Dear Commons Community,

US business leaders are offering their reactions to the steep trade tariffs that the Trump administration has imposed on Canada, Mexico and China. The editorial board of the Wall Street Journal called it “the dumbest trade war in history”.

Trump hit Canada and Mexico with a 25% tariff on imports, and China with 10%, on Saturday in a move that launched a new era of trade wars between the US and three of its largest trading partners. The tariffs against Canada also include tax oil and energy products at 10%.

Trump said on his own Truth Social social media platform that he had used emergency powers to issue the tariffs, due to come into effect today, “because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl”.

The Journal said the moves “reminds us of the old Bernard Lewis joke that it’s risky to be America’s enemy but it can be fatal to be its friend”, adding that with the exception of China “Mr Trump’s justification for this economic assault on the neighbors makes no sense.”

It added: “Drugs may be an excuse since Mr Trump has made clear he likes tariffs for their own sake, pointing to Trump’s comments on Thursday that the US doesn’t need oil or lumber from its neighbors.

“Mr Trump sometimes sounds as if the US shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home,” the editorial continued. “This is called autarky, and it isn’t the world we live in, or one that we should want to live in, as Mr Trump may soon find out.”

Larry Summers, treasury secretary under Bill Clinton, called the impending tariffs “a self-inflicted supply shock.

“It means less supply because we’re taxing foreign suppliers. And that will mean higher prices and lower quantities,” Summers told CNN. “This is a self-inflicted wound to the American economy. I’d expect inflation over the next three or four months to be higher as a consequence, because the price level has to go up when you put a levy on goods that people are buying.”

Kirsten Hillman, Canada’s ambassador to the US, told ABC’s This Week that Trump’s tariff move “is disrupting to an incredibly successful trading relationship.

“We’re really disappointed and we’re hopeful that they don’t come into effect on Tuesday,” Hillman added. “We’re ready to continue to talk to the Trump administration about that.”

Last night Trump backed off on his tariffs and put a pause on them.

Tony

Dear Commons Community,

Mihir Desai, a professor at Harvard Business School and Harvard Law School, had a sobering guest essay in Sunday’s New York Times entitled, “I Study Financial Markets. The Nvidia Rout Is Only the Start.” It is must reading for anyone interested in high tech companies and their financial strategies in the era of artificial intelligence.  He makes interesting speculations on the future of the Big Seven tech companies in light of the fiscal disaster that struck Nvidia last week in response to the announcement of China’s DeepSeek Company development of high-performance and low cost A.I. computer chips.  Here is his main message.

“During last Monday’s stock market swoon, Nvidia, the artificial intelligence giant, lost nearly $600 billion in value, the biggest single-day loss for a public company on record. How could the fortunes of one of our leading companies fall so far so suddenly? While some will seek answers in the promising A.I. start-up coming out of China or the vicissitudes of trade policy, these movements speak to deeper changes in our financial markets that can best be explained, oddly enough, by revisiting ancient mythology.

The image of the ouroboros, a serpent eating its own tail, is a remarkably durable and pervasive motif. Ancient Chinese, Egyptian, European and Latin American civilizations seemed captivated by the image or ones like it, variously symbolizing the cyclic nature of life, the totality of the universe or fertility. Today, the more resonant lesson comes from the self-cannibalism of the ouroboros, which helps us understand the most significant financial puzzle of our day.

Like the ouroboros, I believe Big Tech is eating itself alive with its component companies throwing more and more cash at investments in one another that are most likely to generate less and less of a return. Monday’s correction shows that our financial markets — and possibly your retirement portfolio — may be starting to reflect an understanding of this dynamic.

Even after Monday’s dip, the disjunction in valuations between Big Tech — sometimes referred to as the Magnificent 7 of Microsoft, Apple, Amazon, Nvidia, Tesla, Meta and Alphabet — and the rest of the stock market remains staggering. The Magnificent 7 still constitute more than 30 percent of the market capitalization of the S&P 500 (up from just under 10 percent a decade ago). When you compare their stock prices with their earnings or sales, the traditional way to measure the valuation of a share, our tech Goliaths trade at ratios that are two to three times those of the Unmagnificent 493.

Market watchers have debated whether Big Tech stocks will continue to outperform everyone else or if shares in other companies will catch up as they use artificial intelligence to become more productive. But the myth of the ouroboros suggests yet another possible outcome.

