The anticipated economic boom from artificial intelligence has stalled, mirroring a historical paradox, while a crackdown on immigration is reshaping the labor market, according to recent reports. Simultaneously, a billionaire's decision has blocked the potential use of a Texas warehouse as an ICE detention center, adding another layer to the evolving economic and political landscape.
In 1987, economist Robert Solow observed a similar phenomenon with the advent of early computing technologies, when productivity growth slowed despite technological advancements. According to a Fortune article, the initial promise of increased productivity from new technologies like transistors and microprocessors failed to materialize, leading to what became known as Solow's productivity paradox. This time, the AI boom is facing a similar challenge. Thousands of CEOs admitted AI had no impact on employment or productivity.
The current AI landscape is also facing a "software-mageddon" or "SaaSpocalypse," as software stocks have experienced a significant selloff. JPMorgan analysts noted that software companies lost approximately $2 trillion in value over the past year. However, some market veterans view this as a "generational" buying opportunity, as reported by Fortune.
Meanwhile, a crackdown on immigration has significantly impacted the labor market. A Goldman Sachs analysis revealed an 80% collapse in net immigration to the U.S. due to stricter visa bans and increased deportations during a hypothetical second term for President Donald Trump. The report, released on February 16th, warned that this contraction is fundamentally altering the nation's labor supply and lowering the threshold for job growth needed to maintain economic stability. Net immigration, which averaged about 1 million people per year in the 2010s, fell to 500,000 in 2025 and is projected to decline further.
In Texas, a billionaire Trump supporter blocked the potential sale of a warehouse for use as an ICE detention center. According to Fortune, Edward Roski Jr., whose company Majestic Realty was approached by the Department of Homeland Security to sell a 1-million-square-foot facility, confirmed that the deal would not happen. The facility could have held up to 9,500 beds.
The situation echoes historical patterns, as noted by George Santayana's observation that those who do not learn from history are doomed to repeat it. According to another Fortune article, the current AI boom is reminiscent of the early industrial revolutions, where inventions like the spinning jenny and steam engine reshaped the world.
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