Trump’s MAGA Inc. Super PAC has now agreed to pay for the repurposed Trump campaign ads that have been airing nationwide, which had been marked as paid for with taxpayer money — more than $10 million worth of ads on cable and network TV since September. Is this a rare admission of defeat, or damage control?

The main Democratic Senate Super PAC has been ramping up Epstein-related attack ads, with AdImpact counting 69 Epstein ads this cycle worth more than $36.6 million. N…

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Monica de Bolle is a Senior Fellow at the Peterson Institute for International Economics. Kathryn Anne Edwards is a labor economist and host of the Optimist Economy Podcast.

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The Iran war just reached British soil. The U.S. has abruptly pulled all B-1 bombers from a UK air base after commanders received urgent intelligence about an Iran-backed plot against the facility. British police had already arrested five men in vans near the base — later released on bail but still under investigation — and a dual British-Ira…

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We know polling errors are unpredictable, October surprises happen, and even without those, the Senate is far from a sure thing.

But the odds are that Hakeem Jeffries will be the new Speaker of the House in January, and with a functional majority behind him.

If voters reject the Republicans in November, it will be in part because they are crying out for Congress to take some action: this is a group of people with a 16% approval rating (it fell to a jaw-dropping 10% in April), and just had its least productive session since at least 1973.

And while current House leadership should be held accountable for that, less than a third of Americans have approved of Congress for decades. There were around as many Democrats presiding over the House as Republicans over those years.

Whatever happens in November, the Democrats have a big opportunity to get something done for a public that is desperate for that to happen.

The next question is what? And the good news for Democrats is that the Wall Street Journal just laid out a complete agenda for the left on three major economic items: healthcare, taxes, and affordability.

They come from a survey that the Journal conducted last week, and it’s the single most important policy document for Democrats to hold on to through 2028.

Today, we’re exploring that agenda, and the Democrats who want to do it justice.

Programming note: Raging Perspective is back on Wednesday. Join Jessica and Aaron Parnas live at 12PM for an unscripted, unfiltered, unedited conversation about the issues defining this era. And as always, we’re also taking your questions! Ask away in the comments section below.

Healthcare: Voters want better coverage, lower prices, and Medicare for All

Republicans kicked 13 million people off Medicaid in their “Big, Beautiful Bill” last year, and that was just the tip of the iceberg.

Tightened eligibility and enrollment requirements, messing with states’ taxes and payments, and lower Obamacare subsidies were also major parts of the package.

Undoing those policies is key to most Democratic candidates’ pledges this cycle. Just about all the major candidates are all campaigning on undoing Medicaid cuts, and some want to repeal the bill altogether.

Some candidates are targeting specific parts of our broken healthcare system. Sherrod Brown, for example, is focused on drug prices. In a campaign stop in July, Brown compared drug prices in Ohio to nearby Canada: “You pay more than that same drug, the same dose, the same maker of the drug does overseas in another country.” He wants comprehensive reform of that system.

As the Journal’s poll reveals, that’s something Americans want too: around nine-in-ten voters want to ban surprise medical bills, require health insurers to cover doctor-prescribed medicines and services, and impose caps on drug prices.

Trump’s “TrumpRX” drug discounting website gets positive marks from voters – three quarters say they want a service like that – but Americans want to go further.

Nearly six-in-ten say they want Medicare for All, a sweeping health policy reform that Democrats are increasingly embracing. Maine’s Troy Jackson, Michigan’s Abdul El-Sayed, and Minnesota’s Peggy Flanagan are at the top of the heap this cycle, and it’s bound to be a hot issue in the 2028 primaries.

Taxes: Higher taxes for the wealthy were surprisingly popular

It’s been more of the same on taxes during Trump’s second term: an extension of the 2017 tax cuts that disproportionately benefited the wealthy (not just us saying it: Trump’s tax law was “skewed to the rich, expensive, and failed to deliver on its promises, according to the Center on Budget and Policy Priorities).

