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Hi friends 👋,
Happy Wednesday! What a time to be alive.
Writing about politics is kind of a lose-lose. No matter what I write, a bunch of people will hate it. When I wrote Why the Democrats Lost Tech, Democrats got mad at me for even considering Trump, and Republicans got mad at me for believing there was anything redeemable in the Democratic Party.
The truth is, though, there is nothing happening right now that impacts the types of companies I write about and invest in — Vertical Integrators and crypto, which LPs thought was an insane combination when I raised Fund III — than what’s happening in politics now.
Among the biggest risks to any of these companies is that government regulation (or regulation by enforcement) will dramatically slow them down or even stop them dead in their tracks. I believe that these companies are the highest-leverage way to improve the human condition, so to me, there’s almost nothing more important than making sure they’re free to try to succeed, and politics is a big part of that.
As I’ve been watching American politics play out live for the past week, though, I noticed that there’s a lot more in common between the current moment and the types of things that I normally write about here, and even more reason to be optimistic than I expected.
That’s the Not Boring mission: to make the world more optimistic. In other words, Make America Optimistic Again.
I just ask that you read with an open mind.
Let’s get to it.
The Trump Bubble
My hunch is that we’re in the beginning of the mother of all bubbles, a bubble machine, the bubble that spawns a thousand bubbles: the Trump Bubble.
One of the most shocking things about last week’s Presidential election is just how excited so many people seem to be that Donald Trump won.
Not everyone is, of course. Some people think this is the end of democracy. But some other people are ecstatic. They believe this election changes everything. And a small group of people getting incredibly excited about a specific vision of the future is exactly how bubbles form.
Over the weekend, I read Byrne Hobart and Tobias Huber’s new book, Boom: Bubbles and the End of Stagnation. It’s really excellent, and I recommend that you buy and read it with haste.
The core argument of the book is that a certain kind of bubble can be incredibly useful in pulling the world forward. Bubbles, they suggest, are the cure for stagnation.
Watching the reactions to the election while reading the book, I was struck by how closely the current moment matched the productive bubbles covered in the book: The Manhattan Project, The Apollo Program, Moore’s Law, The Golden Age of Corporate R&D, Fracking, and Bitcoin.
Byrne and Tobias identified “five overarching traits shared by all of the technologies and megaprojects” that they studied:
Definite optimism and constrained vision.
Fear of Missing out (FOMO) and you only live once (YOLO) dynamics.
Excessive risk-taking and over-investment.
Parallelization and coordination.
Reflexivity and hyperstition.
I see many of these on my twitter feed. I feel many of them myself. Even people I wouldn’t have expected to be happy, friends and relatives who voted for Kamala Harris, admitted, “I’m actually kind of excited.”
Last night, in a statement announcing the new Department of Government Efficiency co-led by Elon Musk and Vivek Ramaswamy, Trump wrote that the DOGE “will become, potentially, ‘The Manhattan Project’ of our time.”
He might actually, uncharacteristically, be underselling it.
In Defense of Bubbles
A Trump Bubble might sound alarming. After all, both Trump and bubbles get a bad rap, both at least partially deserved.
When you hear the word “bubble,” you might think, “Overinflated thing that is bound to pop.” The word has negative connotations, earned in particular by the bad bubbles. But those aren’t the only bubbles. In Boom, Byrne and Tobias distinguish between the two kinds:
Mean-reversion bubble: “the basic bet is that the future will continue along present trends.” Think: the mortgage crisis. If you bet that the future will look mostly the same, you can take on debt to lever up your bet.
Inflection bubble: “investors decide that the future will be meaningfully different from the past.” Think: the dot-com bubble. If you think that the future will look meaningfully different, you buy equity in the things you think will benefit most from the difference.
Inflection bubbles, they argue, drive progress. Their argument is similar to the one I made in Infinity Missions: bubbles attract resources to important projects that would not make sense to fund or work on under a normal cost-benefit analysis.
Take the Apollo Program:
When President John F. Kennedy declared in May 1961 that “this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon,” no one knew how to do it. Rockets, launchpads, space suits, hardware, software, zero-gravity food – they didn’t exist, and there were no experts in these domains…
It wasn’t just that the space program lacked what was necessary to get to the Moon – scientists weren’t even sure it was possible.
