Congressman Josh Gottheimer just disclosed roughly $1.5M–$3M in combined Microsoft ($MSFT) options purchases and sales.
He’s a former Microsoft executive and the top Democrat on the House’s NSA and Cyber Subcommittee.
His joint Morgan Stanley account bought October calls at $330 and $340, while selling December calls at $335 and $340.
The trades happened August 14. The disclosure came September 14.
A new academic paper just dropped and it should make every CEO uncomfortable.
It’s called “The AI Layoff Trap.”
The argument is simple and brutal.
Companies are racing to replace workers with AI to cut costs and beat competitors.
Every firm does it because if they don’t, the next firm will.
That part everyone already knows.
Here’s the part no one talks about.
The workers you just laid off are also your customers.
When they lose their income, they stop buying. Less demand means less revenue. Less revenue means more cost-cutting. More cost-cutting means more layoffs.
You see where this goes…
The paper calls it an “automation arms race.”
Rational firms, acting in their own interest, collectively destroy the very demand they depend on.
Every company is doing the right thing for itself and the wrong thing for the system.
The researchers looked at every proposed solution.
UBI? Does not fix it. Upskilling? Does not fix it. Worker equity stakes? Does not fix it. Capital taxes? Does not fix it.
The only thing that actually works, according to their model, is a Pigouvian automation tax.
Basically a penalty on each job a company replaces with a machine.
Whether you agree with that solution or not, the problem they are describing is already happening.
US companies have announced over 170,000 job cuts citing AI this year alone.
The economy can only absorb so many of those before the math stops working.
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