"AI - Apocalyptic or Consequential"

 Like most of you, this is a subject I have been thinking a lot about. I have read reports from thoughtful people on both sides of the issue. So what you have here is my best guess. But I could be easily wrong.

 

On a separate issue, I was pleased that the Federal Reserve raised the benchmark rate by a quarter of a point. We need, as others have said, to let the bond market speak. And we need to recognize that there are creditors as well as debtors. Free markets, marking the decisions of millions of investors, generally do a good job in deciding values.

 

The photograph was borrowed from the Internet.

 

 

Sydney M. Williams

www.swtotd.blogspot.com

 

Thought of the Day

“AI – Apocalyptic or Consequential?”

September 17, 2026

 

"If only there were evil people somewhere insidiously committing evil deeds, and it were necessary

only to separate them from the rest of us and destroy them. But the line dividing good and evil cuts

through the heart of every human being. And who is willing to destroy a piece of his own heart?"

                                                                                                                   Alexandr Solzhenitsyn (1918-2008)

                                                                                                                   The Gulag Archipelago, 1973

 

In searching for the right path forward, as regards AI and its further development, we cannot let emotion determine our response. Change has always wrought concerns. Mary Shelley’s Frankenstein was published as the Industrial Revolution was getting underway. It tapped into the psychological dread and ethical limits of tampering with nature. Henry Ford’s first car, the Ford Quadricycle, reached a speed of 20MPH, about twice as fast a horse could trot for long distances. Its noise and speed frightened those encountering it. And, of course, the decision to drop the Atomic bomb raised moral dilemmas. Yet, history suggests it saved lives, ending the war far earlier than otherwise. What would the world look like today if Nazi Germany beat us in its development and dropped an Atomic bomb on London?

 

AI, or artificial intelligence, is a branch of computer science focused on building computer systems that can perform tasks normally requiring human intelligence. As Daniel Huttenlochner wrote in last Wednesday’s The Wall Street Journal, “AI can make complex choices rather than merely execute specified actions...but accountability doesn’t transfer, because there is no one there to receive it.” It is not human. AI responds to tasks delegated to it by humans. An AK 47 is harmless until picked up by a human. It was not Boeing 767’s that flew alone into the two World Trade Center towers, but Islamic terrorist pilots who wanted to kill innocent civilians. AI requires a power source, as we require air to breathe. Evil exists in humans, not in machines. 

 

The possibility for advanced technology systems to do harm already exists. Hackers in Russia, Iran, North Korea and China are working with AI systems to disenable our banking systems, destroy energy sources and defense capabilities, as we are working on similar systems, for purposes both offensive and defensive. 

 

Differences of opinion are healthy and illustrative of a free people. We in North America and Western Europe are fortunate to live in countries ranked in the top quartile of Cato Institute’s Human Freedom Index. But we should not lose sight of the fact that nations competing for supremacy in AI, like China, rank near the bottom. China’s development of AI will not be held up by debate or protests.

 

Just as we need accountable politicians to put the needs of the Country above personal wants, we need answerable business leaders to ensure that what they produce is without unnecessary risk. If Dario Amodei of Anthropic or Sam Altman of OpenAI feel the risk of what they are creating is too great, they should slow their progress, without calling for government regulation. Otherwise they will be suspected of self-preservation, shutting out future competition. And Congress should debate the issue, and if guardrails are deemed necessary, they should be legislated. 

 

In the epigraph, Solzhenitsyn was expanding on an ancient precept. In Mark 7: 21-23, Jesus is quoted: “For from within, out of the heart of men, proceed evil thoughts...All these evil thoughts come from within and defile a man.”  In 1788, James Madison wrote in Federalist 51: “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” Evil does exist, but it is not endemic to machines, computer programs, or artificial intelligence. If an outcome is bad, it stems from the individual who is designing the algorithm, or in programing and creating the system; it is not the software or machine that is evil. 

 

In debating the issue of AI, as for any issue like climate change and the coronavirus, we need reflection and common sense, not emotion. In the same article quoted above, Mr. Huttenlocher, who is dean of the MIT Schwarzman College of Computing wrote: “AI is an extremely powerful and beneficial technology. But accountability for its actions remains with the people and institutions that grant it the power to act...”

 

As for the question in the title. Artificial intelligence is certainly consequential. I am no expert, but from what I have read AI will increase productivity across myriad industries. It will help generate advances in defense and in the sciences, especially in healthcare. And it will generate jobs that today we cannot imagine. However, in the wrong hands, like any weapon, it could be apocalyptic, which is why it is critical that the United States – not China – be the industry’s leader.

"As Good As It Gets?"

 When I think of the phrase “as good as it gets,” I don’t think of Jack Nicholson and Helen Hunt in their wonderful movie of that name, I think of how lucky I am to be married to the woman I have been for sixty-two years, to have the three children we do and their spouses, and the ten grandchildren they have produced. (The photo, taken a couple of years ago, are of Caroline and me and our ten grandchildren.)

Nevertheless, Jamie Dimon’s comment struck a chord. We are living at an incredible time. So much has gone well, with opportunities rising, but so are the risks that we may be getting over our skis. Life is never a smooth road. Among the bumps, there are twists and turns. Be prepared and stay alert. And don’t lose focus on what is most important in your life.   

