What happens to natural gas prices when weather is mild?

WSJ:

U.S. natural gas futures were down for a third straight session as low weather-driven demand looks set to last into the first days of June while LNG feedgas flows eased and production edged up.

When demand decreases, prices fall.   

Trade with China created US jobs

WSJ: The Real Story of the ‘China Shock’

The jobs harm was largely local and temporary, while overall jobs and consumer welfare increased. ...

There is growing evidence that, while Chinese imports did hammer certain regions, they didn’t cause large net job losses across the entire U.S. Recent research from the National Bureau of Economic Research finds that job losses locally were mostly balanced by job gains in other regions. Manufacturing-heavy areas in the Midwest and South saw employment declines, but services jobs sprouted in coastal and high-tech hubs like the West Coast and Northeast. Import competition shifted jobs rather than eliminated them. ...

While tariffs on Chinese goods might bring back a few factory jobs, they will raise prices for everyone and hurt U.S. businesses that rely on imports. Current attempts to turn back the clock by introducing tariffs are a costly remedy for a poorly understood ailment.

Why central economic planning worked so well for America in WWII but so badly almost everywhere else—most notably in the Soviet Union

From Bastiat's Window: The answer is right out of Chapter 1, "incentive alignment."

...the key to that success (versus the Soviets’ 75-year failure) was that in WWII, America had a single, clear, time-limited, objectively verifiable goal—survival. Everything else was secondary. There was essentially universal agreement among Americans of all political groupings with that urgent and temporary goal. Given the extreme threat posed by the Axis Powers, Americans were willing to endure great sacrifices they would not ordinarily tolerate. And they were willing to put aside much of the self-interested behavior that characterizes more normal times.

In normal times, if a producer tries to take advantage of consumers by reducing quality or raising price, consumers can turn to substitutes, or choose not to purchase. In other words, competition aligns producers' incentives with the goals of consumers. 

But in WWII, there was no need for such markets and competition to play its usual role because everyone's incentives were already aligned by the existential threat posed by the Axis powers.

WSJ: Why EU lags US in tech.

Someone at the WSJ read Why the U.S. Produces More Unicorns than the EU

• Limited Presence of Major Tech Firms: 
• Apple's market cap > entire German stock market, 
• Structural Barriers to Innovation: 
• risk-averse business culture, 
• stringent labor laws, 
• heavy regulation
• smaller venture capital pool
• Talent and Incentive Challenges: 
• lack of stock options makes it harder to align incentives--and retain--innovators.  
• Underinvestment in Emerging Technologies: no quantum computing and artificial intelligence. 
• Dominance of Legacy Industries/lack of dynamism:  EU firms founded in 1911, US in 1985

Why the U.S. Produces More Unicorns than the EU

The United States has produced about twice as many unicorns (private startups valued at $1B+) as China and more than four times as many as the European Union. These numbers reflect institutional and cultural advantages in the U.S. startup ecosystem.

Table: Number of Unicorns Created Since ~1990

Region	Cumulative Unicorns
United States	~1,950
China	~970
European Union	~450

Source: Estimates based on Hurun Global Unicorn Index 2024 and Strebulaev & Gornall, Stanford Venture Capital Initiative. Includes both active and exited unicorns created since ~1990.

Why the Disparity?

• Tolerance for Inequality:  The US gap between rich and poor is bigger than in any other advanced country, but most Americans want to join the rich, not soak them. The EU taxes inquality.
• Bankruptcy Laws Forgive Failure: U.S. founders can declare bankruptcy and get a clean slate in ~7 years. EU bankruptcy regimes are often punitive, with long-term credit restrictions. That discourages risky ventures. The U.S. treats failure as a résumé item, not a moral failing.
• Unified market: A U.S. startup can scale across 330 million consumers under one legal system. EU startups must navigate 27. It's harder to grow when your “domestic market” includes multiple languages, tax codes, and regulations.
• University spinouts: U.S. research universities are world leaders in tech transfer. Stanford alone has spun out over 200 unicorns. The Bayh-Dole Act helps universities commercialize IP. Europe is catching up, but still lags.
• Easier exits (acquisitions) lead to more entry:  investors require an exit.  
• Immigration to the US Nearly half of U.S. unicorn founders were born outside the U.S. If you have a good idea, you can more easily act on it in the US.
• Lighter regulation: U.S. startups face less red tape. European data/privacy rules (e.g., GDPR), strict labor laws increase fixed costs and reduce flexibility.

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Acknowlements:  This post based on research begun by Annie Cox, and Avi Goldberg, and Jack Underwood and finished by ChatGPT.  

Should professors--but not their students--use chatbots?

