OpenAI Says “AGI” Is Here — What Does That Actually Mean?

Ed Elson is joined by Gary Marcus to break down OpenAI’s new Astra model and whether or not AGI has actually arrived. Then, Kathryn Anne Edwards returns to unpack the August jobs report and what it reveals about the current state of the labor market. Finally, Ed shares why he is concerned about the results of Germany’s recent election. Gary Marcus is an author, scientist, entrepreneur, and Emeritus Professor of Psychology and Neural Science at NYU. Kathryn Anne Edwards is a labor economist and host of the Optimist Economy Podcast. Subscribe to the Prof G Markets Youtube Channel Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies 18 plus.

• 0:27Speaker 01

  Hogging seats on a crowded train, not saying excuse me, watching videos on your phone with no headphones in. Sometimes it feels like we don't know how to act anymore. What we have been seeing increasingly is people breaking rules. Why should I play by the rules if nobody else is going to do that for me? This week on Explain It To Me, How To Mind Your Manners. New episodes Sundays, wherever you get your podcasts.

• 1:11Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is September 8th. Let's check in on yesterday's market vitals. U.S. markets were closed for Labor Day, but stock futures fell as the U.S. and Iran escalated their attacks. Brent crude climbed towards $98 per barrel. Copper hit an all-time high on the prospect that Trump will expand his tariffs on the metal. And finally, the Japanese yen rose to its highest level since February as the dollar fell.

• 1:42Ed Elson?

  Okay, what else is happening? OpenAI's newest and most powerful model is officially here. GPT-6 Astra. Released on Friday, Astra was trained on more than 100,000 Nvidia GPUs at the Stargate Data Center in Texas. That makes it the largest training run in OpenAI's history, and it costs two and a half times the cost of OpenAI's previous model. Astra represents a large advance in capabilities for OpenAI, and across the AI industry, leaders have been celebrating. In response to the model, Nvidia CEO Jensen Huang said that artificial general intelligence, or AGI, has, quote, arrived.

• 2:25Ed Elson?

  Meanwhile, OpenAI's president Greg Brockman said, quote, "Welcome to the AGI era," describing Astra as a generational leap. Now, if Astra is indeed AGI, then that would be a very big deal, as many AI researchers have specifically cited AGI as the milestone that might change society forever. Sam Altman, for example, once said that AGI could, quote, "break capitalism." Meanwhile, Stuart Russell, a prominent AI scientist, has said that "when we achieve AGI, human wages will, quote, go to zero." Well, AGI has supposedly arrived, but capitalism and wages remain intact, which would imply one of two things. Either the industry's predictions about AGI were wildly wrong,

• 3:10Ed Elson?

  or this isn't really AGI. Here to give us his view, we are speaking with Gary Marcus, author, scientist, entrepreneur, and emeritus professor of psychology and neuroscience at NYU. Gary, thank you so much for joining us on the show. I'd like to just start with your reactions to the model itself, Astra. What do you make of it? Can you describe some of its capabilities? And then we will get into whether or not it is artificial general intelligence, AGI.

• 3:40Speaker 03

  In terms of the model itself, it's a bit better than the models before. What we have now is an era where some people call it benchmark maxing or benchmarking, where these systems are often, it would appear, trained on lots of benchmarks. They do really well on the benchmarks, and then they don't typically do as well in the real world. So every time we see the phenomenon, the same phenomenon, model comes out, everybody is super excited about it. And then after a few days, people are like, yeah, but I tried it, and it doesn't really work on this. It doesn't really work on that. It deleted my files. The code it writes is for shit. The code it writes is for shit is something I saw about Astra yesterday on Twitter. You know, some people will like it, some people won't.

