The daily view: Iran blockade, AI and labor, Palantir’s bad manifesto

Over the weekend, the U.S. blockaded Iranian ports and seized an Iranian ship. As I correctly wrote 1-2 weeks ago, the stock market has already decided Iran no longer matters despite the situation nowhere near being resolved. The S&P 500 and Nasdaq were only down slightly Monday morning. Here is what I wrote:

Like Iraq or Afghanistan, there is no resolution to Iran in any definite sense. It will continue in the background, much like the tariffs in 2025, as the stock market and economy moves on. High oil prices and gas will have a surprisingly small effect on CPI or consumer spending.

The market’s reaction to the blockade amounted to a tiny blip relative to recent gains, indicated by the red square:

Right again The Hot Hedge Fund Strategy Triggering a Pay Bonanza for Traders.

So far, as I predicted, AI is not going to devalue elite degrees or outlier talent. The smartest people, whether in tech, academia, or finance will continue to maintain their status and wealth. Gatekeepers of prestige, such as academic journals, will not be devalued either. Postdocs who aspire to tenure will still have to compete being published in the same dozen or so of publications; AI will not change this at all.

From Lost Nomad:

The main issue is labor is so expensive, and there is no way to automate it. This is why service is so poor in America, compared to the 2nd and 3rd world, because America puts labor on a sort of pedestal due to regulations or others roadblocks or frictions, leading to a situation where many people want to work but cannot clear the screening, or companies cannot afford to hire. Everything is self-serve in America, compared to being waited on when on vacation overseas despite it being more expensive in America.

To answer the question, “Why cant robots automate restaurant workers?,” robots have the same sort of problem as private planes or cars. Despite marked improvements in car or jet plane technology, private jets and cars haven’t become more affordable. Same for medical equipment. Replacing workers with robots would impose such a large upfront cost that few restaurant owners could possibly afford it, or opt to take the risk.

It would seem as if personal computers and other consumer electronics are outliers of technological improvement also coinciding with said technologies also becoming more affordable. But an affordable private jet or luxury car is nowhere on the horizon. Even adjusted for inflation, middle class cars are more expensive.

I disagree here. Despite AI–doctors, nurses and medical equipment will remain expensive for the above reasons, as there is no obvious way to automate those. There are no AI-based solutions to MRIs or chemotherapy, or oncologists or surgeons. Also, insurers are clearly willing to pay, creating less economic incentive for cheaper options. Similar to excessive student loan debt or excessive credentialism, the fact everyone are willing participants in an inherently broken system, perpetuates the existence of said system.

Palantir’s manifesto went viral:

It has received considerable criticism from both sides of the aisle, so it cannot just be blamed on liberal bias. This is what separates cringe from merely bad, as the former also means being oblivious to why it’s bad. It comes off as prosaic, as if you asked a 10th grader to write it, as Richard Hanania noted.

This is a pattern: As discussed in “Why successful people often have bad opinions online,” when these successful business-types try to venture into domains outside of their expertise, particularly anything to do with social policy, they come off as dumb/misinformed. Expertise does not transfer. When I say “comes off as sounding dumb” it’s not that they are actually dumb. Usually such proposals come off as reinventing the wheel or are otherwise unworkable to those who have actually thought through it. Or so vague, obvious, or idealistic that it amounts to nothing actionable or insightful.