NYTimes:

Ella Stapleton said she was surprised to find that a professor had used ChatGPT to assemble course materials. “He’s telling us not to use it, and then he’s using it himself,” she said.Credit...

..professors said they used A.I. chatbots as a tool to provide a better education. ...chatbots saved time, helped them ... [grade papers] and served as automated teaching assistants.

Dr. Malan, a computer science professor, has integrated a custom A.I. chatbot ... hundreds of students can turn to it for help with their coding assignments. Dr. Malan has had to tinker with the chatbot ... so that it offers only guidance and not the full answers.

How to raise kids in the age of AI

FreePress: AI Will Change What It Is to Be Human. Are We Ready?

...If you raise your children with the uncritical expectation that if they work hard they can be a top person in their field, they will be disappointed. The skill of getting good grades maps pretty closely to what the AIs are best at. You would do better to instill in your kids the quality of taking the initiative and the right kinds of intellectual humility. You should also, to the extent you can, teach them the value of charisma, making friends, and building out their networks.

... 

• Don’t set up being the smartest person in the room as the goal. Encourage them to develop to their fullest, challenge themselves, and to be virtuous. 
• Encourage them to find many sources of meaning and social connection. They should develop hobbies and learn how to do self-directed projects, and actively seek out friends. 
• Make it clear that meaningful endeavors don’t necessarily have to be compensated. Work is one way to contribute, but volunteering, making art, and building a family are some of the many others. 
• Familiarize them with AI. Teach them how to learn from it and how to let it augment them. 
• But choose their AI carefully! Don’t let them fall prey to the attentional black holes that will be built and offered to them. 
• Don’t teach them to expect stability. Make it clear the world will likely change a lot, but that this change brings opportunities for them.

Too many Superheros?

How much content should a franchise produce? A recent WSJ story indicates that the expanding Marvel Cinematic Universe (MCU) is approaching a deluge. The graph they created certainly indicates a huge increase in content, mostly on TV. How much to produce is an extent decision.

On the one hand, the huge success of the Avengers related films created valuable brand awareness. The studio sunk the fixed costs into characterization, story lines, and production values that will pay off in terms of future audience engagement. That is, the marginal cost of attracting additional audiences is now lower because of these past investments. The strategic decision implied by lower MC is to increase content production.

On the other hand, the audience is experiencing diminishing marginal utility in consuming more content. It may not be worth it for fans to keep up with every thread in the franchise. Endgame culminated a consistent story arc that kept engagement high. Additional content necessarily means splintering story lines that fans need not keep up with. Perhaps the studio did not appreciate how the resulting lower MR would optimally lead to a reduction in content production.

There may be lessons here for the Star Wars universe.

The best tariff threat is one you do not have to use

Following up on an earlier post, Reciprocal tariffs as a tit-for-tat strategy in a repeated prisoners' dilemma 

From NY Times:

Trump imposed, quickly withdrew and then threatened to bring back huge tariffs on dozens of countries. Immediately, they began calling and asking what they could do to stop him. “More than 100 countries have already come to the table looking to offer more favorable terms for America and our people,” Karoline Leavitt, the White House press secretary, said at a briefing with Treasury Secretary Scott Bessent on Tuesday. “There has never been a president who has created his own leverage like this president.”

What can Trump get? For starters, some countries are offering to lower their own tariffs on American exports and cut red tape that keeps U.S. businesses out. India said it might lower its tariffs on U.S. farm goods, while Europeans may drop them on cars and machinery if Washington agrees to do the same.

BOTTOM LINE: It looks as though President Trump's Tariff threats are working.

The price of "free" healthcare is the wait

 

While healthcare in Canada's single-payer health care system is technically free, its real price is measured in wait times.  In 2023, the median wait time from a general practitioner's referral to treatment reached 27.7 weeks—the longest ever and nearly triple the 9.3 weeks reported in 1993. (MuskegonPundit)

To see this, think of "free" as a price ceiling of zero.  

• In the short run (Chapter 8), quantity demanded exceeds quantity supplied.  So who gets this care?  Those willing to wait.  In other words, wait times act as prices to ration available supply (AIER). 
•  Even patients whose mortality depends on prompt care--and don't want to pay for care in the US--wait before receiving essential treatments . (Fraser Institute).
• This inefficiency could be lessened by allowing patients to sell their place in line to others.

• In the long run (Chapter 9), fewer providers (physicians, nurses, hospitals, clinics) are drawn into the industry, leading to decreases in supply and even longer wait times, or "prices."  

HT, ZeroHedge: The Wait Is The Price: Quiet Rationing Plagues Canadian Health Care (AIER).