Ask A Nobel Prize Winner: Can AI Save the American Dream?

Plus: More than 440,000 Americans became millionaires this year

Author

Cheddar's Big Business This Week
July 02, 2026

In partnership with

Simon Johnson, the MIT economist and Nobel laureate, has spent much of his career studying how institutions shape prosperity — and how societies lose it when those institutions fail. At a moment when AI investment is booming, tariffs are back at the center of U.S. economic policy, investor protections are being rolled back, and many Americans feel locked out of the economy’s gains, Johnson sees both danger and possibility. Big Business This Week columnist Peter Green spoke with him to discuss what the future of the U.S. economy looks like. He says it is being held up in part by the AI boom, but whether that boom leads to broader prosperity or a deeper ‘K-shaped economy’ depends on choices that are still being made.

Are we at an inflection point for the global economy and the postwar model of growth?

I think there's pressure, obviously, on the system globally, including the role of trade, and there's also pressure on institutions, including in the U.S., so I think we’re facing a big stress test for institutions. At the same time, we're having a boom around investment in AI, which is keeping the U.S. economy going, and which is also raising questions about what's the future of jobs, with people increasingly concerned about their job and their children's prospects. So it's a moment of considerable uncertainty, but there is upside potential.

I don't want to sound too negative but I think there's some very positive things that can happen. At MIT, we have a research group focused on what we call pro-worker AI, asking; Can we get developments of AI that would actually raise wages and share prosperity better? Because that could actually help deal with the polarization of the job market that's been with us for decades now, and that is part of the angst and the anger that many people feel, even in rich countries.

People now talk about a K-shaped economy, where the top keeps pulling away while the middle and bottom fall behind. Is shared prosperity at risk?

It's been in jeopardy for some time. Within labor, highly skilled, highly educated people have done much better over the past four decades than people without much education, and the middle has become squeezed by various forces pretty consistently over those decades. The K-shaped economy is not new. The worry now is that AI and related developments may further intensify it. But there are choices to make, including policy choices, that could put us on a different path.

What would put us on a different path?

The main thing is that the way technology develops needs to increase the demand for human expertise rather than de-skilling jobs. If you get mostly automation, meaning you replace people with machines, then there will be downward pressure on wages, and then CEOs will do extremely well. If you have upward pressure on wages because there's a bigger demand for human expertise to build things and to create new things, and that could be AI-powered or empowered, then workers will do much better. I mean, CEOs may also do well, by the way, in that scenario. I think, though, you're quite right that right now it's the divergence of fortunes that grabs your attention and that is very salient. So if the workers can do better and real wages can rise across the board, including for people who didn't go to college and finish college, that would be a big change.

We are also seeing political expressions of frustration, from Trump voters in 2016 to younger voters in the Blue-state cities like New York angry about debt, housing, and affordability. How do you read that?

Certainly political expression of frustration is increasing. But don't you think that Donald Trump's election in 2016 was also an expression, maybe not by exactly the same demographic? A lot of people feel like they've been left behind. And I agree with your assessment of what's happened in New York, and I think the frustration levels there are very high, but they're shared across quite a few other groups. It's the frustration of the K-shape and feeling that prosperity is not being shared. That's the key frustration. And that's common across multiple groups.

So what else needs to change? It can’t just be AI making jobs better.

Technology. You can change the degree of redistribution, you can support people at different parts of their life cycle and so on. You can change the tax system, reduce the tax on labor, for example, relative to machines. There are other policies and potential levers available, but the technology piece is driving it, and you mustn’t neglect that.

What happens when institutions meant to protect investors and consumers are weakened? 

What's happening at the SEC is worrying. The protection of investors is important, and to the extent that's being weakened, that's a problem. Consumer protection for financial services, like the Consumer Financial Protection Bureau being gutted is also a big problem. Those sort of core investor and consumer protections are very important for shared prosperity and productivity growth. But, you know, allowing people to understand and need to be reminded that the stock market involves a high degree of risk, and allowing people to participate in that is not by itself a bad thing if they understand the risks, if they can afford losses, and so on. If they are duped into thinking it's easy money or one-way bets, that's a problem. I don't think you want to be too draconian in excluding people from trying to make money or trying to benefit from the volatility, but you do need robust investor protection. That is absolutely for sure. Without that, many bad things can happen.

