From Dollar Dominance to the Slop Machine

Part 2: China, energy, and extraction versus creation

This is Part 2 of a 2 Part series exploring attention as infrastructure and a main source of value creation across politics, markets, and the economy. The audio version of this essay will be up here.

I had the chance to go on the Ezra Klein Show and talk with Ezra about all of the below. Please check it out, it was a lot of fun to go back and forth on all of these topics.

UFC at the White House

I flew to NYC last week, and the woman next to me on the plane was very nice. She spent the entire six hour flight scrolling through TikTok. It was strange to watch - I was watching Training Day and I'd glance over to see her consuming an endless stream of get-ready-with-me videos, a new thing every 3 minutes, a jump from one filtered person to another, each competing for the same scarce resource: her attention. She wasn't consuming content so much as being consumed by it.

Everything feels like that now? We're living in this constant scroll, trying to make sense of the world around us within a world confined by the limitations of an algorithm that doesn't care about truth, coherence, or consequences, only engagement.

And logically, this also became how we govern.

The Trump Administration has taken full advantage of this algorithm brain. We’ve entered the pure extraction phase of the economy, where things are created solely for consumption rather than purpose. I don’t mean this as a moralistic argument, it’s purely incentives, but it’s puzzling.

Take the picture below. This is a fan account for the Department of Homeland Security tweeting about the 2026 White House x UFC Fight Night. It’s a perfect image of the present moment. This is most powerful building in the world, a representation of freedom, lit up during an ominous storm, the flag drooping above, crowds gathered around a UFC-branded octagon - it’s creepy AI fever dream, but it’s very, very real.

It's the perfect crystallization of what America has become: the world's most powerful content creator. Roland Barthes, Marshall McLuhan, and Guy Debord would be totally floored here. This image truly has everything - the medium is the message and society is defined by a social relationship to images and the digital world is increasingly disconnected from the physical world, and it’s hard to tell what is real and what isn’t.

That image is about extraction versus creation and it represents a fundamental choice about what kind of economy we want to be.

Act 1: The Show

The US has become an extraction economy.

• We extract value from our existing position through dollar dominance, military supremacy, and technological leadership and now are choosing to tear down the foundations that created that position in the first place.

• We extract attention through spectacle without creating the trust that makes spectacle meaningful.

• We extract wealth from our own institutions without replenishing the capacity that generated that wealth.

• The UFC image captures this well - it takes the symbolic power of American institutions and converts it into entertainment value, with no consideration for what that conversion costs us in terms of credibility or coherence.

China, meanwhile, has become a creation economy¹.

• They're building electrical generation capacity, training engineers, developing industrial policy that spans decades.

• They're creating an “electrostate” with an economy driven by the technologies that will determine 21st-century competitive advantage.

The tariff letters that President Trump sent around yesterday accomplish the same extraction mechanism too - telling other countries that tariffs “may be modified, upward or downward, depending on our relationship” is not a great way to do business².

I keep thinking about something Ezra said in our conversation - Trump embodies the attention economy so completely that he's become indistinguishable from it. The stock market didn’t take the tariff letters seriously - because yes, narrative is capital and attention is infrastructure but there are real world constraints on all of that.

Eventually, the attention games stop working. What do we do next?

In Part 1 of this series, Trump, Mamdani, and Cluely, I mapped how attention became infrastructure, narrative became capital, and speculation became the operating system between them.

Here in Part 2, we will hopefully answer some more questions and provide some more solutions.

• What happens when an entire civilization optimizes for extraction over creation?

• What are the material consequences when your resource allocation system rewards virality over productive capacity?

China is building the infrastructure for 21st-century economic dominance. As we're financializing everything, they're electrifying everything. We're optimizing for attention while they're optimizing for capacity. We must figure out how to channel the dynamics of the attention economy toward creation rather than extraction.

So… how?

Act 2: The Dollar, Energy, and Trust

The Big Beautiful Bill

Somewhere along the way, the United States decided that the most sophisticated thing you could do with economic power was to financialize it and to create increasingly complex mechanisms for extracting value from existing systems rather than building new ones.

We took the incredible wealth-generating capacity that built America and the industrial logic that made us globally dominant and we turned it into a machine for redistributing wealth from the future to the present, from the young to the old, much funneling to the already-wealthy.

