AI: Practical Advice for the Worried

A Word On Thinking For Yourself

There are good reasons to worry about AI. This includes good reasons to worry about AI wiping out all value in the universe, or AI killing everyone, or other similar very bad outcomes.

There are also good reasons that AGI, or otherwise transformational AI, might not come to pass for a long time.

As I say in the Q&A section later, I do not consider imminent transformational AI inevitable in our lifetimes: Some combination of ‘we run out of training data and ways to improve the systems, and AI systems max out at not that much more powerful than current ones’ and ‘turns out there are regulatory and other barriers that prevent AI from impacting that much of life or the economy that much’ could mean that things during our lifetimes turn out to be not that strange. These are definitely world types my model says you should consider plausible.

There is also the highly disputed question of how likely it is that if we did create an AGI reasonably soon, it would wipe out all value in the universe. There are what I consider very good arguments that this is what happens unless we solve extremely difficult problems to prevent it, and that we are unlikely to solve those problems in time. Thus I believe this is very likely, although there are some (such as Eliezer Yudkowsky) who consider it more likely still.

That does not mean you should adapt my position, or anyone else’s position, or mostly use social cognition from those around you, on such questions, no matter what those methods would tell you. If this is something that is going to impact your major life decisions, or keep you up at night, you need to develop your own understanding and model, and decide for yourself what you predict. (...)

Overview

There is some probability that humanity will create transformational AI soon, for various definitions of soon. You can and should decide what you think that probability is, and conditional on that happening, your probability of various outcomes.

Many of these outcomes, both good and bad, will radically alter the payoffs of various life decisions you might make now. Some such changes are predictable. Others not.

None of this is new. We have long lived under the very real threat of potential nuclear annihilation. The employees of the RAND corporation, in charge of nuclear strategic planning, famously did not contribute to their retirement accounts because they did not expect to live long enough to need them. Given what we know now about the close calls of the cold war, and what they knew at the time, perhaps this was not so crazy a perspective.

Should this imminent small but very real risk radically change your actions? I think the answer here is a clear no, unless your actions are relevant to nuclear war risks, either personally or globally, in some way, in which case one can shut up and multiply.

This goes back far longer. For much longer than that, various religious folks have expected Judgment Day to arrive soon, often with a date attached. Often they made poor decisions in response to this, even given their beliefs.

There are some people that talk or feel this same way about climate change, as an impending inevitable extinction event for humanity.

Under such circumstances, I would center my position on a simple claim: Normal Life is Worth Living, even if you think P(doom) relatively soon is very high. (...)

More generally, in terms of helping: Burning yourself out, stressing yourself out, tying yourself up in existential angst all are not helpful. It would be better to keep yourself sane and healthy and financially intact, in case you are later offered leverage. Fighting the good fight, however doomed it might be, because it is a far, far better thing to do, is also a fine response, if you keep in mind how easy it is to end up not helping that fight. But do that while also living a normal life, even if that might seem indulgent. You will be more effective for it, especially over time. (...)

On to individual questions to flesh all this out.

Q&A

Q: Should I still save for retirement?
Short Answer: Yes.
Long Answer: Yes, to most (but not all) of the extent that this would otherwise be a concern and action of yours in the ‘normal’ world. It would be better to say ‘build up asset value over time’ than ‘save for retirement’ in my model. Building up assets gives you resources to influence the future on all scales, whether or not retirement is even involved. I wouldn’t get too attached to labels.

Remember that while it is not something one should do lightly, none of this is lightly, and you can raid retirement accounts with what in context is a modest penalty, in an extreme enough ‘endgame’ situation - it does not even take that many years for the expected value of the compounded tax advantages to exceed the withdraw penalty - the cost of emptying the account, should you need to do that, is only 10% of funds and about a week in the United States (plus now having to pay taxes on it). And that in some extreme future situations, having that cash would be highly valuable, none of which suggests now is the time to empty it, or to not build it up.

The case for saving money does not depend on expecting a future ‘normal’ world. Which is good, because even without AI the future world is likely to not be all that ‘normal.

Q: Should I take on a ton of debt intending to never have to pay it back?

Short Answer: No, except for a mortgage.

Long Answer: Mostly no, except for a mortgage. Save your powder. See my post On AI and Interest Rates for an extended treatment of this question - I feel that is a definitive answer to the supposed ‘gotcha’ question of why doomers don’t take on lots of debt. Taking on a bunch of debt is a limited resource, and good ways to do it are even more limited for most of us. Yes, where you get the opportunity it would be good to lock in long borrow periods at fixed rates if you think things are about to get super weird. But if your plan is ‘the market will realize what is happening and adjust the value of my debt in time for me to profit’ that does not seem, to me, like a good plan. Nor does borrowing now much change your actual constraints on where you run out of money.

Does borrowing money that you have to pay back in 2033 mean you have more money to spend? That depends. What is your intention if 2033 rolls around and the world hasn’t ended? Are you going to pay it back? If so then you need to prepare now to be able to do that. So you didn’t accomplish all that much.

You need very high confidence in High Weirdness Real Soon Now before you can expect to get net rewarded for putting your financial future on quicksand, where you are in real trouble if you get the timing wrong. You also need a good way to spend that money to change the outcome.

Yes, there is a level of confidence in both speed and magnitude, combined with a good way to spend, that would change that, and that I do not believe is warranted. One must notice that you need vastly less certainty than this to be shouting about these issues from the rooftops, or devoting your time to working on them.

Eliezer’s position, as per his most recent podcast is something like ‘AGI could come very soon, seems inevitable by 2050 barring civilizational collapse, and if it happens we almost certainly all die.’ Suppose you really actually believed that. It’s still not enough to do much with debt unless you have a great use of money - there’s still a lot of probability mass that the money is due back while you’re still alive, potentially right before it might matter.

Yes, also, this changes if you think you can actually change the outcome for the better by spending money now, money loses impact over time, so your discount factor should be high. That however does not seem to be the case that I see being made.

Q: Does buying a house make sense?

A: Maybe. It is an opportunity to borrow money at low interest rates with good tax treatment. It also potentially ties up capital and ties you down to a particular location, and is not as liquid as some other forms of capital. So ask yourself how psychologically hard it would be to undo that. In terms of whether it looks like a good investment in a world with useful but non-transformational AI, an AI could figure out how to more efficiently build housing, but would that cause more houses to be built?

Q: Does it make sense to start a business?

A: Yes, although not because of AI. It is good to start a business. Of course, if the business is going to involve AI, carefully consider whether you are making the situation worse.

Q: Does It Still Make Sense to Try and Have Kids?

Short Answer: Yes.

Long Answer: Yes. Kids are valuable and make the world and your own world better, even if the world then ends. I would much rather exist for a bit than never exist at all. Kids give you hope for the future and something to protect, get you to step up. They get others to take you more seriously. Kids teach you many things that help one think better about AI. You think they take away your free time, but there is a limit to how much creative work one can do in a day. This is what life is all about. Missing out on this is deeply sad. Don’t let it pass you by.

Is there a level of working directly on the problem, or being uniquely positioned to help with the problem, where I would consider changing this advice? Yes, there are a few names where I think this is not so clear, but I am thinking of a very small number of names right now, and yours is not one of them.

You can guess how I would answer most other similar questions. I do not agree with Buffy Summers that the hardest thing in this world is to live in it. I do think she knows better than any of us that not living in this world is not the way to save it.

Q: Should I talk to my kids about how there’s a substantial chance they won’t get to grow up?

A: I would not (and will not) hide this information from my kids, any more than I would hide the risk from nuclear war, but ‘you may not get to grow up’ is not a helpful thing to say to (or to emphasize to) kids. Talking to your kids about this (in the sense of ‘talk to your kids about drugs’) is only going to distress them to no purpose. While I don’t believe in hiding stuff from kids, I also don’t think this is something it is useful to hammer into them. Kids should still get to be and enjoy being kids. (...)

Q: Should I just try to have a good time while I can?

A: No, because my model says that this doesn’t work. It is empty. You can have fun for a day, a week, a month, perhaps a year, but after a while it rings hollow, feels empty, and your future will fill you with dread. Certainly it makes sense to shift this on the margin, get your key bucket list items in early, put a higher marginal priority on fun - even more so than you should have been doing anyway. But I don’t think my day-to-day life experience would improve for very long by taking this kind of path. Then again, each of us is different.

