What AI Will Actually Do to the Economy with Noah Smith

Feb 27, 2026

Noah Smith, writer and economist behind Noahpinion, offers data-grounded takes on AI and the economy. He explains why a viral Citrini post rattled markets, why a 2008-style AI crash is unlikely, and how a productivity boom could oddly trigger a mild recession. He also names AI-enabled bioterrorism as his top worry and dissects hiring shifts and job risks in tech and blue-collar sectors.

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INSIGHT

Markets Missed Early AI Signals

Markets are not as forward-looking on AI risk as many assume, since a single blog post like Citrini's moved stocks by pattern-matching to 2008.
Citrini succeeded because it reframed AI risk as a familiar financial-crisis narrative that resonated with Wall Street memory of 2008.

INSIGHT

AI Caused 2008 Scenario Is Possible But Unlikely

An AI-triggered 2008-style financial collapse is plausible but unlikely given today's corporate leverage and the limited systemic role of life insurers.
Nonfinancial corporations are far less levered than before, so large earnings hits would need to be enormous to trigger systemic failure.

ADVICE

Avoid Confident Company Level AI Predictions

Don't assume micro predictions about which companies will fail; focus on macro uncertainty and sector-specific analysis.
Noah admits he's agnostic on many industry outcomes and declines to overconfident calls about travel bookings or DoorDash.

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Noah Smith is a writer and Substack blogger behind Noahpinion, known for his contrarian, data-grounded takes on economics, technology, and geopolitics.

What you'll learn:

Why the viral Citrini "2028 Global Intelligence Crisis" post moved markets — and whether it should have
The psychology behind why "AI causes 2008" scared Wall Street more than killer robots
Why Noah thinks an AI-driven financial crisis is possible but unlikely
How a productivity boom could paradoxically trigger a mild recession through "sticky prices"
Why AI-enabled bioterrorism — not economic disruption — is Noah's biggest fear
What Block's 4,000-person layoff and Mercury's hiring shifts reveal about AI's real impact on jobs
Why software job losses in 2023-24 may have been driven by uncertainty, not AI capability
Noah's take on deflation, GDP growth, and where inflation goes from here
Why intellectual humility has been Noah's biggest edge as a forecaster
The "dinosaur and the meteor" theory — why we're worrying about the economy while a much bigger threat flies overhead

In this episode, we cover:

(00:00) The meteor meme — AI's real threat vs. the economy

(01:07) Introduction to Noah Smith

(02:14) What the Citrini post actually argued

(04:30) Why markets missed Covid — and what that tells us about AI

(06:17) Why Citrini moved markets: the power of pattern matching to 2008

(07:51) Breaking down Citrini's financial crisis domino theory

(08:38) Noah's verdict: possible but unlikely

(11:04) Block lays off 4,000 — how does AI-driven unemployment play out macro?

(17:42) How a productivity boom could cause a recession: sticky prices explained

(19:46) Noah's real AI fear: vibe-coded bioweapons

(24:55) Has bioterror surpassed China-Taiwan as Noah's top worry?

(25:10) The economy today: inflation, deflation, and GDP

(28:44) What Mercury's hiring strategy reveals about AI's effect on headcount

(31:32) Why software job losses in 2023-24 may have been forward-looking uncertainty

(34:38) The threat to blue collar jobs — are truck drivers next?

(35:52) Why intellectual humility is Noah's competitive edge

(39:26) The meteor meme closing: we created zombie gods for a 2.7% productivity boost