The first step in understanding this analogy is to return to some finance basics. Stock prices don’t always rise because the prospects of companies improve. They also rise when investors judge certain companies to be a safer bet than others and don’t penalize them for taking longer to generate returns for their money.

While many industry watchers have argued that artificial intelligence will cause the fortunes of the Magnificent 7 to soar, another dynamic is at play: Investors see these companies as a safe bet and have thus stopped demanding significant immediate returns. That’s why the earnings forecasts of stock analysts have not kept pace with the skyrocketing stock prices of these companies.

Why wouldn’t investors expect more for their investment dollars?

I believe global investors have come to see the equities of these seven companies as the premier safe assets. In a world of inflationary spikes, political instability and gridlock and fiscal uncertainty, why not invest in companies with fortress balance sheets, recurring revenue, stable cash flows, commanding market positions and esteemed management teams? It seems a new generation of investors implicitly views these companies almost like governments. Indeed, as evidenced by Tesla’s extraordinary valuation, it’s clear its founder Elon Musk has inspired a loyalty that is akin to a sovereign. In a world of algorithmic trading and passive investing, those beliefs take on a velocity that results in the extremely high prices for Big Tech stocks we see today.

How have the managers of these companies responded to this massive influx of cheap money? Perhaps, precisely as they should have, by pouring more and more capital into investments without worrying about expecting a lot back quickly. From a practical standpoint, what they seem to have done is unleash a remarkable torrent of spending on one another. In other words, they are eating themselves alive.

Nvidia, the much-beloved creator of the next generation of A.I. chips whose stock was crushed on Monday, gets almost half of its revenue from its siblings in the Magnificent 7. In 2022, Google paid Apple $20 billion for the privilege of being the default search engine on Safari, according to unsealed court documents, and therefore very likely accounts for around 20 percent of Apple’s profit. Meta employs Amazon Web Services for cloud services and increasingly in its A.I. push, and all of the tech giants have unleashed an inordinate amount of spending on infrastructure.

And when the tech giants aren’t showering money on one another, they often practice another form of self-cannibalism: purchasing their own shares. In the past three fiscal years, Apple, Alphabet, Meta, Microsoft and Nvidia have bought back a total of over $600 billion of their own stock — a notoriously low-return activity.

There is nothing particularly troubling about the Magnificent 7 purchasing products and services from one another. Nor is there anything necessarily wrong with spending large amounts on capital expenditures or stock buybacks. But if all of these operational and capital allocation decisions are guided by extremely low investor expectations, they may well eventually yield correspondingly low returns. And that gives us a possible glimpse into what lies ahead for the Magnificent 7 and A.I. Rather than a boom that expands still further to a speculative bubble or a rally for the remaining Unmagnificent 493, we may just witness a slow grind of low returns on excessive spending on a technological future that will not be nearly as revolutionary or imminent as promised.

More dangerously, these companies — like all companies — will one day disappoint those who view them as safe assets. And the self-cannibalization will reveal itself to be not just a mediocre investment but also a shaky bet on an illusion propagated by a mythical and messianic belief in technology and these companies.

Similar dynamics have shaped other periods in American history. The remarkable expansion of railroads in the 19th century gave rise to similarly magical thinking; by the early 1900s, after a few decades of frenzied investment, the rail industry made up more than 60 percent of equity market capitalization, and its bonds were considered a safe bet. Their low yields fueled spending on steel and, ultimately, gave rise to the creation of the huge conglomerate U.S. Steel in 1901.

What followed in the first two decades of the 20th century? Remarkably low profits from these companies and mediocre returns from the stock market overall. The natural limits on railroads and entrenched steel players soon became evident, as did the organizational problems that go along with such scale.

Of course, the natural physical bounds that limited the growth of America’s railroads may not exist for today’s Magnificent 7. If artificial intelligence is a truly general purpose technology, then it may well have far greater potential. That said, information technology has been promising such productivity growth for the last two decades without delivering.

One need not look at ancient folklore to find depictions of the ouroboros. The economist Joseph Schumpeter once described capitalism as a process of almost mystical renewal. He admiringly wrote of a cycle of industrial mutation “that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” That process of creative destruction sounds just like an ouroboros — but that image is easier to admire and appreciate if it’s not your own tail that’s being eaten.”

Thank you Dr. Desai for a most interesting analysis!

