Tag: Bureaucracy

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Finance Politics

Day 1799 and Thucydides Middle Income Local Maxima Traps

I have been catching up on Odd Lots which is the one podcast I listen to with any consistency. As all discussions about economics boil down to great power discussions as of late. The times they are indeed a-changing.

I noticed that both hosts brought up their collegiate studies of international relations across two back to back episodes. First on the Thanksgiving episode with Graham Allison of Thucydides trap fame.

I just caught up on it today and then the subsequent interview with Ray Dalio on his five forces episode. Joe and Tracy brought up international relations studies in both episodes as it does seem to be the current mood.

Dalio is always an enjoyable listen but I’m much more interested in Professor Allison as (to prove the joke Joe made) in the introduction that “a substantial portion of our listeners are really into ancient Greek history”

And indeed Joe is right. I’m a huge Thucydides fan, I went on a Peloponnesian War tour and am a regular visitor of the Balkans and its ancient Mediterranean and Roman history.

So naturally I have followed Allison’s work on rising power and its threat to established ones.

The US and China are in a “Thucydides Trap,” whereby the risk of war is heightened when an established power is threatened by a rapidly rising power. This is the framework that’s been popularized by Graham Allison, the Douglas Dillon Professor of Government at Harvard University. Professor Allison has been writing about China and the US-China relationship for decades

I guess all millennials grew up thinking we’d study these historical concepts in an eternal Pax Americana only to find the end of history wasn’t here to stay and we might fall into the trap. It’s just hard to imagine America feeling threatening to anyone at the moment.

As I listened to the episode, I happened to be walking through a neighborhood on the outskirts of a city that is keen to tear down some of its older homes to make way for new roads and denser apartment buildings. Much of those changes were clearly already in motion, as I saw cranes and construction crews.

The older homes looked multi-generational, but not in that wealthy polished way, so much as the middle income stalled economy compromise.

And yes you see it even in first world nations. In America and Europe, many conditions would benefit from more of a longhouse “in it together” approach. As elders stretch on in years and millennials go into middle age with few markers of adulthood. You’d think we’d want more of these style of homes.

I wondered if a city carving out the old construction through imminent domain tactics and buyouts, would make this outskirts neighborhood more vibrant. It would certainly bring in new buyers of condominiums. Consumption must go up.

I wondered about the families inside of the homes that looked more like multi home construction. Gates and other obstructions made it hard to tell, but the impression I got was more middle income local maxima family compound trap.

China rising, while the first world learns it may be more second world than it realized, makes me wonder if we’ve got it all wrong. More of the planet is in the middle income trap than the World Bank realized.

What if there is no Thucydides trap to fear as other powers sputter and stall. We long for an artificial intelligence boom to launch the globe into a high earning high efficiency world.

Sociologist Salvatore Babones and political scientist Hartmut Elsenhans call the middle-income trap a “political trap” as economic methods to overcome it exist. However, few countries use them because of their political situation. They trace the causes of the trap to the structural problems and the inequalities generated in the early development process.

According to them, the wealthy elites then follow their interests by bargaining for a strong currency which shifts the economy’s structure towards the consumption of luxury goods and low-wage labor laws, which prevents the rise of mass consumption and mass income.  Via Wikipedia

That sure sounds like a lot of the problems we see in America and Europe. All we are doing is getting gummed up in Baumol’s Cost Disease as we try to reinvent new ways of living that consume what remains of the old without the new going as fast as is needed.

But old multi-generational homes blocking the expansion of a city won’t get anyone to mass affluence. So it’s time to bulldoze old neighborhoods and make luxury boxes in the sky.

Not sure that ended well for China either. They popped their real estate bubble. And they wisely tamp their currency to export all their consumer goods. They might be stuck in a local maxima middle income trap too. Maybe Thucydides isn’t the framework here. Or maybe war is the only reset humanity knows.

I myself am hoping we choose to go to space instead but the South China Sea sits waiting. The only currency that matters in this strange moment is GPUs and that’s a different trap entirely.

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Community Startups

Day 1792 and Grateful for The Exceptions

This Thanksgiving I am feeling particularly grateful for the exceptions in my life. My world is filled with the exceptionally rare. Rare people, insights, businesses, and outcomes are part of building something genuinely new.

I suspect I’ll have to justify my faith in investing in and introducing new technologies to the world. We are doing a lot of looking back as the path forward looks so uncertain. And I continue to advocate for looking forward with optimism.

