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People who succeed via analysis of numbers and facts need to learn that understanding of people can make that analysis unnecessary and can even outperform it. Examples: 1. Amazon did not make money between its 1994 founding through 2002. There was no financial or business fundamentals analysis that could’ve led you to buying the stock, which would launch AWS and FBA in 2006. The only way you could’ve profited from the 4000x share price growth between Dec 31 2002 and today was to figure out that Bezos was one of the greatest of all time and was pouring his best years into the company. 2. I was once doing a reference check for a new employee. You can make a quantifiable prediction of employee quality by creating a points system for traits correlated with future work quality. On paper this employee did not appear to be so great, however his reference, who was an accomplished businessman in his own right without an agenda stopped me and said “Hire this guy. Just do it. Trust me.” He was right. 3. Careers and health are complex systems. We can come up with rules of thumb like “work hard” or “exercise”, but, generally we know a lot less about what leads to good outcomes in these fields than we do in chemistry and mathematics where there are higher degrees of predictable certainty. When an older businessperson who has survived and thrived through multiple recessions tells you, someone much younger, less experienced, and successful, to do something like “call them” or “go to this event”, you just need to do it. When your grandmother tells you to stay slim, exercise, and spend time with friends, you just need to do it. There is no fact or data based analysis to support these recommendations, but decades of experience, of seeing people fail in business or die early and those who didn’t, inform these powerful inexplicable recommendations. Yes, facts and numbers are great, but they will only take you so far. Master the understanding of people and know when their recommendations outperform what we call rational analysis to go even father. And note that these two methods are even more powerful when combined. Trust me.
Brontosaurus skeleton at the Yale Peabody Museum of Natural History (allegedly) Let’s pretend for a moment that brontosauruses are made up, despite them being accepted by the public and scientific community, having ample evidence for their existence, and appearing in museums all over the world. Let me show you how this could come to be: Smart, but young, naive, and generally conformist people enter academia to study paleontology (the study of fossils) They learn about brontosauruses: They were up to 7 stories tall They weighed up to 70 tons They have no back teeth and swallowed all their food whole They would eat rocks to help with their digestion Their long necks were to "reach marshy vegetation some distance away or to reach leaves higher up in trees" (Encyclopedia Britannica) No skull has ever been found The bones you see in museums are mostly not real. They're casted. They get a PhD about how their poop is the size of a 737 Then one day they have a thought “you know…there’s a lot of stuff about brontosauruses which is pretty unbelievable” and they make a list They write a paper and submit it to a paleontology journal. If the paper is right, the journal must disband and all the people who work for it will lose their life’s work, so it gets turned down. The skeptical paleontologist turns to the press, but all the more senior paleontologists say that the skeptical guy is crazy, so now our skeptic’s reputation is ruined The skeptic can’t attract funding because they can’t get published and they’re a kook according respected paleontologists No museum will air the possibility that brontosauruses are fake because it’s one of the main reasons why people go to museums If the skeptical paleontologist is smart at all, they will see all this and they won’t say anything. They want to keep their PhD, their role in the group, and their prestige. It takes a unique and rare person to go against the flow and call something out like this and even if they do, their views mostly won’t be heard. Of course, I’m just joking around. Brontosauruses are real. But if they weren’t, the brontosaurus would be an uncoordinated conspiracy.
This article will explain the following: 1. What is a Fiacracy 2. How do Fiacracies NOT work 3. How Fiacracies work 4. Are Fiacracies sustainable 5. Why Fiacracies matter 1. What is a fiacracy? It’s government by fiat (money). The driving mechanism by which it works is not voting (democracy), a royal family (monarchy), or even a stable ruling elite (aristocracy, oligarchy). It’s a government driven mainly by the creation and movement of currency, fiat. 2. How do fiacracies NOT work? In school you were probably taught that your government works like this: A. People vote for politicians B. The politicians use tax revenue to provide services for voters C. If taxes get too high or services too bad, voters substitute the politicians responsible for new ones who will be better Fiacracies have voting, politicians, and taxes, but this is NOT how they work. 3. How do fiacracies work? A. People vote for politicians B. Politicians allocate money for services C. A central bank creates new money to pay for these services D. If voters do not like the politicians or what they are doing, they change them out for new ones What’s different between between this system and the last one? This system has only one check on government action, voting, whereas the other has