The New Bazaar

EIG Chief Economist Adam Ozimek joins Cardiff to share his five favorite unpopular beliefs. Adam believes these ideas are true, even if others may find them contentious, perhaps even contemptible.Adam tries to persuade Cardiff and New Bazaar listeners that…Prediction markets are going greatEconomists should ignore the efficient market hypothesis in their own livesThe United States should let Chinese cars inOne Billion Americans is absolutely a goal the country should pursueConsumers should spend less money on carsAdam and Cardiff also consider when contrarian thinking is useful and when provoking disagreement becomes a brand rather than a way of getting closer to the truth.Plus: Adam shares his most controversial non-economic belief.Related links:Myths and Lessons from a Century of American Automaking by Adam OzimekExceptional by Design: How to Fix High-Skilled Immigration to Maximize American Interests by Adam Ozimek, Connor O’Brien, and John LettieriOne Billion Americans by Matthew Yglesias

Economist Alvin Roth, winner of the economics Nobel in 2012 for his work on market design, joins Cardiff to discuss his new book, Moral Economics: From Prostitution to Organ Sales: What Controversial Transactions Reveal About How Markets Work.The book is about morally contested markets: transactions that participants would like to engage in but that others think they shouldn't be allowed to, even when it’s hard to identify measurable harms to those objectors. It's also a great way to understand how markets interact with the law, politics, social norms, income inequality, human psychology, and so much more than just monetary exchange.In this chat, Alvin and Cardiff discuss:Medical aid in dying and the economics of “repugnant” marketsSex work, trafficking, and the unintended consequences of criminalizationPlural marriage and the challenge of designing new legal protectionsSports gambling and the rise of prediction marketsKidney exchanges, the transplantation shortage, and the opposition to cross-border exchangesThroughout the conversation, they confront the trade-offs involved in both allowing controversial markets and trying to ban them.Related links:Moral Economics: From Prostitution to Organ Sales: What Controversial Transactions Reveal About How Markets WorkAlvin Roth’s website

Martha Gimbel, executive director of The Budget Lab at Yale, returns to the New Bazaar to chat with Cardiff about all things debt and deficits.Martha argues that the fiscal choices of the past decade have already led to higher costs on mortgages, car loans, and small-business debt. She and Cardiff discuss what might happen next given the frightening projections for future borrowing.They discuss:Is “we can’t leave this problem to our kids and grandkids” a misleading way to think about the national debt?Why is it so hard to know exactly what level of debt could lead to a fiscal crisis? Why such precision is often the enemy of understandingDoes she take flak from the left for arguing that the crowding out effect is a real thing?Immigration and the deficitWhich policies could actually bend the deficit curve down?A DOGE post-mortemAnd lots more.Related links:Lower Immigration Means Lower Productivity Growth by Abhi Gupta2026 chart book examines spending, taxes, and deficits by Jessica RiedlMartha’s The Atlantic piece on the national debtThe National Debt’s Unforgiving Math by Jared BernsteinThe Budget Lab at Yale websiteThe Budget and Economic Outlook: 2026 to 2036 | Congressional Budget OfficeWhere Do Our Federal Tax Dollars Go? | Center on Budget and Policy PrioritiesCRS report on Foreign Holdings of Federal Debt

The China Shock of the 1990s and 2000s remains, even now, the subject of much debate. American consumers benefited from the cheaper goods that were imported from China. Some American businesses also benefited from importing cheaper equipment that was made in China. But other American businesses suffered from the competition, shuttering factories throughout the Rest Belt and South. How bad was it? What was the overall effect on workers? How did workers and communities adjust? Today’s episode is about the lessons of that shock for what might end up being a brand new shock: the AI Shock. Economists and many others are trying to figure out what it’s going to mean if AI itself ends up becoming a new source of competition for American businesses and American workers. One such economist is Adam Ozimek, Chief Economist at the Economic Innovation Group. Adam is the co-author of a new analysis about the right and wrong lessons to take from the China shock for the strange world that we now find ourselves in. (You can find that post at agglomerations.eig.org, EIG’s newsletter.)Adam speaks with Cardiff about the similarities and differences between the workers and towns affected by the two shocks, which characteristics matter most for people and places to become resilient to large shocks, how to think about automation and the collection of tasks that make up a job, and much more. Related links: Agglomerations Messy Jobs, by Luis Garicano

This episode is about an ambitious project to erect an entire new city in California, from scratch, about a one-hour drive north of San Francisco.The company that wants to build this city is called California Forever. It has bought about 70,000 acres of land in Solano County, starting in 2017. That’s about the size of two San Franciscos or one-and-a-half Miamis.What California Forever wants the city to be is two things.First: an urbanist, walkable city of about 400,000-500,000 people; zoned for density instead of suburban sprawl, with housing to rent or buy that’s affordable to middle income families; cool amenities; and located in a place where you would not expect to find it.Second: a tech manufacturing center, with new factories making actual physical stuff, and a big shipbuilding operation. A place that creates new jobs and businesses and tax revenues for the people that move there and the surrounding communities.Any project like this is immensely complicated, having to figure out transportation, engineering and logistical problems, waste disposal, how to attract people and businesses to the city, navigate local politics and how city governance is gonna work.Above all, California Forever has to figure out how to build something new and urban in California — a state with lots of wonderful stuff but also a place that’s known for its NIMBY dynamics, high taxes, zoned for suburban sprawl and single-family homes, endless regulatory or environmental reviews, water issues, union negotiations.The country needs more experiments like this. And many states, not just California, need to discover, or rediscover, the virtues of making it easier to create new housing and businesses, build factories, attract people, and just do stuff generally. And even if this project doesn’t work out, at least the rest of us get to learn the valuable economic and social lessons of what works and what doesn’t.Although Cardiff is rooting for the project to succeed, he also has quite a few questions about it. And it just so happens that this episode’s guest is exactly the person who can answer those questions. Jan Sramek is the Founder and CEO of California Forever. He started the company with the backing of tech investors and founders including John and Patrick Collison, Laurene Powell, Marc Andreessen, Michael Moritz, and a few others.Related links: California Forever websiteCalifornia Forever project overview deckClear a path for sweeping urban experiments such as California Forever (LAT)A City Is Broke. Can Billionaires’ Urbanist Dream Offer It a Last Chance? (NYT)