That all assumes you have ruled out attempting to improve our chances. Personally, even if I had to go down, I’d rather go down fighting. Insert rousing speech here.

Q: How Long Do We Have? What is the Timeline?

Short Answer: Unknown. Look at the arguments and evidence. Form your own opinion.

Long Answer: High uncertainty about when this will happen if it happens, whether or not one has high uncertainty about whether it happens at all within our lifetimes. Eliezer’s answer was that he would be very surprised if it didn’t happen by 2050, but that within that range little would surprise him and he has low confidence. Others have longer or shorter means and medians in their timelines. Mine are substantially longer and less confident than Eliezer’s. This is a question you must decide for yourself. The key is that there is uncertainty, so lots of difference scenarios matter.

by Zvi Mowshowitz, Don't Worry About the Vase |  Read more:

Image: via Linkedin Image Generator

[ed. See also: The AI doomers feel undeterred (MIT).]

Elizabeth Warren’s Plan for a Revived Democratic Party

This is a dangerous moment for America and for the world.

A global contest is escalating between democratic institutions governed by the rule of law and lawless dictators who seek to enrich themselves and their cronies.

Here at home, President Trump’s tariffs are driving up costs for families. Millions of Americans have lost their health insurance so that Republicans could fund tax breaks for rich people. ICE is sowing chaos and terror in our communities, resulting in the tragic killing of Renee Good in Minnesota. And Donald Trump’s view of the First Amendment is that he gets to say whatever he wants, AND he gets to use the power of government to silence, extort, bankrupt, or even prosecute anyone who criticizes him. Acting like the wannabe dictator he is, Trump is trying to push out the chairman of the Federal Reserve Board and complete his corrupt takeover of America’s central bank – so it serves his interests, along with his billionaire friends. And he has invaded Venezuela to boost the profits of oil companies and announced that he will “run the country.”

None of this would be happening if Democrats hadn’t been wiped out in 2024. According to some self-described experts, Democrats lost power because we were too progressive. For a lot of powerful people—wealthy people from Wall Street, Silicon Valley, and Washington—“too progressive” is code used to undermine any economic agenda that favors working people. They put it more politely, but those movers and shakers want the Democratic Party to respond to the 2024 losses by watering down our economic agenda and sucking up to the rich and powerful, claiming that a less progressive Democratic Party will win more elections.

They are wrong. Americans are stretched to the breaking point financially, and they will vote for candidates who name what is wrong and who credibly demonstrate that they will take on a rigged system in order to fix it. Revising our economic agenda to tiptoe around that conclusion might appeal to the wealthy, but it will not help Democrats build a bigger tent, and it definitely will not help Democrats win elections. A Democratic Party that worries more about offending big donors than delivering for working people is a party that is doomed to fail—in 2026, 2028, and beyond.

Let’s start with some basic math. By definition, the top 0.1% of the economic ladder doesn’t have a lot of votes. So when the question is raised whether Democrats should build our tent by sucking up to the rich, it’s sure not about attracting their votes. It’s about attracting their money.

There are, of course, extremely wealthy people who are also deeply public-minded. For some, it’s about living their values. For others, it’s recognition that massive economic instability is ultimately bad for business. Either way, these very wealthy people advocate for better health care and universal childcare. They embrace sensible regulations to stop corporate scammers. They press the government to raise taxes—including on themselves and their businesses. Over and over, they push for an economy that works for everyone.

But there is a different, and frankly much larger, group of extremely wealthy people trying to influence policy. This group might align with the Democrats on some social issues. They certainly are not MAGA Republicans. But they’re also not interested in changing an economic game that is already rigged in their favor. In exchange for their financial support, they insist that the Democratic Party turn its economic agenda in a direction that mostly benefits the wealthy and further undermines the economic stability of tens of millions of families all across this country.

These people push Democrats to embrace candidates who will slow-walk popular economic policies. They lobby for deregulation and special tax breaks that will pad their own bottom lines. They promote making big-time corporate lawyers federal judges. They pressure presidents to appoint tepid leaders at regulatory agencies—people who, once in office, seem positively allergic to enforcing the law when that might make life uncomfortable for big business interests.

In their effort to shape the Democratic agenda, the ultra-wealthy wield outsized power. And we all know why.

● Rich people can fund super PACs to prop up political campaigns for their chosen candidates.

● They can fund their own lobbying efforts.

● They can build or simply buy whole media empires in order to bend the news to their liking.

● And, as we’re seeing right now with AI and crypto, they can try to crush anyone who gets in the way of their business interests.

Over the past generation, the wealthy have avoided accountability time and again. Regular Americans must play by every rule or face real consequences. You don’t need to read every news article about Jeffrey Epstein and his good buddies like Larry Summers and Donald Trump to understand how consistently rich and powerful insiders protect each other, regardless of politics and regardless of how obscene the situation has become. The Epstein scandal is real and enormous, but the slew of white-collar pardons issued in recent months by President Trump reflects the same the-rules-only-apply-to-someone-else mentality that pervades Washington.

So how does this affect winning elections?

After the 2024 election, pundits sliced and diced demographic groups—across race, age, religion, and geography—to show how Democrats need to grow our coalition in order to win again. Yes, we need support from rural voters, men, and voters without a college degree. And yes, in 2025 we won back some of those folks, partly because Democratic candidates from every wing of the party ran against Trump’s betrayal of working people on affordability issues.

But in the long run, to build a strong Democratic party with a sturdy big tent, it is not enough to simply attack Trump. Democrats need to earn trust—long-term, durable trust—across the electorate. Trust that we actually understand what’s broken, and trust that we have the courage to fix it—even when that means taking on the wealthy and well-connected.

Democrats weren’t always just the default option when the other guys were worse. Once, we were trusted by working people to fight for their interests. And we delivered—even against tough Republican opposition. Social Security, strong unions, the 40-hour workweek, overtime, Medicare, Medicaid, homeownership for veterans and first-time homebuyers, the Affordable Care Act. Over and over, we showed that we could fight and we could deliver.

I understand the temptation—in this moment of national crisis—to sand down our edges to avoid offending anyone, especially the rich and powerful who might finance our candidates. But we can’t win unless we rebuild trust. And we can’t rebuild trust by excommunicating Biden administration law enforcers who, for the first time in decades, actually fought to hold corporations accountable for driving up prices. We can’t rebuild trust by calling up Elon Musk when he tussles with Trump and offering him whatever he wants if he’ll come back to our side and kick in a few nickels to our candidates. We can’t rebuild trust by staying silent about abuses of corporate power and tax fairness simply to avoid offending the delicate sensibilities of the already-rich and powerful.

I understand that, because of our broken campaign finance laws, Democrats need to raise a lot of money, and I don’t believe in unilateral disarmament against the Republicans. But money is not the only ingredient for a successful election. When Democrats water down their economic platform to appeal to wealthy donors, whether the transaction is explicit or subtle, we squander trust with working people and the money just isn’t worth it.

Yes, Democrats need a big tent. But there are two visions for what a big tent means. One vision says that we should shape our agenda and temper our rhetoric to flatter any fabulously rich person looking for a political party that will entrench their own economic interests. The other vision says we must acknowledge the economic failures of the current rigged system, aggressively challenge the status quo, and chart a clear path for big, structural change.

If we are going to pick up the broken pieces from the 2024 election and build a durable big tent, we must acknowledge a hard truth: The Democratic Party cannot pursue both visions at the same time. Either we politely nibble around the edges of change, or we throw ourselves into the fight. Either we carefully craft our policies to ensure that the rich keep right on getting richer, or we build a party that ferociously and unapologetically serves the needs of working people. Democrats have a choice to make—and the first step in rebuilding trust is to admit that we have to choose. (...)

So what does it mean to focus our agenda on an aggressive economic vision? At its core, the goal is simple and easy to measure.

● It means boosting pay and making life more affordable for working people.

● Building more affordable homes and cracking down on corporate landlords.

● Increasing the size of Social Security checks.

● Providing universal child care.

● Passing price gouging laws with real teeth.

● Guaranteeing the right to repair your own cars, machines, and business equipment.

● Strengthening unions.

● Building universal health care.

● Taxing the wealthy and giant corporations.

● Increasing the minimum wage.

I could go on and on—and in fact I have, with detailed plans and legislative proposals. We are not short on good ideas. (...)