Democrats have been clear-eyed on this topic. James Talarico told attendees at a rally in August that it was “time to repeal the Big Ugly Bill’s tax breaks for the top 1%;” he is running on a fairer tax system that would impose higher taxes on large corporations, including when they announce stock buybacks, and on billionaire tax loopholes.

There is surprisingly broad support for going after billionaires in the Journal’s poll: 73% of voters said they wanted higher taxes on people making over $1 million, and 61% wanted a new tax on Americans with a net worth above $1 billion (that idea will be tested in a California ballot measure this November).

And yes, even taxing people’s second homes is broadly popular: 59% said they’d like to see a tax on “luxury properties” when they’re used as a vacation or second home.

Affordability: Voters want help on housing, interest rates and child care

Then there’s housing, which remains the biggest hidden issue in this election.

Republicans made some progress towards increasing housing supply with their 21st Century Road to Housing Act (you’ll recall that this was the bill enacted with bipartisan support in the Senate, only for Trump to call off a signing ceremony because they wouldn’t pass his “SAVE America” Act with it).

That bill aims to increase housing supply by reducing regulatory barriers, modernizing housing programs, and expanding access to housing. All good things, and something the Democrats can point to as Republicans try to paint their opponents as the “party of no.”

Democratic candidates are making the case on day-to-day affordability issues, led by gas and groceries. Josh Turek in Iowa is a great example. He’s telling voters he’s “laser-focused on costs, corruption, kitchen table issues;” Mary Peltola wants to focus on these costs plus Alaska’s already-expensive utility bills.

That certainly makes sense for their campaigns.

Voters, again, are receptive to an even bigger range of reforms: restricting institutional investors from buying up homes, capping child care costs, limiting rent increases, and raising the minimum wage to $20.

And a quick note on what’s not working: $5,000 checks. Yes, the “populist” idea that Trump floated at his national convention this summer is not even vaguely popular with voters. Only 23% agreed with the idea at all.

That’s voters’ agenda for Democrats. This January, they’ve got a chance to enact it.

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$30,000

That’s how much the world’s most elite sheepdogs sold for at auction on a farm in England.

1. Anthropic’s prospectus shows a $42 billion loss, and OpenAI shelves a model over safety concerns

2. Higher rates are pressuring stocks and making bonds attractive again

3. Apple’s new CEO is cutting managers and shipping new products faster

Anthropic’s Prospectus Shows a $42 Billion Loss Ahead of the Biggest IPO Ever

Anthropic’s IPO prospectus leaked last week, and the numbers are staggering. According to Reuters, the company brought in $4.6 billion in revenue last year, up 1,088% from 2024. It also lost $42 billion. About $34 billion of that loss is a non-cash accounting charge tied to financing that can convert into shares. Without that charge, Anthropic still spent more than $8 billion running the business, about 60% more than SpaceX lost the year before its IPO.

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Anthropic spent $7.3 billion on compute and infrastructure in 2025, up 190% year over year. Capital expenditures are expected only to accelerate: Anthropic estimates it will spend $518 billion on cloud, compute, and infrastructure in the coming years.

Anthropic faces a host of challenges, from unprecedented operating costs to dangerous and unpredictable autonomous agents. The risk section of its S-1, as reported by Reuters, is more than double how many pages are used to describe what the company actually does.

Still, Anthropic is expected to go public at a valuation of $2 trillion in November, making it the most highly valued IPO of all time.

According to NYU professor (and friend of the pod) Aswath Damodaran, Anthropic would need to make $1.2 trillion in annual revenue within 10 years to justify this valuation. Damodaran estimates that the entire current market for AI products and services is roughly $250 billion.

It was also a busy week for Anthropic’s biggest competitor. OpenAI announced it would not release its latest AI model, GPT-6.1 Astra, because of safety concerns. It reportedly showed high levels of deception and was able to evade human oversight.

OpenAI also had its developer day, where it launched Dots, a competitor to Meta’s Muse agent. It is available only on the ChatGPT Pro plan or the Business Premium plan, and the rollout was fraught with awkward moments — including when OpenAI’s CFO, Sarah Friar, accidentally referred to Dots as Muse in a live TV interview.

