2026-02-21 13:11:03
With Rasheed Griffith and Diego Sanchez de la Cruz. Here is one excerpt:
Rasheed: Tyler, if El Salvador were to become a success story, what would it likely be a success at first? Manufacturing, migratory investment, investment tourism, or something more unusual? Because those typical answers feel like maybe they have missed the boat.
Tyler: I think El Salvador has turned itself into a very safe country which is great news. I think you and I both saw that when we were there. I think under all scenarios they have a very hard time becoming much richer. So I don’t think it’s manufacturing through no fault of their own. But most of the world is de-industrializing. So manufacturing is not a source of growing employment due to automation. But there’s other issues for Central America such as scale and the cost of electricity. El Salvador is not the best in Latin America for either of those compared say to Northern Mexico. So I don’t see what its relative advantage is. And it’s just a small place.
I checked with ChatGPT. one estimate places about third of the population, living in the United States on average. That’s probably the more ambitious one third. So there’s considerable brain drain. I do think in terms of levels they can do much more with tourism. They have an entire Pacific Coast which is quite underdeveloped, and could be developed very fruitfully. Sell condominiums, have people do more surfing. Try to have something a bit more like the next Acapulco, but even there you’re competing against Cancun among other locations and it will boost their level but it won’t be a permanently higher rate of growth.
And that’s the case with many touristic developments. They don’t self compound forever and give you many other productivity improvements. So I expect El Salvador to do much better but I know a lot of people who read Bukele on social media and they think it’s about to be the next Singapore or something and I just don’t know how they’re gonna do that under really any scenario. I do think it will improve and they’ll get more foreign investment and more tourism.
Rasheed: How much is “much better”? That’s doing a lot of work there.
Tyler: When you look at the Pacific Coast and you and I sat right next to the water [it could develop much more]. So that could create quite a few jobs. But in the longer term steady state I think they’ll have a hard time averaging more than 2% growth. So they can attach themselves more closely to the US economy. They use the dollar and let’s just assume their governance does not go crazy. That’s another risk right? So Bukele or whoever succeeds them could overreach. The checks and balances the constitutional protections there seem quite weak. Another possible risk there that even despite his best efforts the country becomes dangerous again. You look at Costa Rica which had been quite safe and did all the right things, and is larger and has many more resources and that’s now becoming a more dangerous place because it was targeted by external, in some cases Mexican drug traffickers. And that could happen to El Salvador as well. So even if think the current campaign is gonna work forever it doesn’t mean the country stays safe forever. It’s not really in a very safe region. So that’s a side risk which will also keep down foreign investment. I don’t know, I’m I am definitely seeing the upside but not super duper optimistic there.
Plenty of fresh material, with transcript, recommended.
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2026-02-21 01:57:42
On Thursday, the Center for American Progress, a prominent left-leaning think tank that often cultivates policy ideas later adopted by the Democratic Party, proposed a two-year freeze on the prices of 24 food items, such as strawberries and ground beef.
Grocers would voluntarily agree to capping the cost of food in exchange for paying lower fees on credit card transactions, according to the proposal, which was written by a group led by Jared Bernstein, who chaired the White House Council of Economic Advisers during Joe Biden’s presidency.
That, in effect, would force credit card companies to absorb the cost of subsidizing food purchases, a highly unusual arrangement. A draft of the proposal said the Federal Reserve could force credit card companies to do so via its regulatory oversight, though that provision was removed after questions from The Washington Post.
It is not clear how else the government might persuade credit card companies to foot the bill, nor how many grocers would agree.
Here is more from The Washington Post. Elsewhere in The Great Forgetting, three Supreme Court Justices seem to have forgotten what the Constitution says.
The post The Great Forgetting, a continuing series appeared first on Marginal REVOLUTION.
2026-02-21 01:16:51
1. Firms are replacing freelancers with AI.
2. General disorder does not seem to be increasing.
3. Fei-Fei Li.
4. India does deepfakes of the dead. It is an interesting question which cultures want this most.
5. Post-patent, future markets in everything? Data, at the very least.
6. Isn’t Harvard supposed to be cutting back?
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2026-02-20 23:17:40
We present the GABRIEL software package, which uses GPT to quantify attributes in qualitative data (e.g. how “pro innovation” a speech is). GPT is evaluated on classification and attribute rating performance against 1000+ human annotated tasks across a range of topics and data. We find that GPT as a measurement tool is accurate across domains and generally indistinguishable from human evaluators. Our evidence indicates that labeling results do not depend on the exact prompting strategy used, and that GPT is not relying on training data contamination or inferring attributes from other attributes. We showcase the possibilities of GABRIEL by quantifying novel and granular trends in Congressional remarks, social media toxicity, and county-level school curricula. We then apply GABRIEL to study the history of tech adoption, using it to assemble a novel dataset of 37,000 technologies. Our analysis documents a tenfold decline of time lags from invention to adoption over the industrial age, from ~50 years to ~5 years today. We quantify the increasing dominance of companies and the U.S. in innovation, alongside characteristics that explain whether a technology will be adopted slowly or speedily.
That is from a new NBER working paper by .
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2026-02-20 15:32:42
Pensions cost the government 10% of GDP. If no reforms are made by 2050, Brazil will spend more on pensions as a share of GDP than many richer and greyer countries… Though Brazil’s share of young people is similar to that in Chile or Mexico, its pension spending is already at Japan’s level. That is despite a modest reform in 2019 that introduced a minimum retirement age. The population is ageing rapidly. Without reform, its social-security deficit, or the shortfall between contributions and payments, is set to rise from 2% of GDP today to over 16% by 2060.
Brazil’s courts cost 1.3% of GDP —the second-most expensive in the world—mostly because of generous pensions. The typical soldier retires before turning 55 on a pension equivalent to their full salary.
Here is more from The Economist. By the way, Brazil cannot change its pension system without amending the constitution.
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2026-02-20 13:33:15
In the specific sector I work in (previously law and now tech), I am surprised by how few US companies hire in Canada. The Canadians I know in these fields are typically on par with the Americans, but doing the same work at half the price. This superficially looks like an economic puzzle: with no timezone difference, language barrier, or cultural friction, why would American companies not hire the much cheaper Canadians? I believe the answer brings together everything I’ve touched on in this essay. The reason is legibility. There aren’t enough Canadians with resumes that American hiring algorithms recognize. If an American tech company uses “Previously worked at a company like Amazon” as a filter, a software engineer from RBC, despite being equally talented, does not pass the filter. If Canada wanted to see more of its citizens hired by US companies, the strategy shouldn’t be better education or training. It should be subsidizing large US companies to open offices in Canada, purely to brand candidates as “Amazon Product Managers.” Because once they have the badge, the market will finally see them.
Here is more from Daniel Frank, note the post covers some quite different issues, all related to talent. Via Watt.
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