I believe in markets and a market economy, and I have spent my entire career trying to make them work better so our economy works for everyone. I celebrate success. I don’t think billionaires are bad people just because they are billionaires. Or that corporations are evil because they pursue profit.

And let me say it again: There is a big difference between a billionaire who spends his fortune to advance the interests of working people and a billionaire who uses his money to entrench a rigged economy. Ideas are not better because they come from a rich person offering to open his wallet and advance his own financial interests—and our leaders should stop acting like they are.

by Elizabeth Warren, The Nation |  Read more:

Image: Jemal Countess/Getty Images for Families Over Billionaires
[ed. Big fan, and always have been. This is what a true populist looks like.]

It's Not Normal

Samantha: This town has a weird smell that you're all probably used to…but I'm not.
Mrs Krabappel: It'll take you about six weeks, dear. 

-The Simpsons, "Bart's Friend Falls in Love," S3E23, May 7, 1992

We are living through weird times, and they've persisted for so long that you probably don't even notice it. But these times are not normal.

Now, I realize that this covers a lot of ground, and without detracting from all the other ways in which the world is weird and bad, I want to focus on one specific and pervasive and awful way in which this world is not normal, in part because this abnormality has a defined cause, a precise start date, and an obvious, actionable remedy.

6 years, 5 months and 22 days after Fox aired "Bart's Friend Falls in Love," Bill Clinton signed a new bill into law: the Digital Millennium Copyright Act of 1998 (DMCA).

Under Section 1201 of the DMCA, it's a felony to modify your own property in ways that the manufacturer disapproves of, even if your modifications accomplish some totally innocuous, legal, and socially beneficial goal. Not a little felony, either: DMCA 1201 provides for a five year sentence and a $500,000 fine for a first offense.

Back when the DMCA was being debated, its proponents insisted that their critics were overreacting. They pointed to the legal barriers to invoking DMCA 1201, and insisted that these new restrictions would only apply to a few marginal products in narrow ways that the average person would never even notice.

But that was obvious nonsense, obvious even in 1998, and far more obvious today, more than a quarter-century on. In order for a manufacturer to criminalize modifications to your own property, they have to satisfy two criteria: first, they must sell you a device with a computer in it; and second, they must design that computer with an "access control" that you have to work around in order to make a modification.

For example, say your toaster requires that you scan your bread before it will toast it, to make sure that you're only using a special, expensive kind of bread that kicks back a royalty to the manufacturer. If the embedded computer that does the scanning ships from the factory with a program that is supposed to prevent you from turning off the scanning step, then it is a felony to modify your toaster to work with "unauthorized bread":

If this sounds outlandish, then a) You definitely didn't walk the floor at CES last week, where there were a zillion "cooking robots" that required proprietary feedstock; and b) You haven't really thought hard about your iPhone (which will not allow you to install software of your choosing):

But back in 1998, computers – even the kind of low-powered computers that you'd embed in an appliance – were expensive and relatively rare. No longer! Today, manufacturers source powerful "System on a Chip" (SoC) processors at prices ranging from $0.25 to $8. These are full-fledged computers, easily capable of running an "access control" that satisfies DMCA 1201.

Likewise, in 1998, "access controls" (also called "DRM," "technical protection measures," etc) were a rarity in the field. That was because computer scientists broadly viewed these measures as useless. A determined adversary could always find a way around an access control, and they could package up that break as a software tool and costlessly, instantaneously distribute it over the internet to everyone in the world who wanted to do something that an access control impeded. Access controls were a stupid waste of engineering resources and a source of needless complexity and brittleness:

But – as critics pointed out in 1998 – chips were obviously going to get much cheaper, and if the US Congress made it a felony to bypass an access control, then every kind of manufacturer would be tempted to add some cheap SoCs to their products so they could add access controls and thereby felonize any uses of their products that cut into their profits. Basically, the DMCA offered manufacturers a bargain: add a dollar or two to the bill of materials for your product, and in return, the US government will imprison any competitors who offer your customers a "complementary good" that improves on it.

It's even worse than this: another thing that was obvious in 1998 was that once a manufacturer added a chip to a device, they would probably also figure out a way to connect it to the internet. Once that device is connected to the internet, the manufacturer can push software updates to it at will, which will be installed without user intervention. What's more, by using an access control in connection with that over-the-air update mechanism, the manufacturer can make it a felony to block its updates.

Which means that a manufacturer can sell you a device and then mandatorily update it at a later date to take away its functionality, and then sell that functionality back to you as a "subscription":

A thing that keeps happening:

And happening:

And happening:

In fact, it happens so often I've coined a term for it, "The Darth Vader MBA" (as in, "I'm altering the deal. Pray I don't alter it any further"):

Here's what this all means: any manufacturer who devotes a small amount of engineering work and incurs a small hardware expense can extinguish private property rights altogether.

What do I mean by private property? Well, we can look to Blackstone's 1753 treatise:

The right of property; or that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.

You can't own your iPhone. If you take your iPhone to Apple and they tell you that it is beyond repair, you have to throw it away. If the repair your phone needs involves "parts pairing" (where a new part won't be recognized until an Apple technician "initializes" it through a DMCA-protected access control), then it's a felony to get that phone fixed somewhere else. If Apple tells you your phone is no longer supported because they've updated their OS, then it's a felony to wipe the phone and put a different OS on it (because installing a new OS involves bypassing an "access control" in the phone's bootloader). If Apple tells you that you can't have a piece of software – like ICE Block, an app that warns you if there are nearby ICE killers who might shoot you in the head through your windshield, which Apple has barred from its App Store on the grounds that ICE is a "protected class" – then you can't install it, because installing software that isn't delivered via the App Store involves bypassing an "access control" that checks software to ensure that it's authorized (just like the toaster with its unauthorized bread).

It's not just iPhones: versions of this play out in your medical implants (hearing aid, insulin pump, etc); appliances (stoves, fridges, washing machines); cars and ebikes; set-top boxes and game consoles; ebooks and streaming videos; small appliances (toothbrushes, TVs, speakers), and more.

Increasingly, things that you actually own are the exception, not the rule.

And this is not normal. The end of ownership represents an overturn of a foundation of modern civilization. The fact that the only "people" who can truly own something are the transhuman, immortal colony organisms we call "Limited Liability Corporations" is an absolutely surreal reversal of the normal order of things.

It's a reversal with deep implications: for one thing, it means that you can't protect yourself from raids on your private data or ready cash by adding privacy blockers to your device, which would make it impossible for airlines or ecommerce sites to guess about how rich/desperate you are before quoting you a "personalized price":

It also means you can't stop your device from leaking information about your movements, or even your conversations – Microsoft has announced that it will gather all of your private communications and ship them to its servers for use by "agentic AI": (...)

Microsoft has also confirmed that it provides US authorities with warrantless, secret access to your data:

This is deeply abnormal. Sure, greedy corporate control freaks weren't invented in the 21st century, but the laws that let those sociopaths put you in prison for failing to arrange your affairs to their benefit – and your own detriment – are.

But because computers got faster and cheaper over decades, the end of ownership has had an incremental rollout, and we've barely noticed that it's happened. Sure, we get irritated when our garage-door opener suddenly requires us to look at seven ads every time we use the app that makes it open or close:

But societally, we haven't connected that incident to this wider phenomenon. It stinks here, but we're all used to it.

It's not normal to buy a book and then not be able to lend it, sell it, or give it away. Lending, selling and giving away books is older than copyright. It's older than publishing. It's older than printing. It's older than paper. It is fucking weird (and also terrible) (obviously) that there's a new kind of very popular book that you can go to prison for lending, selling or giving away.

We're just a few cycles away from a pair of shoes that can figure out which shoelaces you're using, or a dishwasher that can block you from using third-party dishes:

It's not normal, and it has profound implications for our security, our privacy, and our society. It makes us easy pickings for corporate vampires who drain our wallets through the gadgets and tools we rely on. It makes us easy pickings for fascists and authoritarians who ally themselves with corporate vampires by promising them tax breaks in exchange for collusion in the destruction of a free society.

I know that these problems are more important than whether or not we think this is normal. But still. It. Is. Just. Not. Normal.

by Cory Doctorow, Pluralistic |  Read more:

Image: uncredited

[ed. Anything labeled 'smart' is usually suspect. What's particularly dangerous is if successive generations fall prey to what conservation biology calls shifting baseline syndrome (forgetting or never really missing something that's been lost, so we don't grieve or fight to restore it). For a deep dive into why everything keeps getting worse see Mr. Doctorow's new book: Enshittification: Why Everything Suddenly Got Worse and What to Do About It," Farrar, Straus, Giroux, October 7 2025.]

