If that is all they are worried about then they are not paying attention. There is a fairly large chance of a much larger war and the economy may well be the least of your problems.
Russia can't refuel trucks 30 miles across their own border, but I'm supposed to believe that their nuclear arsenal / command and control infrastructure is still oh so dangerous?
In what world does incompetence make someone possessing nuclear weapons less dangerous? Europe is pretty densely populated - an accidental launch in western europe's general direction would do terrible damage and potentially start a chain reaction of reprisals that would be catastrophic.
Also, Russia's rockets still seem to be working pretty well as evidenced by the fact that they were used to send American astronauts to space for the last 10 years[1].
They are totally aware of the stakes, but they don't care. In our world, the richer you get, the more you can escape the consequences that the poor, popular and middle classes have to endure.
The higher income class is de facto in power in our democracies. No conspiracy here, just a class phenomenon. The poor don't vote ; the popular and middle classes tend to elect people from the higher income class. Their economic success give them credits for handling things.
The higher income class doesn't care about
1/ the health of people
2/ if the wages are enough to have a modest but at leat descent life
3/ the environment
They care about
1/ their own wealth, health
2/ having no social constraints whatsoever (in the name of freedom, which is a right for all but they are the ones who have the means to act as free persons)
3/ order: they want a super policed society. So the poor are over-repressed by the police but they escape the law (connections, bribery, very good lawyers).
On climate disruption and biodiversity annihilation, our "elite" reveals that they don't even care for their grandchildren. The 0.1%, the top of the income elite, do care and buy large pieces of land in New Zealand with 100% self-sustainable houses and food production. And armed security and heliports.
People have been predicting nuclear war for 70 years. Maybe they need to give it a rest. Obviously it would be very bad, but it's not something to be preoccupied with.
It's influencing the world but individuals are not governments. let's assume there is a .1% chance of nuclear war over the next 2 years. how do I modify my life. You have a greater chance of dying from natural causses than nuclear war.
> let's assume there is a .1% chance of nuclear war over the next 2 years.
Depending on which institute you track the current estimates looking 12 months out are between 5 and 10%. So I think you should update your assumptions.
I stock some iodine. I learn foreign language in case I have to be refugee. I find where bunkers in my city are. I fill some non perisheable food into basement, in case my city will be treated like Ukrainiens are.
I educate myself about nuclear and general War situation.
Oh, and who ends up winning elections and whether people where I live buy Russian propaganda is suddenly important, so I opposed that instead of being silent and keeping good relationships.
Lower-income people are also worried about the economy. In fact, if I'm reading that graph correctly, the brief period where high-income people were the only people not worried about the economy has now ended.
Not really surprising given the sharp disconnection of a large chunk of the world's economy and the blockading and shelling of a smaller part.
That small part is also a breadbasket and, together with the larger, makes up 1/3 of the worlds grain. That 1/3 is closer to 100% in some countries in the ME and Africa.
> they are the first to be affected and the last to see the effects of recovery
Are they? Financial markets are usually hit first. Low-income people don't have financial assets. They're hit the hardest, because losing a job and losing money in a retirement account are night and day. And they're hit the longest. But they aren't hit first.
No, because they spend everything they get. When they cease to get money because a company lost X money and needs to close Y positions so that the balance sheet isn't so red for the next shareholder meeting, the low-income folk end up ceasing to pay for food or housing, with the usual side-effects.
I know a couple people who had to radically downsize (as in 4-dorm to 2-dorm rental and 1-job to 2-jobs each) in 2008, and, guess what, none of them was in finance.
OTOH, another friend of mine was forced to sell one of his boats. He may have been hit first, as in he had to start thinking about which assets he would need to sell, before the low-income ones, but, definitely, their lifestyle didn't change before the others.
Russia’s economy isn’t a large chunk. It’s criminally small given their population, land mass, and strategic location between China, India, and Europe. They make as much money as the Netherlands plus Belgium, two tiny countries with small populations. They need serious reforms, pronto.
Granted, from a resource point of view, they are important.
A bit pedantic, but I agree the original title is distinctly clearer than the posted title.
Also, "getting nervous" is better terminology than "worried," since absolute consumer confidence is still higher among the higher-income group, it just decreased at a greater rate recently.
