Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Can the West’s perplexing employment miracle continue?

economist.com

Post reply on HN
Print view View original

271–280 of 298 posts

Re: Can the West’s perplexing employment miracle continue?

#271

Post by ajross »

marcosdumay wrote: post #263
ajross wrote: post #124

Earlier quoted context omitted.

"Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Without numbers your argument is specious. There are winners and losers. Whose losing and by how much? I'll give you a few losers: retirees on fixed incomes, and investment employees working on commission. And a few winners: homeowners, and young professionals with significant credit debt. There are lots of…

> "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Yes, and it has a different temporal behavior from the impact on the purchase power. The same person can be affected by both. As a rule, inflation infuriates people because almost everyone jut wakes up some day and discover they are much poorer than they used to be. You can't dismiss this by pointing that…

> inflation infuriates people

I'll certainly grant this, not the least because they get terrible information about it from media and online sources.

> almost everyone jut wakes up some day and discover they are much poorer than they used to be

Like this. This is not true. This is a lie. You need to stop saying this. People are "much poorer" post-inflation only in the sense that they were "much richer" post-pandemic, due to the huge savings boom. If you aren't willing to look at the latter, then you're not doing the analysis correctly.

At most, "some" people are "much poorer" due to asymmetric effects. But you're just wrong here if you try to extend that to "almost everyone". Please stop.

Re: Can the West’s perplexing employment miracle continue?

#272

Post by roflyear »

tempsy wrote: post #233
mym1990 wrote: post #191

Earlier quoted context omitted.

It depends on a person's financial situation, from my understanding: if you have a lot of debt(which the average USA household does), you benefit greatly the more inflation goes up. If you have money sitting in the bank, you're basically getting eaten alive. If you have assets, they typically should be tracking inflation somewhat(real estate, some stock categories, TIPS, etc...). People will be in between any of the…

how is a saver getting eaten alive when high yield savings accounts and short term t-bills are paying 5% holding cash is paying something for the first time in more than a decade

Cash was paying out plenty a few years ago.

Re: Can the West’s perplexing employment miracle continue?

#273

Post by nebula8804 »

rjbwork wrote: post #144
throwswaydollar wrote: post #136

Earlier quoted context omitted.

I want all nations to ditch dollar based trading. It's nothing but indirect tax on the non Americans. High interest rates is once in a decade thing btw. America printed 4 trillon dollars since COVID. I am not finding America at fault or anything like that. Everyone puts their interests first after all

The US has been subsidizing global trade for the better part of a century, while not actually getting all that much out of it economically - geopolitically, sure, it's been great, but economically it mostly just decimated domestic low-end manufacturing and resource extraction. Let's see how happy you'll be once the US turns entirely inwards and the rest of the world has to secure their global trade routes. The US wil…

Ah the Peter Zeihan theory. Sounds plausible but at the same time, it clashes with the Chris Hedges theory: the argument that capitalism is an inherently destructive force that rots and ruins every arena of American life.

The corporate state that presides over this destructive capitalist economic system is ruthless and relentless. “It practices only the politics of vengeance. It uses coercion, fear, violence, police terror and mass incarceration as forms of social control while it cannibalizes the nation and the globe for profits.”

This scourge is all-consuming. Once-liberal institutions, including “the press, labor unions, political third parties, civic and church groups, public broadcasting, well-funded public universities, and a liberal wing of the Democratic Party,” have all “collapsed under sustained assault during the past forty years of corporate power.” Today, there are “no institutions left in America that can authentically be called democratic.”

It is terminal. “Short of a sudden and widespread popular revolt, the death spiral appears unstoppable, meaning the United States as we know it will no longer exist within a decade or, at most, two.”

And it is worldwide. “The malaise that infects Americans is global.” Global capitalism is responsible for all misery and the metastasizing of violent rage from many different sides, from jihadists and neofascists to far-right militias and antifa.

Re: Can the West’s perplexing employment miracle continue?

#274

Post by nebula8804 »

m000 wrote: post #197
epolanski wrote: post #178

Earlier quoted context omitted.

Student loans are an American thing. I paid 500€s/year to graduate in chemistry in Italy and have not incurred any debt.