We have a lot to integrate and metabolize into human cultural life. We will be forced to address these changes as they change our institutions and expectations over the next few decades.

There is a lot to dislike about the technology industry at the moment. We’ve evolved far beyond “startups” being scrappy zero to one experiments in the proverbial garage. Startups turned into “Big Tech” and that concentration of influence and money has not always lived up to the high expectations we have for power.

We have had multiple cohorts of businesses as a mature industry. And indeed we’ve had multiple generations of people who spent their entire lives building a global ecosystem of technologies, along with the talent and capital to scale it. We may relentlessly start afresh but we cannot avoid acknowledging that we are a power base in our own right now.

Just in my lifetime, we’ve publicly codified our cultural mores, shared decades of knowledge on best practices on the open web and built institutions dedicated to helping people work across the multiple fields and disciplines that encompass “technology” as an industry. Or maybe I should simply call it an economy. It may even be the economy at this point.

Which is a problem. Our capital sorting mechanisms have seen our efficiencies and returns and pushed more resources, human and financial, towards us.

That has frustrated and starved the industrial base that provides us with the infrastructure to build. Let’s not even get started on what it has meant for food, education, entertainment and family.

I began more seriously investing in startups at the beginning of the pandemic. We maintain a small fund with low key LPs and our own family capital.

That is enabled by what we jokingly call the circle of life that is a liquidity event. When a startup sells many people become not just a little bit better off but sometimes twenty or even hundred times better off.

Those outlier events pay for all of the other things which don’t work as well. It’s a hits driven business. Hollywood would say “Thats show biz baby!” Oddly we don’t have a simple way of explaining the randomness of who or what becomes a winner.

Being excellent just isn’t enough. Startups that succeed are often exceptional in all areas and even then it still might not work. That bothers losers more than it does winners because the winners can comfort themselves with the money. But deep down even the winners know it could have easily gone another way.

So this Thanksgiving I am grateful for all the exceptional cases that have come into my life. To even see one is a rare thing. To be exposed to dozens of them is extremely unusual. To be invested in even positive outcome from the very start is beyond rare.

We’ve done so much to make startups more accessible to those with the mindset and discipline to succeed and still so many barriers remain. I see my work as the first check a founder takes as being a small part of the cycle of exceptionalism that builds success.

Just in the past two weeks we’ve had three companies raise large scaling rounds at markups that now place them soundly in the exceptional category. In two cases, I was their very first check, and in the third I was in their first pre-seed round. I qualify it only because I was not the first person to commit which I strive to be.

That is where I strive to be exceptional. I want to be the very first person that sees you for what you will be.

And I am deeply grateful to the founders that allowed me to be their first believer. It’s hard to be a founder. I’ve done it. To be an investor is much easier. You just have to have the balls, the brain and the bravery to say “yes” to something nearly impossible. That I can say yes is something for which I am most thankful.

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Politics Startups

Day 1784 and Strange Trade Offs

It’s been a pretty fantastic few weeks for my investments. Decisions made years ago are now looking pretty smart. A bet I made two years ago announced a round and then proceeded to announce splitting the atom the next week.

Not to only focus on current belle of the ball in Valar especially as everyone in the portfolio seems to be finding their way. We are lucky that we focused on compute, energy, and decentralization as that is the trifecta of the artificial intelligence wave.

I honestly didn’t expect that we’d see such progress in our nuclear pick. With the regulatory climate it seemed more likely compute marketplaces and inference products would outpace the most regulated technology in the world.

Somehow during a Trump administration you get unexpected outcomes. I’ve been fighting for compute figuring the energy bottleneck wouldn’t get addressed till we had the full supply side of new AI products. It turns out everyone wanted to rush into capital expenditures and infrastructure as the demand was already there.

I guess I’ve proved my own thesis again. You can get a read on the direction and maybe even first order effects but in a chaotic world the second and third order effects are much harder to predict.

And on balance for all the bad I think on balance the atomic age finally arriving might be a worth while trade for our future. Hard to say if I’ll keep that opinion but I am grateful America is getting back on track with nuclear power.

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Politics

Day 1763 and Baumol’s Cost Disease Accelerationism

Today was a pretty big news day. It was a FOMC meeting with a cut, Jerome Powell gave some forward guidance that a cut in December is not guaranteed (cue market upset), and NVIDIA became worth $5 trillion.

This is apparently 16% of our GDP and without investment in artificial intelligence related build-out, our economy would have only grown by 0.6%.