This is the governing philosophy of extraction. Take the Big Beautiful Bill that just passed. We're adding $4.1 trillion to the national debt (potentially $5.5 trillion) to fund tax cuts. We are funding it (or at least, some of it) by cutting billions from SNAP, stripping healthcare from millions of Americans, and slashing the National Science Foundation budget.

The BBB very clearly establishes that more money will go toward extraction versus creation. We will not beat China with tax cuts! And rather than building systems that create new wealth, we're building systems that redistribute existing wealth to those who already have the most political power.

It's completely economically incoherent and politically brilliant, which tells you everything you need to know about how our resource allocation system actually works. Senator Lisa Murkowski, who was the deciding vote, captured this approach perfectly when she said:

“Do I like this bill? No. But I tried to take care of Alaska’s interests. But I know that in many parts of the country, there are Americans that are not going to be advantaged by this bill.”

And that’s the conundrum of an extractive economy. Everyone protects what they have instead of incentivizing what they could make.

The Dollar

We're also extracting value from America's position in the global financial system without rebuilding the foundations that created that position in the first place. Karthik’s piece on Monetizing Primacy is a great read on the complicated relationship the Trump administration has with the dollar.

He writes about the stablecoin legislation that passed through the the GENIUS Act. It’s a pretty distilled version of extraction. The theory, according to Treasury Secretary Scott Bessent, is that stablecoins will create massive new demand for US Treasuries, maybe $3.7 trillion worth over the next few years, which is substantial! Sure!

• Foreign capital will buy these digital dollars

• Stablecoin issuers will pocket the yield

• And Treasury gets a new source of funding!

Stablecoins take advantage of an existing system³, rather than building upon it. And the dollar is very valuable to the United States. The problem is the Trump administration doesn’t know what it wants from the dollar. It both wants a weak dollar to encourage reindustrialization and a strong dollar to prevent inflationary fallout from tariffs. And the dollar, as Karthik explains, is valued by

• Fiscal and mon­et­ary policy inter­ac­tions

• The polit­ics of cent­ral bank­ing

• Expect­a­tions of the rate of return on Amer­ican assets.

So when you take that equation:

• Fiscal policy via blowing out the deficit with the BBB

• Monetary policy which is frozen because of the tariffs we can’t get an answer on

• The Trump administration actively threatening Jerome Powell

You get a weak dollar. And you get higher bond yields because everyone is like “um, hello?” That combination is a crisis-of-confidence signal.

If the trust in the dollar begins to erode and if other countries begin to believe the dollar is being governed by a reality TV feedback loop then the whole system begins to shift.

That will weaken the dollar too. A weaker dollar raises the cost of living, shrinks geopolitical leverage, and chips away at the safety net while making it harder for people to understand why things suddenly feel worse.

So to the point of stablecoins - it's a classic attention-speculation play to create a new financial instrument that generates engagement while (maybe) theoretically serving strategic goals. But the underlying mechanism is fundamentally extractive rather than productive.

Extraction only works for so long. Eventually, you have to create again.

Energy

And this creation begins with energy! At the exact moment when AI is creating unprecedented demand for electricity (and is the backbone of the entire S&P 500), America is dismantling its capacity to generate power through some of the cheapest, fastest-to-deploy sources available through the Big Beautiful Bill. As Thomas Friedman wrote:

There has never been a more intimate connection between the amount of cheap, clean electricity a nation can generate for A.I. models and its future economic and military might.

The bill ignores all of that and instead prioritizes the past over the future:

• Phases out clean electricity tax credits for wind and solar

• Adds complex restrictions to battery storage credits

• Bans fees on methane emissions

• Opens up federal lands and waters to oil and gas drilling

• Orders 4 million additional acres of federal land be made available for coal mining

All because clean energy is coded as lib or is aesthetically unpleasing or something. It completely misunderstands where energy comes from - 93% (!) of the electricity capacity added to the grid in 2025 will come from wind, solar, and battery storage as Rogé Karma writes in the Atlantic. Texas was the top solar state in the nation, adding 10,000 megawatts of power in the last year, mostly from solar-plus-batteries, and saw brownouts decrease as a result.

But rather than scaling this success nationally, we're making it more expensive going forward. Energy Innovation projects that Trump's bill will increase wholesale electricity prices by roughly 50% by 2035, with cumulative consumer energy costs rising more than $16 billion by 2030. Some 830,000 renewable energy jobs will be lost or not created. We are weakening our competitive position to play tribalism games in the name of the attention economy.