They should be, all the massive wage gains they've captured recently could turn into mass layoffs as companies can't afford to pay them, let alone the lower wage workers.
I've been an entrepreneur through three major recessions - the early 2000s (8 months long), the great recession 2007 (18 months long), and the 2021 COVID recession (2 months long).
In each event I was significantly more impacted by the media salivating about the potential for a coming economic collapse than I was actually living through them.
Certainly my companies were impacted negatively at the outset of each, but emerged stronger to take advantage of the clear skies and sunny days that proceeded each event.
We've been playing on easy mode for the past 10 years in many ways - it's difficult to truly innovate without challenge, and today I embrace the potential for the board to shift, to find new opportunities to innovate, and to embrace change.
It was much harder to start in 2000 compared to 1990… it’s always the same every year it’s not harder it’s just harder to see compared to what you can look back to understand… the same is true today as it was yesterday and should be tomorrow - make something to help someone by adding value to what they do… charge them money for it - listen to how they use it etc etc … it’s never been easy IMO…. Finding the inflections is when you can make a unicorn but you can certainly build a business without one IMO… granted I’ve grew up with AOL surging and then collapsing … failed a few times and maybe have something that finally works … so who knows unless you try
2000 was the seeds of the dot com world, there was a massive new multi-trillion dollar global market opening.
1990 had none of that.
Maybe blockchains and NFTs are the 2020s version of the internet as far as greenfield goes. I'm not convinced, but then I've always been too cynical for my own good.
2000 was the height of the dotcom boom. The winners were already selected and the losers imploded soon after. This was not the better time for a new business. 1990 was the time the opportunity was ripe to begin securing your position for the year 2000. Businesses aren't built in a day.
Pre-2015 there were a lot of opportunities to get a running start without much investment. A cool new web-thing would spread organically, could be coded pretty fast, etc.
Now, it's easier to raise money and use that to build a business. A not uncommon strategy is paying Google and Facebook $200 to acquire a $100. It loses money, but shows growth.
For some people, the new way is easy mode. For a lot of people, the ability to raise, pay yourself a real salary and also recruit a well paid team is easy mode. For some people, three dudes and some ramen is easy mode.
Nothing specific in that year but that was around the time when:
1. Everyone using FB ads and the days of FB ad arbitrage and cheap ad prices were going away
2. Cloud computing started to become more mainstream and building your own product became even easier
3. Instagram and YouTube started to really take over peoples attention and the days of getting attention by simply building something cool was disappearing.
I wonder whether having the media doomplay every crisis is part of the confounding or resorbing forces. Are they making it worse by persuading everyone that there is a crisis and that they should stop investing? Or are they helping decision makers anticipate and therefore smoothen the blow? I mean, the 2008 they talked so much about was way smoother than the 1995-1998 crisis, where managers were taken hostage in France in dozens of manufactures, where the Five Dragons fell in Asia and where Boris Yeltsin’s Russia came to an end?
The 1998 Russia crisis is particularly interesting:
- Russia was put under FMI (IMF) leadership with huge monetary injection,
- Financial games made that this money didn’t help the populace but only helped to create a new billionaire class in Russia.
- We have a dozen thousand Russian multimillionaires here on the French Côte d’Azur (Nice) coming from that period; and the other half of the oligarchs created the Putin regime.
Talk about a grave crisis, Ukraine is a ripple effect of the IMF stuffup.
> having the media doomplay every crisis is part of the confounding or resorbing forces
Capitalist economy is fundamentally predicated on confidence cycles, so anything hitting that confidence will inevitably speed up the coming of the next downturn. However, the downturn would eventually come anyway.
> the 2008 they talked so much about was way smoother than the 1995-1998 crisis
That really depended on where you were and a bunch of other factors. Entire neighbourhoods in the US were gutted by repossessions, in London we had meaningless riots, in the arts sector they saw budgets slashed, etc etc.
> Ukraine is a ripple effect of the IMF stuffup.
Undoubtedly. Also of the post-2001 US doctrine on the use of force in international relations. And a bunch of other things. Nothing ever happens just because somebody woke up that day feeling like starting a war.
What worries me more is that it seems like the post-WW2 order is shaken. Large-scale war is back on European soil. Information and propaganda wars are intensifying. The defense architecture of the Western hemisphere now needs to cope with unpredictable dictators posing a nuclear threat.