Without Magnificent Seven spending, GDP would have grown at a mere 0.6% annualized rate instead of around 1.1%-1.2% – Fortune

So America would be looking about as gnarly as Europe without the Magnificent Seven and AI infrastructure build-out spending.

About 92% of GDP growth in the first half of 2025 was driven by investment in data centers, AI infrastructure, and information processing, with NVIDIA as a primary contributor Yahoo Finance

Which is a scary large amount for any corporation, but is somewhat rational in the logic of a civilizational technology changeover akin to the Industrial Revolution.

For some comparisons, Standard Oil at its height represented about 5-6% of the total U.S. stock market value at the time and 1.5% of America’s total GDP. AT&T’s Bell Systems were worth about 3-4% of America’s GDP at their asset peak in 1984 so not entirely an unprecedented situation though Nvidea’s percentage is a very networked era problem.

How afraid should we be about the potential for a market bubble in artificial intelligence? That is a questions for Carlotta Perez

Having lived through both the dot-com crash and the global financial crisis, I have some fears, but also this feels about as rational as any of the other ways we’ve handled valuations and value in past boom-and-bust cycles.

There is significant revenue from very real demand. It is just hard to see the demand as it’s industry demand not consumer. And the consumer demand we have is likely coming from professionals who are more enabled in ways we can’t count. I couldn’t have answered half the questions I had for this post before the LLM age.

And that demand for efficiency was coming and needed to be addressed over some time horizon, no matter what.

As different industries cope with their extreme lack of efficiency in the face of other industries who are efficient and in demand wages rise everywhere and basic needs like education & healthcare get more expensive despite not being delivered more efficiently.

So we still need those inefficient industries but what do we do? We have to find solutions.

Because we were going to need to build out the infrastructure for diversified energy transition. Much of this is being spent on build-outs for things that we genuinely need.

We need nuclear. We need power grids that aren’t from the dark ages. We need the efficiency for compute as government services have gone full runaway Baumol accelerationist. Unless we do the hard work that’s going to take 10 to 15 years, most liberal economies will collapse under the weight of the social safety net.

So we need to do a fairly thorough job of investing in the future, independent of whether it’s artificial intelligence driving our future or developing an industrial policy of, say, going to war with China. Necessity is the mother of invention and I’d rather the need be capital growth than war to drive industry.

I don’t know why this “facts of budgeting life” works people up so much. Booms and busts and bubbles build real things and we really need more efficient energy, healthcare, and education.

The economy is a nutrient gradient and money moves to where it gets fed. Right now the promised efficiency of a solution to unsustainable spending is paid for by gains in areas which did get more efficient. That is just the whole game. Grow faster and bring along anything that isn’t for the ride.

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Chronicle Travel

Day 1743 and Noticing Anarcho-Tyranny Through Habits

I’m coming up on the 5-year mark of writing every single day. It doesn’t feel like I’ve been at it that long, if I’m honest with myself. When you commit to doing a basic task as a daily habit, you don’t expect it to change your life.

I’m not actually sure that writing every day has changed my life, though I think I’ve gotten better at the process of writing and the habit of finding space to think, organize, and get my thoughts together. That is a positive change.

When I first started, there were a number of goals I had in my life that seemed a lot more achievable than half a decade of writing.

Once you’ve achieved such consistency, you notice how little gets done in other areas when you regularly do things for yourself. One of my goals that I’ve had almost as long as this blog was a visa for family friends so they could travel freely to America to see me just as I see them. Pandemics and problematic presidents sure slowed that down and now I despair it will ever happy.

I honestly had no idea that the United States was so broken in its state capacity that granting a travel visas would consume more time than blogging and I’d achieve much less working to obtain a visa for years as its functionally impossible to get a legal visa.

Here I am with all of this writing (fantastic training date for an artificial intelligence) and yet I’d still have failed at obtaining a travel visa for family friends. We have so much power and yet not quite enough to get around America’s failures.

Maybe this is why projects like the Network State appealed to me. I’ve worked on policy like the Right to Compute which has taken on more and more meaning as I go through my life.

I can’t believe I was able to pass a bill into law before I could get the state department to do its job. And government workers wonder why some of us wouldn’t mind if they got fired.

I know I can rely on my own skills, my capacity to use the hardware and software at my disposal, and that the currencies of the web will happily engage with me in trustless and transparent manners.

This is not something I can guarantee when working with the United States and our State Department. It’s a hard thing to look at straight on as it traps me and my family into a kind of anarcho-tyranny where because we follow the law to the letter we are discriminated against while others brazenly broke laws.