• 4:23Speaker 03

  But every model is hyped as if it's this quantum leap forward, and it never turns out to be true. There, you know, each new model is better than the last one. There's no doubt about that. Astra is better than Fable, its competitor, on a bunch of measures. In real-world practice, it's better on some and not others, you know, based on people's different account. It used to be when a new model came out, I would personally test a lot of things about it. But now, the scope of what people want to do with them is so vast, no one person can do that. And you sort of have to see what the world's experience with it is. And what the world's experience has been with all prior models is they don't live up to expectations. We've talked about this before. You know, the return on investment isn't there. Certainly, wages haven't dropped to zero.

• 5:08Speaker 03

  Instead, we have what I call the Klarna effect, which is Klarna said they were going to get rid of a bunch of humans, and then they quietly walked that back and started rehiring humans. We've now seen that dozens of times. We may see a version of the Klarna effect with Astra, where a bunch of people say we're going to lay off a bunch of people and then quietly rehire them. So going back to your opening question, right? If this were really AGI, well, let's put an asterisk around that. What do you mean by AGI? We'll come back to that in a second. Then, yeah, I guess you would expect wages to drop to zero. I mean, assuming that the AI itself were cheap enough, and we could argue about that. The thing is that there's what I would call the AGI bait and switch, right? There's a way that the term was originally initially defined,

• 5:53Speaker 03

  which was basically that you could do any cognitive work that a human could do. And that would indeed, assuming the price was right, be pretty valuable. I mean, even if it costs just as much as humans, maybe it would still be valuable because you could make them work all the time with less requirements and so forth. So the bait and switch, and then people will panic about that in various ways, like, we're going to lose all our jobs, or they're going to take over humanity, or whatever. All of these are premised on, let's call it, a generous version of AGI that really could do everything that people do. And then there's a less generous version of AGI. Like, the least generous version is something like, it can do most of the things that the drunk guy at the bar can do, and he's human, so let's just call that AGI, right? So you have a sort of lower bound and an upper bound.

• 6:37Speaker 03

  You know, maybe that's being a little bit crude about it. But, you know, there's the kind of like, it's verging on superintelligence. Oh, my God, there's nothing I, as an individual human being, can do anymore today. I can't. And there's the version where it can do a bunch of the things that I can do, but I can't really do all of them. And it does a few things better than me, but I do a few better. And, you know, I can't really trust it, but I just want it for marketing purposes, call it AGI. That's what we have now, right? Is the marketing version of AGI. You know, there's historical literature, and you can think about these things in different ways. There's a historical literature about what AGI meant when people like Ben Gertzel and Peter Voss, you know, first coined the term, and Jane Legg, who is a co-founder of DeepMind. And then we're talking about the strong version that I was talking about,

• 7:21Speaker 03

  that, you know, that it could do anything. And then you have different people have tried to weaken it in different ways. People accuse me of goalpost shifting. And I'm always like, which goalpost did I shift? And they always leave the conversation that can't actually document the claims, even though I write all the time. But I can document how this goalpost has shifted, right? Because I can go and show you where people talked about originally, or I can give you my own goalpost. For example, I said, it should be able to watch a movie and understand what's going on. Nobody's ever showed me that, like, Astra can watch a movie and tell me what's going on as well as a high school student, right? That was my, you know, one of my targets examples in 2014. It's 12 years later, we can't do that. I haven't shifted the goalposts. So, you know, one way to think about it is historically,

• 8:06Speaker 03

  has it met those historical things? No. Another way to think about it is how has the history changed? Well, after an original period, all the way up until 2023, when people pretty much agreed that it meant, like, doing whatever people could do. In 2024, is about when I see it starting to happen, people started talking about it economically. So I know Vina Khosla was interested in this. He was, I guess, on the board of OpenAI, or at least he was an investor in OpenAI. And I think he pushed for definition, which is like, can do 80% of the work that humans can do. We haven't met that one either, right? You know, it can do maybe a bunch of tasks that people can do, but doing a whole job is harder. Eric Bryngelson has always made the distinction between doing tasks and doing jobs.

