Jonas Nahm
@jonasnahm.com
Associate Professor at Hopkins/SAIS. Former White House industrial strategy economist. Industrial policy, trade, climate, economic security. Views my own. DC | HNL. 🏳️🌈
Economics
40%
Political science
32%
Jonas Nahm
@jonasnahm.com
· 16h
Interesting counter-narrative to dominant story. Markets often get the direction right but can badly misjudge magnitude and timing. Worth listening if you are tracking industrial policy / energy transition. 9/9
Jonas Nahm
@jonasnahm.com
· 16h
The temporal mismatch cuts both ways - lots of generation coming online in next few years (solar), while bulk of data center demand weighted toward end of decade. 8/
Jonas Nahm
@jonasnahm.com
· 16h
Hardest part remains timing. Even if oversupply materializes, it's likely a 2030+ problem as demand ramps slower than build-out. Near-term dynamics are different: expiring IRA solar credits are pushing deployment now, potentially creating temporary surplus before data center demand ramps. 7/
Jonas Nahm
@jonasnahm.com
· 16h
None of this means AI isn't a major technological shift or that data center growth won't be substantial. But we've seen this pattern before - transformative technology + investment boom + temporal mismatch. Railroads, internet bubble, clean tech 1.0. 6/
Jonas Nahm
@jonasnahm.com
· 16h
If demand undershoots and we overbuild, who bears the stranded asset risk? Either utility shareholders or residential ratepayers. Political economy of subsidizing Big Tech infrastructure through consumer electricity bills is...complicated. 5/
Jonas Nahm
@jonasnahm.com
· 16h
Forward markets aren't reflecting this explosive demand either. Texas power curves barely moving despite forecasts of 30 GW additions to an 87 GW peak market. Natural gas futures are inverted - declining through end of decade. Markets pricing in a very different scenario. 4/
Jonas Nahm
@jonasnahm.com
· 16h
Demand forecasts suggest data centers need ~50 GW of new capacity by 2030 (moving from 45 GW today to 95 GW). But utilities have firm commitments for ~110 GW already in the pipeline. That's 2x what third-party estimates say we'll need. 3/
Jonas Nahm
@jonasnahm.com
· 16h
The consensus view: AI requires massive power buildout, data centers are the new growth driver, utilities shifting from sleepy dividend plays to secular growth story. But the supply-demand math tells a different story. 2/
Jonas Nahm
@jonasnahm.com
· 16h
The Utilities Analyst Who Says the Data Center Demand Story Doesn't Add Up
Utilities may be building twice as much power as needed.
www.bloomberg.com
Listened to this Oddlots episode with utilities analyst Andy DeVries this morning. Some useful pushback on the data center/AI power demand narrative that's worth working through. 1/
www.bloomberg.com/news/article...
www.bloomberg.com/news/article...
Jonas Nahm
@jonasnahm.com
· 17h
The piece's core insight holds: you can't have tariffs (weak dollar), Wall Street dominance (strong dollar), and financial deregulation (instability) all at once. Eight months later, still no resolution—just repeated retreats when bond markets spike.
