The Rundown (Public.com)
Episode Title: Are We Reliving the Dotcom Bubble with AI? Harvard Economist Explains
Host: Zaid Admani
Co-Host: Kyla Scanlon
Guest: Jason Furman, Harvard Economist
Date: November 2, 2025
Duration: ~25 minutes
Episode Overview
In this thought-provoking episode, Zaid Admani and Kyla Scanlon are joined by Harvard economist Jason Furman for a frank discussion on the current state of the US economy, the impacts of AI, comparisons to the dotcom bubble, labor market dynamics, Federal Reserve policy, the rise of socialism among younger generations, and consumer trends such as Chipotle’s recent struggles. The episode encapsulates the uncertainty and complexity facing investors and policymakers as we approach the end of 2025.
Key Discussion Points & Insights
1. State of the US Economy: Data Uncertainty & Contradictory Signals
Timestamp: 00:48–02:34
- Jason Furman: “I have no idea [about the exact economic situation] because we have gotten no official government data for a month.” (01:15)
- Lack of new government data (except CPI) due to a shutdown has created uncertainty.
- Mixed signals: GDP growth looks strong (based on Q3 data up to August), but jobs data is weak and slowing.
- Possibilities: Either productivity is surging, or one dataset is simply flawed.
- Furman notes he typically gives more weight to jobs data over GDP when they diverge.
2. The Role & Impact of AI in the Economy
Timestamp: 02:34–05:51
- AI is currently propping up growth, mainly on the “demand side” (infrastructure, data centers), and less on actual productivity (supply side).
- “If you measure the direct contribution of just information processing systems and software to GDP, they were responsible for 92% of the growth in the first half of this year.” (03:25)
- Without AI, growth would stall, imports would drop, and the housing market might be better—but consumer spending and the stock market would be negatively impacted.
- AI is simultaneously crowding out (“crowding out growth that we would have otherwise have”) and generating net new growth.
3. Is the AI Boom a Bubble? Dotcom Lessons
Timestamp: 04:12–07:40
- Furman distinguishes this AI surge from the dot-com era: “This is not pets.com—10% of the world uses ChatGPT...” (04:44)
- Points out OpenAI’s $20B revenue and possible $1T IPO ambitions as evidence of both hype and real business.
- Future growth may require unforeseen innovations (e.g., mass-market AI hardware) beyond current models.
- Q: If this is a bubble, what would constitute its peak and aftermath?
- Furman: If a bubble bursts, it’d likely cause a mild recession—unlike the socio-economic trauma of the housing bubble—because it’s concentrated in stock values, not credit markets or real consumption.
- “You could have a bubble and still have lots and lots of productivity growth coming out of this. And that would be my central bet if conditional on having a bubble burst.” (07:26)
4. Labor Market: Weakness, Layoffs, and AI’s Real Effects
Timestamp: 07:40–11:24
- Fed rate cuts address concerns about a weakening labor market—stock market up, job openings down.
- Furman dispels the idea that AI is the main culprit for job losses, pointing to slowed hiring and firing (“less churn”), lingering after COVID-era churn.
- “If anything, the surprising thing in the US labor market right now is how few layoffs there are, not how many there are.” (09:17)
- On impacts for young people: Easier to not hire than to fire, but historically, older workers suffer more in transitions.
- Unemployment rate is Furman’s main recession watch metric; says layoffs take time to impact consumer spending: “Families that you’d think were really strapped ... continue, don’t reduce their spending very much in the wake of it.” (11:24)
5. Consumer Spending Trends: The Case of Chipotle
Timestamp: 12:29–14:20
- Chipotle’s weak earnings blamed on economic conditions and young consumers spending less; hosts also blame price hikes and product shrinkage.
- Furman suggests the pain might reflect income distribution—high-income consumers drive aggregate spending, while others cut back, hurting brands like Chipotle in certain segments.
- Notes lack of granular income/spending data limits firm conclusions.
6. Federal Reserve Policy Decisions: Dissent, Rate Cuts, and Bubble Fears
Timestamp: 14:20–19:11
- Recent Fed rate cut was contentious; some Fed members, notably Lori Logan, disagreed with the cut.
- Furman supports more dissent within the Fed, mirroring UK's Bank of England: "I welcome more dissents." (19:32)
- On the rate cut: With possible strong Q3 GDP and inflation still above target, Furman thinks he wouldn’t have cut rates at the last meeting or be eager to cut in December.