• 8:51Speaker 03

  There are lots of tasks that current AI can do. I don't doubt that. And maybe some of them even reliably. You know, certainly it can do, it's not really a task, but it can write, you know, rhymes or whatever, make a song about such and such. It's not, that's not really somebody's job, right? You could do that, but it's not a job, right? A job typically involves a lot of things. A different way to think about this is, like, what is it doing for you? You know, if you have a term, that term does something for you, let's say scientifically, right? So if you have a term like mass, that's in the context of a theory, and now you can, you know, make some calculations relative. So, you know, you could have a theory about economic change. You just gave one at the beginning, right? The theory about economic change is the wages will go to zero once you have AGI.

• 9:35Speaker 03

  Well, if you want to call what we have now AGI, then that theory is wrong. Because really, what you've done is you've bastardized the definition such that it doesn't mean anything anymore. What the AGI now means is like, the thing that they want to sell you on this week. And then the last thing I'll say about this is it's not just this week, but many weeks. So I started compiling a list today. I didn't finish. But of all the times that people have declared that AGI has arrived, going back to, I think, 2023, and like Tyler Cowen said, '03, a model that nobody would take seriously anymore was AGI. And Sam Altman said, "We know how to build AGI," at the beginning of 2025. Jensen, everybody went nuts when he said that Astra was AGI.

• 10:18Speaker 03

  But he said on Lex Friedman, six months earlier, that AGI had arrived. Like, which is it, Jensen, right? Like, so you can make these announcements. The cost of making these announcements is not just zero. It's that it drives up the stock price. But there's nothing, you know, intellectually coherent that stems from it, the way that people are talking about it right now.

• 10:36Ed Elson?

  You describe it as a bait and switch, which does sound quite apt, because this is something that a lot of these people were emphasizing for years as an extremely important term, an extremely important definition, that would be a moment that would change our society, change humanity forever. Sam Altman being one of them. However, we just heard him on a podcast with Alex Heath. And Alex asked him about AGI, asked him about whether that, what that means and how important it is. And his response was quite different. Here is what he said.

• 11:09Speaker 04

  I mean, at best, you could say it's a very poorly defined term. I was going to say it's like an irrelevant marketing term.

• 11:14Speaker 05

  Well, last I checked, Drell's charter defines it as a highly autonomous system that outperforms humans at most economically valuable work.

• 11:21Speaker 04

  I think there are many people that would look at current models and say like, okay, it's there.

• 11:26Speaker 05

  Yeah. Do you think it's there?

• 11:29Speaker 04

  Sort of, close at least. I, I.

• 11:32Speaker 05

  I've heard varying versions of like what people on your team think.

• 11:36Speaker 04

  I think it's, I think there are a lot of, a lot of people who would like, look at our latest internal models and say, this is like very AGI like.

• 11:43Speaker 05

  Um.

• 11:44Speaker 04

  I think there are people who would say, you know, here's something I can point to that it doesn't do, or it's really bad at, and it's not.

• 11:50Speaker 03

  Just listen to all the kind of wildness there. You know, first he says it can't be defined, then he says maybe it's meta. He's, then he uses a term like AGI like. He points to, you know, some people in his company say it like, you know, he never comes out and says, I think it's this and it has met this for this reason. He just sort of, you know, dances all over the place. He might have to listen to the clip twice to really hear that in it. But that is what he's doing. He's, he's avoiding any commitment around it. He's pushing it off to, to other people. And ultimately he's taking this term AGI like, which means nothing, right? And he's made up this new term. What is AGI like? I mean, you know, there's no, there's just, there's no there there.