I don't think much has really changed except that the scales have fallen from the eyes of most Western countries. The military has always had the same pretty much the same posture towards Russia wrt threats and nuclear deterrents.
I see the spread of disinformation and propaganda as something that will inoculate the populace ultimately.
I think Russia (and China) has done the West a favor. Hopefully the West will start offering integration into our economies as a reward for democratic reforms instead of as an incentive, because god knows that hasn't produced the desired result.
I like your comment and its practical optimism. I hope you're right about disinformation innoculation; the science works out because it's hard to stay in emotional disequilibrium for so long! And it really does take long time (years) to get a handle on the troll phenomena and your reaction to it, so perhaps these are the growing pains of a bouncing baby information society!
"The military has always had the same pretty much the same posture towards Russia wrt threats and nuclear deterrents."
That's not my understanding.
I'm far from an expert, but from what I've read there was a radical change in the US military from a focus on large-scale warfare to small-scale warfare focused on urban combat and quick responses to multiple small threats.
There are also way, way less nuclear weapons (on both sides) than there used to be. I think there were something like 30,000 nuclear weapons in the US at the peak of nuclear proliferation, and now there are closer to 5,000 (and roughly the same in Russia).
So the military posture of both countries has definitely changed.
Unfortunately, it seems we're headed back towards a Cold War, if not a hot war... so the arms race is likely to heat up and preparations for large-scale combat will likely increase.
This will make the world a much more dangerous place.
The change you are referencing is an unwelcome and short-sighted change. After the Vietnam War, the US military focused on confronting a possible armada of Soviet tanks flooding Europe. During the Iraq/Afghanistan Wars, the US military had to relearn how to fight insurgencies and perform nation building. The top military brass have to obey the President of the USA. But I would argue, the US military will readily admit we suck at insurgencies and nation building and would argue against the wisdom of doing so. The US military wants to deter aggression from the likes of Putin and other conventional armies. Having nothing but Special Forces and urban warfare specialists is not going to deter Putin from attacking Poland or Kim Jung Un from attacking South Korea.
I honestly don't understand what the point of having large conventional forces is. We know a direct confrontation between NATO and Russia will lead to nuclear war, and all those conventional forces will be wiped out along with the countries they're supposed to protect.
It just wastes money and deludes trigger happy people in to believing a war between nuclear powers can be "won".
It is not about “us”. The aggressor thinks about what he can get away with. Putin knows the US will push the button if the mainland is about to be lost. What about a piece of Poland? Especially if there is no conventional army to counter Putin’s. In his mind, he may think he can get away with it.
>...unpredictable dictators posing a nuclear threat
I'm sorry to say that it makes the most sense to simply not worry about it, unless it's your job to.
We tend to forget that dictatorship is the default human civilization. It also happens to be the "normal" structure of the family, even in liberal countries, for the simple reason that kids are, by definition, incompetent. So I'm not sure if it makes sense to "stamp out dictatorship" when so many people legitimately want to live under one. So that leaves getting rid of nukes - a problem most of us assumed would solve itself over time after the fall of the Soviet Union. This backsliding is worrisome, but the path to success remains the same. But when the next Soviet Union falls, we should pursue denuclearification much much more seriously.
To further expand on "don't worry about it unless it's your job to":
Unless you are able to directly exercise nonzero control over the foreign policy of a nuclear power, the threat of a nuclear apocalypse is sufficiently far removed from anything you can do anything about, that it's tantamount to worrying about a large asteroid impacting the earth. It would be devastating, sure, but it's not productive to genuinely concern yourself with it, because it's unlikely you'll survive and there's not much you can do to change the likelihood of the event or your survival.
There are certain areas more likely to be vaporized than others though. I know in NYC at least there were some who felt moving to a less populated area (ie rural Midwest) might lower their risk of nuclear death.
Yeah but then you will freeze in the winter or starve to death first. I mean by all means buy a decommissioned nuclear bunker and setup solar and download as many videos you can about growing food etc... This is sort of the level of preparation you might need to take.
Except there are missile silos in the midwest that would be first-strike targets.