“The Manhattan Project succeeded because definite optimists were powered along by bubble dynamics,” they write. “The same could be said of Apollo.”
Bubbles pull the future forward by concentrating tremendous amounts of financial and human capital on very specific visions of the future, and allowing for otherwise-wasteful exploration and parallelization in the pursuit of making it a reality.
Things that may not have happened - ever - without a bubble, happen rapidly with them.
Byrne and Tobias make a compelling case that Moore’s Law itself is responsible for Moore’s Law: “The industry has exhibited the classic bubble behavior in which predictions about the future – particularly bold and nearly indefensible ones – end up driving behaviors that make those predictions come true.”
Expectations that chips would continue to improve let people design products that would take advantage of better chips which let chipmakers know that there would be demand which spurred the investment that made chips improve.
In other words, a sufficiently compelling vision can bring itself about. As Stripe Press plasters on Boom’s website, “Optimism can be a self-fulfilling prophecy.”
As Peter Thiel noted and Byrne and Tobias reinforce, however, not all optimism is good, either. Indefinite optimism – just assuming things will always go well – is as destructive as pessimism. Which is why the first common trait among productive bubbles is definite optimism: the belief that the future will be better backed up by concrete plans to make it so.
A Bubble in What?
I got pretty excited when I started noticing the common traits of bubbles in the early days post-election.
The one open question for me was the definite part, the constrained vision.
Just making everything better, Making America Great Again, is too vague and imprecise to fit the book’s definition: “Crucially, this vision involves a concrete and actionable plan to transition from the present to the future.”
Build an atomic bomb before the Germans (or Soviets) is definite and constrained.
Get to the Moon by the end of the decade is definite and constrained.
Each of the bubbles Byrne and Tobias cover is definite and constrained.
But the Trump Bubble? A bubble in what, exactly?
Elon Musk, who was instrumental to Trump’s victory and will likely be instrumental in the Presidency, has called Tesla’s Gigafactory “the machine that builds the machines.” Work on the Gigafactory, get that right, and making the cars themselves is easy.
America is the machine that builds the machines that builds the machines.
Viewed as a machine, America has accumulated gunk in its gears.
It still builds excellent machines (companies) that build excellent machines (their products). “Make America Great Again” never resonated with me, because I think America is still the greatest country in the world. But it’s slower and clunkier than it used to be.
Comparison to other countries masks a deeper truth: America is not as great as it could be.
The Trump Bubble, if it materializes, will be about upgrading and cleaning the gunk out of the machine that builds the machines that builds the machines so that it can run at full capacity.
As Santi Ruiz wrote yesterday in The Five Things President Trump Should Do On Day One, “Presidents come into office with a list of policy priorities and campaign promises, and they don’t tend to be excited about reforming the nuts and bolts part. But they should be.”
I think the reason there’s so much excitement, much more than I expected, about Trump’s second election is that people believe this President will be. That this administration is going to tighten the nuts and bolts on the machine so that they can run their own machines more smoothly.
For people who believe in America, capitalism, and themselves, there’s no more inspiring vision.
As of today, it feels strong enough to induce the strongest bubble ever blown.
Signs of a Bubble
While the Manhattan Project and the Apollo Program are the two case studies in the book with direct government oversight, I think the Trump Bubble will look more like Moore’s Law.
“Moore’s Law,” Byrne and Tobias write, “is perhaps the most compelling and enduring example of a two-sided bubble, wherein the expectation of progress in one domain spurs progress in another, which then propels growth in the first.”
There’s a two-sided bubble at play here, too. The Trump Administration is telling people that it will be easier to build, invest in, and accomplish big things, which is already making people more excited to build, invest in, and accomplish big things. The more energy and excitement there is behind what people are building, the easier it will be for the government to fix the machine.
Rainmaker’s Augustus Doricko captured the sentiment as well as anyone: “we have a 4 year window to go as hard as fucking imaginable.”
With control of the Senate, House, and Executive, the government is promising to streamline processes and remove friction. In return, the private sector plans to increase risk, investment, and innovation.
While it will undoubtedly be harder than anticipated to actually streamline processes and remove friction, just generating belief that it’s possible is enough to set off the bubble.
Armed with the belief that everything is on the table, people are sharing their ideas for what the government might do.
