Friedberg cites Treasury Secretary Mnuchin predicting 20-30% unemployment by summer if shutdowns continue.
“Steve Mucin, The US Treasury Secretary, was saying that we should expect 20% to 30% of the workforce to be unemployed by this summer if we keep this up.”
Friedberg argues happiness comes from relative standards and progression, not absolute living standards.
“Well, I don't think happiness comes from, you know, absolute standards of living. I think happiness arises from one's relative standard of living, whether that's relative to how you lived last year or how you're living relative to your neighbor and seeing some progression over time is the only thing that keeps people happy. It's otherwise society decays.”
Friedberg argues happiness requires relative progress not absolute income, so UBI will inevitably cause societal decay.
“So the notion of some sort of flatlined or even flatlined at inflation adjusted basic income level for a large number of people will inevitably result in kind of what we're trying to prevent, which is, you know, some sort of decay, societal decay.”
Friedberg explains inflation moves through economy in stages, starting with commodities before becoming sticky in services.
“So the first thing we saw inflate was sort of hard commodities and soft commodities, things like energy and agricultural products and metals and so on.”
Friedberg argues 95% of people will eat what's cheap and tasty, not sustainable premium products.
“They're coming up the economic ladder and they're gonna eat more meat and they're gonna eat what tastes good and they're gonna eat whatever they can afford.”
Friedberg states precision fermentation economics aren't proving out at scale despite extraordinary improvements in strain technology.
“So the net economics on making proteins using microorganisms or what people are calling precision fermentation isn't proving out at scale to be what everyone theorized it could or should be.”
Friedberg details potato economics: $5,000 per acre revenue with $1,000-2,000 operating costs, demonstrating room for Ohalo's value capture.
“That potato farmer today is spending somewhere between one top line, that potato farmer is making about $5,000 an acre in The US. K?”
Friedberg argues voters consistently choose increased government spending despite economic growth providing tax revenue.
“And if the government taxes everyone just the same amount, now the government has more money to spend. Consumers, voters have a choice. They have a choice to say tax less and spend less.”
Friedberg argues happiness depends on income change rather than absolute income level above basic needs.
“So if we start with that premise of like human behavior, the government now has an incredible the federal government in The United States has an incredible role in supporting a lot of people”
Friedberg states current potato planting costs can reach 40% of grower revenue.
“So when you add up the cost of the labor, the fuel, of the resourcing needed to store all of the what's called seed potato, all the fumigants, it can be as much as 40% of the revenue of that potato grower.”
Friedberg projects Ohalo potato seed at $500 per acre could deliver $1,500 per acre profit improvement.
“You know, you can probably see that you could save at least 15 or create at least $1,500 an acre of operating profit improvement for that potato grower.”
Friedberg estimates Ohalo's potato seed could create $1,500 per acre operating profit improvement for growers.
“You could probably see that you could save at least 15 or create at least $1,500 an acre of operating profit improvement for that potato grower.”
Friedberg details potato economics: $5,000 per acre revenue with $1,000-$2,000 operating costs for current methods.
“Okay? And that $5,000 of revenue is requiring an investment of 1 to $2,000 an acre.”
Friedberg details potato economics showing farmers spend 20-40% of $5,000 per acre revenue on current planting methods.
“And that $5,000 of revenue is requiring an investment of 1 to $2,000 an acre. So 20 to 40% of revenue to deal with all of the planting and fumigation and storage”
Friedberg cites Norway's 2022 wealth tax causing $54 billion capital flight and $448 million revenue loss versus $146 million target.
“The wealth tax was supposed to raise a $146,000,000 of incremental revenue per year. Instead, what happened? $54,000,000,000 of net worth left the country, and they actually had a $448,000,000 tax loss.”
Friedberg states 40 million Americans graduated with student loans in the last decade, averaging $40,000 debt each.
“four you know, four forty million Americans graduated in last ten years from student from college with student loan. Average student loan debt $440,000.”
Friedberg cites research showing happiness plateaus at $60k income but correlates with year-over-year income change above that level.
“at the time, it improved up to $60,000 of income a year Right. Then it flatlined beyond And then the the the key measure of happiness was income change year over year.”
