"Econ 102" with Noah Smith and Erik Torenberg

What's Really Happening With the Economy?

13 snips

Nov 1, 2023

Dive into the intriguing state of the economy as two experts dismantle common misconceptions about wealth growth in the U.S. They shed light on the struggles of the tech sector amidst a 'rolling recession' and the disconnect between venture capital and startup valuations. Explore the surprising 37% rise in median wealth since the pandemic and the critical implications of economic inequality on startups. The conversation challenges the narrative around policies meant to aid the poor, suggesting they may unintentionally exacerbate inequality.

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INSIGHT

Tech Pessimism vs. Economic Reality

Tech workers feel pessimistic about the economy due to the tech sector's downturn, which is out of sync with the overall positive economic trend.
The overall economy is doing well, with high growth, increasing incomes, and rising wealth.

INSIGHT

Fallacy of Winner-Take-All Markets

Tech stocks crashed partly due to inflated valuations based on the flawed "winner-take-all" market assumption.
Multiple companies in the same sector were overvalued, each priced as if they would dominate the market, ignoring competition.

INSIGHT

Rising Median Wealth

Median wealth, adjusted for inflation, has increased by 37% since 2019, indicating positive economic progress for typical Americans.
This growth suggests most Americans are doing okay financially, despite economic disruptions.

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Noah Smith and Erik Torenberg discuss the state of the economy, whether tech and the VC ecosystem are doing well or facing a 'rolling recession', and unpack assumptions about wealth in the United States. Make informed decision for high impact donations with GiveWell, which is offering Econ 102 listeners donation matching up to $100. To claim your match, go to givewell.org ➡️ pick “Podcast” enter Econ 102 at checkout.

We're hiring across the board at Turpentine and for Erik's personal team on other projects he's incubating. He's hiring a Chief of Staff, EA, Head of Special Projects, Investment Associate, and more. For a list of JDs, check out: eriktorenberg.com.

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Econ 102 is a part of the Turpentine podcast network. To learn more: www.turpentine.co

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X / TWITTER:

@noahpinion (Noah)

@eriktorenberg (Erik)

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TIMESTAMPS:

(00:00) Episode Preview

(01:05) The Rolling Recession?

(03:55) When Are Venture Capitalists gonna get rich again?

(06:15) Will rate cuts go down?

(08:15) Factory Model of Venture Capital

(10:20) Crypto's correlation to the markets

(14:15) Sector specific shocks screwing the economy

(16:50) Sponsors: GiveWell | Daffy

(20:00) The temperature metaphor in economics

(22:41) Regular Americans are getting richer

(25:02) How accurate are the measurement of inequality statistics in terms of reflecting true inequality?

(30:15) Why inequality might be good in economics

(36:55) What mechanisms led to inequality going down

(41:00) Skyrocketing prices and poor regulation of markets

(47:00) Piketty's arguments on inequality

This show is produced by Turpentine: a network of podcasts, newsletters, and more, covering technology, business, and culture — all from the perspective of industry insiders and experts. We’re launching new shows every week, and we’re looking for industry-leading sponsors — if you think that might be you and your company, email us at erik@turpentine.co.