Noah Smith
· Noahpinion
· February 11, 2026 at 09:25
· ⏱ 18 min read
| Read on Substack ↗
Summary
=== SUMMARY ===
•US protectionist policies (tariffs, immigration restrictions) are not achieving their stated domestic goals (e.g., manufacturing job growth) but are successfully accelerating a geopolitical and economic decoupling from China and offshoring of high-skilled jobs, creating clear winners (e.g., India, Vietnam) and losers (e.g., China, US commercial real estate).
•The narrative that AI is already causing significant white-collar job displacement may be overstated; current weakness in "AI-exposed" sectors is more likely attributable to their high sensitivity to the macroeconomic cycle (e.g., interest rates), suggesting a potential mispricing of risk.
•The Japanese government is effectively operating as a large, successful macro hedge fund, using its balance sheet to go short the Yen and long global equities. This dynamic has significantly improved its fiscal position and represents a core macro trend to monitor or follow.
Summary
Noah Smith's roundup argues that BART's fare gates demonstrate public order can be restored by restraining a tiny number of rule-breakers; that claims of AI taking jobs from young college graduates are overstated based on employment rate data and macroeconomic sensitivity; that tariffs are decoupling the U.S. from China but not reducing the overall trade deficit; and that Jon Stewart's critique of economics is uninformed. The article contains no explicit trade recommendations or personal positions.
•BART installed fare gates at many stations, and crime on trains fell 54% in one year; patron-related corrective maintenance time dropped from huge amounts to almost nothing.
•Fare gates are also raising millions of dollars for BART, countering criticisms of being 'carceral' or 'racist'.
•Young college graduates' unemployment is higher than historical trends, but their employment rate relative to non-college peers has actually widened since ChatGPT's release, casting doubt on AI job displacement.
•AI-exposed occupations are also highly sensitive to interest rates, and similar hiring slowdowns occurred in early 2020 before generative AI existed.
•U.S. trade deficits initially surged due to front-running of tariffs, then narrowed, but November data showed imports rising and exports falling, complicating the trend.
•China's share of U.S. imports fell from over one-fifth to less than one-thirteenth after Trump's tariffs; about 82% of lost China exports found alternative markets, with potential transshipment to the U.S. estimated at up to 23%.
•Restrictions on H-1B visas are pushing U.S. tech companies like Alphabet to expand overseas offices in India, with global capability centers projected to employ 2.5 million people in India by 2030.
•Japan's government has effectively acted as a giant hedge fund, earning profits on FX interventions (~8% of GDP) and stock holdings (~11% of GDP), reducing its net debt burden by roughly half.