Citrini Research’s viral “The 2028 Global Intelligence Crisis” note didn’t just shake markets — it triggered a sharp backlash from Wall Street economists and strategists.
Now, a growing number of experts are challenging the notion that an AI-driven productivity surge could spiral into mass unemployment, collapsing demand and systemic financial distress.
Their message is simple and backed by economic theory: productivity booms historically fuel growth — they don’t end it.
And some are warning that investors may be reacting more to narrative than actual data.
The Macro Counterargument To Citrini: Productivity Creates Income
Front Harbor Macro Research founder Gerard MacDonell argues that Citrini’s doom loop logic ignores a basic economic principle: production generates income.
MacDonell described Citrini Research’s piece as an “allegorical essay” and questioned how many of those circulating it had actually taken the time to read it in full.
If AI boosts productivity and profits, that income accrues to someone — workers, shareholders, capital owners — and gets spent or invested.
“Say’s Law invokes the simple point that production generates income and that this income must accrue to someone, who is likely to spend it,” MacDonell said.
Historically, major technological advances have raised real incomes and expanded demand, even if distribution became uneven.
Referencing economist Paul Krugman‘s concept of the “accidental theorist,” MacDonell warned against dismissing established economic reasoning only to construct a more dramatic alternative.
He said that the U.S. economy today is supply-constrained and far from a liquidity trap.
The Federal Reserve still has room to cut rates if needed. In that environment, a productivity burst would more likely be pro-growth than self-defeating.
The idea that productivity automatically destroys demand, he suggests, runs counter to centuries of economic experience.
The Power Of A Good Doom Story
London-based strategist Joachim Klement framed the backlash in blunt terms: bearish narratives sell.
“Investment gurus who sell bearish newsletters make more money selling their newsletters and books than people who sell useful information.”
Klement points to research from the Ifo Institute showing investors are often willing to pay more for compelling economic narratives than for raw forecasts.
In fact, pessimistic narratives can command higher prices among certain investors — especially those prone to overconfidence or motivated reasoning.
“Investors value narratives more than the actual recession forecast,” he wrote.
In other words, stories travel faster than spreadsheets.
That matters when a dramatic allegory — like Citrini’s fictional 2028 debt-deflation spiral — hits a market already jittery about AI disruption.
What The Labor Data Shows
22V Research analyst Peter Williams also questioned whether current data supports the doom spiral narrative.
“The Citrini sell-off… dramatically catalyzed on existing and building AI-related fears,” Williams wrote, noting that negative scenarios tend to gain traction in fragile markets.
But so far, labor data does not show collapse.
“There is certainly no sign of a recent or building collapse in hiring intentions,” Williams said, pointing to white-collar job postings that have stabilized after more than two years of weakness.
Layoff mentions on earnings calls remain well below early 2023 peaks. Job openings in many AI-exposed sectors have been bouncing around similar levels for the past year.
If AI substitution were already triggering a self-reinforcing employment spiral, critics argue, forward-looking labor indicators would likely look far worse.
Yardeni: AI Augments, It Doesn’t Extinguish
Veteran strategist Ed Yardeni has also dismissed the apocalyptic framing.
“We continue to believe that AI is augmenting workers’ productivity rather than making them extinct,” Yardeni wrote this week.
He described the recent shift in tone around AI as striking: “The good news is that bullish sentiment must be dropping rapidly, as the AI story has morphed from a Roaring 2020s productivity booster to an existential threat to our way of life.”
Yardeni sticks to his long-term projection that the S&P 500 – as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) – could reach 10,000 by the end of the decade, arguing that AI will lower costs, increase output and unlock new business models — much like previous technological revolutions.
According to Yardeni, the greater risk isn’t economic collapse, but mispricing — either overestimating disruption or underestimating productivity gains.
What This Debate Really Means
The pushback highlights a key dividing line:
Does AI shrink the economic pie by destroying labor income faster than demand can adjust? Or does it expand the pie by raising productivity and real output, even if distribution shifts?
History leans toward the second.
And as several economists argue, the bigger risk may not be artificial intelligence itself — but the narratives investors build around it.
Image: Shutterstock
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