Azeem Azhar's Exponential View AI, markets, and power: A conversation with Paul Krugman (2025 re-run)
30 snips
Jan 8, 2026 
In this conversation, Nobel Prize-winning economist Paul Krugman analyzes the current US economy, characterizing it as a 'Goldilocks moment.' He compares today's tech valuations to the dot-com bubble, questioning whether they are justified. The duo discusses AI's impact on job displacement and the challenges of creating effective safety nets. Krugman emphasizes that reducing inequality requires government intervention, not just market forces, and shares insights on the role of tariffs and energy innovation in shaping future economies.
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Goldilocks With Political Risks
- The US in early 2025 resembled a Goldilocks economy with low unemployment and tame inflation.
- Paul Krugman warned political shocks and high tech valuations could still unsettle this calm.
Valuations Versus Revenue Reality
- Tech valuations carry an 'end of 1999' feeling despite real revenue momentum.
- Krugman argued valuations depend on bets that incumbents will secure entrenched long-term profits.
From Minitel To Instant AI Deployment
- Azeem recalled building an online realtor in 1997–98 where few had internet access and founders had to buy PCs for clients.
- He contrasted that with today's universal digital stacks enabling instant AI deployment.