U.S. economy shrank at a 1.4% annual rate in the first quarter • Hacker News Board

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by AYBABTME » Thu, Apr 28, 2022, 4:20 PM UTC

omginternets wrote: post #124

AYBABTME wrote: post #91

Earlier quoted context omitted.

> caring for the weak and the elderly is a pillar of civilizations I'm not sure that's true. Many civilizations, up to and including now, have the cultural practice of the weak and elderly destroying themselves (or being destroyed) when they become a burden on their relative/society. The most obvious example being the concept of east asian (Korean/Japanese) elders "going to the mountain to die".

This is absurd. Eastern civilizations most certainly care for their weak, sick and elderly. Removing oneself from society by going up the proverbial mountain does not contradict this. You have to look very hard for a successful civilization that doesn't do this. Sparta, perhaps? (This is also not really the point of the original comment.)

It's not the point but I just thought it's useful to bring up. I disagree with you about your statement that civilizations must have this property (a pillar) you claim they have. All kind of civilizations didn't/don't care anywhere near the way it's done in judeo-christian derived civilizations, and they were/are still civilizations. If I were you, I'd be open to the idea that this is perhaps not an universal truth as you make it out to be. In fact this topic is specifically brought up quite early in "Our Oriental Heritage, The Story of Civilization, Volume 1" by Will Durant.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#242

Post by mywittyname » Thu, Apr 28, 2022, 4:20 PM UTC

thedailymail wrote: post #221

gruez wrote: post #204

Earlier quoted context omitted.

>I think severe taxes for unoccupied homes is a better solution than bumping rates though Yeah but unoccupied units is only a few % in the hottest housing markets. This makes sense, considering that the opportunity cost of leaving a home empty is higher if the rent is higher. Because of this I'm inclined to believe it's popular-but-ineffective intervention, like banning foreign buyers (which also make up a few % of o…

As with many complex problems, the solution will likely need to include multiple parts. Taxing unoccupied properties and putting limits on who or what can buy residential properties (and how many they can buy) could both be elements of a bigger affordable housing package.

A less complicated solution would be to build more housing. Governments weld a lot of power in this respect. They can use eminent domain to acquire land and they have the capability to finance projects on an unrivaled scale.

If we want low-cost housing, the government can provide that. Instead, we rely on a market that is designed to optimized for highest cost the market can bare.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by aftbit » Thu, Apr 28, 2022, 4:21 PM UTC

monkeynotes wrote: post #142

lumost wrote: post #40

Earlier quoted context omitted.

There are many troubling things happening at the moment. From a US centric point of view. - Inflation is at it's highest since the 1970s in the US - There is a large military conflict in Europe. - There are shortages of chips, energy, and food on the horizon. - Unprofitable growth stocks have valuations as high as 100:1 on revenue. - There is increasing militarized tension on many portions of the global supply chain…

Let's not forget COVID is not done yet. We've had two years of restrictions and now it seems like folks are behaving as if it's over. Mutations are propagating and yet most people are out and about without masks and the dialog around vaccines has all but dried up. The ongoing confusion about what this disease's risk factor is worrisome. First I think people have much more distrust in science and government. There is…

In my neck of the woods, there would need to be a serious new threat to motivate people back into school closings and lockdowns. Heck, we're still below 60% fully vaccinated and only 30% have received any boosters. My states's population is done with COVID, even if COVID isn't done with us.

That said, SARS-CoV-2 is endemic now, with known animal reservoirs. We're not going to stop it with NPIs anymore.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by MichaelBurge » Thu, Apr 28, 2022, 4:22 PM UTC

dragonwriter wrote: post #122

omginternets wrote: post #51

Earlier quoted context omitted.

I really don’t want to sound calloused because caring for the weak and the elderly is a pillar of civilizations, but my impression was that the bulk of “excess deaths” were not among the most economically active populations. I could just as easily see this having the opposite economic effect: reducing the burden on the state for such things as retirement and Medicaid.

> I really don’t want to sound calloused because caring for the weak and the elderly is a pillar of civilizations, but my impression was that the bulk of “excess deaths” were not among the most economically active populations Really? The elderly may not be likely to work , but they still consume (they consume lots of medical services in proportion to their numbers, for instance.) > reducing the burden on the state fo…

"They consume medical care" sounds a lot like the broken window fallacy: If you smash a bunch of windows, you're increasing GDP and creating jobs when they get repaired.

To a ruthless cold-blooded optimizer, deleting the elderly should be good for the economy because you save on their maintenance costs and their resources get redistributed to more active investors. This might decrease GDP, but that only reflects on GDP being a problematic metric.

I guess it's true that smashing windows or providing medical care to the elderly would increase the "size of the economy", because it adds entries to the implicit "market's bid/ask order book". And you could measure the size of the economy by the size of that data structure.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by jagraff » Thu, Apr 28, 2022, 4:22 PM UTC

30944836 wrote: post #218

mensetmanusman wrote: post #140

It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…

>GDP has to be at certain levels to support different types of economic activity. E.g. at some point, GDP might be low enough that new semiconductor research isn’t affordable (because all the workers are used up caring for the elderly for example). The good news is, this won't happen in the US, at least not in the 21st century. So if you're an American, feel lucky.

