TWO UNIVERSITY OF PENNSYLVANIA ECONOMISTS JUST PUBLISHED A PAPER THAT SHOULD TERRIFY EVERY CEO RACING TO REPLACE WORKERS WITH AI. The title: The AI Layoff Trap. Here is the core argument in plain language. Companies are automating workers faster than the economy can absorb them. Those workers are also consumers. When consumers lose income, they stop spending. When they stop spending, the companies that automated them lose the revenue they automated to protect. The trap: every individual company is rational to automate. Every company automating at the same time is collectively suicidal. It is a prisoner's dilemma running at the scale of the entire global economy. The part that should scare you most: The researchers tested every proposed solution. Wage adjustments. Universal basic income. Worker equity participation. Upskilling programs. Capital income taxes. Coasian bargaining. None of them fix it. More competition makes it worse. Better AI makes it worse. The only thing the paper finds that actually works is a Pigouvian automation tax. A direct tax on the act of replacing humans with machines. Which means the economists who modeled this concluded that the market will not self-correct. Only policy intervention stops the spiral. The paper is from March 2026. The automation wave is already running. Screenshot this. Follow @cyrilXBT for every AI development that is bigger than the headlines covering it.(CyrilXBT)