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Welcome back. Let me start today with just a very quick little story. Three days after Ronald Reagan was inaugurated as President of the United States, New York City's City Council president, her name was Carol Bellamy, joined a group of speakers at a luncheon to discuss the future of the United States. And this group tried to make sense of a world that was back then hardly recognizable from a generation before. At this time in 1981, crime and inflation and unemployment were surging, and speakers offered visions of what might happen next. And Bellamy stepped in and said they were all misguided because nobody was discussing. What she said was where we've been. And until we know that, it's difficult to figure out where we're heading. What I want to talk about today are two of those ideas. If you are trying to make sense of the world today in the year 2025, economically, politically, technology, AI, whatever it might be, trying to make sense of the world today and where we're going, it helps to make sense of where we've been. Everyone likes to look ahead and make predictions, but the best way you're going to make any kind of prediction is to understand the deep roots of what God is here to begin with. Now, that topic could be endless. You could write a thousand books on that topic of where we've been socially, economically, politically, technology, businesses and investments. But I want to bring up two ideas today that I think about quite a bit that I think have an outsized impact on the state of the world today. All right, number one, people grew apart financially at the same time that they became connected digitally, which exacerbates tribal instincts and exposes you to people who don't see the world as you do, who become easy targets for criticism and blame. To understand why so many people are angry and anxious and frustrated in the year 2025, you have to realize that half the country gained insight into the other half at the very moment that those halves were as different economically as they have ever been. Here's a simple way to think about this. Back in 1960, the top 1% of households owned about 15% of the assets, and the bottom 50% of households owned about 12%. Today, the top 1% owns about 35% of the assets, and the Bottom 50% owns about 2. That is very well known. That's a well known statistic, the rise in inequality. Of course, we talk about that all the time. But the other thing that maybe is obvious as well, that happened at the same time here is that the share of Americans, and I say Americans, but everyone all over the world, using the Internet and seeing each other being exposed to one another exploded. So the Internet went from non existent in 1990 to about 30% of Americans using it in the year 2000 to today in the year 2025. Might as well be 100%. Those two stories, the rise in wealth inequality and the rise of the digital world, are of course very well known, but they're usually viewed in isolation. But how they interact with each other is, I think, so important and interesting and explains what's happening in the world today. So there's a few parts to this. The first is that people gauge their well being relative to those around them. It doesn't matter how much you have. It doesn't matter how well you think you're doing. What matters is how well you think you're doing and how much you have relative to other people. Historically, the people who were you are comparing yourself to were relatively similar to you. They lived in the same city, they went to the same schools, they worked at the same factories, they probably earned similar wages. And the Internet and especially social media just increased. It massively expanded the number of people around you, like exponentially. It used to go from a couple dozen people, probably that you associated with at your job and your neighbors in your town, to now it is literally billions of people. And so people came together, they started looking at each other and became aware of each other at the same time that they grew apart economically. That is so important because when you're exposed to people who are experiencing a different world than you are, it becomes very easy to ask questions like why don't I have what they do? Or on the other hand, why don't they have what I do? Or just to simplify all that, why are you not like me? It becomes very easy to ask that question. Whether you are looking down on people who you think are beneath you, or looking up at people who you think are above you and maybe don't deserve what they have. Very easy to start asking those judgmental style questions. And people have always asked that question. They've always tried to insert themselves into the social hierarchy, but the range of answers isn't as wide. If the pool of people that you judge yourself against is constrained to the town that you live in or the company that you work for once it is now the 3 billion people commenting on Facebook or a curated Instagram feed of the highlight reels of people's vacation in Dubai or the Maldives or whatever, you enter a totally different world and it pours gasoline onto the flames of two things. One is that the lifestyle of legitimately wealthy people inflates the aspirations of lower income families, pushing them towards funding an equivalent lifestyle. That can only be achieved with debt. That is true from everything from houses to cars to college degrees. If you look at and you are become aware of a group of people who are doing much better than you financially, it is very common to say I deserve that too. I've worked just as hard as them, I'm just as worthy of them. And so I want that college degree, I to want, I want that big house, I want that vacation. And the only way they can do it is with debt. I think that is at least one of the big explanations of the last 20 years, financial crisis, rise in household debt, et cetera, et cetera. The other is that people whose lives have taken a different path will have different views than you do on everything from politics to cultural norms. And when those groups are then exposed to each other, it can be hard to distinguish a differing view from a threatening view. And then you get all these disagreements, emboldened by the anonymity and the detached nature of social media. Michael Arrington, he's The founder of TechCrunch, he wrote this a couple years ago. He wrote, I thought