Care to elaborate? What makes you so sure that won't happen in the US?

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by throwaway0a5e » Thu, Apr 28, 2022, 4:23 PM UTC

krapp wrote: post #129

throwaway0a5e wrote: post #120

Earlier quoted context omitted.

>If they couldn't make it happen then, when all of the stars were aligned and the winds of populist ferver were at their backs, I don't think anything more than an occasional riot is going to happen in the future. Gas was cheap and shelves were full then.

I remember $5.00 a gallon gas during the recession, and there were two gas crises in the '70s and '80s. We've been here before.

Your average person wasn't being crushed by their rent in '08 and wasn't over leveraged on consumer debt in the 70s and 80s. Those are just two factors that are different this time around.

The information and media landscape is also very different now in ways that make disseminating "be a good little boy and everything will be all right" messages far less effective and the institutions such messages would come are more reputationally bankrupt than ever.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by jbergens » Thu, Apr 28, 2022, 4:23 PM UTC

coldtea wrote: post #154

mensetmanusman wrote: post #140

It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…

> I’m super interested in what investing looks like in 50-100 years as the population starts collapsing In most countries the population has already started collapsing

I think the rate of change is pretty slow right now but number of births per woman has gone down. If these lower levels stay or goes down further then the population will start to shrink faster in many countries. Some countries may be able to delay this by taking in more immigrants.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by adam_arthur » Thu, Apr 28, 2022, 4:27 PM UTC

colinmhayes wrote: post #83

bitcurious wrote: post #78

Earlier quoted context omitted.

In my neck of the woods, by far the largest and most impactful inflation has been in the housing sector - 50% price inflation over the past two years. This is entirely attributable to the Fed's pumping of soft assets like stocks, leading to a bunch of paper millionaires cashing out.

Also due to the fact that we stopped building new homes after 08. If supply keeps up with rising demand prices don't change.

Housing units per capita is at an all time high. Housing units per working age person is at an all time high, by far.

Housing units per household is at year 2000 levels and in line with history.

Check the data, it's all on FRED

What you're repeating is common conversational talking points spread as fact.

It is true that building slowed in the 2010s, but housing was overbuilt in the 2000s too which neutralizes that. Also number of housing units under construction is at an all time high right now, while population growth is the slowest ever (including immigration) and decelerating.

Look to the Japanese property sector for the future of US pricing. Demographic story is a long one that will take decades to play out though. Immigration policy could change things

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by mywittyname » Thu, Apr 28, 2022, 4:27 PM UTC

dragonwriter wrote: post #185

taylodl wrote: post #55

The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. The inflation we're seeing isn't a result of a hot economy needing to be kept in check, it's the fact that 40% of China's production is on lockdown and just about every product made, regardless of where it's made, is relying on part(s) coming from China. Supply is constrained and therefore prices are rising. Likewise, supp…

> The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. Irrespective of the source, the Fed rate hike (well, and QT, which it is expected to also deploy) is the only tool it has available to deal with inflation, which is still, for now, the bigger problem from the perspective of it's mandate. The fact that (possibly transitory if policy were neutral) slowdown is occurring whi…

Congress dumped boatloads of money into the economy over the past two years and failed to provide oversight.

Everyone is pointing at the Fed for causing inflation and ignoring the fact that Congress gave business owners five-to-seven figure payouts in straight cash. You can find out how much businesses around you received from the PPP, and there's no shortage of small companies who received a few hundred grand in aid.

Imagine what you'd do with a $250k check from the government.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

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Post by adventured » Thu, Apr 28, 2022, 4:27 PM UTC

JaimeThompson wrote: post #231

adventured wrote: post #222

Earlier quoted context omitted.

> Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? Most certainly. We'll very clearly do it with robots and artificial intelligence. Although people are expecting way too much way too soon. The classic line about how people overestimate change in the short-term and underestimate change in the long-term. Elon Musk may occasionally be a clow…

>and they have the cashflow now to easily afford to pursue it in a big way Musk is in the process of tying most of his free cash up in a web app instead of investing it in his businesses which might cause those larger companies to have issues.

Musk is mostly not tying up free cash to buy Twitter, it's going to end up largely being a debt move (as is typical of what he does, as he hates to sell his stock).

And I'm not sure where your premise matters re what I said. Tesla is the entity in question with the booming free cash to spend from operations, as their business has become soundly profitable. If Musk leverages his enormous net worth on acquiring profitable Twitter - what does that have to do with Tesla's ability to direct its operational cash to robotics R&D? Maybe his focus being split further will increase the risk to Tesla's profitability over time, however you didn't suggest that (and maybe Tesla would be better off with a Gwynne Shotwell operating it anyway; a more distracted Musk that has to hire a superior operator might bolster Tesla).

With $3.6b in operating income last quarter, and $9.6b over the last four quarters, Tesla increasingly has huge resources to throw at big R&D programs. Which has little to nothing to do with Musk's personal finances.