> Student loans are an American thing. Unfortunately, they're also becoming an "American export". E.g. Netherlands granted a study grant to all students up until 2015, when it was converted to a student loan [1]. The required amount is still lower and the terms are better than US, but the ball has started rolling. We are now waiting for the next wave of neoliberal policies to see average student debt surging. [1] htt…

Why would you guys even allow this poison to infect your culture? We never had these benefits in the US so there was nothing to take away and many Americans are too poor to ever travel overseas and don't realize how things are done elsewhere. In fact even conservatives fight to maintain what we do have (eg. Social Security, Medicare) But Europe? You guys already have the benefits, aren't you going to get pissed off if they get taken away?

Re: Can the West’s perplexing employment miracle continue?

#275

Post by nebula8804 »

eru wrote: post #173
happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

A debt contract always has a debtor and a creditor.

But the cost structure could very widely when there are different motivators. I suspect this is what is really happening. Colleges in the US are 5 star resorts wheres in Europe they are either old beautiful relics or just old boring buildings with no real amenities and a lot less staff needed to run the operations.

Re: Can the West’s perplexing employment miracle continue?

#276

Post by rjbwork »

nebula8804 wrote: post #273
rjbwork wrote: post #144

Earlier quoted context omitted.

The US has been subsidizing global trade for the better part of a century, while not actually getting all that much out of it economically - geopolitically, sure, it's been great, but economically it mostly just decimated domestic low-end manufacturing and resource extraction. Let's see how happy you'll be once the US turns entirely inwards and the rest of the world has to secure their global trade routes. The US wil…

Ah the Peter Zeihan theory. Sounds plausible but at the same time, it clashes with the Chris Hedges theory: the argument that capitalism is an inherently destructive force that rots and ruins every arena of American life. The corporate state that presides over this destructive capitalist economic system is ruthless and relentless. “It practices only the politics of vengeance. It uses coercion, fear, violence, police…

I somewhat noncommittally also agree with Hedges here. I think that we have serious problems as described by Hedges and other neo-marxist theorists, but I also think that Zeihan is pretty spot on in terms of the geopolitics of the situation. It's unclear to what extent these competing variables will contribute to the situation as things go forward.

On the optimistic side, I'd like to think that the oligarch class in the US relents before revolution and decimation of the country and economy that is their cash cow. Certainly it would be better to reap merely some fraction of their disgustingly obscene profits than none of it, and the US is well positioned a la Zeihan in the coming global crisis years.

But yes, on the pessimistic side, the proletariat cannot be squeezed indefinitely. Too much pressure and it will explode, with disastrous consequences all around.

Overall, I'm hopeful that continually declining birth rates (though much stronger than the rest of the developed world) and the recent decimation of the labor force will continue to bolster labor power, leading to a recession in oligarchical power that will prevent the worst consequences of of their rapacious excess.

Re: Can the West’s perplexing employment miracle continue?

#277

Post by nebula8804 »

rjbwork wrote: post #276
nebula8804 wrote: post #273

Earlier quoted context omitted.

Ah the Peter Zeihan theory. Sounds plausible but at the same time, it clashes with the Chris Hedges theory: the argument that capitalism is an inherently destructive force that rots and ruins every arena of American life. The corporate state that presides over this destructive capitalist economic system is ruthless and relentless. “It practices only the politics of vengeance. It uses coercion, fear, violence, police…

I somewhat noncommittally also agree with Hedges here. I think that we have serious problems as described by Hedges and other neo-marxist theorists, but I also think that Zeihan is pretty spot on in terms of the geopolitics of the situation. It's unclear to what extent these competing variables will contribute to the situation as things go forward. On the optimistic side, I'd like to think that the oligarch class in…

Before the pandemic, after Bernie was crushed for a second time by the oligarchs, I often wondered where the oligarchs would run away to once the people have had enough. Some thoughts were China, Switzerland, Israel, New Zealand, or Mars. Post pandemic all of these places seem to have issues that prevent them from being a one stop destination for all of the worlds wealth hoarders. There is still the theory that the US becomes more like Brazil: Large amounts of poverty with secure enclaves of the extremely rich. I know this is a stretch but we are already seeing shadows of it in the pop culture with the popularity of films like the purge.

Zeihan does talk about the US going through a political reshuffling right now that will take 10-20 years. I guess on that timeframe we will find out what happens.