And without those institutions, prosperity gets shared among ever-fewer people, I suppose? 

Yes, absolutely. Investor protections, requiring transparency, that is the core of the SEC mission. Integrity of markets, that's a Commodity Futures Trading Commission mission. Making sure consumers are not taken advantage of in basic financial services like banking, that's the CFPB. We've never said that you shouldn't be allowed to gamble or you shouldn't be allowed to go to Las Vegas, if that's what you want to do. Of course there are issues of addiction and irresponsibility and so on, but those need to be confronted at an individual level. You want risk-taking, you want entrepreneurs, you want them to be able to raise capital, and you want people to be able to invest in new ventures, “little tech,” as one of my friends called it, the up-and-coming next technologies. That's just a real strength of the American economy.

What happens if the U.S. doesn’t restore a sense of shared prosperity?

If there's a breakdown in investor protections, I think you could have a lot of trouble in the stock market and more broadly. And that would be undermining productivity growth and overall prosperity. The shared prosperity is separate but related: If we don't re-establish that there's a rising tide that lifts all boats, then you would expect—and we have seen it in other countries—broader political backlash, a lot of populism of a not very constructive variety. And that can undermine your overall growth. It's not a new situation, [but] it is becoming more precarious. And what happens with AI, I think, is going to potentially tip the balance one way or another.

You said AI will be a transformative force, but investors and analysts are questioning whether there is a business case for the trillions going into AI.

It's like railways in the 19th century. There was clearly a business case for building railways. They transformed the country. They helped improve many people's lives, not everybody, but many people. But there were periods of overinvestment and periods when the valuations of those stocks were exuberant, overly exuberant. So that is a bit of an American feature. We like to invest. We like to build new things, and we do tend to get carried away. So where are we in that cycle? It's hard to say. The technology, AI, will end up changing the world, but is profit going to accrue? That's the nature of risk, you see. And what you want is people, investors willing to understand risk and willing to undertake investments given that risk. And if they manage their portfolios in the right way, they will benefit over time. But there could be losses along the way, and people need to understand that.

(This interview has been edited and condensed for clarity.)

—Peter S. Green

Big Businesses mentioned this week

This week, big business!

War Story

  • Strait outta Hormuz: The Saudis are filling up tankers, some ships are passing through Hormuz, Oman says it wants to join Iran in charging ships to pass through the international waterway (that’s against the Law of the Sea, which is backed by a bunch of international treaties that both have signed), and most importantly, the price of oil is down, with Brent crude trading at about $71.50 a barrel, about where it was before the bombing began on Feb. 28. But gasoline is still hovering around $3 a gallon, up a  third from before the war, and prices are likely to climb again as countries rebuild their strategic reserves. More price pressure could come this winter, as Gulf states struggle to rebuild their war-wrecked oil and gas infrastructure, but that doesn’t mean more new oilfields will start pumping. “People are not going to start drilling in the U.S. because oil goes above $80 for a few weeks,” said Andrejka Bernatova, CEO of $DYNA ( ▼ 0.38% ) Dynamix, an oil and energy investment firm. “It’s going to take a sustained price at $80 or above for new production to take place.”

ADVERTISEMENT

One Shark Missed Billions… Another Saw This Coming

Imagine turning down Uber at a valuation of $10 million, only to watch it go public at over $80 billion.

That’s exactly what happened to Mark Cuban… a 799,900% return, gone.

But original Shark Tank investor Kevin Harrington built his career doing the opposite: spotting asymmetric opportunities before they go mainstream.

Like Uber turned vehicles into income-generating assets, Mode Mobile is turning smartphones into income streams.

They were named the #1 fastest-growing software company by Deloitte and have already helped their users earn and save over $1B.

Kevin Harrington invested early.

And at just $0.52/share, you can still get in before their potential IPO.

Potential Uber return for Marc Cuban does not take into account dilution.

The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period in 2023.

Please read the offering circular at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A Offering.

