The talking heads programs this morning were chock-full of stories I don’t have any interest in. The biggest stories were about the federal budget, the state of Iran’s nuclear development program, and the New York City mayoral primary. The answer to every question we might have was “we don’t know”.
Will the Democratic Party embrace Zohran Mamdani?
What is the status of the Iranian nuclear development program?
Will the Senate pass the budget bill? And will the House approve the reconciliation bill?
There were some things on which there was pretty general agreement. That Iran’s nuclear development program was “obliterated” is typical Trump exaggeration. That Republicans really, really want to make the tax cuts from President Trump’s first term permanent. The Democrats really, really want to spend more on healthcare. I could have told you any of those and I don’t have a staff of investigators.
House Minority Leader Hakeem Jeffries really struggled to avoid endorsing Mamdani. The strategy that Democratic consultants seem to have settled on about Mr. Mamdani is that he’s not really committed to the things he’s said over the years. We’ll see. Maybe New Yorkers will dodge this bullet and re-elect Adams.
I’ve expressed my view of the federal budget any number of times. We need to tax more and spend less. Spending on Medicare and Medicaid spending cannot continue to grow at the rate they have over the last ten years.
I’ve already provided my opinion on the reforms we need to make to Social Security.
The key point is that all of the necessary reforms are poisoned pills. They won’t be embraced by either political party.
As to the president’s beloved tax cuts consider this:
Do you see an increase in real business investment subsequent to their enactment? Me, neither. I think it’s possible (and desirable) to affect business investment via the tax code but cuts in the personal income tax rate would need to be much more targeted than the sort they have been for the last 40 years to accomplish that.
Maybe you arent interested but I interpreted your earlier posts as claiming that Iran was building a bomb and there was evidence. The IAEA report was used as proof. However, The IAEA people continue to claim that was not what they said and they had no evidence that Iran was building a bomb. They also believe, like US intelligence that Iran could start enriching in months and there was no obliteration.
“Iran feels that report was used, or published, as a pretext for Israel’s attack, and said Grossi should have been clearer that his inspectors had not found any evidence of a nuclear weapons programme.
After the attacks, Grossi told Al Jazeera: “We did not find elements in Iran to indicate that there are active systematic plans to build nuclear weapons. To pretend in any way that the report was a green light or an enabler of an attack is absolutely absurd.”
https://www.theguardian.com/world/2025/jun/29/iran-will-likely-be-able-to-produce-enriched-uranium-in-a-matter-of-months-iaea-chief-says
Steve
The performance of the S&P 500 Index was over 20% in 2023 and 2024.
Also, where’s the increase in capital investment? The tax reduction was, what, 7-8 years ago? Still no increase. IMO the reason is obvious: there are alternatives that present lower risks.
That’s not my view, Steve. My view is that we do not know. Maybe the Israelis know but we do not know. That raises an additional question that’s just as thorny. Should we trust Israeli intelligence? I think it would be imprudent to do so.
In the past I think I have written that one of several things is possible. Either
1. The Iranians are building a bomb.
2. The Iranians want “breakout capability”, i.e. to be able to build a bomb in a very short period.
3. They want to be able to sell highly enriched uranium to other people.
None of those is particularly in our interest but they’re all disastrous for the Israelis.
I don’t think we know either but the agencies with the people best equipped to make estimates are skeptical that there was obliteration.
#2- All Israel had to do was not go and bomb Iran and they wouldn’t have had a reason to make nukes.
Steve
“Obliterated” is a bad word but it’s typical Trumpian bloviation. IMO the more serious question is whether the Iranian nuclear development program has been set back by weeks, months, or years and everything we’re hearing about that is completely speculative. Where you stand depends on where you sit.
Another aspect of my view: I frequently wonder if the Iranian leadership knows what the Revolutionary Guard is doing.
“The strategy that Democratic consultants seem to have settled on about Mr. Mamdani is that he’s not really committed to the things he’s said over the years”
In my recollection, every politician who is elected makes an effort to implement the platform they campaigned on, no matter how it appears to those outside the campaign.
I wonder how the business investment numbers are being calculated and whether it is suffering from the same data issues that has been affecting other economic statistics…. because it doesn’t reflect the insane capex occurring in the “AI / cloud computing” industry. I saw a stat that approximately 1% of GDP is now being spent on AI data centers alone, and it is causing demand for electricity to slope up for the first time in 20 years.
I’m working on a post on the impact of AI. I think we’re repeating what went on during the “PC revolution” of the 1980s. Businesses made enormous investments in hardware and networking infrastructure without getting much in the way of return.
IMO the problem with AI won’t be AI but management.
There some other problems that I’ve mentioned before, e.g. junior engineers become senior engineers. AI will replace junior engineers first.
I look forward to seeing your post.
I believe that the impact is going to be much faster then the 1980’s and the PC revolution; the usage of LLM’s is on a ridiculous exponential curve, much of it occuring at work on a “shadow basis” but not officially sanctioned.
The limiting factor on impact is data (and perhaps power to run the data centers). Like Einstein couldn’t derive relativity unless Morrison Morley presented data there was no ether, Kepler couldn’t derive his laws of motion without Brahe’s observations; LLM’s can’t change a lot of jobs without the “tacit” knowledge in many jobs that isn’t written down.