Act III: The Alternative

China vs the United States

And this is where the China comparison comes in. China, for all its (very many) faults, spends its money on itself. It builds infrastructure. It trains engineers. It electrifies villages. It rewards capacity.

By contrast, the US has the infinite money glitch as Soda said (the dollar) and we’ve used this vast financial and worldwide power mostly to subsidize stock buybacks (which certainly has generated value in its own way) but that differentiation is the key line between the US and China. Value is understood and developed differently between the two countries.

• Because of deindustrialization, the US has lost coordination capacity.

• And the world has changed since. We have a murky idea of what we are supposed to be building - maybe it’s a generative AI slop machine, maybe it’s the future of manufacturing, I guess the free market will decide.

But China has made the conscious decision to invest in people, knowledge, and systems like their next-generation high-speed train, the CR450 which will allow for the country to be connected even more - and encourage even more innovation.

They treat human capital as infrastructure, the same way we treat attention as infrastructure. David Autor, an MIT economist, did an incredible interview on the US-China race in manufacturing. The whole interview is worth a listen (essentially, the days of yesteryear aren’t coming back) and the problem we face is extraordinarily serious. It will take public knowledge to address and public money to address:

We’re in the midst of a totally different competition with China now that’s much, much more important. Now we’re not talking about commodity furniture and tube socks. We’re talking about semiconductors and drones and aviation, electric vehicles, shipping, fusion power, quantum, AI, robotics. These are the sectors where the US still maintains competitiveness, but they’re extremely threatened. China’s capacity for high-tech, low-cost, incredibly fast, innovative manufacturing is just unbelievable. And the Trump administration is basically fighting the war of 20 years ago. The loss of those jobs, you know, was devastating to those places. It was not devastating to the US economy as a whole. If we lose Boeing, GM, and Apple and Intel—and that’s quite possible—then that will be economically devastating.

China understands⁴ something that American policymakers seem to have forgotten: there has never been a clearer connection between a (1) nation's ability to generate huge amounts of electricity at affordable prices and (2) its ability to develop the AI systems that could determine future economic and military advantage.

As Autor said, the Trump administration is fighting the war of 20 years ago. We are memeing our way through a time of vast geopolitical change⁵, passing cuts to science and energy and cutting degree offerings all of which will likely kneecap our role in the world, and are for some reason presuming that stablecoins are going to save us⁶.

As Lu Feng said:

The past 500 years of world history show that an industrial power has never lost when challenged by a financial power, even when the financial power is also a global hegemon.

Antimemes

We all know that the attention economy erodes trust. It rewards the most dramatic claims, the most outrageous behavior, the most compelling narratives regardless of their relationship to truth or long-term consequences.

As Ezra and I discussed, it creates adverse selection: the people most willing to play by attention economy rules are often the least suitable for positions requiring patient stewardship of complex systems and the feedback loops are accelerating.

• As traditional institutions lose credibility, more activity shifts to attention-based platforms.

• As more activity shifts to attention-based platforms, the incentives become more distorted.

• As the incentives become more distorted, traditional institutions lose more credibility.

We're not just losing to China because they're good at what they do. We're losing because our own systems are increasingly optimized for outcomes that make us less competitive. You can't run an industrial economy on spectacle! You can't compete with China using tax cuts! You can't maintain global worldwide power through financial engineering if you're dismantling the productive capacity that makes you globally competitive in the first place!!

Nadia Asparouhova's book about antimemetics helps explain why we're stuck in these destructive loops. Antimemes are high-impact, low-transmissibility ideas. Compared to traditional memes, they are hard to spread because they're complex, counterintuitive, or culturally taboo.

The attention economy is hostile to antimeme development. It rewards ideas that spread quickly and generate immediate engagement, not ideas that require patient development over years or decades. Supermemes - those apocalyptic, high-transmissibility ideas like "AI will kill us all" or "climate change will end civilization" suck up all the cognitive bandwidth while the important work of building alternative systems happens in the shadows.

The result is a political discourse dominated by supermemes that generate lots of engagement but very little constructive action, while the antimemes that might actually solve our problems like “how to build industrial policy that works” or “how to design monetary systems for multipolarity” remain confined to small networks of specialists.

We're trapped in the “infinite AI TikTok slop machine” - an information environment that makes long-term strategic thinking nearly impossible while rewarding the kind of attention-seeking behavior that undermines our competitive position. We need more infrastructure around real ideas.

