Five for Friday – February 27, 2026

In recent months, the discourse around artificial intelligence seems to have shifted from worries that companies were overspending on AI to worries that the new technology will so aggressively disrupt the economy that it results in mass unemployment. The latter point has (again) picked up steam in the media, and – with a great dose of humility – I’d push back. The specter of technological unemployment has loomed over humanity for centuries, with declarations that automation would replace human labor accompanying nearly every technological revolution. And while it is true that new tools have rendered certain jobs and entire sectors obsolete, it’s also true that the labor force participation rate for prime age workers is right near a 75-year high. There are more jobs today than ever, but what those jobs entail would have been functionally impossible to predict 100 years ago. The reality is that forecasts for mass technological unemployment consistently underrate the extent to which innovation both drives down costs (fueling demand) and leads to new products and services that ultimately power economic activity (and employment…and stock prices). Joseph Schumpeter elegantly described this as the “perennial gale” of creative destruction, the process by which innovation and entrepreneurialism sustain long-term growth. This time might well be different, but it would be a risky bet to assume so.  

2. ATMs

There’s also the possibility that the more dire predictions are misjudging the depth of impact that AI will have on work. In a classic example, the introduction of the ATM – widely forecast to spur massive job loss for bank tellers – actually coincided with higher teller employment. This embodies two ideas described above: ATMs lowered costs and allowed banks to open more branches (driving up employment) and also only automated part of a teller’s job (leaving workers to focus on customer service, cross selling, and more complex issues). Teller employment eventually did drop…but not until 40 years after the ATM’s debut. Living in the midst of economic upheaval is uncomfortable, and the media’s proclivity for negativity (spurred by our own preferences) often overemphasizes worst-case scenarios. But if the ATM is any guide, the real risk today may not be AI itself, but mistaking short‑term disruption and loud narratives for long‑term economic reality.  

3. Tariffs

Our partners at Strategas (a Baird company) have you covered on the recent SCOTUS ruling and what’s next.  

4. IPOs

Forecasts project a boom in initial public offerings (IPOs) this year, with mega-hyped Tech companies SpaceX, Anthropic, and OpenAI among the deals rumored to be in the pipeline. IPO activity is a barometer of market  sentiment because companies tend to bring new issues when investor risk appetite is strong – surging deal volume, aggressive pricing, and ravenous investor appetite signal euphoric sentiment worth viewing skeptically (for instance, see if you can spot the dot-com bubble on the chart). But while IPOs often generate a lot of hype (and, in fairness, the occasional home run), longer-term returns have actually trailed the market. For the 9,253 IPOs launched from 1980 to 2024, the average 3-year return lagged the broad benchmark by over 20%. Both the late 1990s boom and the early 2020s SPAC mania left many worse for the wear. Tread lightly.  

5. On this day

in 1900, the U.S. granted a patent for acetylsalicylic acid to German chemist Felix Hoffmann (for Bayer & Co.). This was the culmination of thousands of years of use, with ancient civilizations having consumed willow bark (containing salicin) to ease aches and fever. Today, due to its extremely low cost and wide range of benefits, the humble aspirin is considered one of the most cost-effective and economically beneficial treatments ever.  

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