END OF ADVERTISEMENT

The Usual Suspects

  • Comcastaways: Every few years, big media and entertainment companies get bored and decide to shake thighs up to boost their share price. Well, after watching David Zaslav wipe 70% off the market cap of Warner Bros. Discovery $WBD ( ▼ 1.19% ) , and Shari Redstone wipe $17 billion - also about 70%, off the value of Paramount $PSKY ( ▲ 2.16% ) , only to be saved by nepomogul David Ellison and the deep pockets of his dad (and Oracle founder) Larry, it looks like Comcast $CMCSA ( ▲ 0.19% ) CEO Brian Roberts is heading down the same path. After failing to win the bidding for Warner, Comcast is spinning off its NBC Universal broadcast and programming unit from its core cable and telecom business just months after NBC had its own re-org, hiving the MSNBC and CNBC gabfests into a new company called Versant (no, it’s not a new alcohol-free bubbly wine). The news pushed Comcast stock up 4% on Monday, and raised the specter of a new round of media mergers. This may be good news for shareholders, who saw Comcast’s P/E ratio below that of nearly every other stock in the S&P 500. “Comcast now sheds its conglomerate discount and each company can adopt a capital structure appropriate for the times,” analyst Craig Moffett of MoffettNathanson wrote in a note to clients on Monday. It will take a while for the mechanics of the deal to close, but expect the media dealmaking chatter to begin. Already this year Charter Communications $CHTR ( ▼ 2.33% ) and Cox Communications $COXCF ( 0.0% ) are tying up a $34.5 billion merger, and Fox $FOXA ( ▲ 4.34% ) just bought Roku. Shares in Comcast are down nearly 30% in the past year. 

  • Paramount’s European Adventure (UK and EU) - the Paramount - Warner merger appears to have jumped one of the few remaining hurdles to its completion, offering some so-far unknown concessions to meet EU anti-trust and public access rules. But the EU is still examining whether the financing from Saudi and Qatari sovereign wealth funds amount to a foreign subsidy for the deal, worth $110 billion including assumed debt. The combined Paramount/Warner would be an entertainment powerhouse, uniting HBO, CNN, CBS, Paramount Pictures and Warner Bros studios. But a couple of sticking points remain. California Attorney general Rob Bonta is reportedly considering blocking the deal unless Paramount spins off CNN, and British culture minister Lisa Nandy said she is "minded to intervene” in the deal, which is Britspeak for seriously considering an investigation. That would add another 40 days to the timetable. 

  • Take it lying down? Many of the world’s top airlines are flying empty luxury seats because their new configurations haven't yet passed strict U.S. safety tests. The rules affect airliners from both Boeing $BA ( ▲ 3.62% ) and Airbus $EADSY ( ▲ 3.76% ) and airlines including Lufthansa $DLAKY ( ▲ 2.89% ) Delta $DAL ( ▼ 0.69% ) , United $UAL ( ▼ 1.92% ) , American $AAL ( ▼ 1.41% ) and KLM. The problem is that new offers, like locked cabins and lay-flat seats, can affect the way the human body reacts to a crash or inflight turbulence, or even how quickly passengers can evacuate a plane. The testing can take years, and some airlines are now pulling out the new seats and putting back old-fashioned first-class recliners. 

  • Dimon’s endgame: Is this the end of the road for Jamie Dimon, the tough-talking, f-bomb throwing, 70-year old CEO and chairman of JPMorgan Chase $JPM ( ▼ 0.11% ) ? The bank has named two senior bankers co-presidents, and given them each a $30 million retention bonus. Doug Petno and Troy Rohrbaugh appear to be jousting to see who follows Dimon’s 20-year run as the bank’s supremo. Previous top contender Marianne Lake, 56, said she’s leaving the bank. Not so fast, though. The new appointments will need time to be tested in their new roles, and the Wall Street Journal said people close to Dimon expect him to stick around for three more years, and then continue to kibbitz from his seat as executive chairman. JPM shares are down almost 3% since the announcement.

Tech Talk

  • If you can’t beat ‘em, grease ‘em. Following on reports that OpenAI $OPEAZZX ( ▼ 0.11% ) is postponing its IPO to next year, after SpaceX $SPCX ( ▲ 2.07% ) sucked all the cash out of the market, CEO Sam Altman has come up with novel idea for getting the federal government to buy in to his company’s plans to dominate the world of AI: Give the government 5% of the company. The Financial Times reports that Altman’s in talks with the feds, including Treasury Sec. Scott Bessent and Commerce chief Howard Lutnick to use the stake to fund a sovereign wealth fund for Americans affected by AI job displacement. The plan would require OpenAI’s competitors, including Anthropic, Google $GOOG ( ▼ 0.59% ) , Meta $META ( ▼ 4.67% ) , and Microsoft $MSFT ( ▲ 1.69% ) , to also hand over stakes to the feds, but none of them have signed on. Altman seems to be on the same page as Senator Bernie Sanders, who last month pledged to introduce legislation for a one-off tax of 50% on the stock of the largest AI companies. Sanders said the tax would create a $7 trillion fund generating hundreds of billions of dollars a year in direct payments to Americans and to health care, education and housing programs. “The benefits cannot simply go to the handful of wealthy corporations. They will be shared by the American people,” Sanders told the AP.