I’ve said this before: I don’t think we have an AI bubble infecting the whole market. Look at Nvidia’s valuation, which has come down significantly. But we do have an AI lab bubble. There’s too much excitement about Anthropic and OpenAI because they’re new and sexy. But they still haven’t figured out their business models. They’re some of the most unprofitable businesses of all time, and that isn’t priced in.

Economic conditions shape market dynamics. But you know what else matters? Vibes and trust. And right now, the vibes have soured. It’s becoming increasingly clear that people actually dislike AI, and I don’t just mean data centers.

Students and parents are pissed that AI is making us dumber. Gen Alpha’s newest insult is “that’s so AI.”

Tech has become a less popular career choice for young people. In 2022, the most attractive employers for undergrads studying business were Google, Apple, and Microsoft. Last year, they were JPMorgan, Goldman Sachs, and Morgan Stanley.

In 2025, 32% of Americans had little to no trust in Big Tech. This year, that number jumped to 41%.

Hollywood has noticed. Four films about tech founders come out this fall, and none of them are flattering.

Bad vibes won’t stop people from using AI. But they will hurt AI companies trying to go public. Anthropic’s numbers don’t support a $2 trillion valuation. They need investor enthusiasm, and the public is moving the other way.

At $2 trillion, Anthropic would be more valuable than Meta and more than twice as valuable as JPMorgan. Its revenue growth has been remarkable, but this valuation doesn’t take into account the risks it faces.

Start with customer concentration.

Higher Rates Are Pressuring Stocks and Creating an Opportunity in Bonds

The third quarter ended last week, and a lot has changed in the markets. While macroeconomic data still looks strong — GDP was revised up to 2.2% growth and the unemployment rate has hovered near its 10-year average — bonds tumbled and stocks had a worse quarter due to concerns about higher rates and AI safety.

On the surface, the stock market looks healthy. The S&P 500 has increased 12% so far in 2026, putting it on pace for its fourth consecutive year of double-digit gains. The rally has become increasingly narrow, however. Close to 60% of S&P 500 companies are in a bear market right now, which means their stock is down 20% or more.

In fact, since July, only five stocks — Microsoft, Meta, Apple, Alphabet, and Nvidia — have contributed 93% of the S&P 500’s gains.

Earnings have stayed strong across sectors: Even excluding the Magnificent 7, the S&P 493 grew earnings 31.8% in Q2 2026, the fastest pace since Q4 2021. But this strength hinges on AI. Goldman Sachs estimates half of earnings growth this year will come from AI investment.

While earnings grew, stocks and bonds came under pressure due to rising interest rates. The 10-year Treasury yield hit 5.3% in the third quarter, its highest level since 2007, and the Fed raised rates for the first time since 2023. When investors can earn 5.3% on a “risk-free” Treasury, they demand a higher return for holding stocks, which means paying less for each dollar of earnings.

Higher yields also mean lower bond prices. Long-term Treasury bonds declined nearly 8% over the course of the quarter, and the Bloomberg US Aggregate Bond Index fell 4%.

Falling bond prices hurt existing investors, but they also create an opportunity. With yields above 5% on maturities of five years and longer, the risk-reward profile of owning bonds looks increasingly attractive. Buy a 10-year Treasury at current levels, and if yields rise another percentage point over the next year, you’d lose about 1.5% after interest. If yields fall a point, you’d make about 13%.

Investors are responding: Flows into bond funds so far this year have already outpaced those of every full year since 2021, according to Morningstar.

The market has shifted. Over the past three weeks, at least six companies have postponed their IPOs: Holtec, Amaero, Aggreko, SB Energy, Bamboo Insurance, and Oura. Most of them blamed “market uncertainty.”

There’s a lesson here for young entrepreneurs and professionals:

I think it’s time to buy bonds. Yields are just too high to ignore.

Apple’s New CEO Starts With Cost Cuts, and a New Smart Home Device

John Ternus is officially one month into his tenure as Apple’s CEO, and he’s starting to shake things up. He’s reportedly planning layoffs to eliminate middle-management roles and speed up the company’s product release schedule.