Chamath (love him or hate him) tweeted an idea for education that I agree with:
Notice the meme. Make America X Again. Bryan Johnson tweeted a picture of himself with RFK Jr. with the caption “MAHA,” or Make America Healthy Again.
Bryan Johnson is *one of us.* He’s a tech founder who spent last week raving at Hereticon. We follow each other on Twitter. If he has the ear of the person who might be responsible for America’s health apparatus, people feel, the administration might be open to listening to our ideas on health, and all sorts of things.
You personally might think this is a good thing or you might think it’s a terrible thing, but we’re focused on the bubble dynamic here, and the bubble dynamic is that people feel like they’re a tweet away from influencing government policy, which means that more people are tweeting their ideas for government policy.
I like this one from Tomas Pueyo:
And I obviously love Jordi Hays, John Coogan, and Eric Glyman’s proposal to help bring transparency and efficiency to government spending with Ramp.
The fun part is: some of these might actually happen.
Of course, the administration won’t see all of these ideas, they’ll consider even fewer, and they’ll enact even fewer than that. But there’s a lottery or prize dynamic at play: it seems almost certain that the administration will try to push through at least a few of the previously-unthinkable ideas bandied about on Twitter, and some of them might even work, and when they do – imagine if we just solve global warming with sulfate injection – the government will be more emboldened to try previously unthinkable things.
By making it feel like change is possible – again, even if it’s just people projecting their hopes that change is possible – the Trump administration is making it cool to work with the government again.
Bryan Johnson is getting involved. Elon Musk, the world’s richest person, the guy who just caught a 22-story rocket with chopsticks, is getting involved. Regular geniuses who never would have considered working with the government are trying to figure out how to get involved.
Sequoia’s Sean Maguire said that he’s getting messages from physics PhDs asking how they can work in the Trump government.
This is parallelization and coordination at national scale. Parallelization because so many entrepreneurs want to build within an American machine that they expect to run more smoothly. Coordination because so many talented people want to get involved in actually fixing the machine itself, now that they think there might be a chance to.
Again, these things are self-fulfilling. More talented people working to fix the government – backed by a strong mandate from the people to do so – should make it more likely that they’re able to fix the government. That, in turn, should make it more likely that all of the talented people building hard things, from crypto to energy, are successful in building their machines.
The belief that all of this is possible – that all of the wildly ambitious things people are trying to build despite how hard the government currently makes it to do so are actually going to be unblocked – is already creating a real sense of FOMO.
Because crypto is liquid and moves so quickly, you can see it most clearly in crypto prices:
What would crypto be able to accomplish, investors are asking, if the agency trying to extrajudicially regulate it out of existence… didn’t do that?
Interestingly, there’s a mini-Bubble in here, too. Byrne and Tobias include a case study on Bitcoin in Boom, noting that, “Adoption drives the value, security, and network effects of any currency, and Bitcoin is no exception.”
a16z crypto has long highlighted a price-innovation cycle in crypto: price goes up, which attracts attention and developers, who build products, which make crypto more valuable over time.
Again, this cycle is clearest in crypto because it was born liquid, but a similar dynamic plays out across industries: rising prices attract talent, talent builds things that justify increased prices over time. Hyperstition and reflexivity.
What I think will make the Trump Bubble so potent is that it’s setting off these mini-Bubbles all over the place. It’s a Bubble Machine.
When it’s legal to build in crypto, more people will build useful crypto products. When it’s possible to get new nuclear reactors approved, more people will build nuclear reactors. When SpaceX can launch a rocket without getting slowed down by the FAA, it will launch more rockets.
Which brings us back to FOMO and YOLO. If you’re paying attention, it’s hard not to feel that there is something big happening and that you need to get involved. On Monday, I tweeted that despite how exposed I am to all of this, personally and through Not Boring Capital, I feel underexposed.
I meant financially, of course, but I also meant something bigger, almost spiritually, like I should have been doing more before and need to ape in on my contributions now to catch up. This, too, is bubbly. Highlighting the underappreciated spiritual aspect of bubbles, Byrne and Tobias write, “one way to identify future domains of technological progress is to identify their spiritual potential for transcendence.”
It feels like there is, right now, the opportunity to build the world that we’ve been talking about wanting to build for a very long time, to rip the future into the present, and that no matter how much you’re doing, there’s someone else who’s doing even more.