High trust people who display their commitment daily are worn down by this bitterly painful reality that what we put in doesn’t guarantee us all that much when the state is concerned. We move fast and keep at it. The American state department moves slow and failed at every step of the way.

Categories
Community Politics

Day 1736 and Putting Good Things Back Into The System

I had a few appointments in town today including two doctor appointments. I like to have my husband with me when the medical system is involved just in case I need a backup or level headed second opinion.

Afterwards we were able to catch a late lunch (nearly happy hour) at one of Bozeman’s trendy no seed oil spots. It being an odd hour for dining we could hear the conversations at the bar as the place was mostly empty.

A virgin Huckleberry margarita

There were two couples, one Boomer pair and the other geriatric millennials, who as it turned out both celebrating their anniversaries this weekend. The out of town Boomers had come for a Yellowstone and Tetons visit while the younger couple turned out to be local farmers in the valley and were excited to learn the tourists had something in common with them.

The Boomers had also run a farm in Florida but retired and sold it as it is apparently nigh impossible to grow oranges for juice in Florida anymore. The conversation had turned to everyone’s frustrations with the tariffs and the pressures it put on their work.

No one could remain competitive as cost inputs kept going up. Finding labor for smaller farms was getting more expensive and harder to secure. And land developers increasingly competed to acquire land piece by piece from older larger family farms who struggled to compete. We were full on eavesdropping at this point.

The husband in the young farmer pair was dressed just like Alex. He could have been Alex for how closely their styles matched. When he left for the bathroom, his wife said to the older couple how hard it has been recently.

Land he’d worked for years on a lease had just recently been sold to developers at an enormous markup. They understood the demand for housing but how could anyone continue to farm and make a living?

Between tariffs, labor costs and ravenous unmet demand for housing that could only be financed by large scale real estate developers the era of the family farm felt over. Only the big dogs could afford the costs and regulatory overhead.

We were finishing up our meal as we nodded along. Alex said to me “ok I know we don’t do this very often but I think we should pick up the meal for the younger couple.” Being on the verge of tearing up myself I couldn’t have agreed more.

I waved over the waitress and asked if this was possible. She seemed a little surprised “the whole meal?!” But it wasn’t a crazy amount. It was about $100. We sneakily paid our tab and theirs as quickly as we could. We didn’t want to make a thing of it. We just wanted to make their day a little better.

We got up and said to both couples that we couldn’t help overhearing it was both their anniversary weekends coming up and we wanted to wish them many more happy years together.

We thanked them both for keeping America fed and tried to casually saunter out before anyone noticed what we’d done. Hopefully this added a little cheer to their day. In a system as big and opaque and impersonal as America it can feel like there is nothing any of us can do.

So when you can do something even if it’s a small thing like picking up a meal we should do so. America is an idea but we are also a people and we stick together even if our elites make stupid decisions.

Categories
Aesthetics Media

Day 1710 and Speaking The True Name or Obfuscating To Remain Illegible in Bureaucracy

There is a tradition in certain corners of the internet of hiding in plain sight. Being illegible to anyone without the shibboleths of your chosen in-group protects you from unwanted attention. Or so we tell ourselves.

The downside of an implacable insistence on being inscrutable is that you won’t ever be clear enough to have your ideas spread.

Lack of clarity is an anti-mimetic just as surely as lack of speed prevents you from getting your ideas out into the world.

“I can write faster than anyone who can write better, and I can write better than anyone who can write faster.” AJ Liebling

Writing quickly in a language designed to obfuscate with jargon, keeps the those who search for clarity in the dark and your grip on communication tight. You should want to write fast and well and clearly.

One of the first rules of institutional cohesion is to develop acronyms and coin new words. And nobody is better at this than the military industrial complex. The RAND corporation feels as if it jas invented as many turns of phrases as a teenage TikToker and the Cambridge Dictionary combined.

So if you find yourself concerned that an obfuscated acronym like the DOD’s Department of Defense is getting a name with a bit more clarity as to its purpose ask yourself why?

Maybe a department of war is the proper name for the branch who commissions prime contractors to make weapons.

War looked different in the past?
Categories
Politics Travel

Day 1170 and The Machine

I hate failing. The sense of doomed futility I have when I interact with the broken bits of the American bureaucracy weighs on me. Every time a crucial piece of the business of government fails I feel helpless. Like I am a loser.

I feel deeply that the machine has ground out some remaining spark of hope in me.

