In today’s newsletter I discuss if Economists lie to us about the K-shaped Economy, Anthropic might IPO at a $2 Trillion dollar valuation, YouTube just raised the bar on content creators and I'm not happy about it, there’s a device designed to give people painless permanent tattoos, Myspace might be coming back, the federal government is paying $3 billion dollars a day on interest on the national debt, Google co-founder Sergey Brin has spent $102 million dollars to fight California’s billionaire tax, and The Walt Disney Company has said that they’ve sold out of all their ad inventory for this year’s Super Bowl.

Let’s get into it!

For years, economists have been telling us the American economy is a story of the haves and the have-nots, or better said that there are two totally different tracks where high earners have prospered while lower-income households have suffered. While prominent talking heads on TV have pushed this theory, the reality on the ground turned out to be far more complicated than a simple letter-named K-shaped economy. It turns out that working-class wages have actually begun to rise faster than white-collar employees, forcing economists to reconsider whether their predictions were flawed from the start, or has the economy shifted under our feet?

I think it’s a little bit of both. Hear me out.

What many experts failed to anticipate is the strength of the labor market for hourly workers. Treasury Secretary Scott Bessent pointed out during a recent interview on CNBC on August 4 that wage growth for lower-income earners has actually outpaced the gains of upper income earners, which shows real resilience in blue collar jobs. He also said, “I got sick of hearing about this K-shaped economy. I can say here, definitively, the K-shaped economy is over.”

Not so fast.

Independent economic data is still telling us there continues to be a divergence between upper and lower-income earners. According to an article in Fortune “the spending of the top 20% accounts for 60% of personal outlays—meaning economic growth is even more dependent on a small subset of households than in previous cycles.”

It was only a few years ago when economists were claiming that the “K-shaped economy” was only going to get more extreme, and that it would get worse before it got better - IF it ever got better. Now those same economists aren’t so sure. They’re seeing signs that lower-income families aren’t permanently trapped at the bottom, thanks to a tight labor force that has forced employers to raise baseline pay in the retail, hospitality, and construction sectors. Those are the exact same sectors of the economy that the upper middle class and wealthy people have been spending more on in the last few years. This is what Scott Bessent is arguing when he says that the economy is shifting into a "C-shaped" model where lower-income wage growth finally catches up.

I’m not buying this “C-shaped economy” theory, at least not 100%. Let me explain why.

While I do concede that entry level wages have risen for lower-income workers, it’s not like the middle class’s wages have gone up a lot more in comparison. What has happened, to set these groups apart, is that the middle and upper classes have seen their investment portfolios skyrocket in the last few years thanks in part to increased spending by the wealthy and the stock market-defying AI boom.

Families making over $200,000 dollars a year have continued to spend just as freely as they always have, while households earning under $50,000 dollars a year are spending most of their income on basic necessities including gas, energy, food and shelter. The upper classes also haven’t been increasing their credit card debt levels, while the lower class’s credit card balances are hitting record levels as families use credit to cover those same necessities I just mentioned.

So while economists might be saying the “K-shaped economy” is dead, and welcome to the new “C-shaped economy”, I think they’re missing the growing divide between the upper and lower classes. The lower class hasn’t participated in the stock market’s massive bull run of the last few years to the same extent that the middle and upper classes have experienced the growth of their portfolios and retirement accounts. The current bull market has minted a record number of upper class white-collar millionaires, and I think that’s the story we should really be talking about as the prosperity of the upper and lower classes begins to diverge at a record rate.

A $2 TRILLION Dollar valuation!?!? WoW! I did not see this coming.

Anthropic is talking with investors about a $2 trillion dollar valuation ahead of their planned IPO this Fall. I'm just beside myself at that valuation, considering that Anthropic’s last fund raise was on May 28, 2026 when they raised a $65 billion dollar Series H funding round at a valuation of $965 billion dollar post-money. Now a little over 2 months later Anthropic is saying their valuation has doubled to $2 trillion dollars.

Can we all just agree this isn't normal?!?!

YouTube just announced a huge hurdle for would-be content creators like yours truly. Starting February 1, 2027 they are raising the bar on how many watch hours a YouTube channel has to have from 4,000 watch hours up to 8,000 watch hours on long-form videos, and from 10 million watch hours on YouTube Shorts up to 20 million watch hours. By doubling the number of watch hours YouTube believes they will be able slow the growth of AI slop YouTube channels, but that seems a little naive to me.

YouTube has encouraged the use of AI in making videos, now they’re penalizing all new content creators who are looking to become monetized, even if they don’t use any AI to make their videos (like me). Surely there must be a way for YouTube to instead weed out AI slop channels from those that are creating real content. Hopefully YouTube will listen to its content creators and revise these new rules. Seems like an odd way to run a company by hurting the new content creators who will be fueling your profits in the years to come.