Twitter was driving us apart, but I'm slowly starting to think that half of you always hated the other half, but you didn't know it until Twitter. Harper's magazine wrote in 1950, seven generations ago, about the leveling forces of the prosperous middle class. It wrote, the rich man smokes the same sort of cigarettes as the poor man, shaves with the same sort of razor, uses the same sort of telephone, vacuum cleaner, radio and TV set, has the same sort of lighting and heating equipment in his house, and so on indefinitely. The difference between his automobile and the poor man's are minor. Essentially, they have the same engines and the same fittings. So life was much more, was much more flat back then. And I'm not saying that we should go back to that. I'm not necessarily saying that this is all a terrible thing. But it's interesting to ask, what would social media have been like in that era, in an era where there was much less wealth inequality? What would have been like back then? It probably would have been nasty and led to disagreements, but would have had the same fervor as it does today? I think probably not. It would have been nasty. But as nasty as today? Probably not. We became aware of each other at the same time that we grew apart economically. And I think that explains so much of the Tribal instinct and the anger and the anxiety that a lot of people see in the world today. All right, number two, local news gave way to national news, which gave way to global news, which can make the world feel perpetually broken, because there is always a tragedy somewhere, and now you are guaranteed to hear about it. Writing about life in the year 1900, Frederick Lewis Allen described how people got information. He wrote, it is hard for us today to realize how very widely communities were separated from one another when they depended for transportation wholly on the railroad and the horse and the wagon, and when telephones were still scarce. There were sharp limits to to the fund of information and the ideas which people of all regions and walks of life held in common. To some extent, a Maine fisherman, an Ohio farmer, and a Chicago businessman would be able to freely discuss politics with one another. But in the absence of a syndicated newspaper column appearing from coast to coast, their information would be based mostly upon what they had read in very divergent local newspapers. So information was, of course, much harder back then to disseminate over distances. And what was going on in other parts of the country or other parts of the world just was not your top concern. Information was local because life was local. Now, if you look historically, radio changed that in a very big way. It connected people to a common source of information. In the middle part of the 20th century. TV did that even more. In the 1990s, the Internet exploded that connected people all over the world. And social media just in the last 10 or 15 years absolutely took it to a different level, orders of magnitude than anything we have seen before. Digital news and social media has, by and large, killed local news. Between 2004 and 2017, 1800 US print media outlets disappeared, were wiped out. And the decline of local news has all kinds of implications. But one that I think doesn't get enough attention is that the wider your news source becomes, the more likely it is to be pessimistic. Two things make it that way. One is that bad news gets more attention than good news, because pessimism is more seductive than optimism and it feels more urgent. So if you look at today's news headlines and sort them, the bad stuff is always going to rise to the top and get people's attention. The second thing really important here is that the odds of a bad news story, like a fraud or corruption or some natural disaster, the odds of that happening in your local town today are pretty low. But when you expand your attention nationally, the odds are pretty good that it's happening somewhere. And when you expand your attention Globally, the odds that something terrible is happening right now are 100%. And when your news focus is global, you are going to hear about it. So to exaggerate just a little bit here, local news reports on high school football scores. National news reports on crime and politics. Global news reports on genocides and plane crashes and terrorist attacks. The wider you go, the worse it gets. It's always like that. There was a researcher I came across recently who ranked the sentiment of news over time, and he found that news outlets all over the world, this was global. Have become steadily more gloomy over the last 60 years. Now, you could argue the world has gotten worse over the last 60 years, but I don't think that's what's going on here. I think as you shift from local to national to global, the news always gets worse. And maybe there are some good things to come from that. Like maybe it's good that rather than living under a rock, living in a bubble, people are more cognizant of how other people live, good and bad. Maybe that makes them more empathetic and more realistic to how the world works. But we should not be surprised that the world feels historically broken in recent years, and maybe we'll continue that way going forward. I don't think it is. I think if you're a student of history, it's very hard to say that the world is more broken today than it was at various points in the past when we had world wars, great depressions, political upheaval like we couldn't even fathom today. I don't know if you could say it's more broken today if you disagree with that. I think people could counter that. But the past was really bad in many, many ways. We discount that because we know how the story ended. But I think the past was filled with very bad things. But I think we are more cognizant of making sense of the bad stuff today because we see more of it. And actually, I think there's an irony here that most people are probably the most ignorant of what's happening in their local town and are the most cognizant of what's happening nationally and globally, because that's what the news reports on. That's where the attention goes to today. And so if you're trying to make sense of a world where people have maybe more pessimism and more gloom today than you feel like they have in the past, that I think, is one reason why that's it for this episode. Thanks again for listening, and we'll see you next time.