Your best bet is to move somewhere in the southern hemisphere, such as New Zealand. Hey ... that's where a lot of the mega rich have been buying property of late ...
Really, the vast majority of human activity remains organized under heavily hierarchical, authoritarian command economies—since that's how nearly all companies work. We're fortunate to live in a seemingly-unusual time when maybe 1/3 of the world's population lives under semi-functional, more-or-less liberal democratic states that claim higher authority than those companies and do an OK job of slightly moderating the ability of the rich to dominate everyone else, but still. The world's very much mostly not democratic, even today, and even in democracies little mini-oligarchies/dictatorships dominate much of our life.
"dictatorship is the default human civilization" definitely needs a citation. Many historical societies had one person at the top, but a bunch of several rich and powerful people with non-trivial ability to veto things / influence policy. I'd guess that an oligarchy where these people take turns to be the top guy and still retain some control when they're not on top is a fairly common pattern.
In that respect, the mention of family made earlier is also really more like an oligarchy. One member may have the final say (historically the man of the house), but other members of the family (notably said man's wife, historically speaking), can wield power to try and sway the opinion. That distinction from dictatorship may not be all that significant.
It's difficult to determine who is at the top, like in the UK. Who are the principle people who control PM Johnson? There's the royal family, but without resources of the secret service it's impossible to know who he's taking direction from. There are occasional glimpses: connection of Russian money to Brexit, delay of the Russia Report, delay of sanctions against oligarchs showing them to handle their finances before sanctions take effect, etc., but that's one small block, I suspect. Clearly there's heavy interplay with media tycoons. But really it's all pretty opaque.
There are far too few technologists in that list. Twitter, for example, certainly drives the decisions of politicians these days; politicians perceive it a pretty good substitute for polling, for better or worse, and have the donations to prove it.
Yeah I disagree with this. There was a line in Sapiens (I'm forgetting which chapter) but most of humanity during civilization have lived in Empires. Maybe you can construe the definition of Empire to be a dictator but I don't think that's fair.
You are throwing the mode of government and the outcomes of government on one big pile, but I don’t think you can. Even under a dictatorship people can reasonably expect access to basic human rights. Putin seems to be depriving his people of even that.
There are basic rules of human decency which we as a species have agreed to in the form of human rights, people may choose an alternate mode of government to democracy (and this is always a choice on some level, no dictatorship can rule an entirely unwilling populace), but nothing they choose can morally deny them their human rights.
I don't see how "dictatorship is the default human civilization" (which seems true!) implies "so many people legitimately want to live under one". The fact that many/most people do live under authoritarian control, to me does not say anything about those same people's desire to continue doing so.
Totally agree with the main point of denuclearization, it needs to be pursued even more aggressively in the future. The current 12,000 nukes is yes way lower than Cold War, but it's an insane level / irrational overall.
I'm going to go against the grain here and say denuclearization is not the solution for peace. I believe the reason the world has been at (relative) peace since WWII is because of the threat of a nuclear war.
If Ukraine had kept their nuclear weapons, do you think Putin would even consider invading? I don't think so.
A better solution to denuclearization, in my opinion is to adopt a "No First Use" policy [1]. I suspect internally the US and NATO do follow this policy but will not disclose it publicly for strategic reasons.
No, if you connect a nuclear launch to the decision of a single human mind, eventually that mind will have a stray thought, and press the button. To think otherwise is to assume that any human mind remains stable, sane and rational for its tenure manning the button. Nevermind morality or compassion! But nothing could be further from the truth. Organic mushy brains are inherently unstable and irrational in the long run. If the button exists, its only a matter of time before someone pushes it.
A no first use policy is never going to happen, because it completely flies against all of the prevailing wisdom about nuclear deterrence[1]. Nuclear powers benefit heavily from ambiguity about where their "red line" is that would need to be crossed for them to use nukes, because that limits the ability of others to act against them for fear of crossing the line. Drawing a lower bound on where your red line is, like with a no first use policy, frees up others to act against you because they know how far they can safely go (literally anything short of using your own nukes in the case of a no first use policy).
"so many people legitimately want to live under one"
We sort of see this in democracies when the simple majority want to force a large minority to do or not do things (sometimes contrary to law). We want a dictatorship, just so long as it's one that we agree with.
