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Good Friday Morning! Especially to everyone surviving the first major freeze of the year. Did you see any “frost flowers?” The rare phenomenon happens when frozen water bursts through plant stems, forming thin ribbons of curling water that look like flower petals (the AP has pictures).
They are found most often in the Eastern half of the U.S., especially in the upper half where hard freezes are more common, and resemble clouds of cotton candy or spun glass.
On Monday and Tuesday, people in Indiana, Missouri, Tennessee and elsewhere posted photos on social media showing undisturbed fields and backyards littered with the distinct pieces of natural art in the early hours after the hard freeze.
If you do, make sure to throw the pictures up on social media. Not everyone knows about them.
This week, I’m going to jump back into the AI coverage because there’s an interesting shift in how people are looking at it, which could have an impact on the broader economy – links to follow.
Quick Hits:
- Rod Dreher weighs in on the Tucker issue. Tucker Carlson’s episode with Nick Fuentes continues to dominate the internecine arguments on the right this week. It started with Rod Dreher writing a long piece blasting Carlson, and claiming that 30-40% of the Gen-Z staffers in D.C. share the racist views of Fuentes and Carlson (additional note: Tucker Carlson is arguing Dietrich Bonhoeffer is a “bad Christian” this week, for opposing Hitler). Emily Jashinsky wrote a follow-up on Dreher, claiming the 30-40% number was totally made up. It’s all anecdotal. Here’s what I do know: Gen-Z is considerably less pro-Israel than any generation preceding them. And there’s really no explanation for that consistent finding. From that, you get the milieu around Tucker Carlson and Fuentes that’s ardently antisemitic. How does that translate into the D.C. staffers? I don’t know. I doubt Dreher’s takeaways are accurate because he’s a minority within conservatism. While Jashinsky is better sourced, it’s still a narrow way to measure the topic. In any event, I recommend both pieces for a complete picture of what’s animating the right-wing discourse this week.
- Keep an eye on Venezuela. I am increasingly convinced the United States is about to engage in outright regime change in Venezuela. At the beginning of the month, I wrote an X/Twitter thread pointing out that the week of November 19 would be ideal for a strike. I updated that last night, and the case for a strike that week looks even stronger. Hurricane season is over, the Caribbean is clear of any tropical development, and a new moon will remove any natural nighttime light. This would be the first real shot Trump has had at a clean strike window since spring.
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Where you can find me this week
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Artificial Intelligence Moves Into Political Power Games – Conservative Institute
The Democratic Party Needs Therapy – Conservative Institute
We Don’t Have An ‘Affordability’ Crisis – It’s Inflation Stupid – Conservative Institute
The AI Bubble Is Here – Hopefully It Continues
I want to start with an easy way to see how fast AI is moving. A former colleague of mine wrote a viral piece for Whiskey Riff titled “An AI-Generated Country Song Is Topping A Billboard Chart, And That Should Infuriate Us All.” That piece burned up the internet.
He writes:
The #1 song on this week’s Billboard Country Digital Song Sales chart is a song called “Walk My Walk,” by an artist called Breaking Rust.
Now, if you’ve never heard of Breaking Rust, it’s because they’re not a real artist. The song is credited to someone named Aubierre Rivaldo Taylor, who is also behind an “artist” called Defbeatsai which posts some…well, pretty raunchy AI-generated songs.
While the Instagram page for Defbeatsai discloses that the songs are AI-generated, the IG for Breaking Rust describes it as only “Outlaw Country” and “Soul Music for Us,” with no mention of that music being created entirely by a machine.
You can check it yourself. Now, you’re going to go and listen to that, and you may even claim to know it was AI-created. But I’m going to pop that bubble before you get far with those thoughts.
Ipsos polled 9,000 people and tested them with music samples. What they found surprised even me – no one could tell what was AI and what wasn’t:
The company said 97 percent of the participants were unable to distinguish between the three clips.
Just over 70 percent of participants were surprised by the results. Another 52 percent reported feeling uncomfortable that they were unable to distinguish between the two, according to the survey.
When asked even further about it, “51 percent of respondents believed the technology would lead to lower-quality music on various music platforms, and 80 percent said AI-generated music should be clearly labeled.”
So, let’s put things clearly: you can’t tell the difference between AI-created music and non-AI-created music. I’ve spent the last few weeks listening to good and bad AI music on YouTube. Now that I’ve done that, I can faintly hear the differences between some of the issues that AI is struggling with. But let’s be real, it’s not easy.
A common refrain I keep hearing about AI is that what it creates “lacks soul” or “doesn’t have a spirit.”
That’s true. But the uncomfortable reality many people are about to face is that they don’t consume much media that’s “full of soul“ or “spirit.“ And the content they create isn’t “full of soul,“ or wholly original.
I’m fully cognizant that AI could replace everything I do, including this newsletter. As esoteric as my story selection is at times, I could absolutely replace what I do with AI, and some of you, dear readers, would prefer this. I know, because I’ve seen the polls and AI tests from authors and writers in other fields.
I haven’t done this, primarily because I enjoy writing. But I see it used in many other areas. I sat through a talk where a prolific author used AI to grow his self-publishing business, cranking out 150+ books in the first six months of this year (I have no idea what his number is now). These are full-length novels by a professional six-figure author (he was making six figures pre-AI, too).
We’re not stopping here, however. Disney announced it would soon allow “User-Generated Content via AI“ on its platforms. The Hollywood Reporter summed it up with this line, “Don’t want to wait until 2027 for Frozen 3? Soon, you may be able to make your own.“
It’s not all rainbows and sunshine, however. Cracks are forming in the artificial intelligence industry. Now, when I say ‘cracks,’ I don’t mean the technology is going to implode or that no one will use it. We’re never going back from this point. Pandora’s box is open on AI.