Act IV: The Way Out

The way out requires acknowledging that the attention economy's incentive structure is quite misaligned with the requirements of maintaining complex civilizations.

So what can we do?

1. Reintroduce friction: We’ve mistaken convenience for progress. Instead of making everything easier, we need to make important things appropriately difficult in the digtital world. Right now, the system rewards the performance of expertise rather than its development. AI makes that worse. We likely will have to rethink education - AI will be a part of it, and right now, the system rewards output over understanding, so of course students are Chat-GPTing essays. Some things will have to be harder than they currently are - maybe getting a college degree should require more than the ability to prompt an AI effectively. (maybe governing a country should require more than generating attention on social media.)

2. Treating attention as infrastructure rather than a market to be optimized. Right now, we treat attention like a commodity. It’s something to be mined, optimized, and sold to the highest bidder. But attention is infrastructure! It’s the invisible highway that ideas, identities, and institutions travel on. We have to invest in it like we would a highway. We’ve built a digital ecosystem that optimizes for engagement, not understanding. As boring as it is, we need new algorithms and to treat attention as a shared utility.

3. Boring things. Most of the ideas that will save us are boring at first. We need to rewire our entire grid, retrain an industrial workforce, and build factories We need more of the Manhattan Project, the Interstate Highway System, DARPA, etc - the confluence of public investment (and probably private investment at this point) and educational training systems that directly train people for the phenomenal task of rebuilding the physical infrastructure of the United States.

4. Rebuild systems that restore stakes. A functioning economic and political system doesn’t need to give everyone the same outcome, but it must give them a stake in the game. Today, vast swaths of the public don’t see policy as cause-and-effect. They see it as a performance, a branding exercise, a series of decisions made for someone else. That’s why Kansas farmers vote for a leader who guts their food export program. And it’s why young people identify as socialists- what’s the alternative? As Peter Thiel once noted: people without a stake in capitalism will rationally turn against it. What we're seeing now is that process playing out. Reestablishing stakes doesn’t mean giving everyone money in the S&P or whatever. It means showing them that effort leads to change and that policy is cause-and-effect.

One thing that I tried to get across in the Ezra interview (and he kindly asked me a followup so I could be clearer about it) was that there are two worlds right now, the digital world and the physical world. Floods just wreaked havoc on Texas, and Coast Guard Rescue swimmer Scott Ruskin rescued 165 people from the raging waters.

As Peachy Keenan said, the job Scott did has a few requirements - you must (1) love your country enough to be willing to put yourself in harm's way for it and (2) love your fellow citizens enough to risk your life for them.

That has nothing to do with the attention economy and everything to do with what it means to be a human. Its creation in its purest form - creating safety, trust, and meaning through competence and service. As C.S. Lewis said:

Since it is so likely that children will meet cruel enemies, let them at least have heard of brave knights and heroic courage

Many of the things we fund right now are completely killing us.

We need strategic investments in creation over extraction while acknowledging that the attention economy is a part of that. But it doesn't have to be the dominant logic of resource allocation. It doesn’t need to be so extractive.

Every day, people are making the other choice to create. They're installing solar panels and rescuing flood victims and teaching skills and building the infrastructure that keeps civilization running. They're choosing the hard work of creation over the easy work of extraction. We have all the pieces, we just have to realign our capabilities and our priorities.

Thanks for reading! I’ll be working on these ideas throughout the next several newsletters.

1. China very clearly has their own sets of problems - but they are investing heavily in the technology of the future

2. There is also a point to be made in that all these letters were exactly the same with some very interesting caps locks choices and could reflect “staffing problems in the White House”

3. This strategy also carries domestic risk. If stablecoin issuers are holding long-dated Treasuries and a crisis prompts mass redemptions, we could see a destabilizing Treasury fire sale

4. And China has headwinds too, and surprisingly similar ones to the United States. The young people aren’t happy. The big question that we will likely forever have to answer, but with increasing consequence, is what happens when effort stops yielding return? In China, they call it tang ping or lying flat. Why strive, when overtime work no longer buys upward mobility? In the US, the opt-out is has more choice and is therefore more chaotic through performance politics, attention careers, aesthetic rebellion, digital escapism. But the emotional logic is the same.

5. US is the only country of 184 countries around the world facing tourism decline.

6. In a financialized society, more financialization is the answer, right?