• 12:31Speaker 03

  And again, it's only interesting if it has some consequence in the world, right? Either it fits in with an intellectual debate, then you have to stick with the terms of intellectual debate, or you make a prediction about economics that follows from there. None of that's happening. Um, and again, it's, it's not changing the world economically the way that these folks did. I think if we really did have AGI, here are some things you might expect. You might expect wages to drop. You might expect unemployment to go up. You might expect that we could rely on agents. Like, you know, one guy proposed on Twitter today, the pizza test. You should be able to ask any AI system, order me a pizza. And it should figure out, you know, where you live, how to order the pizza and who's open and whatever. And like, that's not that hard, but you know, anybody who's played around with these agents

• 13:16Speaker 03

  know you can't really trust that. I mean, even shopping has been hard for them. You know, they don't know which menu to click on and, and things like that. Um, and so all of these systems asking for agents, then we do things that you don't need that, you know, you don't need a PhD to do those kinds of things. Those systems are not reliable. They're AGI like, if what that means is some of the time they do it and you're amazed that it does it, but they're not AGI itself if it can't do them reliably, you know, in the way that a human could. I mean, that was the definition all along is you have to be able to do it, you know, like an intelligent human can, and they just don't.

• 13:52Ed Elson?

  It seems that if they're using it as a marketing tactic, to use this poorly defined term that can mean basically anything, and perhaps it could mean the entire world changing at that point, maybe you start thinking about how incredible the AI future is going to be, et cetera, et cetera. They use that, this marketing tactic in expectation, as you said, that that is going to drive up the value of their companies. If we say that we have achieved AGI, then suddenly everyone's going to use our models and suddenly we're going to, we're all going to become rich. Is there a point at which people no longer buy it? Is there a point at which people hear the term AGI, they hear the term artificial general intelligence, the new one is recursive self-improvement that I hear a lot?

• 14:34Ed Elson?

  And is there a point at which people say, I don't think that that's interesting. I don't think that's meaningful and therefore I'm not interested.

• 14:41Speaker 03

  I mean, I guess yes and no. There's different populations of people and different populations of people have different motivations. The average person, I think, in the United States is actually kind of fed up. The average person in the United States is kind of like, this is not actually doing that much for me and I don't want a data center in my neighborhood and, you know, forget it. Right? So the, the views of the average people have changed. There is however, a class of people that make investments and I think a lot of them like these stories. And there's this whole meme stock thing that's been going on for a while now, right? This is not the beginning of it. And you can think of things like GameStop. I think social media has driven them. And in the meme stock world, these kind of pronouncements often drive things up.

• 15:23Speaker 03

  And, and so like, you know, every time that Elon has said that driverless cars are imminent, and he said it like 15 times in the last, or probably more than that, but he said it annually, pretty much every year since 2014. Every time he says that, it drives the stock up. I mean, you could ask, what, what is the stock market such that it still responds when he says those things, given that he doesn't really have credibility around them anymore? And I, you know, so there's some population of people out there. I don't know if they're trading on the notion that the cars are actually imminent, or the notion that other people will believe that, so I should buy this stuff. You know, so is this, the stock market's become almost this meta thing. What, what might other people believe?

• 16:05Speaker 03

  You and I, I think, talked about SpaceX a little and I loved your, your riffs on SpaceX on Twitter. There's no way that it's worth what it's valued right now. If you look at it in financial terms, but you could make sense of it in terms of, well, I think other suckers will buy it at this price, so I'll buy it in order to flip it. Then maybe it makes sense.

• 16:24Ed Elson?

  But if other people believe that it's AGI, then perhaps it really is AGI.

• 16:30Speaker 03

  They don't even have to believe it's AGI. You could just say, well, I think that other people will believe this crap even if I don't, and so that'll drive the stock up. So, um, and like now you, you've lost any financial footing. And I think the problem with that is eventually it falls apart and then, you know, somebody gets left holding the bag. And clearly the goal here is to have retail investors hold the bag.

• 16:51Ed Elson?

  Gary Marcus is author, scientist, entrepreneur and emeritus professor of psychology and neuroscience at NYU. Gary, appreciate your time. Thank you.

• 17:01Speaker 03

  Pleasure to be here.

• 17:04Ed Elson?

  After the break, a closer look at the jobs report.

• 17:14Speaker 00

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required. Compatibility and availability varies, 18 plus.

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• 18:43Ed Elson?

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• 19:28Ed Elson?

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• 19:59Ed Elson?

