"Econ 102" with Noah Smith and Erik Torenberg

Europe's Future, Online Politics, and Populism in America

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Jan 2, 2026

The discussion delves into Europe's struggle between regulation and innovation, with a focus on the challenges facing traditional industries amidst rising competition from Chinese electric vehicles. The hosts explore the implications of the Gaza deal for economic stability, and analyze shifting American sentiments toward Israel. They also examine the rise of fringe right figures in US politics, the dynamics of online extremism, and the evolution of leftist narratives, questioning how engagement with these extremes can shape future discourse.

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INSIGHT

Europe's Regulation Slows Industrial Pivot

Europe prioritizes heavy regulation over rapid innovation, hurting its ability to pivot into new industries.
China's cheap, aligned electric cars are exposing Europe's industrial inflexibility and tooling problems.

INSIGHT

Reconstruction Is Part Of The Gaza Deal

The Gaza deal is notable because it contemplates Gaza's economic reconstruction, not just stopping violence.
Noah Smith argues a self-sustaining Gaza would reduce support for groups like Hamas by giving people too much to lose.

INSIGHT

Strength Alone Won't Solve Israel's PR Problem

Israel's international PR suffers because its leaders often respond with strength rather than building alliances.
Noah Smith notes Israel is militarily strong but still depends on external suppliers for critical military needs.

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In this episode of Econ 102, Noah Smith and Erik Torenberg cover Europe's economic future, how internet discourse has changed politics, the rise of identitarian populism on both the right and left in America, and more.

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Europe continues to focus more on regulation than innovation, creating challenges for economic growth
Traditional European industries like auto manufacturing are struggling with the transition to electric vehicles
Chinese companies are producing better and cheaper electric cars that align with Europe's climate goals
The Gaza deal is viewed positively because it considers Gaza's economic future beyond just stopping violence
An economically self-sustaining Gaza might be less likely to support groups like Hamas
Gulf Arab countries could potentially assist with Gaza's economic development given their expertise
Israel has been militarily successful against Hamas, Hezbollah, and Iran but faces global criticism
Israel's approach to international criticism has often relied on projecting strength rather than building alliances
Israel remains dependent on other countries for military supplies despite its own manufacturing capabilities
Regular people are disengaging from politics, leaving only the most extreme voices engaged ("evaporative cooling effect")
Political discussions on platforms like X (Twitter) have become increasingly extreme
Young political staffers who work for both parties are heavily consuming this extremist content
The speakers observe parallels to the political unrest of the 1960s-70s, which eventually dissipated
Unlike previous eras, today's extremism remains highly visible online even as the general public tunes out
Discussion of Zohran Mamdani's election in New York as representing a new direction in leftist politics
Concern about the mainstreaming of far-right figures like Nick Fuentes who previously were more fringe
The conversation reflects concern about the polarization between extremes while the majority of people disengage
There's agreement that substantive engagement with ideas is needed rather than simply dismissing opponents

Timestamps:

00:00 — Introduction

00:24 — Europe and Russia

03:02 — China and Electric Cars

04:38 — Israel-Gaza Conflict

06:43 — American Sentiment Toward Israel

09:57 – Sponsors: Notion | Netsuite

12:00 — Online Extremism and Political Disengagement

22:50 — Staffers and Extremism

24:25 – Sponsor: Found

25:29 — New York Politics and Mamdani

31:47 — The Future of Leftist Politics

34:11 — Race and Identity

38:06 — Islam and Immigration

38:44 — Identitarian Populism

41:44 — Closing Thoughts

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