Tony

Dear Commons Community,

Dozens of U.S. Department of Education officials were suddenly put on paid administrative leave Friday night, their union said, because of President Donald Trump’s executive order banning diversity, equity and inclusion programs in the federal government.

The employees worked in multiple offices across the agency and included civil rights attorneys, public relations and IT specialists, people who helped students defrauded by colleges and others, according to Brittany Holder, a spokesperson for the American Federation of Government Employees.

The staffers were explicitly told by the Education Department that the decision to place them on leave was “not being done for any disciplinary purpose” but was pursuant to the president’s DEI-related executive order, according to a memo obtained by USA TODAY. Their email access was also suspended.

The AFGE, a union which represents federal officials, estimated that at least 55 staffers received leave notices on Friday, but the group expects that number to climb.

The Education Department did not immediately comment on the matter yesterday.

According to Holder, affected staffers said the decision appeared to be related to employees’ participation in a diversity training called the “Diversity Change Agent” program. That’s an instructional course that the agency previously described as an attempt to “foster an inclusive culture that respects individual talents, values differences, and allows our workforce to fully contribute to our organizational success.”

The program dates back many years. Internal emails provided by the union from March 2019 show Education Department officials being encouraged to get involved with the training during Trump’s first term.

The Education Department says it has already canceled millions of dollars in contracts related to DEI trainings and services and removed more than 200 webpages that previously housed DEI resources for schools and colleges. Informational resources for LGBTQ students, universities with the largest amounts of Hispanic students and tribal colleges have gone dark in recent weeks.

Sad situation and probably only the beginning!

Tony

Dear Commons Community,

I have just finished reading A Place to Hide, a novel written by Ronald H. Balson, who wrote the international bestseller, Once We Were Brothers.   It explores the moral actions of Teddy Hartigan, who reluctantly takes a position in the U.S. consulate in Amsterdam in the late 1930s as Naziism and Jewish persecution rise up in Europe.  Hartigan marries a Jewish woman and adopts a Jewish child, whose lives are at stake as the German ‘Final Solution” spreads throughout Europe and into The Netherlands.  Hartigan evolves during the story as a government bureaucrat processing visas to an individual who takes deeply moral actions to save imperiled Jews especially children. At two hundred and ninety pages, it is a fast read, just perfect for a cold January weekend.

I highly recommend A Place to Hide!

Below is an excerpt of a review that appeared in the Congregation Beth Shalom website.

Tony

————————————————————————————————————————–

A Place to Hide is the remarkable new novel by Ronald H. Balson. The plot is based on a true story and
begins in Tel Aviv in 2002. A chance meeting between Karyn and Burt leads Karyn to reveal that she
was a hidden Dutch child during WWII. She still yearns for information about the sister she was
separated from. Burt’s elderly cousin Teddy worked in Amsterdam during the war and has contacts
there. Karyn, a former journalist, travels to Washington to seek Teddy’s help in return for documenting
his war time story. Balson’s plot switches seamlessly between Teddy’s past and present. Teddy is not in
great health.

Theodore “Teddy” Hartigan is the scion of a wealthy and well-connected D.C. family. Teddy leaves his
cushy position in the State Department in 1938 when he is re-assigned to the U.S. Consulate in
Amsterdam to replace fleeing staff. His job is to process Visa applications when there are no Visa’s
available. Teddy wants to help all the desperate people, but his hands are tied.

Teddy falls in love with Sara, a Jewish girl from the nearby town of Utrecht. Sara’s father is head of the
history department at the university there. He understands the Nazi threat and solicits Teddy’s help to
insure his daughter’s future. Teddy and Sara marry and adopt a little girl who has been abandoned, for
her own safety, at a pre-school in Amsterdam. When the consulate is permanently closed Teddy is
asked to stay on and to work undercover with Sara’s father. Teddy becomes part of the resistance
movement. Jewish families are sequestered in Amsterdam and awaiting transport to concentration
camps. Parents are desperate to save their children, and Teddy conceives a plan to help as many of them
as possible. Could these children be adopted by gentile families? Balson’s writing puts this extraordinary
story where it belongs – available for everyone to read and remember.

Dear Commons Community,

From an ice cream parlor in California to a medical supply business in North Carolina to a T-shirt vendor outside Detroit, The U.S. is bracing to take a hit from the taxes President Donald Trump imposed yesterday on imports from Canada, Mexico and China — America’s three biggest trading partners.