  We're back with Prof G Markets. The August jobs report came in and it was much stronger than expected. The economy added 162,000 jobs, nearly three times economists' expectations, and the unemployment rate held steady at 4.1%. The gains were mainly concentrated in food services and drinking places. Yes, that is actually a technical term, and local government education. Still, stocks slipped and the two-year treasury yield jumped after the report as a stronger labor market gives the Fed cover to raise rates. Odds of a hike this month are now at 52% on Kalshi.

• 20:39Ed Elson?

  So, joining us to discuss the state of the labor market, we are speaking with Catherine Anne Edwards, labor economist and host of the Optimist Economy Podcast. Catherine, thank you very much for joining us. I want to jump right into this jobs report. 162,000 jobs added in August. The unemployment rate stayed steady at 4.1%. I saw an interesting analysis of this report that was on CNBC from Wendy Edelberg, who was a Brookings economist. She was not very convinced by these numbers. She was expressing some doubts about them. I want to play you this clip and then let's jump into it.

• 21:19Speaker 07

  My guess is that these numbers get revised down. I am very puzzled actually by the strength in the payroll numbers. So at 71,000 on average for the last three months, that's like seven times faster than the pace of job growth last year. I see nothing else in the labor market that suggests that kind of pickup in activity.

• 21:42Ed Elson?

  In other words, too strong to be true, therefore must be revised down. Perhaps a fair claim? I don't know. What do you make of those comments?

• 21:52Kathryn Anne Edwards?

  I think that she is really hitting on something, which is that the rest of the report was fairly weak beyond the big headline numbers. And even though the revision was definitely to the labor market's favor, a lot of the kind of like. Real like meat of the of the jobs report is, you know, just where are we adding jobs and are we seeing those dividends get to workers and that we're draining people from unemployment or people are joining the labor force en masse and you're seeing wages go up. You know, the unemployment rate itself is important, but it's often much more important for the things we expect to see happen when it's low or steady, right? The jobs number is important, but it's more important for all the things we expect to see when it's really high. And I think what she's getting at is

• 22:37Kathryn Anne Edwards?

  those other things we expected to see, we really didn't. Now, there's, it could come down to revisions. I don't, I don't know if I, revisions are hard for me to speculate on because the summer months in particular can be very volatile. But at the same time, we're an economy that is holding pretty close to steady. So, you know, you're trying to measure something holding still and you'll have, you know, certain industries will have a, you know, a big summer, a bad month, you know, a big month, a bad month, people stop working at schools in the summertime and then they rejoin, but maybe the schedule shifted. Like, these very small movements can have a large effect on the headline number because this is not the same thing as a quarter of a million jobs have been added for the last

• 23:19Kathryn Anne Edwards?

  15 months. I mean, we've been so close to zero, the influences of what will push the number up or down. If we were otherwise adding 200 or 250,000 jobs, we wouldn't notice these small fluctuations. But now they're kind of all of our focus because they're what driving the overall number. So I think she, she's hitting on something that I'm sure a lot of people listening to have struggled in the labor market can tell you, like, I don't care what that unemployment rate says, it's not good right now.

• 23:45Ed Elson?

  Just on these month to month numbers, part of my takeaway is that I'm not sure if we should take any of these numbers that seriously, or at least I'm not sure exactly how important they are in terms of our understanding of the fundamental health of the economy. Because we had, we recently had jobs reports that were seemingly quite bad. And then suddenly we have a jobs report that is seemingly quite great. And does that tell me much? I'm not so sure. So what does it tell you, if anything, how seriously should we take these month to month jobs reports?

• 24:21Kathryn Anne Edwards?

  You know, any one month is overinterpreted, absolutely. And I think people put way too much emphasis on what I would call the point estimate coming out in any number, you know, and better than expected and worse than expected tends to be dominated by what a set of random economists predict in a monthly survey and is by no mean like the mood on the ground. So what I, you know, what I always say is to just step back and look for the trend as opposed to the point. And the trend that we've seen in the labor market, I think that every jobs report has been quite informative of. And they send, they're filling in the same space every time, which is that our economy is not growing well. But there's a big difference between falling off a cliff in a recession and growing at a fast clip.