That is an incredibly productive dynamic, one that, again, parallelizes and coordinates the efforts of thousands or even millions of people who want to contribute to the grand project, by either fixing the machine or building a machine that might be much easier to actually build now.
All of this will almost certainly lead to excessive risk-taking and overinvestment, rounding out our list of bubble traits. While hard tech – or Vertical Integrators – have gotten more popular, many investors and LPs still find themselves dramatically offsides, positioned for a world in which it was just too uncertain and too capital-intensive to build hard things, even if the rewards for the few who did were great. I expect that we’ll start to see silly rounds in everything from nuclear to aerospace in the coming months, just like we’re seeing silly prices in crypto.
And that’s good! The beauty of an inflection bubble is that even if some investors’ equity goes to zero, no contagion will set in and the world will be left with more progress on hard challenges than would have been made otherwise. Eventually, certain companies that might not have made it otherwise, will, and those companies will change the world for the better.
Will it be perfect? No. It will be messy and volatile. But it will, I believe, lead to spectacular results. There’s actually a model that I think gives a preview, even if it’s a little on the nose.
How the Bubble Machine Gets Made
In a now-famous 2021 video with Everyday Astronaut, Elon Musk shared his five-step approach to improving manufacturing and design processes:
Make requirements less dumb.
Delete the part or process.
Simplify or optimize.
Accelerate cycle time.
Automate.
I said it was on the nose because Musk has been very involved in getting Trump elected, but if you view America as the machine that builds the machines that builds the machines, then the approach that Elon takes to building the machines that build the machines is an interesting place to start.
And it rhymes an awful lot with the approach the Trump Administration has said it plans to take!
Make requirements less dumb → Regulatory reform (ex: NEPA, NRC)
Delete parts/processes → Eliminate agencies like the Department of Education
Simplify/optimize → Streamline remaining processes
Accelerate cycle time → Speed up approvals
Automate → Modernize government systems
This might break things! SpaceX’s rockets occasionally blow up.
Maybe it turns out that the Department of Education, despite America’s poor recent performance in public education, actually fulfills a crucial role. Add it, or something like it, back!
I think we’ll be surprised, though (or maybe we won’t) with just how much there is to streamline and optimize, and just how smoothly things run when you do. People are excited – filled with thymos, or “spiritedness,” – precisely because this is the first administration in a long time that they believe will actually try to push the limits and see where it breaks.
More than anything, though, a willingness to break things is a return to embracing risk.
Right in Chapter 1, Byrne and Tobias call out risk aversion as a main source of stagnation. “What these symptoms of stagnation and decline have in common is that they result from societal aversion to risk, which has been on the rise for the past few decades,” they write.
It’s an argument I made in Riskophilia, which I concluded by saying:
I refuse to believe that America’s best days are behind it. Decline is not inevitable. But it takes more than tech. It’s up to all of us to cut through the cruft, get back to the sense of freedom and adventure that make the country great, and build from there.
Go do that risky thing you’ve been putting off. Now. Build the muscle. Spread the word: we’re going risk-on.
The only way out is up, even if it’s a little risky up there.
Now, the newly elected government is promising to cut through the cruft and get back to the sense of freedom and adventure that make the country great, even if it means breaking some things on the way. Like any good bubble, it’s risk-on.
Risk On
Sometimes, as a writer, you get lucky. I couldn’t have asked for a better cherry on top of my analysis than President Trump announcing that Elon and Vivek would be running the Department of Government Efficiency the night before hitting send on this piece, after I’d written the draft.
He wrote that DOGE has the potential to be “‘The Manhattan Project’ of our time, and after reading this, I hope you have a better sense of why that might actually be true. As I noted, it might actually be underselling it: the Trump Bubble could be the bubble that makes bubbles.
The DOGE, according to Trump, will “pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.” It will, “create an entrepreneurial approach to Government never seen before,” and “liberate our Economy.”
It aims, in other words, to fix the machine that builds the machines that builds the machines.
Do you understand why people are getting so excited? In the last section, I wrote about Elon Musk’s process for fixing the machines that build the machines. Even I thought it was too on the nose. Then just after I finish writing that, Trump appoints Elon Musk himself to co-lead the organization responsible for fixing the machine that builds the machines that builds the machines. Elon is the best person you could get for the job, and he took the job.