The Boring Reason We Don't Have $7 Rideshares

New York, Baltimore, and DC have a rideshare app called Empower that charges 20-40% less than Uber. Drivers like it too because they keep 100% of the fare. Drivers pay a monthly fee instead.

The most common fare I’ve paid on Empower over the last six months is $7.65.

For a recent trip from downtown to the airport, Uber wanted $32. Empower wanted $17.25.

I use it constantly, and so do a lot of car-less people I know. That price difference is a pretty big deal!

For many, it can be the difference between getting to the clinic or skipping an appointment. Between getting a ride after a night shift or walking home alone after buses stop running.

DC is trying to shut Empower down, primarily over liability insurance. DC law requires $1 million in coverage per ride.

The $1 million requirement isn’t sized to typical accidents. When $100,000 is the limit available for an insurance claim, 96% of personal auto claims settle below $100,000.

The high ceiling shifts incentives: plaintiffs' attorneys have reason to pursue cases they'd otherwise drop and push for larger settlements. Fraud rings have emerged to exploit these policies. The American Transit Insurance Company, which focuses on NY rideshare insurance, estimates 60-70 percent of its claims are fraudulent. Uber recently filed racketeering lawsuits against networks of law firms and clinics allegedly staging fake accidents in New York, Florida, and California.

That $1 million requirement traces back to Uber’s early days. When the company was fighting for legality across America, taxi commissions called ridesharing dangerous. To win over skeptical politicians, Uber proposed $1 million in coverage, matching limousine services and interstate charter bus companies, not taxis. It became the national template. Had Uber aimed to match taxi limits, the mandates would be $100,000 to $300,000.

Now Uber is advocating to lower the $1 million mandates. The company (and its drivers) complain that insurance is around 30% of fares, particularly in states like California, New Jersey, and New York which also require additional $1 million uninsured motorist coverage and/or no-fault insurance. Even in DC, with very strong anti-fraud protections, the base $1 million requirement makes up about 5% of every fare—roughly a quarter of Empower’s advertised price advantage. (...)

Empower shows people want options. The app doesn’t let you schedule rides in advance, store multiple cards, or earn airline miles. Drivers don’t always turn off their music. Empower’s not trying to target the same audience as Uber. But the New York Times estimates Empower handles 10% of DC’s ride share market. People are comfortable with the rideshare industry’s scrappy options.

I think the core question is: now that society has accepted rideshare, should we revisit the rules that helped us get there?

Coverage of the potential shutdown rarely focuses on who stands to lose most: price-sensitive riders. Most coverage focuses on Empower’s lack of commercial insurance without explaining that the mandate is three to ten times higher than what taxis carry. Few explore whether or how Empower’s model actually differs: drivers can set their own prices. Drivers fund the platform through monthly fees rather than a cut of each fare. Drivers who get commercial insurance can also use it for private clients.

People now trust and rely on this mode of transportation. Ridesharing has become pseudo-infrastructure for car-less Americans and a tool against drunk driving. In areas of Houston where rideshare first rolled out, drunk driving incidents appear to have dropped 38%.

We should want rideshare to remain affordable, especially as we build the excellent public transit we need.

by Abi Olivera, Positive Sum |  Read more:

Image: uncredited

[ed. Learn something new every day. I'll certainly look into this new company. The pricing of Uber is getting crazy (I've never used Lyft). Unfortunately, expansion won't be easy. As noted: High mandates also act as a moat. In DC, becoming a licensed rideshare company requires a $5,000 application fee, a $250,000 security fee, and infrastructure for that $1 million coverage. You have to be well-capitalized before you serve your first rider. This is likely why we see few bare-bones apps or local competitors to turn to when Lyft and Uber are surging.]

So You Want to Abolish Property Taxes

A lot of people in the Republican party have been talking about abolishing property taxes lately. This is a bad idea with unintended consequences, and they shouldn’t do it.

Doing so would undermine economic growth and housing affordability gains certain red states have recently seen. Worse, we’ve already run this experiment and know where it leads: a California-style de-growth death spiral that slams the door in the faces of young working families.

I begin by explaining why property tax elimination is a bad idea:

1. States will never actually do it

2. The alternatives are worse

3. Blue state experiences serve as a warning

Then, I conclude by showing how to pragmatically reform property taxes in a way that delivers both meaningful tax relief and the sustainable pro-growth, pro-family, results craved by red and blue states alike.

1. States will never actually do it

The first reason eliminating property taxes is bad is that local politicians don’t have the guts to actually pull the trigger. As soon as it’s time for implementation, intra-party fighting overwhelms the legislative process, causing lawmakers to throw up their hands, slap on a band-aid, declare victory, and go home.

Why you can’t eliminate property taxes

In my home state of Texas, Republicans have tried and failed twice in back-to-back legislative sessions to eliminate property taxes. This is despite the fact that Texas has been under complete Republican domination for over twenty years.

First, it’s just too expensive. In 2024, the legislative budget board found that replacing property taxes would cost $81.5 billion dollars, more than the annual state budget of $72 billion. Read here:

“This is not something that you can find $81 billion on a per-year basis and not have a major impact on the remaining sales tax rates, because that is a huge amount of money to be able to replicate,” said state Sen. Paul Bettencourt, a Houston Republican and [Lt. Governor Dan] Patrick’s chief lieutenant on property taxes.

Second, replacing all property taxes with sales taxes would require raising the sales tax rate to over 19%, according to the Texas Taxpayers and Research Association. Just in case state leaders don’t think prices on everyday goods have risen high enough yet, they should note that inflation is the number one most important issue1 among Republicans. [...]

Property taxes are less hated than you think

At least according to recent polling, the #1 most hated tax is not the property tax, but the Federal Income tax: [...]

Note the change in the last two decades: a net 20 percentage point swing in most-hated status between property tax and federal income tax. The large drop in housing affordability over that time period has surely contributed towards that change in sentiment...

Also, if property taxes are so desperately hated, why do states keep voting to keep them in place?

Every single state has some form of state or local property tax. Meanwhile, over a quarter of states opt out of at least one of sales, corporate, or income taxes.

In short, while it is often claimed that property taxes are the least popular tax by stated preferences, if we look at revealed preferences, they could actually be the most popular local tax. Perhaps this is why every time a red state tries to abolish property taxes, strident opposition crops up from unexpected places: [video]

But maybe you don’t care. In that case, pick an alternative.

2. The Alternatives are worse

An OECD report ranks different taxes by which are the most harmful to growth:

1. Corporate taxes (worst)

2. Personal income taxes

3. Consumption/sales taxes

4. Property taxes (best)

Overly high corporate taxes cause investment to flow to other states instead, and sufficiently high income taxes are a commonly cited driver of outmigration from blue states to red states. Modest sales taxes are the least distortionary of the three, but they’re still worse for growth overall than a well run property tax.

In conservative states like Texas, raising income and corporate taxes is already dead in the water (if not explicitly banned in the state constitution), which just leaves sales taxes. Since people say they hate property taxes more, shouldn’t we just bite the bullet and go all in on sales taxes?

The problem with this line of thinking is that the polling is based on sales taxes at current rates. The highest sales taxes in the nation cap out at 10%—rates as high as 19% are completely unprecedented. Even worse, the Texas Taxpayers and Research Association found that at those levels you start triggering tax avoidance, so you will inevitably have to raise the rate even higher to compensate, pushing it well past 20%.

We don’t even need to argue about whether this is popular or not because this exact proposal has been proposed twice already in Texas and it’s failed twice. Texans do not want to replace all property taxes with 20% state-imposed inflation on goods and services.

Ironically, reducing property taxes might actually be hardest in red states like Texas, precisely because the state is so anti-tax that there just aren’t many alternatives left. It’s no surprise then that the most famous instances of states that have “succeeded” in undermining property taxes are blue states.

The results have not been good.

3. Blue state experiences serve as a warning

Don’t California my Texas

One anti-property tax measure is not to lower tax rates so much as to completely undermine the entire system of property valuation itself, and there is no example more infamous than California’s Proposition 13. This 70’s-era reform fell far short of abolishing the property tax, settling for simply unleashing one of the most wildly unequal and unfair taxation schemes in the nation instead.

