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The Demoralization is just Beginning

geohot.github.io

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Re: The Demoralization is just Beginning

#261

Post by bunabhucan »

_heimdall wrote: post #36
ryandamm wrote: post #11

I prefer my economic takes from economists, or people who actually study these things. -there is more to an economy than manufacturing. Using manufacturing metrics to rate an economy is like scoring a soccer game based on how far your players run: in some contexts correlated with “winning” but in others it’s not. -gold is not a good currency or basis for monetary policy. -these ideas only sound self consistent withou…

> or people who actually study these things How do you define "actually study" here, and what makes you think the author didn't study the topic at all? Its totally fine if you disagree with the author's view or have additional information that they missed or didn't consider. Writing it off as coming from someone who didn't "actually study" the topic is unnecessarily dismissive.

The fact that US gdp and population has grown while energy inputs have stayed flat is an important measure of both the energy efficiency of an economy and the mix of sources of gdp. "Energy intensity" is a measure of PPP gdp per capita per kg of oil. If you want to grow your economy then you either improve energy intensity (get more gdp for the same or less energy) or find new energy sources. China wants to reduce their energy intensity. Yet the author is showing a "graph goes up" to mean "better" with all the confidence of an engineer outside their circle of competence. The US energy intensity has halved since the 1980s - less oil and more IT.

Re: The Demoralization is just Beginning

#262

Post by locallost »

giacomoforte wrote: post #240

He contradicts himself. Europe, in particular Spain, France and Germany are still manufacturing goods. And yet their economies are stagnant. Because those industries have seen no growth for decades already.

It's not true there was no growth for decades there, but otherwise I agree.

He is not far off from the truth that a lot of the American economy is phony with wrong incentives. I submitted an article recently that makes the same argument, about e.g. the 2008 crisis "we used to sell mortgages to so we can build houses, not build houses so we can sell mortgages".

But his solutions fall on their face. The contradiction you mention is not the only one - his wrong way involves "protectionist economy" which is actually exactly what is happening right now.

It's also a bit funny the current backlash against globalization I'm the US government is led by the people that profited the most from it. That right there tells you their intentions are not noble.

Re: The Demoralization is just Beginning

#263

Post by chii »

janalsncm wrote: post #99
jazzyjackson wrote: post #55

Earlier quoted context omitted.

Right, velocity of money! I think this is the meatier part of the essay and I wish geohot would have skipped the bit about the gold standard - our main measure of growth is how quickly we hand money back and forth (is there another measure that allows expenditures to cancel out ? Net Domestic Product ?) The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I…

Intuitively, if a toaster costs 5x in the US what it would cost in China, GDP says that a sale in the US was more productive when in reality it’s the same thing in both places. My opinion is the money is a means to an end and we’d be served better by focusing on those ends instead: healthcare, housing, education, life expectancy etc.

> in reality it’s the same thing in both places.

the utility of a toaster is different in different places.

It may also be the case that a toaster costing 5x in the US, because this is including an opportunity cost for that toaster being made (which means a different thing wasn't made).

Re: The Demoralization is just Beginning

#264

Post by tony69 »

Panzer04 wrote: post #93
tmn wrote: post #73

Earlier quoted context omitted.

Care to elaborate? It’s thought provoking as a mechanism to reduce all of this zero sum (or even worse, parasitic) effort that dominates our system.

Making an inelastic resource (gold) the unit of exchange in a growing economy is a recipe for deflation. You don't want the most economically sensible decision to be holding onto capital, since that results in precisely nothing useful being done.

Deflation is fairer and reduces moral hazard in finance. The weak point of gold is that it’s too slow to settle transactions (you have to move it), so a paper gold system on top of it inevitably arises. [0] “broken money” by Lyn Alden

Re: The Demoralization is just Beginning

#265

Post by foota »

Rury wrote: post #144
ryandamm wrote: post #121

Earlier quoted context omitted.

If you can truly come up with an objective measure of wealth, I believe there might be a (quasi) Nobel Prize in economics for you. The reason economics is hard, in part, is that there isn't some core firmament you can rest on; there is no fundamental, provable truth. And yet, with fancy statistics and clever experimental design, you can still make intelligent statements and understand the world better. To me, economi…

I think some people need to step back and ponder what's the purpose of economics? Why do we even study it? What are we hoping to achieve in analyzing it? I can only think it began with the philosophy for making better decisions, solving problems, and improving society - particularly in the allocation of its resources. As so, I think a huge part of the problem with economics, including most economists, is that people…

Economics has two broad disciplinces, micro and macro economics. Macro economics is for if you're trying to plan or consider the economy, micro economics is if you want to understand a business or person and how it makes decisions etc.,. Broadly, there's also normative and positive economics. Normative economics is stating opinions about what's right (e.g,. there should be a minimum wage so that no one can be paid less than X for their work) whereas positive economics is about facts (e.g., if you raise the price of something, you'll generally sell less of it).