Ternus is also eyeing a bigger push into the smart home market. There is white space in home electronics, as smart speakers haven’t achieved the kind of mass adoption that other personal electronics have.

Apple’s next device, which is expected to be released in mid-October, is a smart hub designed to recognize household members and show each one personalized information. For example, the device would show each family member their own personal calendar, messages, and notes. It would know to switch to another view when someone else walks up to it. It will also support Siri and FaceTime calls.

Notably, OpenAI’s first device is also a smart home speaker. It is expected to be released sometime in 2027.

Apple shares hit an all-time high in mid-September and have returned 22% year to date.

Apple is great at developing talent, and I’m already impressed with Ternus.

Apple is trading at 38x earnings. Meta is at 27x, and Microsoft and Nvidia at 29x. That’s a ridiculously expensive valuation, and to sustain it, I want to see

1. Google pushed AI into schools — and even students say it’s gone too far

2. Chinese couples are turning wedding videos into epic productions

3. 2026 has been a record year for $100 million listings

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In my next life, I’m coming back as a Navy Seal, Broadway dancer, or chiropractor. However, in this life, I should have gone into insurance. Yeah … insurance. If you meet someone who has a middling IQ, exceptional EQ, and is making $600k/year, there’s a decent chance they’re in insurance. This industry thrives by tapping into an instinct: fear. We’ll gladly suffer a series of guaranteed losses to avoid the possibility of a catastrophic one. Nowhere is this more evident than with health insurance. Of the wealthy nations at this year’s World Cup, the U.S. is the only one that doesn’t guarantee healthcare.

In many industrialized nations, employers play a small role, via payroll deductions, in funding universal coverage, but only in America is employment tied directly to that coverage, meaning employers can shift rising healthcare costs to labor, while workers who lose their job also lose their coverage.

For people under 65, employer-sponsored plans are the leading source of health insurance, providing benefits to approximately 165 million American workers and their families. Without reducing benefits, premiums for employer-sponsored plans are projected to increase this year by an average of 11% YoY — the steepest rise in two decades and more than 3x the rate of inflation. (Prof G Media’s premiums are increasing 9% YoY. We’re seeing a slightly smaller jump thanks to the Professional Employer Organization that handles our payroll, taxes, etc., allowing a firm like ours with fewer than 50 employees to participate in a larger plan.) Meanwhile, many companies are shifting a greater share of their costs to their employees, with the average worker paying 8% more YoY to cover higher payroll deductions for premiums and out-of-pocket charges including deductibles and copays. If you’re getting the feeling that America’s private health insurance market is a drag on businesses and workers, trust your instincts.

Subsidizing Cost Increases

When a market fails, our tendency is to provide demand-side subsidies. If healthcare is unaffordable, the logic goes, we should subsidize access, helping more companies and people pay for it. The demand-side approach feels (morally) right, directing help toward those who need it. But because demand-side solutions do nothing to control costs, subsidies are akin to pouring fuel on a flame. Actually, it’s worse than that. Between 2011 and 2024, the average insurance premium increased by $3,143 (78%), while health spending per person rose by $2,844 (84%), according to an analysis by Yale economist Zack Cooper and University of Wisconsin Business School professor Stuart Craig. Over the same period, insurer markups — the portion of the premium that covers insurance companies’ administrative costs and profits — decreased from 19% to 15%. The growth in health spending accounted for 91% of the overall growth in average premiums. “We found that health insurance premiums increased nearly dollar-for-dollar with health spending,” Cooper said.

That’s Where the Money Is

Over a 40-year career, Willie Sutton robbed more than 100 banks, stealing an estimated $2 million (roughly $20 million in today’s dollars) by the last time he was apprehended, in 1952. According to legend, when a reporter asked him why he’d hit all those banks, Sutton said, “Because that’s where the money is.” If he were alive today, Sutton would likely have directed his talents toward the healthcare industry. Total U.S. healthcare spending makes up 18% of GDP, and that’s expected to rise to 20% by 2034. Healthcare is projected to account for 37% of all new jobs created through 2035, according to data from the Bureau of Labor Statistics. Not all growth is good growth, however. An aging population and the growing prevalence of chronic conditions — heart disease, cancer, diabetes — are the primary drivers.