“It’s the hope that kills you”

Phrase Ted Lasso ain’t too crazy about

I spent some time today feel like it was the hope thar kills me. I felt it deeply.

But I couldn’t wallow in it. Being made victim to a system is awful but I am not a victim.

Some time passed and I reminded myself that while I can accept finite disappointment, I can never accept losing the grace of an infinite capacity for hope.

“I think it’s the lack of hope that comes and gets you. … See, I believe in hope. I believe in belief.”

Ted Lasso

I’ve written a lot about how broken the process of coming to America especially when you try to do so legally and transparently. It’s a challenge to get even basic travel documents like tourist visas.

I see cases on socially media daily of award winners, brilliant engineers, academics, and simple good faith aspirants who wish to spend time with the American dream and are denied.

I have hope that we can recognize that tourists, students, entrepreneurs and others that genuinely wish to contribute to our nation deserve an efficient transparent system that lets people come to America.

It should be unacceptable that these systems are unaccountable and impossible to navigate. It shouldn’t feel like we are living within a Kafka novel when getting a visa. This is America not the Soviet eastern block.

I believe that the network state is coming for badly run governments. But it cannot come soon enough. It may sound dramatic but consider that venal, impossible to navigate and expensive government serves none of us and harms the markets, businesses and people. It’s an embarrassment to our national character.

The longer we tolerate these state of affairs the closer we edge to anarcho-tyranny. When the government and help you but it can hurt you. We should be ashamed as Americans that we let this monstrous machine do us so much harm.

Categories
Politics Travel

Day 435 and Coming to America

I’ve had occasion to try to get an appointment at the consulate in Frankfurt. I’m helping someone with a visa situation. And holy fucking shit I had no idea how how hard it was to get a hold of someone, literally anyone, at the state department. Now I grant maybe they are a little busy at the moment but I’ve spent over 10 hours over the past 24 trying to get ahold of a person.

First I tried calling the consulate. I got lost in the phone tree several times. After finally learning the proper branches (it’s four steps in) I was able to get to an operator line. It rang. And rang. And rang. And rang. I let it ring for ten minutes. Nothing.

I decided to try another tactic. I went back into the phone tree to see if there was another number. I kept trying permutations. I hit dead end after dead end. Finally I got lucky. They provided a phone number. I took it down. I asked someone else to listen to it to be sure I hadn’t misheard. Our numbers matched. I called. “Your call cannot be completed as dialed.” Ok weird. Maybe let’s try with another country code. Nothing. If anyone can figure out what 032221093243 is supposed to be I’d very very grateful.

So the phone was a dead end. I began emailing. I was able to find a basic visa email for the consulate. The auto response said it was deleted.

In the meantime I had emailed constituent services at my Congressman’s office. I live in Colorado’s Second Congressional District so I am represented by Joe Neguse. They asked for proof of my address and my social security number. I had no idea if the website was secure but fuck it I hit submit. I got a response from a constituent services person. She said she would reach out to the consulate. Amazing! I felt like I was on a path to victory.

Ok….so now what? I emailed the consul again with a different format on a tip from an internet friend. This auto response had a link to a google sheet explaining how to write an email with the proper code to get a response! I sent in an email with the correct formatting to prevent automatic deletion. This generated an automated response. But that email had a a link to a live chat! Fuck yes! I opened the live chat. A bot responded. I answered a series of questions. The bot decided it was time to send me to a live operator. Please hold for a live operator.

I waited. And I waited. And I waited. After 48 minutes in the live chat box a human arrived. Fuck yes! I explained the situation. He said he would check on appointments. Please hold. I waited for another ten minutes. There were no appointments at all. He explained that this meant there were no available appointments. That sadly 999 days till the next appointment meant that there were no appointments. There was nothing he could do.

The next day my congressional support person emailed back saying she had heard from the consulate. So clearly constituent services works great! Alas the news from the consulate was bad. They confirmed what the live chat had said. There was no appointments to be had. They included the same live chat link. The best advice they had was to keep checking back for appointments but it was unlikely to open up. We could check other cities but most of them also listed no available appointments. And they issued a warning. You cannot reschedule too often as after more than two changes to the system you are forced into a six month waiting period before you are allow to try again.

So that’s the end of my Kafkaesque twenty four hours. With no resolution in sight. If any of my friends have friend at the state department that can figure out how to schedule an appointment for visa services at the consulate in Frankfurt (though we will happily travel to any other German city too) hit me up. Until then I think I’ll be lobbying Congress for a bigger budget for our consular services. Maybe even try my hand at immigration reform.