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Why Income Inequality is Bound to Worsen
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Why Income Inequality is Bound to Worsen

Thursday, March 18th (60 Second Read)

Afternoon Audit
Mar 18, 2021
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Nasdaq Falls 3% in Worst Session of the Month

Dow: -0.46% | Nasdaq: -3.02% | S&P: -1.48%

Catch Up Quick

  • FedEx earnings beat estimates on “unprecedented” holiday shipping season (a possibility we noted in November)

  • The Fed sharply increased its economic growth expectations while affirming that it doesn't plan to raise interest rates until 2023

  • The IRS plans to push back the tax filing deadline to May 17, pointing to a backlog of 24M filings from 2019

  • Biden agrees to send 4M AstraZeneca vaccine doses to Canada & Mexico

  • Short bets against the S&P rose 10.2% from the end of 2020 to mid-March 2021, touching a recent high of > $521B (S3's data)

  • For the first time in 14 months, inflation replaced the coronavirus as the top market risk (BofA survey of global asset managers)

  • Global demand for gasoline has likely peaked per The International Energy Agency in its latest five-year outlook

  • Goldman Sachs, Citigroup, JPMorgan, BofA and Morgan Stanley had $77.8B in exposure to Chinese assets last year → up 10% from 2019

  • Biden called Vladimir Putin a "killer" during an interview with ABC and promised he will "pay a price" for interfering in the 2020 U.S. elections

  • The Biden administration is reportedly targeting mid-May to begin relaxing pandemic travel restrictions


Thought of the Day

  • From the late 18th — early 19th century, the increasing use of new energy sources (such as coal) and developments in machinery made possible the shift of an economy based on agriculture and crafts to scaled industry and mechanized manufacturing (the industrial revolution)

  • Today, A.I. + the increasing amount of businesses and organizations becoming encoded in software are bound to drive a shift in the way we both obtain and interpret data

  • At first glance, both societal metamorphoses seem vastly different, however a deeper look reveals a common underlying theme

  • Whether it be factory workers replaced by machines, or data collection via form-based software replaced by machine learning that can analyze behavior, both “revolutions” involve automation

  • This aspect of the industrial revolution benefitted the select owners of machinery much more than workers / operators

  • This concept created the backbone for both capitalism and it’s opposition, as wealth concentration increased

  • And while the past isn’t always indicative of the future, the above is likely to happen with A.I., though the scale could be unrivaled

  • Sam Altman of OpenAI has posited that artificial intelligence will generate enough wealth to pay each adult $13,500 a year, though this illustratively assumes a society wide benefit, which is ultimately unrealistic (click on the below to read full article)

Twitter avatar for @samaSam Altman @sama
AI is going to change a lot of things. The world is going to get phenomenally wealthy. I wrote about what I think will happen, and an idea for how we could change our economic system in light of it:
Moore’s Law for EverythingWe need to design a system that embraces this technological future and taxes the assets that will make up most of the value in that world–companies and land–in order to fairly distribute some of the coming wealth.moores.samaltman.com

March 16th 2021

634 Retweets3,335 Likes

The Bottom Line

  • Among the evident wealth creation incoming from the A.I. revolution and the resulting societal implications, there exists a reasonable argument for the regulation of technology, given how the industrial revolution contributed to income inequality at a relatively less severe scale

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