Anyway, idk if that's useful. I'd say though, economists don't really need to care about what people value, except to the extent that they can e.g,. learn about what people value by observing their behavior, or use how they ascribe value to something to predict their behavior. That is to say, "real" economists _do_ study allocations of physical resources etc., don't think they just try to model some theoretical value function :)

Re: The Demoralization is just Beginning

#266

Post by throwawaythekey »

roenxi wrote: post #82
Finnucane wrote: post #69

Earlier quoted context omitted.

When gold was money, most people were poor. Gold was mainly good for the aristocracy.

Wealth generation has been growing exponentially for 200, 300 years. Maybe longer. Noting that people in the past had less wealth than today is hardly a point. Anything but the most jaw-droppingly stupid economic systems would have todays population being very wealthy compared to those of yesteryear. Even the experiments in authoritarianism and communism have managed that although they killed a lot of people along th…

I agree with the thrust of your argument but the idea that you need to have a really really large pile of gold sitting in a warehouse to fix it seems silly to me.

Can't they just not print so much?

Re: The Demoralization is just Beginning

#267

Post by atwrk »

throwawaythekey wrote: post #250
ikiris wrote: post #78

Earlier quoted context omitted.

It's only a debate if you reject the very principals of science. I realize we're getting there for a lot of people, but merely disbelieving in science is not a refutal of it. This ignores so called Austrian economists however, who are just flat out lying to either themselves or everyone else depending on the person.

Is there a fundamental repudiation to Austrian economics? All I know about them is that they don't like funny money, which to me as a systems thinker is perfectly reasonable. At worst you would expect it to be harmful, at best to obscure what is really going on.

Contrary to serious economists Austrians try very hard to avoid specific forecasts, but we all can nonetheless look at their writings and compare what actually happened during every crisis in the last 50 years - and nothing Austrians are postulating proved correct. Or just look at the very last, covid caused one: If you'd been doing prognoses with textbook keynesianism regarding inflation, demand, stimulus effects and so on, you'd been pretty spot on. Just read the old blog posts from krugman from 2020 onwards as an example. The Austrians, by comparison, predicted 5 of the last 0 hyperinflation scenarios correctly.

Re: The Demoralization is just Beginning

#268

Post by l0ng1nu5 »

amrocha wrote: post #209
l0ng1nu5 wrote: post #203

Earlier quoted context omitted.

> I prefer my economic takes from economists, or people who actually study these things. Keynesian economists and now mmt advocates are the reason that most of the productivity gains of the last hundred years have ended up in the hands of a few hundred people while most struggle. I'd say it's high time to stop listening to these people who are nothing more than useful idiots of the elites.

Can you give an example of countries listening to MMT economists?

The US since the GFC is probably the most obvious one.

As I understand it, pretty much every developed country employed mmt practice in response to covid.

Now we have (even more) rampant inflation and wealth inequality with no sign of slowing down.

Re: The Demoralization is just Beginning

#269

Post by lll-o-lll »

ryandamm wrote: post #11

I prefer my economic takes from economists, or people who actually study these things. -there is more to an economy than manufacturing. Using manufacturing metrics to rate an economy is like scoring a soccer game based on how far your players run: in some contexts correlated with “winning” but in others it’s not. -gold is not a good currency or basis for monetary policy. -these ideas only sound self consistent withou…

> I prefer my economic takes from economists, or people who actually study these things.

I think the ideas are interesting and worthy of discussion. If you want an actual credentialed economist talking about similar issues — here’s one: https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-econ...

But you need to recognise that there is an “orthodoxy” and challenges to that. You aren’t going to hear the questioning of the status quo without looking outside the “establishment”. Here’s a taste (note that Yanis is old school left as far as politics goes)

“Faced with President Trump’s economic moves, his centrist critics oscillate between desperation and a touching faith that his tariff frenzy will fizzle out. They assume that Trump will huff and puff until reality exposes the emptiness of his economic rationale. They have not been paying attention: Trump’s tariff fixation is part of a global economic plan that is solid — albeit inherently risky.”

Re: The Demoralization is just Beginning

#270

Post by sam_goody »

globular-toast wrote: post #238
georgeecollins wrote: post #143

I get tired of people talking about how the US doesn't "make anything". I spent my adult life creating software that was super valuable. Along the way I worked with a bunch of people (from all over the world) who-- because of their brains and their education-- could have made almost anything very well. They didn't make steel or automobiles because that wasn't where their skills were best deployed.

I'm not convinced that software is really intrinsically valuable. We write it to help us make and deliver things that are actually valuable, which are physical goods. The whole service sector would be nothing without the physical. Finance doesn't exist just to see numbers changing on a screen. It's there so we can buy food after we retire etc. Maybe games are truly software that isn't tied to anything physical. I can…

At work, we provide video courses of therapists to other mental health professionals.

I help run a youth group, which uses lots of software to manage, communicate, learn and empower the next generation.

Nothing physical, but there is no question in my mind that all this software is intrinsically valuable.

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