The levies of 25% on Canadian and Mexican and 10% on Chinese goods will take effect Tuesday. Canadian energy, including oil, natural gas and electricity, will be taxed at a lower 10% rate.

Mexico’s president immediately ordered retaliatory tariffs and Canada’s prime minister said the country would put matching 25% tariffs on up to $155 billion in U.S. imports.

China’s Ministry of Foreign Affairs said the country’s government firmly opposes the move and will take “necessary countermeasures to defend its legitimate rights and interests.” The Ministry of Commerce in China said it would file a lawsuit with the World Trade Organization for the “wrongful practices of the U.S.”   As reported by the Associated Press.

The Budget Lab at Yale University estimates Trump’s tariffs would cost the average American household $1,000 to $1,200 in annual purchasing power.Gregory Daco, chief economist at the tax and consulting firm EY, calculates the tariffs would increase inflation, which was running at a 2.9% annual rate in December, by 0.4 percentage points this year. Daco also projects the U.S. economy, which grew 2.8% last year, would fall by 1.5% this year and 2.1% in 2026 “as higher import costs dampen consumer spending and business investment.’’

The Penny Ice Creamery in Santa Cruz, California, has had to hike prices of its ice cream, including popular flavors “strawberry pink peppercorn’’ and “chocolate caramel sea salt,’’ repeatedly in recent years as an inflationary surge increased the cost of its supplies.

“I feel bad about always having to raise prices,’’ co-owner Zach Davis said. “We were looking forward to inflation coming down, the economy stabilizing in 2025 … Now with the tariffs, we may be back at it again.’’

Trump tariffs, Davis said, threaten to drive up the cost of the mostly made-in-China refrigerators, freezers and blenders he’ll need if Penny Ice Creamery goes ahead with plans to add to its six shops. He still has painful memories of the extra equipment costs the company had to absorb when Trump slapped massive tariffs on China during his first term.

The new tariffs will also raise the price of a customer favorite — sprinkles — which Penny Ice Creamery imports from a company in Whitby, Ontario. Tacking a 25% import tax on even something as small as that can damage a small business like his.

“The margins are so slim,’’ he said. “Being able to offer that add-on can maybe generate an additional 10 cents in profit per scoop. If a tariff wipes that out, that can really be the difference between being profitable and being break-even and even being underwater by the end of the year.’’

In Asheville, North Carolina, Casey Hite, CEO of Aeroflow Health, expects to take a hit because his company gets more than half its supplies, including breast pumps, from Chinese manufacturers, providing them to American patients through insurance plans. Aeroflow Health gets paid by insurers at pre-negotiated rates, put in place before Trump decided on his tariffs.

Hite said the tax on Chinese imports would hit the company’s finances, forcing it either to purchase cheaper and lower-quality products or pass higher costs along via higher health insurance premiums. Those might take two years to materialize, Hite said, but eventually they would hit consumers’ budgets.

“It will impact the patients,” Hite said. “In time, patients pay more for the products.”

Even the made-in-USA absorbent incontinence pads Aeroflow Health buys aren’t safe from Trump’s import taxes. They may include pulp from tariff target Canada and plastics and packaging from China, according to the Aeroflow Health, which warns of “turbulences” from the tariffs.

“Is this going to affect our business? You bet it is,’’ said Linda Schlesinger-Wagner, who owns skinnytees, a women’s apparel company in Birmingham, Michigan, north of Detroit, that imports clothing from China. She said the 10% tax would increase her costs, though she plans to absorb the extra expense instead of passing it along to customers.

“I don’t like what’s going on,’’ she said, referring to the broader impact of the tariffs. “And I think people are going to be truly shocked at the pricing they’re going to see on the cars, on the lumber, on the clothes, on the food. This is going to be a mess.’’

William Reinsch, a former U.S. trade official now with the Center for Strategic and International Studies, said that many companies that stocked up on imported goods ahead of time to avoid the tariffs. They will be able to draw on their piled-up inventories for weeks or a couple of months, delaying their customers’ pain.

George Carrillo, CEO of the Hispanic Construction Council, an industry advocacy group, said construction companies have been hoarding materials in anticipation of Trump’s actions, but he worries about the possibility of inflation spiking in three to six months.

“Once that inventory starts to get low, we’re going to start feeling the effects,” Carillo said in a phone interview Saturday, ahead of the announcement. “Developers and general contractors need to keep up with the pace and they’re going to start buying more products and it’s going to be at a higher price point.”

