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Noah Smith pushes back on Paul Krugman's claim that AI creates no benefits for ordinary Americans, arguing the data center buildout is generating substantial construction jobs, tax revenue for local governments, and demand-side economic support that's offsetting Trump's disruptive policies.
- Data center construction has created measurable job growth for construction workers since late 2022, with real wage increases even as Trump deported undocumented workers from the sector, and Goldman estimates 500,000 additional construction jobs needed by 2030.
- State and local governments are collecting significant tax windfalls from data centers—property taxes, sales taxes, corporate taxes—that fund public goods like schools, roads, and libraries, with Loudoun County, Virginia as a concrete example of this payoff.
- The AI investment boom is functioning as a major positive demand shock to the economy, counterbalancing the negative effects of Trump's tariffs, deportations, and policy uncertainty that would otherwise have caused visible economic damage.