Prop 13 works like this:

• Assessed values are frozen at their 1976 valuations

• The tax rate is limited to 1%

• Increases in assessed values are limited to 2% a year

• New reassessments are allowed only for new construction or when property changes hands

Various propositions in the following decades added yet another privilege: a property’s Prop 13 status may be passed on to children and grandchildren, thereby literally establishing a class of hereditary landed gentry.

The results have been an absolute disaster for both housing affordability and any semblance of basic fairness. Side-by-side houses have wildly unequal property assessments (source):

Again, complete property tax elimination never actually arrives. What arrives instead is special treatment for one class at the expense of everyone else in the state. But that’s not all; on top of the much higher property tax burdens young working families face for the audacious crime of moving in last year, the state has extra treats in store (source):

The state’s top marginal individual income tax rate of 13.3 percent is compounded by a 1.1 percent newly uncapped payroll tax, bringing the all-in top rate to 14.4 percent. Additionally, nonresidents must file income taxes if they work even a single day in the state, and California is one of only four states to still impose an alternative minimum tax.

Don’t forget that California also has among the highest corporate taxes in the nation as well, just in case you were thinking of starting a business, or investing in one.

Honestly, the fact that it’s taken this long for California to start to bleed population really shows you what an incredible natural advantage California has long held over every other location in the United States. Even though the game has always been California’s to lose, if you spend multiple decades repeatedly punching yourself in the face, the crown eventually slips from your head.

NOTE: as much fun as it is to get high huffing California schadenfreude, Republicans would do well to remember that Prop 13 was pushed for in large part by members of their own party.

Unfortunately, California isn’t the only blue state with gorgeous weather and Edenic geography that’s been steadily sending its children into exile.

Aloha ‘Oe

The state with the lowest property taxes in the nation, at an effective tax rate of 0.27%, is Hawaii. Incidentally, Hawaii has the second highest top income tax rate at 11%. It also has the third highest net domestic outmigration rate of all US states between 2020-2024.

Even worse, the overall population “natural change” (births minus deaths) is steadily shrinking:

What’s not shrinking is the size of billionaire landholdings. Just 37 billionaires own more than 218,000 acres of Hawaii, roughly 5.3% of all land in the state, a figure equal to 11.1% of all privately held land.

Just one of those billionaires owns more than 1.27% of the entire state—Larry Ellison, founder of Oracle, who owns 98% of the entire island of Lānaʻi.

Meanwhile, Mark Zuckerberg & Priscilla Chan have seen their landholdings in Kaua’i more than triple, from 700+ acres in 2014 to over 2,300 acres today over the last ten years. Oprah Winfrey now owns over 1,000 acres on Maui after a recent purchase, the same island on which Jeff Bezos owns 14 acres. But what Jeff lacks in quantity, he makes up for in quality: he paid $78M for his land in La Perouse Bay, a full $13M more than Zuck paid for his 1,000-acre Kawai’i purchase in 2025.

As a quick aside, this underscores another problem with rock-bottom property taxes: it turns real estate into the perfect speculative financial asset in which to park money. When so little cost to hold it, real estate becomes an attractive passive investment, and over time tends to take up an ever-increasing share of bank loans, as expertly illustrated in the paper The Great Mortgaging, by Jordà, Schularick, and Taylor. This has a double-whammy effect on the economy: real estate sucks up all the loans, bidding up its price, while leaving all other sectors (like actually providing productive jobs) with less investment...

Making real estate the perfect speculative asset for the ultra-rich is never a good idea, but Hawaii faces other problems too: the top reasons cited for leaving the state include high cost of living, limited economic opportunities, housing challenges, quality of life concerns, and education. That last one is exacerbated by chronically underfunded public schools.

Hawaii’s high income taxes and low property taxes have done little to curb the island state’s steady transformation into a paradise for the rich, but a port of exile for the young working families its future depends on.

Five thousand miles away, on the cold and distant far shore of the mainland, another blue state grapples with a similar challenge. [ed. hint: New York]:

In any case, whether it’s Texas, Florida, Hawaii, California, New York, or any of the other forty-five of these great United States, there’s a solution out there that meets everybody’s needs.

It delivers meaningful property tax relief to the median homeowner, without excluding renters and businesses or pitting seniors against young working families, all while driving overall economic efficiency and setting the state up for a pro-growth flywheel that keeps the budget balanced and taxes competitive.

That policy is Universal Building Exemption.

3. Universal Building Exemption is better

There is a problem with property taxes: it’s a good tax combined with a bad tax. The bad part of the tax is the portion of the tax that falls on buildings and improvements. We’re in a housing crisis, so why are we taxing houses? We’re in an age of rising unemployment, so why are we taxing workplaces? We want more construction, not less.

A universal building exemption fixes this by shifting the tax off of buildings and onto the unimproved value of land. Crucially, it’s revenue-neutral: it raises the same amount of property tax dollars as before, so it doesn’t break the budget.

Here’s why it’s the solution to the property tax debate:

Economists and key conservative thinkers support it

1. It balances the budget

2. It’s pro-growth and pro-natal

3. It’s better than the homestead exemption

4. It’s politically viable 

[specific details...]

Okay, but am I just talking my own book here, coming up with a tax shift that will just personally benefit me, a middle class Texas homeowner and father of three?

No, because the beauty of universal building exemption is that the biggest losers are the ones holding the most valuable downtown urban land out of use, and the chief beneficiaries are everybody else.

Who are the losers? The big losers are surface parking lots and vacant land, particularly those situated downtown next to skyscrapers. This shifts the tax burden off of locations people actually live in, to massively valuable locations where nobody lives.

This isn’t just a handout to homeowners, developers, and landlords, either—it’s a carrot and a stick. The carrot of building exemption rewards everybody who actually contributes more of what contributes to growth in our society—namely, homes, neighborhoods, and jobs—a category which includes the best kinds of property managers and builders. The stick of a higher effective tax rate on land pokes everyone in the butt who is sitting on the most valuable locations—which includes the worst kinds of slumlords and land-banking “developers”— to either build something already, or sell it to someone who will.

Lars Doucet, Progress and Poverty |  Read more:

Images: uncredited/Gallup/James Medlock

[ed. Agree 100%. There should be some kind of penalty for developers holding dead land and letting it appreciate through scarcity and the sacrifice of their more productive neighbors. Also, the California Prop 13 issue is insane. Didn't know that's how it all played out. For a new way of taxing property (and easing the tax burden on productive businesses), see this video (and transcript) of LVT (land value taxes) that encourage more building and less vacant land speculation here.]

The Monkey’s Paw Curls

[ed. More than anyone probably wants to know (or can understand) about prediction markets.]

Isn’t “may you get exactly what you asked for” one of those ancient Chinese curses?

Since we last spoke, prediction markets have gone to the moon, rising from millions to billions in monthly volume.

For a few weeks in October, Polymarket founder Shayne Coplan was the world’s youngest self-made billionaire (now it’s some AI people). Kalshi is so accurate that it’s getting called a national security threat.

The catch is, of course, that it’s mostly degenerate gambling, especially sports betting. Kalshi is 81% sports by monthly volume. Polymarket does better - only 37% - but some of the remainder is things like this $686,000 market on how often Elon Musk will tweet this week - currently dominated by the “140 - 164 times” category.

(ironically, this seems to be a regulatory difference - US regulators don’t mind sports betting, but look unfavorably on potentially “insensitive” markets like bets about wars. Polymarket has historically been offshore, and so able to concentrate on geopolitics; Kalshi has been in the US, and so stuck mostly to sports. But Polymarket is in the process of moving onshore; I don’t know if this will affect their ability to offer geopolitical markets)

Degenerate gambling is bad. Insofar as prediction markets have acted as a Trojan Horse to enable it, this is bad. Insofar as my advocacy helped make this possible, I am bad. I can only plead that it didn’t really seem plausible, back in 2021, that a presidential administration would keep all normal restrictions on sports gambling but also let prediction markets do it as much as they wanted. If only there had been some kind of decentralized forecasting tool that could have given me a canonical probability on this outcome!

Still, it might seem that, whatever the degenerate gamblers are doing, we at least have some interesting data. There are now strong, minimally-regulated, high-volume prediction markets on important global events. In this column, I previously claimed this would revolutionize society. Has it?

I don’t feel revolutionized. Why not?