All that will be exacerbated by an emerging immigration crackdown that is already spooking the construction industry’s labor pool, he said.

“You put tariffs and you put workforce instability, it’s going to create major delays in projects. It’s going to create an increase in prices because of the lack of availability,” Carrillo said.

Then there are the industries that don’t have the luxury of stockpiling, including supermarkets whose farm products will spoil. So the tariff impact will show up on grocery shelves within days.

“You don’t stockpile avocados,’’ Reinsch said. “You don’t stockpile cut flowers. You don’t stockpile bananas.’’

In the tomato trading hub of Nogales, Arizona, produce vendor Rod Sbragia, who followed his father into the business nearly four decades ago, worries that the import levies will force some distribution companies out of business and “would be detrimental to the American consumer, to the choices they have at the supermarket.”

Sbragia voted for Trump in the past three elections and calls himself a “staunch Republican.” The president, he said, must not have been properly advised on the matter.

“When we’re worried about cost to consumers, inflationary pressures and the overall health of our population,’’ he asked, “why are we going to make it more difficult to get access to fresh fruits and vegetables?”

American farmers are also likely to get caught in Trump’s trade tussle with Canada, China and Mexico. The president’s supporters in rural America make a tempting target for retaliatory tariffs. That is what happened in Trump’s first term when other countries, notably China, slapped back against the president’s tariffs with levies of their own on things like soybeans and pork. In response, Trump spent billions in taxpayer money to compensate them for lost sales and lower prices.

We will be digging deeper into our pocketbooks and wallets to pay for Trump’s tariffs.

Tony

Chuck Todd. Courtesy of William B. Plowman/NBC.

Dear Commons Community,

Chuck Todd, the former “Meet the Press” moderator, is leaving NBC News, he told colleagues in a memo issued yesterday, a move he’s making in order to pursue ventures outside the NBCUniversal empire.  As reported by Variety:

Todd had in recent weeks been meeting with other news outlets and potential employers, according to people familiar with the matter. His current contract with NBC News had been expected to lapse at some point after the 2024 election.

“There’s never a perfect time to leave a place that’s been a professional home for so long, but I’m pretty excited about a few new projects that are on the cusp of going from ‘pie in the sky’ to ‘near reality,’ Todd told NBC News staffers in the memo.  “So I’m grateful for the chance to get a jump start on my next chapter during this important moment.”

He said his “Chuck Toddcast” podcast would be “coming with me,” and urged colleagues to “stay tuned for an announcement about its new home soon.” Todd plans “to continue to share my reporting and unique perspective of covering politics with data and history as important baselines in understanding where we were, where we are and where we’re going.”

“We’re grateful for Chuck’s many contributions to our political coverage during his nearly two-decade career at NBC News and for his deep commitment to Meet the Press and its enduring legacy,” NBC News said in a statement. “We wish him all the best in his next endeavors.”

Many personnel at traditional TV outlets have explored opportunities with digital or new-tech outlets in recent months, a nod to the more difficult economics of national newsgathering in the current climate. Jim Acosta, the CNN anchor, announced earlier this week that he was leaving the Warner Bros. Discovery-backed network to launch his own Substack. Don Lemon and Megyn Kelly are among the ranks of well-known TV anchors who have moved on to digital media.

When he moderated “Meet The Press,” Todd demonstrated an entrepreneurial streak, bringing the long-running Sunday program into podcasting and even launching a film festival.

“Everyone is trying to figure out how to get in front of millennials. I think the millennial generation learns as much visually as they do the old-fashioned way, by the book,” Todd told Variety in 2017. “We are no longer in the business of telling people how they should consume information. Our job is to provide depth and information in any way they want to consume it.”

He told staffers he expected to continue to try to build new media businesses. “The media has a lot of work to do to win back the trust of viewers/listeners/readers and I’m convinced the best place to start is from the bottom up.  At my core, I’m an entrepreneur — I spent my first 15 years professionally working for the company that started the political newsletter craze that dominates today.  And this is a ripe moment,” he said, adding: “The only way to fix this information eco system is to stop whining about the various ways the social media companies are manipulating things and instead roll up our collective sleeves and start with local.  National media can’t win trust back without having a robust partner locally and trying to game algorithms is no way to inform and report.  People are craving community and that’s something national media or the major social media companies can’t do as well as local media.”