There’s a new tech company out of London that has developed a device designed to give people painless permanent tattoos. Co-founders Ferdinand Kohle and Karl Anton Harms built a microdot tattoo applicator at their startup CipherX that delivers tiny, permanent designs through microneedle skin patches rather than traditional mechanical needles. The system relies on tiny biodegradable needles that dissolve into the skin within 15 minutes, allowing individuals to receive small and simple black ink graphics without sitting through the typical pain of a tattoo session.

Right now the startup is charging clients at their flagship London studio around $67 dollars for a tiny half inch design, which ranges from simple stars and hearts to a tiny chair icon, if you’re into that sort of permanent thing. The company spent nearly 6 years developing the skin technology after drawing inspiration from medical drug delivery systems, and deciding to repurpse the technology for people who like the idea of having a tattoo but don’t want to go through the pain that is typically associated with needles.

I like the idea of these new form of tattoos if they can expand the selection of available tattoos and in the future scale up both the size available and allow for custom designs. As someone who doesn’t have any tattoos, because I’m a scaredy cat, this might be something I look into in the future.

Myspace might be coming back, and it couldn't happen at a better time if you ask me. Gen Xers like me have grown tired of Facebook, Twitter (because I won’t ever call it X), LinkedIn, Instagram, TikTok and all the other social media platforms with their algorithmically generated feeds and endless AI slop. We hunger for the good ‘ol days of social media where you could actually see what your friends were posting without your feed being inundated with non-stop “influencers” and commercials for things you never knew you needed and still don’t!

I’m not going to go into depth about Myspace’s founding by co-founders Tom Anderson and Chris DeWolfe, or how they had over 100 million active registered users before Facebook came along. I’m not going to talk about how the social media site shrunk after users migrated to Facebook, and ultimately Myspace was sold to Rupert Murdoch’s News Corporation for $580 million dollars. Or how no one could figure out how to revive the site, and it languished in obscurity for years until the co-owners of Viant Technology, brothers Tim and Chris Vanderhook with help by Justin Timberlake, purchased the site for $35 million dollars.

Rebuilding and relaunching Myspace would be a huge endeavor and gamble, and it’s unclear if former users and hopefully new users would flock to the platform, but what is clear is that current social media platforms aren’t giving their users what they want. When given the choice I will always go back to a platform that allows me to customize my page and tailor my feed to only show me what I want. You hearing me Facebook and LinkedIn?!?!

The national debt has grown to such an insane size that the Department of the Treasury now spends over $3.18 billion dollars every single day just to pay interest on the $39.94 trillion dollar national debt. That means that we’re now paying more on the interest of the national debt than we are spending to fund Medicare and national defense spending. At this rate the national debt is anticipated to increase by $2.1 trillion dollars a year just based on the interest we’re paying.

With that kind of bad math, why would any other country look at the United States and think “They sure know what they’re doing?”

Who would have thought that spending $102 million dollars could actually save you over $13 billion dollars? Google co-founder Sergey Brin has directed $102 million dollars toward political campaign groups like Building a Better California to defeat California’s Proposition 40, a ballot measure that would establish a wealth tax on high-net-worth residents, such as Google co-founder Sergey Brin.

If passed the law would target around 200 individuals with net worths exceeding $1 billion dollars, who would then be hit with a one-time 5% tax bill. For Sergey Brin that could come out to almost $13 billion dollars based on his approximate $267 billion dollars fortune. California has estimated that Proposition 40 could help the state bring in an estimated $100 billion dollars in revenues over the next 5 years to help support healthcare programs like Medi-Cal and public education.

Here’s why I don’t like the idea of hitting billionaires with one-time taxes, and it’s not because I’m a billionaire. Far from it. I’m just a lowly content creator with dreams of one day making enough to do this fulltime. What I don’t like about this is it is too easy for billionaires to just leave the state, as Sergey Brin has done by moving to the Nevada side of Lake Tahoe. But before you shed a team for Sergey, hundreds of billionaires around the world can easily move their domicile to no or low-tax jurisdictions, so while California’s ballot measure might raise some money for healthcare and education in the state, they’re doing it by driving away wealthy entrepreneurs who are actually funding the current AI boom and other entrepreneurs in the future.

Seems a little short sighted of California to me.

The Walt Disney Company will broadcast Super Bowl LXI on ESPN and ABC on February 14, 2027, live from SoFi Stadium in Inglewood, California, and they’ve sold out of all their ad inventory, with some spots selling for a record $10 million dollars for a 30-second ad.

Here are the stats:

Was this email forwarded to you? Did you not hate it?

Then consider subscribing to The Business Behind The News. The only newsletter that brings you the business behind the news, with a healthy dose of sarcasm - all delivered to your inbox once a week in an easily digestible 5-minute read.

The Business Behind The News is written, edited, and published by Chris Thompson.