While many people have pointed out that DOGE has no real authority, that it can only make recommendations, that kind of misses the point.
The point is that people on both sides of the aisle believe that the government might actually become more efficient. Even if Elon and Vivek can’t unilaterally (bilaterally?) decide to cut agencies and regulations, they can at the very least shine a light on where the Federal Government is particularly wasteful and create pressure for change through the people.
For the first time in a long time, people feel like they have the chance to participate in making the American machine run better.
Elon tweeted that they’ll be sharing all DOGE actions on X:
And Vivek tweeted that DOGE is going to crowdsource ideas from the people: “Americans voted for drastic government reform & they deserve to be part of fixing it.
This is exactly what I’m talking about. Like any good bubble, it’s participatory.
People will feel like they can actually fix the government, so they’ll put more effort into actually trying to fix the government. That might come in the form of submitting ideas, and it might come in the form of calling their Congresspeople to push them to enact DOGE’s recommendations.
The involvement of the people will make it more likely that DOGE succeeds in streamlining the machine, which makes it easier for entrepreneurs to start companies assuming the machine will be fixed, which means more people will try to start companies to fix problems that they see.
Whether this is exactly how it plays out or not is of secondary importance. In forming the bubble, the important part is that people believe this is how it will play out, which shapes their actions.
Those things feel squishy, but they’re real. They can turn into a self-fulfilling prophecy.
I guess one reason I’m writing this is so that you feel a little of the FOMO yourself, so that we can all work on this American project together. Bubbles work best when they grow.
Whoever you voted for and however you feel about the results of the election, there is now a clear choice: you can spend your time wallowing and miss out on what may be the greatest opportunity to build in America since the Second Industrial Revolution, or you can get to work and build.
That’s another thing that’s surprised me, just how non-partisan this feels. The line is not Democrat vs. Republican, but those who think the American people can make America, and the world, better and those who think we need government bureaucracy to do it for us.
To whit, in response to the DOGE announcement, Box CEO Aaron Levie, who vocally supported Kamala, tweeted last night: “There’s significant opportunity to make the government more capable of delivering for Americans, and ironically it will actually cost less not more.”
Earlier in the day, he tweeted, “America could enter a supercycle of growth in manufacturing, energy, housing, innovation, and more with the right policies going forward.”
Whatever bitterness and divisions people feel, I think it’s time to let them go. This is bigger than politics.
No one likes paying more taxes to fund wasteful bureaucracy. No one likes feeling like their country is broken and there’s nothing they can do about it. No one likes things going 100x more slowly than they should or costing 100x more than they should. We can all agree on a lot.
The American machine, for all its flaws, is the best the world has built so far, and we’ve never had a better chance to make it run even better. The ramifications if we do – cheaper energy, better goods, faster travel, more potent drugs, and much, much more – benefit everyone.
This is a meta-bubble that could spawn inflection bubbles for decades to come.
Welcome to the Trump Bubble. The American Millennium starts now.
Thanks to Byrne and Tobias for writing Boom, to Claude for editing, and to any of you reading this for reading this far with an open mind.
That’s all for today. If you have a little time, to say thanks to our sponsor and Make Yourself Healthy Again, check out TrueMed. We’ll be back in your inbox with a Weekly Dose on Friday.
Thanks for reading,
Packy
I can't help but notice that none of your enthusiasm markers/voices are women. Wonder if you recognize this gap or if it's also a bubble.
Packy, this is blissfully ignorant of the social impacts we may be facing and all of the harm that has *actually been proposed and promised* to so many families, women, and children by a insurrectionist, racist felon. Your ignorance of the costs that will be paid by so many is tragically disappointing. I really thought your perspective was more comprehensive and well-balanced than optimism for optimism's sake, but it's clear you've sacrificed the moral high-ground. No government is perfect, and certainly blue cities and states could and *must* drastically streamline regulations to *at the very least* build (so much) more housing, but you know what really fixes the machine fixing the machines? What establishes a baseline that everyone can rely on? Health care. Clean water. Clean air. Eliminating lunch debt. Outcome-based missions, like aggressively reducing fossil fuel subsidies to zero, so 8 million people a year around the world don't have to die because of air pollution. You can do so much better than this. I'm incredibly disappointed.