The problem isn’t that the prediction markets are bad. There’s been a lot of noise about insider trading and disputed resolutions. But insider trading should only increase accuracy - it’s bad for traders, but good for information-seekers - and my impression is that the disputed resolutions were handled as well as possible. When I say I don’t feel revolutionized, it’s not because I don’t believe it when it says there’s a 20% chance Khameini will be out before the end of the month. The several thousand people who have invested $6 million in that question have probably converged upon the most accurate probability possible with existing knowledge, just the way prediction markets should.

I actually like this. Everyone is talking about the protests in Iran, and it’s hard to gauge their importance, and knowing that there’s a 20% chance Khameini is removed by February really does help to place them in context. The missing link seems to be between “it’s now possible to place global events in probabilistic context → society revolutionized”.

Here are some possibilities:

Maybe people just haven’t caught on yet? Most news sources still don’t cite prediction markets, even when many people would care about their outcome. For example, the Khameini market hasn’t gotten mentioned in articles about the Iran protests, even though “will these protests succeed in toppling the regime?” is the obvious first question any reader would ask.

Maybe the problem is that probabilities don’t matter? Maybe there’s some State Department official who would change plans slightly over a 20% vs. 40% chance of Khameini departure, or an Iranian official for whom that would mean the difference between loyalty and defection, and these people are benefiting slightly, but not enough that society feels revolutionized.

Maybe society has been low-key revolutionized and we haven’t noticed? Very optimistically, maybe there aren’t as many “obviously the protests will work, only a defeatist doomer traitor would say they have any chance of failing!” “no, obviously the protests will fail, you’re a neoliberal shill if you think they could work” takes as there used to be. Maybe everyone has converged to a unified assessment of probabilistic knowledge, and we’re all better off as a result.

Maybe Polymarket and Kalshi don’t have the right questions. Ask yourself: what are the big future-prediction questions that important disagreements pivot around? When I try this exercise, I get things like:

• Will the AI bubble pop? Will scaling get us all the way to AGI? Will AI be misaligned?

• Will Trump turn America into a dictatorship? Make it great again? Somewhere in between?

• Will YIMBY policies lower rents? How much?

• Will selling US chips to China help them win the AI race?

• Will kidnapping Venezuela’s president weaken international law in some meaningful way that will cause trouble in the future?

• If America nation-builds Venezuela, for whatever definition of nation-build, will that work well, or backfire?

Some of these are long-horizon, some are conditional, and some are hard to resolve. There are potential solutions to all these problems. But why worry about them when you can go to the moon on sports bets?

Annals of The Rulescucks

The new era of prediction markets has provided charming additions to the language, including “rulescuck” - someone who loses an otherwise-prescient bet based on technicalities of the resolution criteria.

Resolution criteria are the small print explaining what counts as the prediction market topic “happening'“. For example, in the Khameini example above, Khameini qualifies as being “out of power” if:

…he resigns, is detained, or otherwise loses his position or is prevented from fulfilling his duties as Supreme Leader of Iran within this market's timeframe. The primary resolution source for this market will be a consensus of credible reporting.

You can imagine ways this definition departs from an exact common-sensical concept of “out of power” - for example, if Khameini gets stuck in an elevator for half an hour and misses a key meeting, does this count as him being “prevented from fulfilling his duties”? With thousands of markets getting resolved per month, chances are high that at least one will hinge upon one of these edge cases.

Kalshi resolves markets by having a staff member with good judgment decide whether or not the situation satisfies the resolution criteria.

Polymarket resolves markets by . . . oh man, how long do you have? There’s a cryptocurrency called UMA. UMA owners can stake it to vote on Polymarket resolutions in an associated contract called the UMA Oracle. Voters on the losing side get their cryptocurrency confiscated and given to the winners. This creates a Keynesian beauty contest, ie a situation where everyone tries to vote for the winning side. The most natural Schelling point is the side which is actually correct. If someone tries to attack the oracle by buying lots of UMA and voting for the wrong side, this incentivizes bystanders to come in and defend the oracle by voting for the right side, since (conditional on there being common knowledge that everyone will do this) that means they get free money at the attackers’ expense. But also, the UMA currency goes up in value if people trust the oracle and plan to use it more often, and it goes down if people think the oracle is useless and may soon get replaced by other systems. So regardless of their other incentives, everyone who owns the currency has an incentive to vote for the true answer so that people keep trusting the oracle. This system works most of the time, but tends towards so-called “oracle drama” where seemingly prosaic resolutions might lie at the end of a thrilling story of attacks, counterattacks, and escalations.

Here are some of the most interesting alleged rulescuckings of 2026:

Mr Ozi: Will Zelensky wear a suit? Ivan Cryptoslav calls this “the most infamous example in Polymarket history”. Ukraine’s president dresses mostly in military fatigues, vowing never to wear a suit until the war is over. As his sartorial notoriety spread, Polymarket traders bet over $100 million on the question of whether he would crack in any given month. At the Pope’s funeral, Zelensky showed up in a respectful-looking jacket which might or might not count. Most media organizations refused to describe it as a “suit”, so the decentralized oracle ruled against. But over the next few months, Zelensky continued to straddle the border of suithood, and the media eventually started using the word “suit” in their articles. This presented a quandary for the oracle, which was supposed to respect both the precedent of its past rulings, and the consensus of media organizations. Voters switched sides several times until finally settling on NO; true suit believers were unsatisfied with this decision. For what it’s worth, the Twitter menswear guy told Wired that “It meets the technical definition, [but] I would also recognize that most people would not think of that as a suit.”

[more examples...]

With one exception, these aren’t outright oracle failures. They’re honest cases of ambiguous rules.

Most of the links end with pleas for Polymarket to get better at clarifying rules. My perspective is that the few times I’ve talked to Polymarket people, I’ve begged them to implement various cool features, and they’ve always said “Nope, sorry, too busy figuring out ways to make rules clearer”. Prediction market people obsess over maximally finicky resolution criteria, but somehow it’s never enough - you just can’t specify every possible state of the world beforehand.

The most interesting proposal I’ve seen in this space is to make LLMs do it; you can train them on good rulesets, and they’re tolerant enough of tedium to print out pages and pages of every possible edge case without going crazy. It’ll be fun the first time one of them hallucinates, though.

…And Miscellaneous N’er-Do-Wells

I include this section under protest.

The media likes engaging with prediction markets through dramatic stories about insider trading and market manipulation. This is as useful as engaging with Waymo through stories about cats being run over. It doesn’t matter whether you can find one lurid example of something going wrong. What matters is the base rates, the consequences, and the alternatives. Polymarket resolves about a thousand markets a month, and Kalshi closer to five thousand. It’s no surprise that a few go wrong; it’s even less surprise that there are false accusations of a few going wrong.

Still, I would be remiss to not mention this at all, so here are some of the more interesting stories:

by Scott Alexander, Astral Codex Ten |  Read more:
Images: uncredited

Big Beautiful Belly Flop

America is losing jobs in blue-collar industries, something that last occurred during the initial shock of the early pandemic and the depths of the Great Recession. The country is down 65k industrial jobs over the last year, a dramatic reversal from 2024, when the US added a lower-than-usual but still respectable 250k jobs. A major slowdown has hit all blue-collar sectors this year, including construction, mining, and utilities—though manufacturing and transportation are driving the vast majority of US job losses. via:

The US continues to lose manufacturing jobs—payrolls are down 75k over the last year, & another 8k jobs were lost in December Transportation (especially auto manufacturing), wood, and electronics/electrical manufacturing are the biggest losers, but few subsectors are doing well. via:

Chairman Powell's Statement

[ed. Don't hear public comments from a Fed Chairman too often... screw around with administrative, social, legal fields and you might notch a few wins. Screw around with the nation's monitary system and expect significant pushback (from both parties). See also: Chairman Powell’s Statement (MR):]

***

Whether an independent Fed is desirable is beside the point. The core issue is lawfare: the strategic use of legal processes to intimidate, constrain, and punish institutional actors for political ends. Lawfare is the hallmark of a failing state because it erodes not just political independence, but the capacity for independent judgment.

What sort of people will work at the whim of another? The inevitable result is toadies and ideological loyalists heading complex institutions, rather than people chosen for their knowledge and experience.

[ed. And it all began with this: Trump Meets With Powell at Federal Reserve... leading to one of the most surreal political moments in recent memory.]