Re: Can the West’s perplexing employment miracle continue?

#278

Post by eftychis »

thephyber wrote: post #137
eftychis wrote: post #28

Earlier quoted context omitted.

Best case what happened in the 70s if this keeps up. Can't predict really as you said. You can bound expectations though. Best outcome is perhaps interest rates get lower and things resume as normal assuming there is no other lockdown say.

> what happened in the 70s Do you mean the early 1970s when the US moved off the gold standard and there was a massive oil shock? Or the late 1970s when inflation made an attempt for a runaway spiral? > get lower and things resume as normal The last few years (2008-present) have been anything but “normal”. The Fed has been full throttle on the lowest interest rate for years and Quantitative Easing / asset purchase pr…

Offering a reply as it seems my comment was perceived incorrectly and I can not unfortunately edit it. My wording was perhaps a bit too nuanced. (Again this is my opinion, and I might be wrong. I appreciate your opinion. (And other readers' opinion.))

a) You assume that me saying "best case" if we continue as is, is a good case scenario -- from my point of view it is not. Which is what I am expressing.

We both agree here we are not in a good situation. Even if we "recover" GDP wise the buying power of the middle and lower classes is taking a serious hit.

This is one of the results of Volcker's policy (to remind he set the Fed policy in '70s) which we are following or asked to follow by some segment of the banking world today (cf. https://econreview.berkeley.edu/then-and-now-the-crisis-of-t...) Thus, my '70s reference.

b) Already economists do not consider 2008 crisis as over. But we are arguably in a continuation of that crisis. Again, this is how an economist historian is going to treat the 2000s. Normal could be before that and sure I could recalibrate my normal, but do you think we should expect magical times?

The view that Fed is using too much QE and too much free money is political and moral. I offer no opinion and definitely did not try to include it in my 3 line opinion.

Disclaimer: I do not abide in the market efficiency camp. I think history proves that markets are inefficient.

> Normal would involve checking and savings accounts paying a non-trivial interest rate.

Even now that the fed fund rate has increased, the savings rate offered is low. Why? Because the business model and flows of banks has changed. They don't need to ask for your money. They are going to get it in the U.S. even indirectly. Perhaps they still care if you are a high value individual that can give them a few millions and give them a few percentages of fees annually.

They are also now allowed to treat checking and savings the same, thus able to issue more loans. (U.S. detail.) Namely, Regulation D has changed and thus the definition of M1 money also.

[0]https://www.federalreserve.gov/boarddocs/supmanual/cch/int_d... [1] https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

Those times are over for the foreseeable future, unless U.S. or E.U. enters an unprecedented recession that stirs the banking world fundamentally.

Re: Can the West’s perplexing employment miracle continue?

#279

Post by tracerbulletx »

lordfrito wrote: post #256
eek2121 wrote: post #72

Earlier quoted context omitted.

Accurate prediction: Job data trails rate increases by many months. So do recessions. If the fed levels off interest rates within the next year or so, we have a very good chance of avoiding a recession. I am young/old enough to remember the last time interest rates were this high, and we were BOOMING. If the fed pushes the gas on interest rates, it will likely push us into a mild recession. Thanks (covid!) to million…

> we have a very good chance of avoiding a recession Not sure that's the case, I work in RV, which is a leading indicator for recession and recovery. RV volumes have been getting hammered for the last 8 months. OEM mfg numbers are down over 50% year on year. [1] Sure it's just one small segment of the overall economy, but things are getting strange out there. [1] https://rv-pro.com/wp-content/uploads/2023/01/Shipment…

You really think that it's not just that the RV surge was another COVID phenomenon? The same thing is happening with the bike market.

Re: Can the West’s perplexing employment miracle continue?

#280

Post by dang »

LeonB wrote: post #152
abduhl wrote: post #108

Earlier quoted context omitted.

And why would they expect that?

Before I answer that I’d be interested to know if you have ever met any people? And secondly, do you have any compassion? Because it seems like the answer to one or the other might be “no”, in which case you’re going to struggle to understand any answer I can provide.

Please don't cross into personal attack, no matter how wrong someone is or you feel they are. It only makes things worse.

https://news.ycombinator.com/newsguidelines.html

Post reply on HN