On Friday, while chatting with Kristalina Georgieva at the IMF meetings in Bangkok, Kevin Warsh talked up what he characterized as a once-in-a-generation investment boom.

Not so long ago, he told Georgieva, economists were of the view that secular stagnation was a fact of life — a macroeconomic inevitability that policymakers were powerless to address.

That view, Warsh said, was misguided. “There’s a lot we can do about it,” he declared. “Policy matters” and America’s “investment boom” is proof. “We have structural growth,” he went on. “That’s probably the most important thing that’s happening to the global economy on the upside.”

It was hard to ignore the barely-veiled allusion to Donald Trump’s “golden age” messaging. Warsh was less keen to point out that American households have rarely, if ever, felt worst about things.

The figure below plots this month’s record low for the current conditions component of the nation’s marquee household sentiment survey with the spread between the share of respondents in a New York Fed poll who said they expect to be better off a year from now and the share who said the opposite.

How’s that for a tight fit? Suffice to say… well, let me put it as a question one might pose to Warsh: What difference does an “investment boom” and “structural growth” make if they aren’t accruing to everyday people?

The whole point of public policy is (or should be) to improve people’s lives in a utilitarian way, which is to say to promote the greatest good for the greatest number. Whatever the merits of current policy, it’s not maximizing collective well-being, that much we can say with something approaching certainty. (The snide among you might gently note that hyper-capitalism’s not exactly famous for producing utilitarian outcomes.)

There are two main problems. The first relates to the deterioration of social capital in America (we’re “Bowling Alone” and perishing from “Deaths of Despair”), the other to inflation. Trump’s polarizing politics at the very least don’t help when it comes to restoring broken social bonds, and his wars (trade and shooting) have “succeeded” in reviving an inflation impulse that had mostly abated.

With the September CPI update in hand, we can now calculate inflation-adjusted earnings growth for last month. As the figure shows, it was negative to tune of 0.8%, the same as May and June, which were the worst months for real pay growth since 2023.

It’s not just tariffs and naval blockades pushing up prices, it’s the AI buildout behind Warsh’s great American investment boom. While the supply-demand imbalance for critical compute components (most obviously memory) has been great for corporate profit growth (just ask Micron), it’s not so good for households paying up for consumer electronics.

If you own a lot of SPY, the tradeoff’s no issue. So what if you have to pay a couple hundred bucks more for your next Apple product? Your Apple stock‘s up 25% this year, and thanks in large part to HBM prices, your equity index funds are up handsomely too (Micron accounted for 14% of S&P 500 profit growth in Q2, 19% in Q3 and is seem accounting for more than 20% in Q4).

The figure above, derived from the latest edition of the Fed’s sprawling triennial household finance survey (there’s more on that survey here), shows you the trajectory of net worth by income percentile. The highest-paid Americans scored the largest percentage gain from 2022-2025 and the same’s true for the wealthiest Americans (i.e., those with the highest net worth saw the largest percentage increase).

So… I don’t know, Kevin. Color me skeptical not so much about the idea that America’s experiencing an investment boom, but rather of the notion that the at-all-costs construction of energy-hungry data centers in pursuit of artificial general intelligence is the best answer to the question posed by frustrated economists during the secular stagnation era.

Indeed, this particular solution may turn out to be worse than the problem, particularly if the tail risk laid out in Anthropic’s IPO materials is realized.