Friedberg explains happiness research showing year-over-year income change matters more than absolute wealth for human satisfaction.
“the key measure of happiness was income change year over year. The more your income changes from one year to the next, the happier you are.”
Friedberg argues moving workers from government to private sector increases productivity and grows the economy.
“But when people move from the government workforce into the private workforce, they become productive. They're making things that grow the economy, and, theoretically, they should also make more money.”
Friedberg calculates that 5% interest rates would add $650 billion yearly, bringing total interest expense near $2 trillion.
“But if rates climb closer to 5%, as I mentioned in the past, just using the current debt levels, it adds another $650,000,000,000 a year of interest expense, which takes interest expense almost up to 2,000,000,000,000 a year just paying the interest on the past debt.”
Friedberg explains prediction markets concentrate profits in large accounts with edge while small accounts burn through capital.
“So the the accounts that have a lot of money, they generally only trade in things where they have an edge, where they make markets, Sharp.”
Friedberg argues robotics will unlock economic mobility like cars did, enabling everyone to do different jobs.
“Everyone now like, when everyone got a car, they could now go and do a lot of different jobs.”
Friedberg estimates a $15 to $30 trillion annual economic opportunity on the moon with high business multiples.
“I actually think there's probably a 15 to $30,000,000,000,000 a year economic opportunity on the moon. That kind of a business, like you're gonna see with SpaceX's IPO, is gonna have an insane multiple.”
Friedberg says shipping costs from moon to Earth are zero due to physics advantages.
“And the reason is if you can get to the moon, the moon has an extraordinary abundance of material that we can mine, process, and manufacture into goods.”
Friedberg says continuous moon mining and manufacturing would cost a fraction of Earth operations.
“So we could run continuous mining, continuous manufacturing processes on the moon at a fraction of the cost of what it would take to do it here on Earth.”
Friedberg claims energy costs dropping to one cent per kilowatt hour would expand every economy.
“if you get the cost of energy down to 1¢ a kilowatt hour, it absolutely expands every economy. Like, everything blows up. Like, imagine if you”
Friedberg estimates nearly half the US population receives government paychecks, pensions, or welfare benefits.
“Today, if you add up federal, state, local government employees, plus all the contractors for the government, plus all the people that live off of a retirement check or or a welfare support check, so all the people that are living off government checks, it's about nearly half The US population.”
Friedberg predicts the moon will become a giant economy comparable to the East India Company.
“I actually think the moon is gonna be a giant, giant, giant economy. And I think it's like one of these economies.”
Friedberg states extending lifespan by one year adds tens of trillions to GDP.
“For every one year, we can extend average human lifespan. We're adding tens of trillions of dollars to GDP. Right? So this is also another big economic driver.”
Friedberg warns that subsidized services could create a spiral requiring more free offerings to offset inflation for those who can't afford rising costs.
“create a spiral where you need to offer more stuff for free to come up with a way to cover the cost of the inflation for people that can't afford things anymore.”
Friedberg warns that certain initiatives will create a radical spectacle because no one has to pay the bill immediately.
“I think these things are going to create a radical spectacle… because at the end of the day, no one has to pay the bill, because the bill doesn't come due for some time.”
Friedberg says housing, education, and healthcare inflated at 5-6% versus 2.5% average where government launched subsidy programs.
“And all three of these categories are categories where the federal government has launched programs to either subsidize or make available these categories of services to people through promises.”
Friedberg argues government spending of $300B housing, $200B education, $2T healthcare makes things more expensive, questioning government role.
“And the more that the government provides, 300,000,000,000 a year in housing support, 200,000,000,000 a year in education, over a trillion dollars, $2,000,000,000,000 almost in health care, the more things get more expensive.”
Friedberg validates the feelings of people complaining and moving toward socialism, saying they are absolutely right in how they feel.
“I don't think the people that are complaining and that are trying to go down the socialist path are wrong in how they're feeling. I think they're absolutely right,”
Friedberg states each 1% interest rate increase costs US government 1.25% of GDP annually in interest.
“For every 1% change in the interest rate, the US government has to pay 1.25% of GDP in excess interest each year.”