antenna is rusty, this is a 30‑minute tune‑up.

And then there’s the broader management layer. Alex Wilhelm dropped James Burnham’s managerial class thesis into modern tech — the tug‑of‑war between founders, financiers, and the middle stack that actually runs things. The TikTok deal politics, Nvidia’s giant check to OpenAI, billionaire influence — I’d say it reads like a reminder that who writes the memo isn’t always who writes the checks. Or the laws.

The News Soup: Climate, Geopolitics, Medical Bills, and That Dollar

Naked Capitalism did their usual “Links” thing twice this week. Climate knocking food prices, long COVID still humming under the surface, Iran–Israel tension, South Asian alliances, and a cost of living that makes U.S. healthcare feel like a carnival game where the ring never fits the bottle. One separate post was a fundraiser note recapping a year of heavy lifts: Trump‑era policy swings, wars, economic instability, platforming new writers. If you read them, you know the voice — scrappy skepticism, lots of source‑pulling.

Further down the alley, Dean Blundell mixed geopolitics with domestic chaos. Russian drone probes in Scandinavia, Trump publicly shoving NATO and Russia in the same breath, and a “dollar crash” framing that makes the week feel like a Tom Clancy paperback. If you like a spicy take with your macro, that’s the one.

Harvard’s Old Class Notes: Why This Still Matters

There’s a quiet rhythm in Irwin Collier’s archive digs that somehow fits this week. Multiple posts from the early 1900s Harvard scene: medieval and modern economic history, the distribution of wealth, methods of social reform, and the pre‑Physiocrats history of economic thought. And then a 1938 note about Harvard professors — including Haberler and Leontief — signing a petition to back an amendment helping the victims of aggression in the Spanish Civil War.

I’d say these pieces land a soft punch. Economists were always political animals, and students have always learned economics as a string of arguments, not just curves. Carver’s exams asked pointed questions about socialism and the Single Tax, using Socratic back‑and‑forth to sharpen ideas without squashing them. You can feel a thread: economics teaching people how to argue well before arguing loud.

Resource Scarcity, Pricing Oddities, and the Thread Tying It All Together

Once you step back, a pattern peeks through. It’s about scarcity and who gets to price it.

• GPUs are scarce; auctions and pay‑as‑bid try to make pricing less dumb. Gojiberries makes that point without fluff.
• Power is scarce in the AI boom; Dave Friedman warns that owners of bottlenecks tend to win the long game.
• Housing is scarce; Kevin Erdmann says zoning is the choke point.
• Specialized transport is scarce; Gary Leff shows Arctic airfare pain as the price of physics and logistics.
• Cheap capital is getting scarce; Better than Random warns that the Fed risks its independence if it tries to play too many tunes.
• Industrial capacity in Canada is scarce; Dougald Lamont calls for a wartime build, not a band‑aid.
• Political patience is scarce; Naked Capitalism says tariffs on drugs will test it hard.
• And attention is scarce; Paul Kedrosky and Otakar G. Hubschmann both wave at teen reading and AI distraction like weather reports you shouldn’t ignore.

Even the salt essay by Incautious Optimism fits here. Salt stored time; oil stores motion; data centers store cognition. The invoice always arrives. The question is who forwards it.

A Few Curios You Might’ve Missed

• Political Calculations turned metal prices into physical cubes. It’s quirky, but it may be the cleanest demo of relative value you’ll see this month. A pocket gold cube versus a coffee‑table aluminum cube — same dollars, different realities.
• Molly White pointed to a piece on crypto wealth in Wyoming that never seems to trickle down to workers. If you’ve heard the “jobs boom” line and then met the barista who serves the VCs, you know the feeling.
• Alex Wilhelm reminded that U.S. tech media culture is shifting away from CNBC‑style public markets coverage to in‑the‑weeds operator culture pieces. I’d say that’s because balance sheets are now intertwined with national security, labor debates, and how much compute you can hoard.

Where the Blogs Agreed, and Where They Didn’t

Agreement
- Housing supply is the real limiter, not just rates, even if rates grab headlines. Kevin Erdmann and Mike "Mish" Shedlock, in different registers, both led there.
- AI is transformative but financially tricky. Dave Friedman, Gojiberries, and Jakob Nielsen all made that song rhyme.
- China’s slowdown is real, and prices there can be self‑cannibalizing. Political Calculations and Angelica Oung shared that space.
- Tariff‑first policy often boomerangs onto consumers. Naked Capitalism hammered this; others implied it in their own lanes.

Disagreement, or at least tension
- Rate‑cut urgency: Better than Random warned about Fed overreach and credibility; Mike "Mish" Shedlock highlighted Miran’s pro‑cut stance to protect jobs. The wedge is how fast and how far to cut without stoking prices.
- Education as growth engine: Bryan Caplan cast doubt in the Qatar case; Brett Scott reminded that understanding state money mechanics may matter more than schooling slogans. Not exactly a fight, but they tilt different ways.

The Week’s Mood, If That’s Allowed

If this week were a street, it’d be a high street with a closing sale sign on half the shops and a new, glossy AI showroom opening two doors down. People in line for the Weetabix are comparing mortgage rates on their phones while a loud guy outside promises cheaper drugs if you just vote the right way, except someone taped a tariff notice over his poster.

To me, it feels like the economy is doing that awkward double step: real growth in places, real price pressure in others, and a lot of smart people trying to price scarcity in compute, housing, and energy without the old maps. It’s not doom; it’s more like a complicated IKEA shelf with three missing screws. You can make it stand. You just wouldn’t put your TV on it yet.

And tucked inside the big debates were the little reminders. A tiny gold cube that costs ten grand. A tin‑can plane in the Arctic that costs four grand because gravity and cold don’t negotiate. A circle of professors in 1938 arguing about aggression abroad while teaching about wealth at home. A blog fundraiser saying, “we kept the receipts.”

I’d say the best pieces this week were the ones willing to be specific even when it made the story smaller. Those are the ones to click through — the GPU auction note from Gojiberries, the housing choke‑point from Kevin Erdmann, the AI capex skepticism from Dave Friedman, the emission proxy from Political Calculations, the salt‑to‑oil bridge from Incautious Optimism, the tariff gut‑check from Naked Capitalism, and the Miran rate‑cut argument tracked by Mike "Mish" Shedlock.

A little repetition is probably fine here. Rates may come down. Prices might not. Jobs will shift. Chips will stay scarce a bit longer. Zoning reform would help more than any pep talk. And in the corners, people will keep turning salt into time, metals into cubes, and blog posts into better questions. That’s where the good stuff usually hides.