  • Meta’s compute pop (and fall): How do you make $160 billion in a single day? Rename your overhang as excess inventory. That’s what Meta $META ( ▼ 4.67% ) did this week when it announced it was creating a cloud computing business to sell its excess AI compute power to other businesses. Suddenly, it went from overbuilding data processing capacity to entering a growing business. That caused the stock to pop nearly 9% on Wednesday. But the numbers tell a slightly different story: Meta said it will spend $145 billion in capex this year, constructing data centers and buying GPU chips to train AI models. The cloud business reassured some shareholders that Meta might not lose so much on its AI buildout. Meta’s also already signed $47 billion worth of computing leases with data center builders Coreweave $CRWV ( ▼ 4.58% ) and Nebius $NBIS ( ▼ 5.92% ) , whose shares plunged 12% on Meta’s announcement that it was about to compete with them. So what’s it really about? Zuck seems to have taken a page from Elon’s playbook, when SpaceX $SPCX ( ▲ 2.07% ) announced it was leasing Colossus capacity to Anthropic and Google $GOOG ( ▼ 0.59% ) : If you overbuild and don’t have the demand (or even a decent AI to run), you can reduce your losses by renting out all that surplus inventory. If anyone else wants it. Then Zuckerberg told employees that AI agent development hasn’t accelerated as expected, and the stock fell around 5%.

The Short Stack

  • Steak and Eggs: With the U.S. beef herd at its smallest since 1951, farmers are finally getting decent prices for their cattle. But meat packers say they are hurting, losing about $300 per head. Worried about the small and medium-sized packers that slaughter and slice only about 15% of U.S. beef, the Dept. of Agriculture is promising them as much as $500 million in payments to keep working.The move comes as the Big Four U.S. packers, Brazil’s JBS $JBS ( ▲ 1.62% ) , Tyson Foods $TSN ( ▲ 0.69% ) , Cargill, and Brazilian-owned National Beef stand accused by ranchers of price-fixing to keep down the price of cattle, as beef prices hit all-time highs. Meanwhile, the feds have proposed a settlement to the Great Egg Price Fixing Scandal of 2022-2025, when three of the largest U.S. egg producers Cal-Maine $CALM ( ▲ 4.18% ) , Versova, and Hickman's Egg Ranch co-ordinated by phone and text message to inflate prices on the Egg Clearinghouse spot market. Under the settlement, the three will pay a total of $3.3 million in fines and donate 50 million eggs to food banks. 

  • Why not you? More than 440,000 Americans became millionaires this year, or about 1,200 every day, according to a new report from Swiss bank UBS. Most of that was due to stock market gains (the Dow $DJI ( ▲ 0.6% ) rose 13.4% in 2025, and the Nasdaq Composite $NASDAQ ( 0.0% ) rose 20.36%). On average, the American adult was worth $696,277 at the end of last year, just behind Switzerland. The U.S. now has 23.6 million millionaires. Felling rich? Don’t max out your credit cards just yet. The Fed’s tri-annual household survey says the median income for Americans was only $192,700 in 2022. That’s because a few outliers (We’re looking at you, Elon) can skew the average. The next Fed survey results will be out this fall. 