• 25:06Kathryn Anne Edwards?

  And that's where we've been for a very historically long period of time. I think the uncertainty in so many aspects of our economic policy is weighing on many agents and actors in our economy, and everybody is waiting for the next thing. So you have these like massive over interpretation of the job market numbers, but really it's just people wanting to know when the Fed is going to do what it said it's going to do. And they're less interested in the labor market as a state of the world and more interested in whether or not the jobs report gives the Fed room to lower or raise interest rates, which is what they're really interested in. And I think that the labor market on its own has been telling a very consistent story, which is that it's weak, it's been weak, and it's been slowing

• 25:49Kathryn Anne Edwards?

  down since the summer of 2022. It hasn't, hasn't had broad enough or rapid enough decline to be, to warrant a recession, but in a lot of ways, it looks like one. I was talking with Guy Berger on Friday, and we were saying that the increase in the number of unemployed over the past three years is on par with a kind of like mild recession. That doesn't mean that we're in one, it just means that the, that is what the labor market has been indicating, a very gradual slowdown and overall weakness. So I think, you know, you've got to put the points on the line, and that's where the real outlier comes from, and less so the market expectations or the economist survey expectations. Because I think they're

• 26:29Kathryn Anne Edwards?

  really speaking to the, the aspect of which a number comes out on a Friday and it's closer to betting than it is a report on the labor market's quality.

• 26:40Ed Elson?

  What are some of the data points that you are focusing on in terms of actually measuring the health of the labor market? You mentioned the number of unemployed, which is not going in the right direction right now. But I think people talk about the unemployment rate, which from my understanding isn't terrible. There's, of course, the labor force participation rate. There are all these different things that we can look at and then make a value judgment as to whether they're going in the right direction or the wrong direction. What are your favorite things to look at?

• 27:06Kathryn Anne Edwards?

  Yeah, the length of unemployment. So not just how many people are unemployed, but how long they've been unemployed and the, the share that have been looking for six months or more. Both of those numbers are way too high to call the labor market good. And they've been going in the wrong direction for, for a while. It's for people who are unemployed, it's taken a long time to find a job. I look at wage growth, right? Are we just, is the labor market generating earnings for the people who are showing up every day? And that wage growth has been weak to fair, and it's now slipping behind inflation. And it's done that, you know, off and on, but it's, you know, anytime wage growth falls below price growth, that means that every American just got a pay cut in

• 27:48Kathryn Anne Edwards?

  real terms. That's a, that's a marker that's been particularly poor performing. And then I look at the labor force level and labor force participation rate amongst the prime age. And this one, I think, is where it's been, you know, particularly tough. We have over 1 million fewer prime age men in the labor force this month than we did last August. So you're, you're seeing people get frustrated, you're seeing people leave, the labor market doesn't have a ton of moving around, or it's not generating good wage growth. I'll also look at all the alternative measures of labor underutilization. So people who have, who say they want a job, people who say that they looked for a job, but just not in the last four weeks, so they're not technically unemployed, and then people who have said

• 28:32Kathryn Anne Edwards?

  they've just given up. And none of those are really showing, they're not flashing red, but they're all on the same trend of this is a very weak labor market, especially for job seekers.

• 28:41Ed Elson?

  This is a timely discussion because we're speaking on the evening of Labor Day. And I just want to point you to a statement from President Trump, talking about Labor Day. He put this out on Truth Social. He said, quote, that there are too many non-working holidays in America, and that it is costing our country billions of dollars to keep all of these businesses closed. The workers don't want it either, essentially coming out against Labor Day. Given that this is your area of expertise, you are a labor market economist, what do you make of those comments? And what do you make of the importance or not importance of Labor Day in America?

• 29:23Kathryn Anne Edwards?