Todd joined NBC News in 2007 as a political director, after having spent 15 years working at National Journal and leading the “The Hotline,” an early digital newsletter focused on inside-the-Beltway maneuvers. In 2008, he was named chief White House correspondent. In 2014, he was elevated to top duties at “Meet The Press,” succeeding David Gregory. He expanded the program by doing a regular daytime hour on MSNBC called “MTP Daily,” a program that was eventually moved over to the live-streaming service NBC News Now.”

I always thought of Todd as a fine newsman.  We wish him luck in his new ventures.

Tony

Dear Commons Community,

John Horgan, who is the author of Mind-Body Problems and My Quantum Experiment, had an article in Scientific American in 2022 and republished earlier this week sub-titled “A radical quantum hypothesis casts doubt on objective reality.”  It reviews individual perceptions and whether reality is strictly  in the eye of the beholder.  This is an old issue that has been debated ever since Max Planck and Niels Bohr first posited quantum mechanics which challenged traditional deterministic, empirical theories in the early 1900s. Horgan refers to QBism (Quantum Bayesianism Probability Theory) which Horgan defines as:

“A newish interpretation of quantum mechanics called QBism (pronounced “Cubism,” like the art movement) makes subjective experience the bedrock of knowledge and reality itself. David Mermin, a prominent theorist, says QBism can dispel the “confusion at the foundations of quantum mechanics.” You just have to accept that all knowledge begins with “individual personal experience.”

According to QBism, each of us constructs a set of beliefs about the world, based on our interactions with it. We constantly, implicitly, update our beliefs when we interact with relatives who refuse to get vaccinated or sensors tracking the swerve of an electron. The big reality in which we all live emerges from the collisions of all our subjective mini-realities.”

QBism is similar to multiple realities and  has been a bedrock for qualitative researchers for decades. I have been lecturing on this since the 1980s in my education research methods courses. In sum, this new interpretation of QBism seems like old wine in a new bottle.

Below is an excerpt from the Horgan article.

Tony

————————————————————————–

“As philosopher Michael Strevens points out in The Knowledge Machine, science resolves disputes by means of repeated observations and experiments. Strevens calls scientists’ commitment to empirical data the “iron rule of explanation.” Ideally, the iron rule produces durable, objectively true accounts of the world.

But subjectivity is hard to expunge even in physics, the foundation on which science rests. Quantum mechanics, a mathematical model of matter at very small scales, is science’s most rigorously tested theory. Countless experiments have confirmed it, as do computer chips, lasers and other technologies that exploit quantum effects.

Unfortunately, quantum mechanics defies common sense. For more than a century, physicists have tried to interpret the theory, to turn it into a coherent story, in vain. “Every competent physicist can ‘do’ quantum mechanics,” a leading textbook says, “but the stories we tell ourselves about what we are doing are as various as the tales of Scheherazade, and almost as implausible.”

Many physicists ignore the puzzles posed by quantum mechanics. They take a practical, utilitarian attitude toward the theory, summed up by the admonition, “Shut up and calculate!” That is, forget about those quantum paradoxes and keep working on that quantum computer, which might make you rich!

Others keep probing the theory. In 1961 a prominent theorist, Eugene Wigner, proposed a thought experiment similar to the conundrum of Schrödinger’s cat. Instead of the fabled cat in a box, imagine that a friend of Wigner is inside a laboratory monitoring a radioactive specimen. When the specimen decays, a detector flashes.

Now imagine that Wigner is outside the lab. If Wigner’s friend sees the detector flash, he knows that the specimen has decayed. But to Wigner, standing outside the lab, the specimen, his friend and the entire lab hover in a blur of possible states. Wigner and his friend seem to occupy two distinct realities.

In 2020, physicists performed a version of Wigner’s thought experiment and concluded that his intuitions were correct. In a story for Science headlined “Quantum paradox points to shaky foundations of reality,” physics reporter George Musser says the experiment calls objectivity into question. “It could mean there is no such thing as an absolute fact,” Musser writes, “one that is as true for me as it is for you.”

A newish interpretation of quantum mechanics called QBism (pronounced “Cubism,” like the art movement) makes subjective experience the bedrock of knowledge and reality itself. David Mermin, a prominent theorist, says QBism can dispel the “confusion at the foundations of quantum mechanics.” You just have to accept that all knowledge begins with “individual personal experience.”