Jonas Nahm
@jonasnahm.com
· 18h
Worth reading the full piece for the historical analysis of how we got from Bretton Woods to the offshore dollar system—and what's at stake in the current moment. 12/12
Jonas Nahm
@jonasnahm.com
· 18h
Trump wants to restore American manufacturing by weakening the very system that funds US imperial power. As Murau puts it, "the US risks deepening its condition of imperial decline" by eroding an international system structured in its favor. 11/
Jonas Nahm
@jonasnahm.com
· 18h
4. Transnational payment union: Central banks rebuild cooperation through the BIS, using SDRs as a new international unit of account. Resembles Bretton Woods but without US dominance. (Requires regime change in Washington—unlikely.) 10/
Jonas Nahm
@jonasnahm.com
· 18h
3. Monetary anarchy: If the US defaults on Treasuries or the Fed stops backstopping the system, we get chaos. Each country adopts different monetary arrangements. Big Tech sees an opening for private payment networks. 9/
Jonas Nahm
@jonasnahm.com
· 18h
2. Weaponized globalization: Wall Street wins. Financial globalization continues but the Fed swap network becomes even more coercive—dollar access only for those who submit to Washington's demands. 8/
Jonas Nahm
@jonasnahm.com
· 18h
1. Competing monetary blocs: Tariffs fracture global trade. Dollar retreats. Regional currencies rise (RMB in Asia, EUR in Europe). New geopolitical alignments form around monetary zones. 7/
Jonas Nahm
@jonasnahm.com
· 18h
So what happens when Trump's team tries to fix a system they fundamentally misunderstand? Murau sketches four scenarios: 6/
Jonas Nahm
@jonasnahm.com
· 18h
When crises hit, everyone scrambles for dollars and the Fed becomes global lender of last resort through swap lines. This isn't a burden—it's the infrastructure of hegemony. The US can fund massive deficits by selling Treasury securities branded as the ultimate "safe asset." 5/
Jonas Nahm
@jonasnahm.com
· 18h
We live in an offshore dollar system where most dollar creation happens outside US borders. Private banks worldwide create dollar-denominated instruments, making the dollar a partially denationalized currency that amplifies American power. 4/
Jonas Nahm
@jonasnahm.com
· 18h
But this gets the causality backwards. The dollar's dominance doesn't force America to run trade deficits—it allows the US to import far more than it exports while remaining the world's financial hegemon. 3/
Jonas Nahm
@jonasnahm.com
· 18h
The MAGA view claims the dollar's reserve status hurts America: it makes exports too expensive, imports too cheap, and hollows out manufacturing. The solution are tariffs, dollar devaluation. 2/
Jonas Nahm
@jonasnahm.com
· 18h
Trump's Dollar | Steffen Murau
Calls to weaken the dollar have become a feature of Trump's second term. But in today's credit-based system, where the US currency is often created offshore, nativist politics cannot be translated int...
www.phenomenalworld.org
New essay by @steffenmurau.bsky.social on Trump admin's misunderstanding of dollar hegemony—and four possible futures for the international monetary system. 1/
www.phenomenalworld.org/analysis/tru...
www.phenomenalworld.org/analysis/tru...
Jonas Nahm
@jonasnahm.com
· 19d
6/ This is a consumption tax on imported goods, with all the distortions that entails. Yet of course it's being presented as extracting concessions from trading partners while generating revenue at no cost to American households.
Jonas Nahm
@jonasnahm.com
· 19d
5/ The policy implication is straightforward: the $200B customs revenue surge represents wealth transferred from American businesses and households to Treasury—not from foreigners to Americans.
Jonas Nahm
@jonasnahm.com
· 19d
4/ Why don't exporters absorb tariffs? Several factors: alternative markets exist (goods redirected to EU, Asia); a 50% tariff is nearly impossible to overcome via price cuts; sticky supply chains give existing suppliers pricing power; expectations tariffs may be temporary.
Jonas Nahm
@jonasnahm.com
· 19d
3/ Event studies on Brazil (50% tariff, Aug 2025) and India (25→50%) show that Brazilian exporters didn't reduce dollar prices post-shock. Indian export data is even cleaner: FOB prices to US unchanged vs. EU/Canada/Australia destinations.
Jonas Nahm
@jonasnahm.com
· 19d
2/ Using 25.6M shipments worth ~$4 trillion, they show US import prices rose nearly 1-for-1 with tariffs while trade volumes collapsed. Exporters didn't cut prices to maintain market share—they just shipped less.
Jonas Nahm
@jonasnahm.com
· 19d
America’s Own Goal: Who Pays the Tariffs? - Kiel Institute
www.kielinstitut.de
1/ New Kiel Institute study on 2025 tariffs. The headline finding won't shock anyone who studied 2018-19 tariffs: near-complete pass-through to US importers. Foreign exporters absorbed ~4% of burden; Americans paid ~96%.
www.kielinstitut.de/publications...
www.kielinstitut.de/publications...
Reposted by Peter Holmes
Jonas Nahm
@jonasnahm.com
· Dec 31
10/ The lesson for industrial policy: you can’t tariff your way to competitiveness. Competitiveness today is about where learning happens — and right now, much of it is happening in China.
Jonas Nahm
@jonasnahm.com
· Dec 31
9/ @cornelban.bsky.social argues that the choice facing Europe’s auto industry isn’t integration vs sovereignty, but integration vs slow industrial decline. Carmakers know this — even if politics hasn’t caught up yet.