No, what’s changed is the economic impact. Nvidia is now a $5 trillion company, with OpenAI suggesting the government needs to step into this space more. I have a column this week on the reasons why we don’t need that. However, the economic threat is becoming increasingly real.
What if the AI bubble pops? A few years ago, it wouldn’t have mattered. Last year, if the bubble popped, it would have been bad, but not terrible. The further we go along, the worse the impacts of the bubble popping will be. Every 3-6 months, the impacts get slightly worse for a pop.
Tracy Alloway had a must-read newsletter on this topic in Bloomberg:
Before the great financial crisis, market legend Jeff Saut—then chief economist at Raymond James—wrote something that was both important and underappreciated.
He noted that real estate crashes were historically triggered by broader economic problems – rising unemployment, for instance. But in September 2007, Saut noticed the causal direction was changing: the enormous size of the US property market and its supercharged importance to the wider economy meant that housing itself became the driver of macroeconomic problems. Instead of reacting to economic stress, the housing sector was starting to cause it.
Cause and effect had flipped.
I can’t help thinking of this dynamic when observing the AI market now. Nearly every day brings a new headline about an AI company raising capital or planning major investments (today it’s Anthropic committing $50 billion to building US data centers). The scale is staggering. That Center for Public Enterprise report mentioned above estimates that Meta, Microsoft, and Amazon are expected to pour more than $350 billion into AI infrastructure this year alone, with even larger outlays expected in coming years. The economic impact is already huge, fueling measurable growth across the US economy.
The CPE report describes data center investment as “the chief motor of growth in the U.S. economy,“ estimating that AI investment will account for over 40% of US GDP growth in 2025. One economist quoted in the report claims AI spending has contributed more to US growth than consumer spending during the first half of this year.
I’ve tried to capture this scale in some of my writing, as well. But it’s getting larger. And as that grows, we move beyond a “crash“ and into “systematically important.“ I don’t mean “too big to fail,“ but I do mean that if this industry sneezes now, America is going to shudder.
Tracy Alloway continues to the most critical part:
Al is now affecting property values, the labor market (with the net impact still argued), electricity prices, manufacturing, and household wealth. JPMorgan estimates that about 44% of the S&P 500’s value now comes from the 30 biggest AI-focused companies, and the sector has made Americans about $5 trillion richer in 2025. If AI’s market value suddenly falls, so, presumably, does consumer spending.
Going back to Saut’s 2007 note, he made an important distinction even before the crisis ramped into full gear. It was important, he argued, to distinguish between a credit crunch and a collateral crunch. A credit crunch was when bankers and investors were too scared to lend. A collateral crunch, meanwhile, was the sudden collapse in value of the assets underpinning all those loans. As Saut presciently noted (again this is in 2007) the risk was “that the contagion spreads and morphs the collateral crunch into a full-blown credit crunch.“
That’s exactly what ended up happening in 2008.
At the moment, cashflow seems irrelevant to the AI sector and the spending boom continues apace. But one day the ability to monetize all this spending and transform capex expenditure into revenue is actually going to matter. If those profits don’t materialize – if consumers switch to cheaper Chinese alternatives, if the value of GPUs falls – the sector could face a collateral crunch. As Saut warned almost two decades ago, the danger is that a collateral crunch becomes a credit crunch and the entire Al-finance-economy flywheel comes to a screeching halt.
In short, AI is one of the fastest-growing technological revolutions we’ve had in a generation. It’s outpacing the internet itself. The scale is beyond the dot com bubble, social media, video, and anything else. That pace and the progress we’re seeing are astonishing, but the risk is finally starting to show.
If this bubble pops, we’re in for a big ride down.
That’s the ultimate message Nvidia and OpenAI are delivering now. The AI trade is so big now that whatever happens, we’re in this together, whether we want to be or not. That has significant ramifications.
What could prevent a pop? One of these companies —OpenAI, Anthropic, etc. —figures out the monetization question. The belief has been that one of them will find Artificial General Intelligence (AGI). I do not believe this will happen, and do not see AGI as even possible at the moment (while others see it as 2-3 years away).
If that doesn’t happen, one of these companies could blow up. And that would be a massive pop to the bubble. And no one in Washington, D.C. is ready for that conversation.
We’re at a turning point in human history with this technology. It’s weird to understand that kind of thing is happening in the moment, but it is true. Now we have to survive the economic impacts, which are approaching a level far closer to “Great Recession“ levels, not “dot com bubble.”
Links of the week
Karine Jean-Pierre is not a #GirlBoss: A qualified defense of feminism’s oft-maligned strivers – The Argument
Twenty-Eight Shutdown Thoughts: May I never have to write about these things again – Matt Glassman
Six Takeaways from Last Week’s Elections: A deep dive into election results in New Jersey, Virginia, and elsewhere. – The Liberal Patriot
The Great Affordability-Washing of the Democrats: Will it work? – The Liberal Patriot
Fetterman: The Radical Left Is More Hateful And Cruel Than The Radical Right – CNN
X/Twitter Thread(s) of the week
What my political leanings look like mapped over the electorate.
Ryan Hall storm chases the northern lights in a plane.
Satire of the week
Jack Schlossberg, Member Of Schlossberg Political Dynasty, Announces Run For Congress – Onion
Latest Tucker Guest Bigfoot Reveals How Mind-Controlling Chemtrails Are Sprayed Over The Flat Earth By The Jews – Babylon Bee
Dave Ramsey In Critical Condition After Learning Of 50-Year Mortgage – Babylon Bee
Entire Town Killed After Installation of Roundabout – The Hard Times
“Follow My Skin Routine With These 9 Amazing Products” Implores Waxen Figure That Looks Permanently Haunted – Waterford Whispers News