You're describing a feature of democracy and majority rule. The majority always can vote in policies they prefer. That is not a feature of a dictatorship.
This phenomena was called the "tyranny of the majority" by John Stuart Mill in "On Liberty". The theoretical ability of the majority to bully a minority was a big open question about the viability of democracy, which was to be determined by the American experiment. Results are mixed.
Subsequent to the start of it, the American experiment has shown that the implementation details of democracy are fundamental to not backsliding into dictatorship. Germany's democracy is different from USA's democracy is different from Russia's, and they all have had different results. There are other experiments to be run, too (especially with recent advancements in technology), but unfortunately we lack the necessary ingredients to test them out. Experiments like large scale direct democracy vs what's technical a republic. Centrally planned economy under a democratic system.
Western democracies greatest danger isn't Russia, it is their own collapse into authoritarianism out of fear. You can look at Germany how it managed to create two dictatorships in short order and it still repeats the mistakes of the last century even today. The stereotype about Angst might be exaggerated, but an old population has similar attributes.
Overall we didn't had much time not under some form of emergency powers. Terrorism, war, insurrections... there is always a reason the be afraid.
With the interesting conclusion: we must all learn to live without fear even in legitimately fearful circumstances! If you cannot control your emotion, it becomes rational to ignore your reason, or even "hack" your reason by feeding it false belief. Somehow that one scene in "Airplane!" comes to mind, with the long line of people waiting to slap the hysterical passenger. The joke being that in an emergency most people are fine, a few people get hysterical, and other people cope by slapping the hysterical person in order to "help" them calm down.
In the end, it probably doesn't matter; the Fermi paradox strongly implies no civilization makes it out of their tiny radio bubble alive. Consider that our own radio waves have only traveled 122 light-years into the void, and already our civilization has been at risk several times from nuclear weapons, and is now at risk because of climate change and biosphere degradation. A civilization desiring interstellar contact must prioritize it's own longevity above all else. That humans might be the first in our galaxy does not bode well for humanity's chances! Which brings me to my own favorite tool to disspel fear: zoom out, remember it's all temporary at some timescale, and enjoy the good stuff while it lasts.
I'd imagine slaves would view it differently. They clearly did live under democracy in the US, but I don't think anyone would argue that it behaved like a dictatorship towards them.
>does not say anything about those same people's desire to continue doing so
Well, I'm not sure about that. I feel that we are all responsible for our government to some degree. If the gov is really doing evil things without accountability, then it is the people's responsibility to change it.
The problem is that it is very easy to move from democracy to dictatorship, and very hard to move from dictatorship to democracy, with the latter transition almost always requiring the use of force. Its a big, gigantic step. It's starts when Russian mothers and fathers, Russian neighbors and shopkeepers, start whispering about really taking up arms against Putin.
This is a very problematic line to cross, mainly because people are stupid and will trigger 'a revolution' about anything and everything. The information landscape is treacherous for false positives, now more than ever. Consider the example of the pitiable 1/6 insurrectionists. Every one of them thought they were defending their country against a threat. But they were all badly wrong, and now they suffer for it. But the instinct to put their lives on the line for their constitution is, in my old-fashioned belief system, admirable. They just got tricked into fighting for the wrong side.
There's no getting around living under "authoritarian" control. You could categorize the forms of government as so:
- Monarchy/Dictatorship: Power in the hands of one, one person is authority
- Oligarchy/Republic: Power in the hands of a few, aristocrats are authority
- Democracy: Power in the hands of many, majority is authority
- Anarchy: Power in everyone's hands, everyone is authority (or no one is depending on how you look at it)
In reality, society only works when there's a power hierarchy; it's the natural order of things. The more power is equally distributed amongst people, the more dysfunctional/less orderly/more bureaucratic society becomes. When you're in complete Anarchy, might/ability is what ultimately determines the outcomes in conflicts, and those who wield it typically end up becoming the "authority". Hence, over time, Anarchy will naturally develop into the other more stable forms of government. Notice however, all forms of government have the following issue: when there's a conflict in wants between people, someone (ie authority) will have their way, someone won't. You can't get rid of this reality, no matter how you structure government, which is to say: oppression is unavoidable so long as there exists conflicts in what people want.