According to QBism, each of us constructs a set of beliefs about the world, based on our interactions with it. We constantly, implicitly, update our beliefs when we interact with relatives who refuse to get vaccinated or sensors tracking the swerve of an electron. The big reality in which we all live emerges from the collisions of all our subjective mini-realities.

QBists hedge their mind-centrism, if only so they don’t come across as loons or mystics. They accept that matter exists as well as mind, and they reject solipsism, which holds that no sentient being can really be sure that any other being is sentient. But QBism’s core message, science writer Amanda Gefter says, is that the idea of “a single objective reality is an illusion.” A dream, you might say.

Proponents bicker over definitions, and physicists and philosophers fond of objectivity reject QBism entirely. All this squabbling, ironically, seems to confirm QBism’s premise that there is no absolute objectivity; there are only subjective, first-person viewpoints.”

John Horgan, who has written for Scientific American since 1986, comments on science on his free online journal Cross-Check. He has also posted his books Mind-Body Problems and My Quantum Experiment online. Horgan teaches at Stevens Institute of Technology.

Satya Nadella, the C.E.O. of Microsoft, said his company will keep up its investments in A.I. despite China’s DeepSeek! Credit…Chalinee Thirasupa/Reuters

Dear Commons Community,

Both Meta and Microsoft are committing to large investments in artificial intelligence, despite new Chinese software developed by DeepSeek outperforming American rivals at a lower cost.

Wall Street has been on tenterhooks about how Silicon Valley would respond to DeepSeek, the Chinese start-up whose low-cost artificial intelligence software threatens to undercut the pricey American approach to the technology.

So far, the answer appears to be: full steam ahead.  As reported by The New York Times.

Meta and Microsoft, two of the so-called Magnificent Seven group of tech stocks, said they each planned to keep spending billions on A.I. And news reports about SoftBank’s talks to inject billions more into OpenAI suggest that deep-pocketed investors are still bullish on the ChatGPT creator.

Continuing to spend heavily on A.I. will be a “strategic advantage over time,” Mark Zuckerberg, Meta’s C.E.O., told analysts on Wednesday, defending plans to invest up to $65 billion, largely in A.I.-related resources, this year.

And Amy Hood, Microsoft’s C.F.O., told analysts that her company — which plans to invest about $80 billion in A.I. this fiscal year — will grow such spending next year, though at a slower rate. It’s worth noting that Microsoft’s sales growth slowed in the most recent quarter partly, according to the company, because it lacked the cloud computing capacity to meet A.I. demand.

The comments were a strong defense of the status quo, where the prevailing wisdom is that winning the A.I. race requires lots of money to buy expensive Nvidia chips and build data centers to train and power such software.

That’s despite DeepSeek seemingly showing that it was possible to achieve industry-leading performance with a fraction of those resources (even as OpenAI has raised questions about its rival’s achievements.)

And then there’s SoftBank, which is in talks to invest $15 billion to $25 billion in OpenAI, according to The Financial Times and The Wall Street Journal. That would come after the ChatGPT creator raised $6.6 billion from SoftBank and others, and after OpenAI and SoftBank agreed to collaborate on the $100 billion-plus Stargate data center initiative.

Masa Son, SoftBank’s wildly ambitious C.E.O., wants to become a central figure in A.I. A deal would make OpenAI SoftBank’s biggest bet to date on A.I., underscoring a belief by Son — who tends to bet big on companies he thinks will be clear winners — that OpenAI fits that bill.

But there are signs that Microsoft is willing to hedge on OpenAI. Microsoft is the start-up’s largest investor, at least for now, and Satya Nadella, the tech giant’s C.E.O., said that he remained committed to their partnership.

He added, however, that the data centers that Microsoft is building to support A.I. applications were “fungible” and could be tasked to different models, including DeepSeek’s.

Investors appear to have mixed feelings. Shares in Meta were up 2 percent in premarket, a seeming ratification of Zuckerberg’s plans. But shares in Microsoft were down nearly 4 percent, in part because of uncertainty over sales growth and spending.

The battle of the AI titans is heating up!

Tony

Dear Commons Community,

America’s children have continued to lose ground on reading skills in the wake of the COVID-19 pandemic and have made little improvement in math, according to the latest results on the National Assessment of Educational Progress (NAEP) exam also known as the nation’s report card.