Prediction Market Debate: Did the U.S. ‘Invade’ Venezuela?

Polymarket users who bet on a U.S. invasion of Venezuela are crying foul after the prediction market company declared that the Jan. 3 U.S. military operation did not constitute an invasion.

Polymarket, where users can gamble on world events, has not paid users who bet on an invasion. The dispute started over a question posed to bettors on site: “Will the U.S. invade Venezuela by …” followed by a range of possible dates.

A description said the bet would pay out if “the United States commences a military offensive intended to establish control over any portion of Venezuela,” adding that “the resolution source for this market will be a consensus of credible sources.”

So when U.S. Special Forces flew into Venezuela on helicopters and snatched the country’s leader, Nicolás Maduro, and his wife in the early morning of Jan. 3, many Polymarket gamblers were ready to collect their winnings.

But later that day, after the Trump administration’s assertions that it would control Venezuela’s policymaking and oil industry, Polymarket added a note to its site stating that the operation did not constitute an invasion.

“President Trump’s statement that they will ‘run’ Venezuela while referencing ongoing talks with the Venezuelan government does not alone qualify the snatch-and-extract mission to capture Maduro as an invasion,’’ the note said.

Polymarket declined to comment on its decision.

Polymarket is regulated by the Commodities Futures Trading Commission, which did not respond to a request for comment. Roughly $20 billion was traded on the platform last year.

Bets are based on the likelihood of an event’s taking place. If it is deemed likely to happen, bets could be close to $1 and the potential payout small; if the outcome is seen as unlikely, bets could be just a few cents and have a much higher potential payout.

The odds on a U.S. invasion of Venezuela jumped after the incursion but have since plummeted, implying very little likelihood of a payout. People are still wagering on a future invasion: There is roughly $6.5 million betting it will occur through the end of January, and another $2 million betting on it through the end of March.

Comments from users on the webpage for the disputed Venezuela bet were angry at Polymarket’s decision.

“There is no mathematical possibility that the snatch-and-extract operation could succeed without invading any point on Venezuelan territory,” wrote one user. Another wrote: “Everyone is calling it invasion.”

by Joe Rennison, NY Times | Read more:
Image:Vincent Alban/The New York Times
[ed. This seems to me a big downside of prediction markets. Anyone with inside information, or worse, decision-making authority, could easily and anonymously make bets and profit. By now everyone's heard about the person who placed a 30K bet on this 'invasion' and 'won' $400K a few hours later. Hegseth or J.D. would be high on my list of suspects, but it could be anybody with close access. Fortunately, congressman Ritchie Torres (D-NY) is taking the issue seriously and proposing a ban affecting all government officials (will be interesting to see who does and doesn't support it). Also, just as an aside, why is everyone gambling these days? Update: What $400,000 payout after Maduro raid says about prediction markets (AP/ST).]

Floreat Britannia (in the Era of AI)

Reflections on 2025: The Compute Theory of Everything, grading the homework of a minor deity, and the acoustic preferences of Atlantic salmon.

***

May Britain flourish. I mean this unironically.

To say this in late 2025, however, is to mark oneself out as a dangerous contrarian, or perhaps just someone whose internet service provider has been down since the Platinum Jubilee. I say this with the stubborn affection of a developer trying to run Doom on a smart fridge: the hardware is eccentric, the display is glitchy, but deep down, I believe the architecture is solid. (...)

Britain is not currently flourishing. It is a country that has suffered catastrophic forgetting of its “Industrial Strategy” while overfitting deeply on “Artisanal Sourdough” and “Risk Assessment.” I will now establish this through the standard literary method of listing increasingly dispiriting statistics until the reader either agrees or leaves.

Real wages grew by 33% per decade from 1970 to 2007. Since 2007 they have grown by approximately nothing, representing the longest wage stagnation since the Napoleonic Wars, though in fairness to the current era, Napoleon was eventually defeated and exiled to St Helena, whereas the causes of British wage stagnation remain at large and are frequently invited to speak on panels. (...)

Our industrial electricity prices are the highest in Europe. Hinkley Point C will cost £46 billion, making it the most expensive power station ever built, with a price tag suggesting that the reactor core is being hand-carved by Jony Ive. We’re SotA on cost. South Korea builds equivalent reactors for one-quarter the cost. The Fingleton Report analyses why, citing capital structures and safety frameworks across 162 pages of sober text. But the detail that reached my heart this year, concerns the fish.

Hinkley’s fish protection measures will cost approximately £700 million. This includes an acoustic fish deterrent system referred to, apparently without irony, as the “fish disco”. Based on the developer’s own modelling, this nightclub for aquatic life is expected to save 0.083 Atlantic salmon per year. At £700 million amortised over the system’s life, this values a single salmon at roughly £140 million. This is approximately 700 times the fish’s weight in cocaine.

The stagnation of British growth is a sunk cost. We cannot unstagnate the 2010s. But what I want, as a citizen, is a system going forward where the primary constraint on energy is not the acoustic preferences of 0.083 salmon.

by Samuel Albanie, Substack |  Read more:

Image: uncredited

[ed. Pretty funny 2025 summary. I don't spend a lot of time thinking about Britain, its economy, or AI "compute" issues at cocktail parties, but this little factoid caught my attention.]

Blame and Claim

A public adjuster on insuring a burning world

Just off a hiking trail, not far from where Sunset Boulevard meets the sea, a fuel and an oxidant combine and combust. The underbrush is dry and dusty, and within an hour flames engulf your home. Smoke fills your kitchen and your garage. Flecks of wallpaper from your children’s bedroom float down onto a nearby parking lot. Your wedding photos melt, as does your car battery. The glass windows of your dining room shatter and temperatures reach a thousand degrees. The root cause might have been a mountaineer who burned his toilet paper at dawn, a spark at a faulty transmission line in the foothills, a discarded cigarette fanned by the Santa Anas, or, simply, arson.

But it is too early to assign blame. Your attention is elsewhere. You are not home and you cannot get there, as the fire department has evacuated your neighborhood, the Pacific Palisades in Los Angeles. Your mind races, and you reach for your phone to ensure your family is safe even if you have already heard from them. Maybe you call the police, even though you hear the sirens throughout your neighborhood and see the caravans of emergency vehicles filling the streets.

When you do manage to get home, you stand on the sidewalk watching your rafters collapse and, covering your mouth with a shirtsleeve, you make your next call, to your insurance company to file a claim. You don’t know what this process entails. You have never filed a homeowner’s or business insurance claim, you have never read your policy, and you do not know if your policy covers what has happened, since you do not know what has happened or what caused it.

You are unaware that the insurance industry has been, in recent years, denying more claims and more coverage, exiting major markets, and raising premiums. As governments and corporations continue to enable fossil fuels, throttle renewable-energy sources, and deny long-established climate science, the related catastrophes (fires, floods, droughts, storms) and social effects (mass migration, war over natural resources, economic and demographic stratification) are increasingly commonplace and metastasizing. This new world order transfers the risk and harm of the disaster business by way of the insurance industry onto you, the consumer. On an episode of the climate science podcast A Matter of Degrees, Dave Jones, a former California insurance commissioner who is now the director of the Climate Risk Initiative at UC Berkeley, said, “For many Americans, the single biggest financial asset you have is your home. If you don’t have insurance or you can’t afford enough insurance and that home is destroyed, then you’re left with basically nothing. Insurance is the climate crisis canary in the coal mine, and the canary is just about dead.”

Days later, as embers still burn and you begin to accept that not one object will be recovered or salvaged from your home, your insurance company sends one of its employees or contractors, called an adjuster, to assess the damage, value what is or was, and (hopefully) make an offer of payment. While insurance companies defend their adjusters as necessary agents who help them evaluate claims, critics label them as conflicted loyalists who will undervalue losses, delay settlements, and pressure policy holders to settle quickly.

But as you stand there, a man in business-casual attire emerges from the smoke and approaches you apprehensively. He introduces himself as someone who can help. His title, too, is adjuster, but if you are able to focus enough on his pitch, he tells you he is not an employee of your insurance company or of a roofing company or a general contractor. If you would like help navigating the ashes of your new life, he will help you rebuild: independently value your losses, handle communications and negotiations with your insurer, draft paperwork, and take care of the settlement of the claims. He is part private detective, part lawyer, part psychologist. All of this sounds reasonable, so you take his card and tell him you’ll be in touch.