  He's president right now, but at his core, he's kind of a charlatan businessman who, you know, was guilty of wage theft. He was a union buster. He's terribly anti-union. I mean, this, if you look inside this guy's heart, the working class is not there and workers are not in it. And anyone who has ever worked on a job site would have been able to tell you that. So it doesn't really surprise me. There is something brazen about saying that it costs businesses so much to give their workers a holiday, given that it's not a requirement in the United States that every worker get a paid holiday, a paid sick day, a paid vacation day. All of that is voluntary, which is why low-income workers don't get them. Sure, it's galling to say when the minimum wage is $7.25 an hour. It has been, you know, that since the summer of 2009. But, you know, you can't, people

• 30:08Kathryn Anne Edwards?

  don't change. Not, not on the essentials. This guy doesn't care about workers and he never has. And you can look to his Secretary of Labor, who had to resign in disgrace after being drunk on the job and, you know, terribly mismanaging the department and breeding a culture of fear, to know that he never really cared about them in the first place.

• 30:23Ed Elson?

  Are there any merits to the, we're taking too many holidays discussion? Is that something that we should actually be talking about in America? Or is it just flat out wrong?

• 30:35Kathryn Anne Edwards?

  It's flat out wrong. Yeah. I mean, every other peer country we has, that we have considered in the Organization of Economic Cooperation and Development, these would be industrialized countries, not necessarily in Europe, but in countries we would consider our peers. We're the only ones that doesn't have required paid sick days. We also are the only ones that don't have required statutory vacation leave, which is why we take so little. And in fact, we're taking less vacation days now than we did in the 1970s. But of course, that's expected when unionization has fallen, as have most basic worker protections and worker power writ large. I mean, it's such a wasted moment. This is, this is this guy's thing, right? He's like so good at wasting the moment. This could have been an opportunity to talk about how the labor share of income has fallen to levels not seen in seven decades. And the reason why so many families are struggling is because they're just not bringing

• 31:20Kathryn Anne Edwards?

  home enough money relative to what they need to buy to have a decent life. And rather than elevating people who feel ignored in their economy because their struggle, you know, they don't make $7 an hour, they, they make $75,000 a year and they can't make it work, rather than elevating, you know, people who want to be seen and who need their economic experience validated, it's just erasing them through and through.

• 31:44Ed Elson?

  Do you think that this is ultimately an intentional attempt to suppress workers, to suppress labor? Do you think that this is potentially more insidious than a guy just kind of tweeting whatever random thought comes up in his head?

• 32:01Kathryn Anne Edwards?

  I don't know. I mean, he doesn't have to be much more insidious than he already is. I don't know if it's got to change direction or degree. I mean, he put someone in charge of the Department of Labor who, you know, where does wage and hour enforcement come from? Right? Where does our monitoring of things like the employment of veterans and the employment of women and the employment of workers with a disability, this comes from a department whose job it is to monitor the health of the labor market beyond just one report that the stock market pays attention to. And it was, you know, gutted and eviscerated, right? Like, it's, you attack the Bureau of Labor Statistics, you attack the Census Bureau because you don't want good numbers coming out because you're afraid of what they say, or you just don't care. So I don't know if it's necessarily a change in direction or

• 32:44Kathryn Anne Edwards?

  degree. It's very much on brand with, I need to erase anyone who disagrees with me and minimize what they're going through to make whatever I care about most important. I think all politicians do that to some degree. I think for a lot of people in the working class, it feels like a heel turn because he said he was for them. But he's never been for a single, you know, I would say, policy that has been in the favor of the working class.

• 33:08Ed Elson?

  Catherine Ann Edwards is labor economist and host of the Optimist Economy Podcast. Catherine, we always appreciate your time. Thank you.

• 33:16Kathryn Anne Edwards?

  I am much more optimistic on the show, I'll say.

• 33:20Kathryn Anne Edwards?

  Try to put a good spin.

• 33:21Ed Elson?

  That's where you go on her podcast, but not here.

• 33:24Kathryn Anne Edwards?