The findings are yet another setback for U.S. schools and reflect the myriad challenges that have upended education, from pandemic school closures to a youth mental health crisis and high rates of chronic absenteeism. The national exam results also show growing inequality: While the highest-performing students have started to regain lost ground, lower-performing students are falling further behind.  As reported by The Associated Press.

Given every two years to a sample of America’s children, the NAEP is considered one of the best gauges of the academic progress of the U.S. school system. The most recent exam was administered in early 2024 in every state, testing fourth- and eighth-grade students on math and reading.

“The news is not good,” said Peggy Carr, commissioner of the National Center for Education Statistics, which oversees the assessment. “We are not seeing the progress we need to regain the ground our students lost during the pandemic.”

Among the few bright spots was an improvement in fourth grade math, where the average score ticked up 2 points on a scale of 500. It’s still 3 points lower than the 2019 pre-pandemic average, yet some states and districts made significant strides, including in Washington, D.C., where the average score increased 10 points.

For the most part, however, American schools have not yet begun to make progress.

Growing numbers of students lack basic reading skills

The average math score for eighth grade students was unchanged from 2022, while reading scores fell 2 points at both grade levels. One-third of eighth grade students scored below “basic” in reading, more than ever in the history of the assessment.

Students are considered below basic if they are missing fundamental skills. For example, eighth grade students who scored below basic in reading were typically unable to make a simple inference about a character’s motivation after reading a short story, and some were unable to identify that the word “industrious” means “to be hard working.”

Especially alarming to officials was the divide between higher- and lower-performing students, which has grown wider than ever. Students with the highest scores outperformed their peers from two years ago, making up some ground lost during the pandemic. But the lowest performers are scoring even lower, falling further behind.

It was most pronounced in eighth grade math: While the top 10% of students saw their scores increased by 3 points, the lowest 10% decreased by 6 points.

That could reflect investments by families in high-performing students’ recovery from the pandemic. “Families that had the resources, they hired extra tutors, they got extra support to build on what was going on in the classroom,” said Eric Mackey, superintendent of education in Alabama. “Families that either could not afford that or didn’t have the opportunity or resources for that continued to struggle.”

The drop in scores continues a post-pandemic slide

The latest setbacks follow a historic post-pandemic backslide in 2022. In that year’s exam, student achievement fell across both subjects and grade levels, in some cases by unprecedented levels.

This round of testing again featured students whose lives were disrupted by the pandemic. When COVID hit in 2020, the fourth graders were in kindergarten. The eighth graders were in fourth grade.

But Carr said poor results can no longer be blamed solely on the pandemic, warning the nation’s education system faces “complex challenges.”

A survey done alongside the exam found in 2022 that fewer young students were reading for enjoyment, which is linked to lower reading scores. New survey results found students who are often absent from class — a persistent problem nationwide — are struggling the most.

The results provide fresh fuel for a national debate over the impact of pandemic school closures, though they’re unlikely to add clarity. Some studies have found that longer closures led to bigger academic setbacks. Those slower to reopen were often in urban and Democratic-led areas, while more rural and Republican-led areas were quicker.

The new results don’t show a “direct link” on the topic, Carr said, though she said students clearly do better when they’re in school.

Among the states that saw reading scores fall in 2024 are Florida and Arizona, which were among the first to return to the classroom during the pandemic. Some big school systems that had longer closures made strides in fourth grade math, including Los Angeles and New York City.

The success of big urban districts — 14 of which saw notable improvement in fourth-grade math when the nation overall saw only minor gains — can be credited to academic recovery efforts funded by federal money, said Ray Hart, executive director of the Council of Great City Schools. Investing in efforts like intensive tutoring programs and curriculum updates is “really proving to make a difference,” he said.

Is screen time to blame?

Pandemic-era changes in childhood outside the classroom may have impacted scores as well.

“We should be looking at what social media and the rise of the screen-based childhood is doing for reading skills,” said Marty West, academic dean at the Harvard Graduate School of Education.

Parents should be reading with their kids, and listening to them read, Mackey said. “We are concerned that students are spending … too much time on the phone and not enough time reading books,” Mackey said.

Even in school, West pointed out, students are reading and writing less. A majority of eighth graders last year said their teachers asked them to write several sentences about reading assignments fewer than six times a year.

“There’s no way around the fact that relationships, high-quality teachers and really engaging and high-expectation classrooms matter the most for kids,” said Robin Lake, director of the Center on Reinventing Public Education.

It will take a small miracle to turn this around!

Tony