Several trends are sending healthcare costs higher. AI, which many had hoped would lower administrative costs, is actually increasing reimbursements paid by private insurers. Providers are using AI to better document care, meaning the same healthcare interactions generate more billing codes and greater profits. Increased demand for GLP-1s is also a factor, fueling an 81% increase in pharmaceutical spending to treat obesity and a 13% increase in spending on diabetes treatments, according to a PwC report. Greater demand for mental health services is also raising costs, with utilization increasing 10% from 2023 to 2024 and surging 62% since 2018. Finally, the No Surprises Act, which was meant to protect patients from unexpected out-of-network bills, has inflated costs, because providers are using its arbitration provision to dispute reimbursements and winning 88% of the time. To save money, some employers are increasing employee premium contributions and/or reducing benefits, including coverage for GLP-1s. Meanwhile, the share of companies turning to Health Reimbursement Arrangements — essentially, stipends that let employees buy their own coverage on the open market — increased 53% YoY in 2026.

All of this is happening against the backdrop of industry consolidation. From 1998 to 2023, there were more than 2,000 hospital mergers. The share of hospitals operating independently declined from 90% to 31% from 1970 to 2024, and now 9 out of 10 U.S. hospital markets are classified as “highly concentrated.” Meanwhile, only 42% of physicians work in an independent physician-owned practice — down from 60% in 2012. A 2025 HHS analysis found that hospital mergers in concentrated markets can raise prices up to 65%. Willie Sutton needed a gun and a getaway car. Today’s health systems just need to merge their way toward a captive market.

Scarcity vs. Abundance

Every election cycle, candidates tell Americans their healthcare system is expensive and broken. We spend 2x what other OECD nations spend, and by that metric should be the healthiest nation on Earth, but instead we achieve worse results than our peers. “The U.S. continues to be in a class by itself in the underperformance of its healthcare sector,” researchers at the Commonwealth Fund wrote in a 2024 report. For those in the back, that’s the wrong kind of exceptionalism. As it turns out, we’re also exceptional when it comes to the scarcity of our healthcare supply. According to federal data, 92 million Americans live in an area where there’s a shortage of primary care. The U.S. produces just 8.6 new medical graduates per 100,000 people, well below the OECD average of 15.

Another sign of scarcity? We average 2.8 hospital beds per 1,000 people, compared to the OECD average of 4.3. Hospitals, clinics, and doctors’ offices account for 52% of total healthcare expenditures, compared to 8% for drug costs. Talking about drug prices wins elections, as patients typically pay for prescriptions out of pocket. Addressing provider costs by unblocking supply bottlenecks makes for a lousy stump speech, but good policy.

So what’s the fix? The Niskanen Center has a blueprint, and it comes down to one word: more. More doctors, more clinics, more competition. Start with the pipeline. Congress froze Medicare-funded residency slots at 1996 levels, so we’re training the same number of doctors for a country with 70 million more people. In 2023, Congress added 1,000 residency slots over a five-year period — a good start, but we need more doctors, and we need to steer them toward primary care, especially in underserved areas, where the shortage is worst. The best way to do that, as my friend Mark Cuban has argued, is to make medical school free while empowering universities to require students to work for a stint where shortages are most acute. Next, remove local barriers to practice so labor can freely move where demand is greatest. Only 30 states grant nurse practitioners full practice authority, while state licensing laws restrict the supply of primary care doctors by an estimated 27%. We should also welcome foreign-trained providers. This year nearly 12,000 foreign-trained doctors applied for U.S. residency. More than 5,000 didn’t get one, and without a U.S. residency, most states won’t let them practice. Perversely, some of those doctors attended American medical schools but were forced to return to their home country because they couldn’t get a visa. Meanwhile, an estimated 263,000 immigrants and refugees with undergraduate degrees in health-related fields — mostly nurses and physician assistants — are underutilized, due to licensing restrictions. This isn’t a labor shortage, it’s an oversupply of red tape.