two, voting and taxes. A concrete example: It’s much easier for fiacracies to go to war because taxpayers don’t need to pay for it, they just need to vote for it. And it’s also much easier for fiacracies to do handouts, whether it be for the rich, the poor, or the companies’ shareholders which benefit from war. Why is it so much easier? Because no one has to pay for it. All it requires is votes. An uncoordinated consensus exists between politicians, the central bank, and voters to keep the system going. If politicians don’t spend they don’t have political support and they get voted out. If the central banks don’t finance the spending they know the system collapses resulting in chaos. The voters are subjected to propaganda (oftentimes paid for by the government itself), don’t know what is happening, and if they do, why end the system and face chaos? Uncoordinated consensus. 4. Are fiacracies sustainable? Let’s answer the question in reverse: What would make a fiacracy unsustainable? A. People must be willing accept the newly created money, otherwise government cannot provide services nor effective handouts. B. People must believe in the system and its fairness or they will revolt C. It cannot be too easy to convert the newly created money into other currencies that are perceived to be more stable D. If money is created too fast, handouts will overtake the creation of value as peoples’ focus and people will stop working causing system collapse E. Handouts must be allocated fairly to system participants or the system will face instability from groups who feel shortchanged F. Greed. If a powerful group makes too much money for itself without acknowledging the delicate balance between the participants in the fiacracy, the system will destabilize and die. G. Immigration/emigration. Countries mostly are not closed systems and the arrival of new voters or their departure can cause violent swings how new money is allocated, which is the main determinant whether people continue to support the fiacracy system. We can see from how many different ways they can go wrong that individual fiacracies are generally unstable, but with proper management and the right general conditions they can last for a long time, particularly if culture, education, or propaganda (which can be paid for with fiat) are conducive to the maintenance of the fiacracy. 5. Why Fiacracies matter? They matter because of how ubiquitous they are and how increasingly large government spending is relative to the overall economy. Politics in a fiacracy is, at its core, a fight over access to the newly created money enabled by achieving a voter majority. Once you understand that and how fiacracies work at large, you can both benefit yourself, but also predict and maintain your country’s stability. The fiacracy is a useful mental model that explains better how things actually work than what we were taught in school and told by media.
1. Empathy 2. Dexterity 3. Persuasion 4. Musicality 5. Confidence 6. Ambition 7. Grit 8. Creativity 9. Flexibility 10. Energy 11. Individualism 12. Willpower 13. Stoicisim 14. Objectivity 15. Allure
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This post is a list of books that I read in the first quarter of 2025, including The Lessons of History, American Journey, the works of Aristophanes, Plato, Xenophon, and more.
Plus! Interfaces; Surface Area; AI's Jobs Impact; Capacity; Capacity, Continued
On Friday at 8:30 AM ET, the BLS will release the employment report for March. The consensus is for 135,000 jobs added, and for the unemployment rate to be unchanged at 4.1%. We estimate nonfarm payrolls rose by 150k in March, slightly above consensus ... We estimate that the unemployment rate was unchanged on a rounded basis at 4.1%. emphasis added From BofA: Nonfarm payrolls are likely to increase by a robust 185k in March, higher than consensus expectations of 135k, due to payback in leisure & hospitality for cold weather in Jan and Feb. Government job growth is expected to come in at just 10k due to the federal hiring freeze/DOGE. Given the muted claims data in the survey week, we do not expect DOGE driven job cuts to be a sizable drag, although risks are to the downside. We expect the u rate to remain at 4.1%. • ADP Report: The ADP employment report showed 155,000 private sector jobs were added in March. This was above consensus forecasts and suggests job gains above consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report. ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires). The ISM® manufacturing employment index decreased to 44.7%, down from 47.6% the previous month. This would suggest about 50,000 jobs lost in manufacturing. The ADP report indicated 21,000 manufacturing jobs added in March. ISM® services employment index decreased to 46.2%, from 53.5%. This would suggest 30,000 jobs lost in the service sector. Combined this suggests 80,000 jobs added, well below consensus expectations. (Note: The ISM surveys have been way off recently) Unemployment Claims: The weekly claims report showed about the same initial unemployment claims during the reference week at 225,000 in March compared to 224,000 in February. This suggests layoffs in March were about the same as in February. • Conclusion: Over the last year, employment gains averaged 155 thousand per month - and that is probably the current trend. It seems early for the government related layoffs to significantly impact employment. Also, although the ISM employment indexes were weak this month, my guess is headline employment gains will be above consensus in March.