Thus, I honestly don't see why people think a dictatorship is necessarily more oppressive than other forms of government. Some people are quite happy with their dictators, even if there's other people living under the same dictator that aren't; but this is true of any form of government. And it's not hard to see why there can be people happy with their dictators, as dictatorships are highly efficient and effective at carrying out policy. If your dicator is competent & beneveloent towards your wishes, it's arguably the best - most effective form of government. But understandably, if your dicator is not competent or benevolent to you, its among the worst...
Otherwise very nicely put, but surely there is a useful distinction between "not getting what you want" and "oppression"! I think we can all agree that even losing the vote on every issue is far preferable to losing the ability to vote on any issue. But that's not true if, by losing a vote, or a court case, or an administrative decision, you consider yourself 'oppressed'. You lost, true. Maybe unfairly. But that's necessary but not sufficient to prove oppression! Like, if I could wave a magic wand and grant all American voters the (apparent) super-power of gracefully losing, I would.
If every loss is oppression, then winning becomes a moral imperative, possibly requiring escalation to violence. No-one wants to live in that world, so we need to give people a way to take their licks at the polls and then work together to solve the world's problems. And you know what, if you want to go to war over abortion, have at it, but do you really want to die on that hill? Aren't there issues that are more urgent, and more clearly dire than abortion? Or gay people? Or racist people? Aren't we ALL kind of in the same boat with respect to climate change, nuclear armaggedon, income inequality and the backsliding of democracies into autocracies? And aren't all of these at least 5 orders-of-magnitude more important than whether or not a trans woman can compete in NCAA sport?
(Why don't we hear our senators debating the important issues of the day? Why aren't they erudite men, well versed in many fields of endeavor, hosting daily podcasts of debates, singly and in groups? Is this not their job? And isn't it our job to second-guess all of them mercilessly??)
>Otherwise very nicely put, but surely there is a useful distinction between "not getting what you want" and "oppression"!
Wants themselves do have ranks, as does the amount of oppression felt by not getting them. As you can imagine, there are likely some people who want 2nd vacation homes, but would prefer not having a 2nd home over not having food if they were ever forced into a situation where they had to compromise. But it's not as black and white as you'd might think. People don't all share the same wants, let alone to the same degree. There are people in this world who would prefer to own 3 homes not caring that there are homeless people wanting just 1 (greed). There are people out there who prefer to go without buying food, dumpster dive, and work minimum wage jobs despite having better offers, all in order to save up to buy a house (I personally know a guy - and this is pride). People who like to go without food (ie fast) for weeks (me). And yet, people who prefer to remain homeless, people who want to help the homeless, and people who don't want to help.
>If every loss is oppression, then winning becomes a moral imperative, possibly requiring escalation to violence
Whether something is a moral imperative is subject to opinion - whether you personally deem it so. But yes, especially at some extreme point, that is reality, and you cannot escape it. This is exactly the sort of thing political philosophers such as Hobbes and Locke argued in their social contract theories. It's why when loss is deemed to be so terribly bad under tyrannical governments, that there are violent revolutions. It's the reason for wars. It's literally what lead to the foundation of the United States.
That said, you can learn to go without most wants. It's what Buddhist monks teach and practice. Additionally, wants have ranks, as I mentioned above. So winning is not always a moral imperative for everyone in every case. Some people simply don't care that much about certain topics, and don't care if they lose the outcome.
>No-one wants to live in that world
Yes, that's why true Anarchy doesn't last long. Anarchy, or the state of nature, can often be brutally violent. Wild animals often kill each other just for fun, it's called surplus killing. Power hierarchies naturally form within same species, just to avoid constantly having to violently fight to determine the outcomes for conflicts. The suffering of being subjugated is often preferred to the suffering of being violently maimed (or mere risk of it) by your neighbor, but pushed to a point it can obviously flip, leading you back into a revolution. As you put it, no one wants to live in that violent world, (at least not very long), so a hierarchy eventually forms in order to avoid having to live in it.
>Aren't we ALL kind of in the same boat with respect to climate change ...
Yes and no depending on how you look at it. Do we all have opinions on those topics? Yes. Do they affect us in some way? Yes. Do we all share the same opinions over them? No. Do we all rank those issues at the same level of importance? Probably relatively to some degree, but ultimately no.