We’re also driving up costs by restricting the supply of hospitals. Thirty-five states still have “certificate of need” laws, which let incumbent hospitals veto future competitors. Imagine Chipotle needing Taco Bell’s permission to open a store. The supply crunch is further compounded by healthcare costs that vary widely for the same services. Here’s how: Medicare pays a hospital-owned clinic nearly double what it pays an independent practice for identical care. So hospitals spent years buying up doctors’ offices, hanging a new sign on the door, and sending taxpayers a bigger bill … for the same service. Paying the same rate for the same service — i.e., site-neutral payments — removes one of the biggest incentives for consolidation. It would also save Medicare an estimated $170 billion over a decade.

Medicare for More

We often frame healthcare reform as a choice between public and private solutions. But that’s misleading. Employer-based plans, as well as plans purchased via the Obamacare exchanges, are both heavily regulated and heavily subsidized, making healthcare the most favored sector in the tax code. In 2025 taxpayers poured $512 billion into the healthcare industry through Obamacare premium tax credits and deductions for employer-based premiums, certain medical expenses, and health savings accounts designed to derisk individuals with high-deductible plans. As economist Paul Krugman wrote in August, “the government’s role is so large that U.S. healthcare is better described as partially privatized socialism than as anything resembling a free market.”

I’ve argued in favor of expanding Medicare slowly by lowering the eligibility age by two years every year for the next decade. That would reduce premiums for employers, since people ages 45 to 64 register 32% of healthcare spending, compared to 31% for those 44 and younger. It would also set free the 1 out of every 4 workers who say they’re “locked” into their job because of healthcare. With more enrollees and legal reforms, Medicare will have greater leverage to negotiate lower prices. Medicare is also more efficient, with just 1.3% of its spending going to administrative costs. Medicare Part D (prescription drugs) and Advantage plans, both of which engage private insurance companies to manage benefits, spend 8% and 17%, respectively, on administrative costs.

But as long as we keep subsidizing inefficient, wildly profitable private insurance, costs will keep climbing across the board. Expanding Medicare while propping up the private side is like flooring the gas with your other foot on the brake: There’s lots of noise, the smell of burning rubber, and you go nowhere. Insurance sells fear. American healthcare monetizes this fear, as we’ve built the only system in the developed world where losing your job is a medical emergency.

We need less insurance, and less fear. And the cheapest way to reduce fear is to stop manufacturing it: Let’s kill private insurance subsidies and embrace Medicare for More.

Life is so rich,

P.S. In the minds of many Americans, rising costs frequently reverse-engineer to private equity. Prof G+ paid subscribers can catch my Deep Dive on America’s favorite corporate villain here.

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Meanwhile, the EU and Canada are reportedly planning to announce a sweeping new partnership at the end of October, covering digital trade, critical minerals stockpiling, and more — a direct response to Trump’s trade war. Is this a winning strategy?

Yesterday, Defense Secretary Pete Hegseth used his “State of the Force” address…

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He explains how reduced U.S. support is shaping the war, why Ukraine’s fate matters for Taiwan and nuclear proliferation, and what Canada’s response to Trump reveals about standing up to intimidation. Plus, why he sees the upcoming midterms as a critical test for America.

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Madison Mills is a senior AI reporter at Axios. Justin Wolfers is a Professor of Public Policy and Economics at the University of Michigan and the founder of Platypus Economics.

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Meta’s new AI assistant, Muse, promises to do more than answer questions. It can shop, handle tedious tasks, and potentially find money you didn’t know you were owed. Jack looks at why Meta is giving it away, what happens to businesses that profit from customer inertia, and whether AI agents could put a dent in the “annoyance economy.” Plus, investor JC Bahr-de Stefano shares what happened when he let an AI agent try to score a hard-to-get dinner reservation.

Want to be featured in a future episode? Send a voice recording to officehours@profgmedia.com, or leave us a text/voicemail at (201) 472-3656‬.