That evening, as you make plans for your family to sleep at a nearby friend’s house or in a hotel, some quick internet research teaches you this “public” adjuster is indeed part of a legitimate industry (although sometimes public adjusters, you discover, are known as “private” adjusters). Staff adjusters, you learn, are the ones that work for insurance companies, and independent adjusters are contracted for certain projects by insurance companies.

This ecosystem of adjusters is baffling, but you decide to retain the public adjuster. As you sign his contract, he informs you that he will take a significant cut of any claim settlement he negotiates. Your calculation is that outsourcing the administration of the recovery of your life is worth the cost—so long as the insurance company agrees to write a check.

I recently spoke with the president of a large public adjuster firm in California that represented victims of the Palisades and Eaton fires that broke out in early 2025 and destroyed about sixteen thousand buildings on nearly forty thousand acres, causing tens of billions of dollars in damages. This conversation has been edited for length and clarity.

***

Tyler Maroney: How many claims does the average public adjuster typically handle in a year?

Adjuster: It depends on the size of the claim, but some will do a hundred claims a year, mostly smaller—$10,000 claims or $50,000 claims. But if you’re talking about somebody who’s handling complicated claims, I’d say an average load for an adjuster is somewhere between twenty and fifty a year.

TM: And you handle more than just massive disasters, right?

Adjuster: We respond to disasters every day, 365 days a year. Some of them are disasters that affect a hundred people or a thousand people. Those are big events. But there are buildings that burn down every single day. It doesn’t matter whether you’re in Minnesota or if you’re in New York, there’s water damage, there’s flooding, there are fires, there are robberies. It doesn’t require a hurricane or a wildfire for there to be a need for our service.

TM: I’ve read that clients don’t really know that public adjusters exist until they are desperate. Is part of your job getting the word out that this is an industry?

Adjuster: We’re luckier now in today’s world of technology because people can search for things online. I’ve been doing this thirty-three or thirty-four years, when there was no internet to search. If you had an insurance claim, you only had the connections you had, but today people can type into Google, “Can I get any help with my insurance claim?”

TM: I presume you go out into the field to attract clients?

Adjuster: Yes, part of the job is to be out there when an event happens or shortly after an event is over, to let people know that we exist.

TM: When a large fire like in the Pacific Palisades in Los Angeles breaks out, you go as quickly as possible to the scene?

Adjuster: Yes. When you show up at somebody’s house and the family is in the front yard crying and trying to save things that aren’t savable, it’s sad. Sometimes it’s total loss, and you find people sifting through the rubble, lining up bits of pottery.

TM: And when you approach these suffering people, how do they respond?

Adjuster: You get a wide range of emotional responses, from “Get the fuck off my property, you ambulance-chasing vulture” to “Oh my God, we’re so lost. We don’t know what to do. Thank you so much for being here. Can you help us?”

TM: That must be a difficult emotional minefield to wade into.

Adjuster: Yes, and when you’re walking up to meet these people, most of the time they’ve never heard of a public adjuster. They have no idea who we are or what we do or that it’s a licensed profession. It can look like we’re trying to prey on people when they’re at this vulnerable point. The reality is that’s when they need help the most, because often they do whatever the insurance company tells them to do. That puts them in the worst spot they could be in.

TM: Worst spot?

Adjuster: So, say someone calls us six months after a fire. They have been arguing with their insurance company about the value of a claim and then, out of nowhere, they get a $65,000 bill from the restoration company [a third-party, for-profit vendor] and they want us to deal with that too. We have to say: You already agreed in writing and signed for them to do that work. That money’s gone, you spent it. We can’t take that back because it was an agreement you made before we were involved.

Most people just know they have an insurance agent that sold them some insurance, and they do what they’re told. Often that results in mistakes.

TM: What kinds of mistakes?

Adjuster: I’ll give you the easiest one. There is a fire in your house, but it burns only part of your house down. There’s still stuff in it. It’s not like a wildfire where it burns all the way to the ground. So the insurance company comes out, and they bring a restoration contractor. He’s going to help you get your stuff out of the house, store it, and get it cleaned up. Seems like an incredibly important service. He says it’s going to get worse if we don’t get your stuff out of the environment. Just sign here.

TM: Okay.

Adjuster: If the owner asks, “Who pays for this?,” the automatic response is “Oh, don’t worry about it, the insurance company pays for it, it’s part of your policy.” It makes perfect sense at the time. What they don’t share is that it erodes your contents limit [which means it reduces how much money the insurance company is likely to pay out]. You have given them carte blanche, and they can bill the insurance company directly. They charge not only for clean-up but for storage. And there’s no language that protects the homeowner if they’re not happy with the service.

TM: The homeowner is vulnerable at this point.

Adjuster: What they don’t understand is that six months from now, their stuff has all been cleaned, and the restoration company charged maybe a thousand dollars to clean something that was worth four hundred dollars and they don’t even want anymore. They could have just said, “Oh, a thousand dollars to clean that item? I don’t care about that anymore. Give me the thousand dollars.”

TM: And what can you do as an adjuster to prevent this?

Adjuster: You can say to the insurance company that our client wants to select items that have intrinsic value or that we believe are valuable enough to save and restore. We can advise that often the cost to clean something is more than its value or that it’s too damaged to properly restore it. Otherwise, a homeowner will find out that the restoration company has charged $65,000 when they have $300,000 of coverage for their contents, and that $65,000 is coming right off the top, and the cleaning costs reduces the amount of insurance they have for the things that they’ve completely lost.

TM: Back to the field, is the pitch as simple as “Hi, this might be awkward, but my name is x and I’m a public adjuster, which means I help people like you”?

Adjuster: Yeah. Often it’s “Your insurance company’s going to come out here, they’re going to assign an adjuster. That adjuster works for the insurance company. They don’t work for you. You have the opportunity and you have the right to hire your own public adjusting team that counterbalances the insurance company’s team so that you have an advocate who’s a true advocate for you to level the playing field.” That’s the pitch.

TM: Do you have a sense for what percentage of people who’ve been victimized by a catastrophe are able to engage public adjusters? I assume that most people, when they’ve gone through something like that, call their insurance company, right?

Adjuster: That’s traditionally what happens, yes. They either call their agent, if their insurance agent is somebody who they’re close with, or they call the insurance company and give notice that they have a claim. And some agents will refer clients to us in a secretive way. Some brokers [who work for policy holders, not insurance companies] think that if the carriers see that they’re recommending a public adjuster, that will be bad for their reputation with the insurance carriers. Some brokers don’t care.

TM: So how does that work?

Adjuster: Some brokers say, “Hey, don’t tell anybody I told you this, but you should talk to x public adjuster.” Or sometimes it’s more open, like, “Hey, [this public adjuster company] helped a lot of my clients, so you might want to talk to them.”

TM: So how do the brokers respond to you?

Adjuster: There are insurance brokers who haven’t worked with us or don’t know us. Or they feel threatened because they were hired to do this job, and by bringing or inviting you in as a public adjuster, they’re admitting that they don’t know what they’re doing. If you’re a salesperson and you’re selling insurance policies and you’re a credible person, you want to believe that what you’re selling is the best product available. You want to hold your head up high and say, “I represent x insurance company and they’re great insurance.” So for some insurance brokers, saying “Maybe you need help getting money” is saying something negative about the insurance company. For some insurance agents, that doesn’t feel right.

TM: Do you feel you are adversarial to insurance companies?

Adjuster: We are advocating for the policy holder, not the insurance company. The insurance companies like to say, “Why do you need a public adjuster? We’re going to pay you all the money you’re owed anyway.” But if that was true, then why would they care? Why would they even have that discussion if they’re going to pay the same benefits regardless of whether somebody has somebody helping them put it together? The reality is that they’re going to pay as little as they can. So are we adversarial, or are we just taking the workload off the policy holder? It’s an arduous process. Imagine a family where everything is gone, disappeared into the smoke, and you have the burden of sharing with the insurance company everything that you lost. Where would you start?

by Tyler Maroney, The Baffler |  Read more:

Image: Andrew Norman Wilson.

[ed. Public service post. Reminds me that I need to do an annual homeowner's insurance review. Been wondering how premiums and coverage have changed in the wake of increasingly common climate-related disasters. Unfortunately, no detail is provided on what these services are likely to cost (other than a "significant cut" of any negotiated claim settlement).]