 

Sydney M. Williams

www.swtotd.blogspot,com

 

Thought of the Day

“As Good As It Gets?”

July 21, 2026

 

“It’s getting close to as good as it gets.

We just don’t know how long it will last.”

                                                                                                    Jamie Dimon, CEO & Chairman JPMorgan Chase

                                                                                                    July 14, 2026

 

Jamie Dimon made those comments after his bank’s record-breaking quarter. But his observation may have wider applicability, for the stock market in particular. However, trying to time the market is, generally, a fool’s exercise. Nevertheless, perspective is important, and Mr. Dimon’s comment resonated with me.

 

And I do worry about other factors. Have we crossed a fiscal, political and diplomatic Rubicon? Our federal debt – $5.7 trillion in 2000 – has soared to $38 trillion in 2025, while unfunded federal obligations now approach $88 trillion according to the Cato Institute. These are burdens placed on future generations. I worry about leveraged ETFs and “prediction markets,” which, according to Pew Research will grow from $51 billion in 2025 to an estimated $240 billion in 2026. They are simply a form of gambling, and I worry about what that says about young participants. I worry about the rise of nationalism, anti-Semitism, retributive politics, populism, protectionism, and the return of “great powers,” with China dominating the Pacific region, the U.S. controlling the Western Hemisphere, and with Europe, Africa and the Middle East being up for grabs. And I worry about today’s polarized politics and the ascending interest in socialism.

 

And being older, with a diminishing runway ahead of me, I do worry about financial markets that have been so generous over the past decade and a half. In the seventeen years since the stock market’s[1] bottom (March 9, 2009) following the 2008 credit crisis, the DJIA have provided a compounded annual return of 13 percent, roughly double the long-term average. Does that mean we are at the end of a long-term bull rally? I don’t know. In August 1982, the averages were lower than they had been in 1967 when I became a stock broker. That August saw the start of a bull run that ran through January 2000, and which saw the DJIA compound annually at over 16 percent[2]. However, ten years later, in January 2010, the Averages were ten percent lower. 

 

Perhaps there is further to run, but I suspect returns over the next ten to fifteen years will be less exuberant. That does not mean one should avoid stocks; it does mean that one should be more selective and, perhaps, lower expectations.

 

I don’t want to sound too pessimistic, because we live in a time of dramatic technology change. Artificial intelligence is revolutionary. While I am somewhat of a Luddite when it comes to technology, it is my belief that many older industries – despite disruptions that will be part of the process – will benefit from AI, in ways we cannot anticipate. Productivity gains will help corporate margins and benefit shareholders. Like the Industrial Revolution in the 19^th Century, the proliferation of consumer products in the 1920s, the invention of the integrated circuit in the early 1960s, and the evolution of the internet in the 1990s, we are living through a time of disruptive technological change, which if the past is guide will add jobs, provide economic growth and improve our lives; but it will also be disruptive, as change always is.

 

There are cycles to investing, and a few people may be good at market timing, but most are not. Markets rise and fall, but over the long term they have done well. One should never become too greedy and assume higher than average returns will persist. On the other hand, one should never become discouraged by bear markets that may last a decade or more. The secret to successful investing is dollar-cost-averaging and the magic of compounded returns, lessons I wish had been learned years earlier. It is the magic of compounded returns that make 530A IRAs (Trump Accounts) so attractive, especially given that parents can contribute up to $5,000.00 annually. The accounts grow tax deferred until the child reaches eighteen. Perhaps a new generation of Americans will come to appreciate capitalism? 

 

As long as our political system allows us to be free to innovate, and if taxes and regulations are not too onerous or restrictive, and debt is manageable, we should be fine. I am reminded of these lines from Rudyard Kipling’s 1895 poem “If:” 

 

“If you can keep your head when all about you

Are losing theirs and blaming it on you,

If you can trust yourself when all men doubt you,

.........................................................

If you can dream and not make dreams your master,

.........................................................

If you can fill the unforgiving minute

With sixty seconds of distance run,

Yours is the Earth and everything that’s in it...”

 

So, is this as good as it gets? To be honest, I cannot answer the question. If we speak of bank earnings or the stock market, perhaps. But I am no seer. If we speak of the economy, I suspect fewer tariffs, less regulation, lower taxes and a focus on debt and deficit reduction would help. Politically, I hope this is not as good as it gets. But as regards my family and friends – wife, children, in-laws, grandchildren, and those in my social orbit – I cannot imagine life getting better. 

 

 

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[1] In writing of the stock market, I use the Dow Jones Industrial Average, as I have the daily closing prices going back to January 4, 1915, thanks to Laszlo Birinyi’s Book of the Dow. Since 2012, I have tracked the DJIA’s closing prices. Other indices, such as the S&P 500 or the NYSE Index, may be more reflective of the overall market, but this is what I have. 

[2] Keep in mind, that period included October 19, 1987, a day which saw the DJIA decline by 22.63%, the largest daily percent decline in its history. Reasons for the speed of the decline are generally attributed to computer-based models providing ‘portfolio insurance.’