- Bubble talk: “The Fed probably shouldn’t prick bubbles, but it probably shouldn’t add rocket fuel to them either.” (17:01)
- High market valuations: “You can look at a CAPE Shiller price earnings ratio, and it’s around 40, which is around the highest it’s ever been in the last 150 years, with one notable exception, which was the year 2000, when it was even higher just before the bubble burst.” (18:33)
7. Structural Shifts: The Rise of Socialism
Timestamp: 21:13–23:41
- Discussion on the renewed popularity and redefinition of “socialism” among young people and some politicians.
- Furman: “If you want to call socialism what the Scandinavian countries do ... then I’m reasonably sympathetic ... If you want to define socialism as the government does stuff instead of markets doing stuff ... then count me out.” (21:57)
- Bipartisan trend: Even Republicans like Trump are directly investing/governing in industries, blurring traditional party lines around economic intervention. “Donald Trump deserves [the socialist label] just as much as any Democrat deserves it.” (23:19)
8. Navigating Data Gaps: How to Read the Economy Now
Timestamp: 24:12–25:17
- With government data scarce, Furman jokes he’s “taking more time off and enjoying myself because there’s less government data to obsess over.” (24:29)
- In the absence of new macro data, he follows business anecdotes, news, and corporate earnings calls, while noting that such sources can be misleading (e.g., Amazon is 1% of US employment, not the whole picture).
Notable Quotes & Memorable Moments
-
“I have no idea. …Just a lot of, lot of uncertainty out there and that seems to be a perennial for the US Economy. But maybe more than ever right now.”
— Jason Furman (01:15) -
“If you measure the direct contribution of just information processing systems and software to GDP, they were responsible for 92% of the growth in the first half of this year.”
— Jason Furman (03:25) -
“This is not pets.com—10% of the world uses ChatGPT. Basically everyone with a smartphone either does or will be using generative AI on a daily basis...”
— Jason Furman (04:44) -
“If anything, the surprising thing in the US labor market right now is how few layoffs there are, not how many…”
— Jason Furman (09:17) -
“The Fed probably shouldn’t prick bubbles, but it probably shouldn’t add rocket fuel to them either.”
— Jason Furman (17:01) -
On high P/E ratios: “You can look at a CAPE Shiller price earnings ratio, and it’s around 40… highest it’s ever been in the last 150 years… except for the year 2000.”
— Jason Furman (18:33) -
“If you want to call socialism what the Scandinavian countries do… I’m reasonably sympathetic. If you want to define socialism as the government does stuff instead of markets doing stuff… then count me out.”
— Jason Furman (21:57) -
On data gaps: “Mostly I was just sort of taking more time off and enjoying myself because there’s less government data to obsess over.”
— Jason Furman (24:29)
Timestamps for Important Segments
- 00:48 — State of the Economy Overview
- 02:34 — AI’s Role in Current Economic Growth
- 04:12 — Is AI a Bubble? Dotcom Bubble Comparisons
- 07:40 — Labor Market Worries and AI's Impact
- 12:29 — Chipotle Earnings & Consumer Trends
- 14:20 — Federal Reserve Decisions, Dissent, and Risk of Bubbles
- 18:33 — Disconnect Between Stock Market & Economy; Historic P/E Ratios
- 19:32 — Fed Dissent and Healthy Debate
- 21:13 — The New Rise of Socialism
- 24:12 — Navigating Economic Uncertainty without Data
Key Takeaways
- Data uncertainty is front and center in economic analysis due to government shutdowns.
- AI-driven demand is a critical pillar holding up economic growth; however, real productivity gains have yet to fully materialize.
- The current AI investment climate is not a typical bubble—even if there is overvaluation, real adoption is far more widespread than past fads.
- Labor market weakness appears more cyclical and linked to post-COVID adjustments than to automation or AI displacement—at least for now.
- Income inequality is likely influencing consumer spending patterns, explaining some company-level woes like Chipotle’s.
- The Fed’s recent moves are controversial, with some advocating for more dissent and more caution in fueling market bubbles.
- Renewed openness to 'socialism' reflects both shifting meanings and economic anxieties, crossing traditional partisan lines.
- With official data gaps, anecdotes and earnings reports are the stopgap—but caution is required in their interpretation.
This summary provides an engaging, comprehensive briefing on the episode, capturing its dynamic conversational tone and the most practical, actionable insights for investors and economics enthusiasts.