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Jessica Tarlov and Aaron Parnas are back for Raging Perspective with 35 days until the midterms.

They open with a bombshell recording obtained by the New York Times: Ken Paxton, the Republican Senate nominee in Texas and longtime Trump ally, is privately admitting that Trump may be hurting him and other Republicans politically. In the recording, Paxton says his numbers — and everyone else’s — dropped after the recent Trump-led GOP “midterm convention” in Dallas. How bad is this for Paxton — and what does it mean for the Texas Senate race?

Former special counsel Jack Smith testified before the Senate Judiciary Committee yesterday, as Senate Republicans hoped to secure a public humiliation of Trump’s political enemies. But a moment between Smith and Senator Eric Schmitt (R-MO) went viral — and not for the reasons Republicans wanted. Aaron and Jessica react, with an eye toward the expression on Katie Britt’s face.

Trump is working overtime to make “superintelligence” a thing. All executive branch departments and agencies are now required to use that phrase instead of “artificial intelligence,” a change announced after a White House lunch with AI — or is it SI? — leaders. The tech leaders signed what Trump called a “morally binding” agreement to establish AI safety standards — a one-page, voluntary pact calling for four layers of controls and auditing, including internal monitoring, outside evaluators, and independent board oversight. Aaron breaks down why Trump is doubling down on AI when it’s becoming increasingly unpopular. Also, the U.S. launched its own branded AI chatbot: America.gov. Aaron shares what he’s learned from the site so far.

Plus, a quick check in on the situation in Iran, and Jessica and Aaron take listener questions on Texas, immigration hearings, and Kristi Noem’s divorce.

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These are legitimate questions, and Prof G Media has covered many of them. But they’re also a distraction from what’s actually happening right now, which is that the American university is going out of business, one campus at a time, for reasons that have nothing to do with artificial intelligence.

More than 4,720 degree-granting institutions existed in the U.S. in 2013. Since then, the count has fallen by at least 800. The Philadelphia Fed projects another 80 could close by 2029. The Education Department has about 400 schools on what it calls heightened cash monitoring, a bureaucratic term for “having financial troubles,” and about 20 on the more severe track, or those “having even worse financial troubles.” Overall, more than a quarter of private colleges in America are at risk of closing in the next 10 years.

For now, the question isn’t whether AI will kill college. It’s why college was already dying in the first place.

Fewer 18-Year-Olds, and Fewer of Them Want to Go

In 2025, the largest high school class in U.S. history graduated 3.9 million students. That was the peak. From now on, each graduating class is projected to shrink. The class of 2041 will have 3.4 million students — 13% fewer than the class of 2025. That means 576,000 fewer 18-year-olds contemplating college, roughly the entire undergraduate population of the University of California and the SUNY systems combined.

Why? Americans aren’t having kids. Births peaked at 4.3 million in 2007 and have fallen almost every year since. Add 18 years to that, and you get an admissions office staring at a smaller pool of applicants than the year before, every year, for the foreseeable future.

None of this is a surprise. Demographers have been publishing these projections for over a decade — but the future is easy to ignore until it becomes reality.

It’s not just that there will be fewer kids. It’s that fewer of the kids will want to go to college. The share of high school graduates enrolling in college right away has dropped to around 63% from 70% a decade ago. Adult enrollment (25 and older) is down by roughly a quarter since its 2011 peak. Demand is falling independently of demographics.

Think about what this will do to the college business model. Roughly 4,000 degree-granting schools in the U.S. spend every fall recruiting from the same pool of 18-year-olds. Starting now, that pool will get smaller and smaller every year. Harvard won’t notice, as it already rejects 96% of applicants and can dig deeper into the pile forever. The regional private schools that admit 80% of applicants are already noticing.

Tuition Went Up. The Money Went to Administrators and Lazy Rivers.

Colleges will eventually notice because of what it does to their bottom line. The average annual tuition at a public college is 40x as expensive as it was in 1963. Since 1983, tuition has risen 2x as fast as medical costs and about 4x faster than home and gas prices. No other industry has weaponized its pricing power like higher ed.

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