  Yeah, with a little bit more lead time and runway. I'm able to, I'm able to spin this good, but you know, a quick jobs day hit like, oh man, that wage growth number came in, that dropped like a lead balloon.

• 33:37Ed Elson?

  Do you want to make a quick optimist pitch while, while we have a couple of minutes?

• 33:42Kathryn Anne Edwards?

  I think the theme of this show and, and what I try to explain every week is that one of the biggest obstacles that Americans face is how little their policymakers have tried. You know, we are not at the end of an era where we have done everything we can and now we're pulling our hair because nothing has worked. We just haven't, haven't done anything. It's truly that nothing has worked and nothing is what we have done. But there are so many policies sitting in drawers that are waiting to do Americans good, to make the economy better, and we don't have any of them on the federal level. And that doesn't mean that we won't, it means that we could. And so we have something to fight for.

• 34:17Ed Elson?

  Go find out more at the Optimist Conroy Podcast. Catherine, really appreciate it. Thank you.

• 34:22Kathryn Anne Edwards?

  Bye all, happy Labor Day.

• 34:28Ed Elson?

  The far right just won a major election in Germany and many are calling it a turning point for the country. The German AFD party, infamous for its extreme positions on immigration, won 44% of an important regional election over the weekend. That was higher than any polls had predicted and it was also the best result for the AFD party since it was created in 2013. German Chancellor Friedrich Merz called it the worst defeat for his party in years and politicians are now preparing for what might be a very different era in Germany, an era defined not by traditional liberal democracy, but by hardline nationalism.

• 35:09Ed Elson?

  Indeed, the AFD is more popular across the nation today than ever before. Now, how did we get here? Well, Germany finds itself in a very difficult economic position. Their economy hasn't really grown for almost a decade. Two years ago, it actually shrank and this year it is expected to grow less than 1%. Meanwhile, the number of manufacturing jobs has dropped to its lowest level in 10 years and investments in the nation have been falling. That is why so many Germans are so attracted to the AFD party. They consider it to be the shakeup that their country really needs. But what actually is the AFD and how would it actually help?

• 35:53Ed Elson?

  Well, beyond the party's cultural views, which include teaching children less about Nazi history and more about traditional cultural heritage, the party's only real economic position is to crack down very aggressively on immigration. They've promised to carry out deportations and to build a remigration task force and even to build separate schools for refugee children. They believe that immigrants have caused this economic crisis and so they want the immigrants out. But putting aside any moral judgment of that position, it is also a fundamental misunderstanding of their own problem. The real reason that Germany is struggling right now is because they haven't been able to grow their economy.

• 36:36Ed Elson?

  This is a function of overly conservative fiscal measures that didn't allow their government to borrow, along with overly bureaucratic regulation and over dependence on Russian energy and an aging and therefore dwindling population. Each of these factors have reduced innovation, productivity, entrepreneurship, and therefore growth, but it wasn't because of immigrants. The truth is that the AFD is just another example of political laziness. They don't want to spend the time addressing the actual problems, which are actually quite complicated. Instead, they would rather make a scapegoat out of one of the most frequently targeted groups in the history of humanity, which is of course immigrants. It's powerful because it's easy.

• 37:21Ed Elson?

  You can say things like, they are different from us, we are not like them, but it is also profoundly stupid. I saw this firsthand growing up in the UK where the most economically disastrous decision in our nation's history, Brexit, was made out of a very similar anti-immigrant position. It didn't work. In fact, it made things worse and today Britain has never been more economically insecure. So no, the AFD is not shaking things up in Germany. In fact, it is going down one of the most popular paths in the history of politics. Fewer immigrants, more insularity, and ultimately an even slower economy. The AFD is a signal of what's to come, but let's be clear, it isn't good.

• 38:08Ed Elson?

  Okay, that's it for today. This episode was produced by Claire Miller and Alison White and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Chalon, Kristin O'Donoghue and Mia Silverio. And our social producer is Jake MacPherson. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson, I will see you tomorrow.