There may be no winners of the game of Global Domination (tm), and that is likely the best outcome. Okay, players: jokers are wild, but with a twist: the entire deck is jokers. Since everyone at the table will have five Aces, nobody wins. Welcome to the Trade War Poker Table: nobody wins, as everyone has the same hand of jokers. This is not to say that exploitive, mercantilist "free trade" (no such thing has ever existed) is desirable, much less possible. We're reaping the consequences of what was passed off as "free trade": corporations gleefully gutted National Security to boost profits by offshoring everything that could be offshored. Every nation can impose tariffs or limit imports by other means. Tit for tat tariffs, concessions, grand deals, side deals--everyone has access to the same deck of cards. Who wins each round of play is an open question, as is who wins the game. There are several time-tested strategies in the game for Global Domination (tm). One is domination gained by exporting far more than you import, building up treasure in the form of vast trade surpluses. The problem with this strategy is eventually the nations being stripped by your mercantilist strategy wise up and limit your exports. There is only one way to get around this: military force, i.e. establish a Colonial Empire in which your colonies are forced to buy your surplus production (exports) via a bayonet in their back. Absent force and a colonial empire, mercantilism is eventually defeated by its own success. There is another way to play for Global Domination (tm), and it's the exact opposite of mercantilism: run large, sustained trade deficits by importing more than you export, which beneath the surface is a remarkable flow of trade: the importing nation "exports" its currency in size in exchange for goods and services. Once this currency is "exported" in sufficient quantities, it becomes the dominant currency simply from its ubiquity, its liquidity (i.e. its quantity and ubiquity make it easy to trade everywhere) and its trustworthiness due to its wide ownership across global markets: since the currency is spread across the globe, the issuing nation no longer controls its valuation; that's now set by the market. This is Global Domination (tm) via financing trade rather than by running trade surpluses by exporting tangible goods. Pick one, as you can't have both: either export goods to run mercantilist trade surpluses, and build up a trove of other nation's currencies, or "export" your own currency via sustained trade deficits so it becomes the global lingua franca of financing trade. Due to the demands of the Cold War, this was the U.S. strategy in the postwar era. As I have often explained, the U.S. was not merely in an arms race with the Soviet Union; it was also in a war for influence and alliances. The strongest adhesive in alliances is self-interest; by absorbing the surplus production of its allies in Europe and Asia in exchange for dollars, the U.S. cemented alliances that essentially encircled the Soviet Empire. This strategy was far more effective than open conflict, but it came with a cost. Just as the success of mercantilism generates its own undoing, so too does maintaining a reserve currency via trade deficits / exporting one's currency. Should the issuing nation (in this era, the U.S.) decide to limit imports and reduce its trade deficit, its currency will slowly lose the global scale needed to sustain its market dominance. This is Triffin's Paradox, which I've addressed many times over the years: any currency--and the system for creating and distributing the currency--has two masters it cannot possibly serve equally: the domestic economy and the global economy. Any nation that wants to control the valuation of its currency cannot possibly achieve global financial dominance, as the only way to gain and maintain global financial dominance is to surrender control of the currency's valuation to the market via exporting currency in such vast quantities that the global market sets the value. There's a profound irony in this. To manage the domestic economy, the state wants to control everything: the issuance of currency and its valuation via its relative abundance or scarcity, which is reflected in the cost of credit (i.e. interest rates) and asset prices. But to gain the high ground in the global financial landscape, the currency must serve the global demand for a currency that is ubiquitous, extremely liquid and trustworthy precisely because its value cannot be reset by state diktat. The valuation of a truly global currency is constantly influenced by interest rates, bond issuance, demand and so on--all the features of a transparent marketplace. The game of Global Domination (tm) will never be decided by a deck of jokers. The real game is 5-card draw: you play the cards you've been dealt by Nature, history, culture and chance. Every nation has a spectrum of strengths and weaknesses, advantages and disadvantages. Some are rich in resources, some are poor in resources. Some have advantageous geography, some less so. Some have cultural coherence, others have diversity; each is a strength and a weakness. In Nature, the winner is not necessarily the strongest or the one most blessed by chance. The winner tends to be the one with the greatest capacity and incentives for flexibility, experimentation, a level playing field (i.e. social mobility) decentralized capital and all the traits of fast adaptation: if not an appetite then at least a capacity for a continual churn of instability, failure and self-criticism, which are the necessary components of experimentation. There may be no winners of the game of Global Domination (tm), and that is likely the best outcome. Any form of dominance generates its own undoing. New podcast: The Coming Global Recession will be Longer and Deeper than Most Analysts Anticipate (42 min) My recent books: Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site. The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $18, (Kindle $8.95, Hardcover $24 (215 pages, 2024) Read the Introduction and first chapter for free (PDF) Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF) The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF) When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF) Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF). A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF). Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF). The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF) Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency. Thank you, DawgPond ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership. Thank you, Lucia U. ($70), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership. Thank you, Peter C. 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This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the March 2025 seasonally adjusted annual sales rate (SAAR) of 403 thousand. Click on graph for larger image. Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 288 thousand SAAR in May 2020. Heavy truck sales were at 403 thousand SAAR in March, down from 436 thousand in February, and down 12.1% from 459 thousand SAAR in February 2025. Year-to-date (NSA) sales are down 10.1%. Usually, heavy truck sales decline sharply prior to a recession. Perhaps heavy truck sales will be revised up, but this was somewhat weak. As I mentioned yesterday, light vehicle sales "surged" in March to 17.77 million SAAR as some buyers rushed to beat the tariffs. The second graph shows light vehicle sales since the BEA started keeping data in 1967. Light vehicle sales were at 17.77 million SAAR in March, up 11.0% from February, and up 13.3% from March 2024.