Trumplandia

  • Donald makes book, and JD makes book on books: Sometimes, it’s not friends in high places that you need, it’s simply being in high places. President Trump’s financial disclosure forms released this week show he made at least $2.2 billion in 2025, up from $622 million in 2024. The main source of all that money? Crypto deals. Trump’s holding in World Liberty Financial $WLFI ( ▼ 0.27% ) , founded by the son of Commerce Sec. Howard Lutnick, earned Trump $799 million, and the sale of those Trump memecoins? $636 million. If you held on to your Trump coin, it’s down 96% since it peaked in January 2025. Memberships and meals at Mar-a-Lago earned him $77 million, up $27 million from a year earlier. Coming in next year’s disclosure: The president’s income from a tungsten mining deal in Kazakhstan, which Trump personally approved. The U.S. government offered up to $1.6 billion to finance the deal. Who won the contract? A firm in which Don Jr. and Eric Trump, and Lutnick sons Brandon and Kyle, have an interest. (In fact, the New York Times found 14 mining companies, with some $8.9 billion of federal contracts or guarantees in which the Trump or Lutnick scions have an interest).  Twitter commentators have been having a field day with the numbers:

  • But even a step down the ladder, there’s money to be made. Vice President JD Vance has his cash spread among standard ETFs, and a stake of $250,000 - $500,000 in bitcoin, some venture capital investments, and between $1 and $5 million in royalties from his controversial memoir “Hillbilly Elegy.” He was a self-confessed “never Trumper” when he wrote and sold the book as a student at Yale Law School, and even considered voting for Hillary Clinton out of distaste for his future boss.

  • What Will Kevin Do? The June job numbers out this week won’t help the Fed with a rate cut argument. At 57,000 new jobs, the count was underwhelming and only half the 113,000 the Fed had expected. Even after revising the May number down to 129,000 new jobs from a first guess of 172,000, and seeing participation drop to 61.5%, its lowest since 2021, unemployment is at a sustainable 4.2%. “The labor market may be stable, but it exhibits a high degree of job growth concentration,” said EY Parthenon chief economist Greg Daco. The worst news in June was the leisure and hospitality sector losing 61,000 jobs, the largest decline since the pandemic, with weak seasonal hiring, despite the the World Cup. “The labor market is stuck in second gear,” Daco added, with labor demand remaining “selective” amid “substantial negative shocks to labor supply from demographics and net migration.” That leaves the Fed focused on fighting inflation. And where’s inflation? Last month’s 4.2% annual number is already dropping, and once oil prices hold steady at pre-Iran War levels, it will likely sink back to about 2.5%, as the economy simultaneously absorbs the full shock of last year’s tariffs, says Claudia Sahm, chief economist at New Century Advisers. In other words, “Nothing in this report would lead us to change our long-standing view that the Fed will remain on hold in 2026,” said EY’s Daco. So why are markets still nervous and why are yields on T-bills staying high? Maybe because Warsh’s new policy of issuing far less guidance than Jerome Powell or other Fed chiefs leaves little to work with. Does Warsh still think the Fed should cut rates because productivity will rescue us from inflation, as he told Congress (and Donald Trump) before his confirmation? “It is one thing to reduce the amount of communication and quite another to leave the markets completely in the dark about your reaction function,” says Ethan Harris. a former Fed Economist and current Fed watcher. Polymarket traders now overwhelmingly expect no more rate cuts in 2026.

(Polymarket)

  • More tariffs? Remember that US-Mexico-Canada Trade deal which replaced NAFTA? The one negotiated by Trump, who called it “the largest, fairest, most balanced, and modern trade agreement ever achieved?” Well, now Trump trade negotiator Jamieson Greer, says the U.S wants to scrap it. The accord was supposed to be renewed this year for 16 more years, but Grier says it can stay in place while talks continue on its “shortcomings” and U.S. trade deficits with its neighbors are resolved. Otherwise, the accord gets ripped up. That’s bad news for trade, and particularly for U.S. carmakers who’d worked NAFTA into their production but now pay tariffs on parts and assemblies that cross borders. 

  • And there’s that pesky trade agreement with Europe - the one that the EU just approved. Now President Trump is threatening to slap 100% tariffs on any European nation that taxes U.S. tech giants. How serious is he? Well the U.K. has been taxing U.S. tech firms including Google $GOOGL ( ▼ 0.58% ) and Meta $META ( ▼ 4.67% ) for several years now, and so far, Trump hasn’t put any new tariffs on them.

Want more Cheddar?

You’re clearly into smart people talking about even smarter things. Lucky for you, that's literally our whole deal at Cheddar. We interview the brightest minds in business, finance, and tech. If you'd like more in-depth analysis from interesting people, lcheck out our where to watch page and turn us on 24/7! Your wallet will thank you and so, more importantly, will your mind. But also your wallet. Remember that. 

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.