>> as dictatorships are highly efficient and effective at carrying out policy
Hardly ever true. Most dictatorships are unstable and unable to do anything more than a bare minimum.
Hierarchy is not the same as dictatorship. Dictatorships means unlimited power. There is also hierarchy in democracies, but it is more about the separation of power, rather than of concentration.
>Hardly ever true. Most dictatorships are unstable and unable to do anything more than a bare minimum
Dictatorships are only as effective as their leaders competence, so you can make that argument. But relavtive to other forms of governments, dictatorships are efficient and effective at carrying out policy simply because there is minimal questions, debates, delibrations over decisions and conflicts. In democracy, you MUST debate, vote, count votes, and come to an agreement about a topic amongst many people, before you can enact policy. This is often a lengthy (ie inefficient/bureaucratic) process. In dictatorships, this is a shorter process, as one man decides, and it's do as your told, no questions asked. In this aspect, dictatorships are faster at enacting/delivering policy.
>Hierarchy is not the same as dictatorship
A heirarchy is a system or organization in which people or groups are ranked one above the other according to status or authority. Dictatorships are a heirarchy, namely a heirarchy consisting of 1 man having unlimited authority over everyone. But not all heirarchies are dictatorships, as you can have many other possible forms of heirarchies.
I doesn't help you much if you are the fastest widget maker if every widget you produce is defective because you didn't take the time to do it right. So no, there is no law of nature decreeing dictatorships are more efficient or effective than other forms of government. It is actually the other way around, skipping important input is what makes dictatorships historically almost universally worse than other forms of government from the offset.
>I doesn't help you much if you are the fastest widget maker if every widget you produce is defective because you didn't take the time to do it right
You're conflating effectiveness at "making good policy" with effectivness in "delivering policy". I never said they were most effective at "making good policy" but in "carrying out policy" (meaning time to deliver policy).
>So no, there is no law of nature decreeing dictatorships are more efficient or effective than other forms of government
And again, I never made that claim (if you mean efficient/effective at making good policy). I said they were when it came to delivering policy (whether that's good or bad policy) and it depends on their competence. IF their leaders are competent (in making good policy and decisions), they naturally are more efficient and effective governments. This holds true, because, of the words 'if' and 'competent' and the reasons I explained prior.
As far as waiting for input vs skipping input goes, it's a double edged sword not a one way street. Extra time spent in gathering input means slower to act. Slower to act means missed action/opportunities, which is a terrible aspect to have in an immediate crisis. This is exactly the reason why the executive branch of the US functions more similarly to a dictatorship than a democracy - it's so that it can respond faster in times of crisis. It's because dictatorships are actually better in this aspect, when compared to other forms of government.
I mean Gaddafi had a pretty stable dictatorship for a pretty long time, but dictatorships are anything but stable and they are always challenged. As soon as the dictatorship cannot deliver mainly economic prosperity, they will fail. True for other forms as well, but the economic growth comes with desires of political participation at some point.
> I honestly don't see why people think a dictatorship is necessarily more oppressive than other forms of government.
A friend once wondered why there are nations. I responded that because even one nation will expand until it is stopped by another. (A nation usually meaning one geographical location and it's people, language, etc. Or, uniquely for the US, meaning one set of values. Used to mean enlightenment values, but now means Jerry Springer, WWF, Payday loan values. But I digress.)
"I'm not sure if it makes sense to "stamp out dictatorship" when so many people legitimately want to live under one"
The people who want to live under a dictator do it either because they're greatly benefiting from the status quo (these tend to be an elite minority) or those who have been brainwashed by a state-controlled media and education system to not realize how oppressed they are.
Free access to the internet lets people see outside their tightly controlled propaganda bubble, which is why totalitarian regimes such as China try to censor it. They are afraid of the internet for good reason: because once people start to find out what really happened in their country (like at Tiananmen Square) they'll start to wonder if their own government is as benevolent and if the outside world is so horrible as state-controlled media and education tells them. That could contribute to the overthrow of the old regime.
Free access to information is only one piece of the puzzle, but revolutions and deposing of dictators can and has happened.
Unfortunately, what replaces dictators is sometimes just as bad or worse than the dictator. See the results of the Communist overthrow of the Russian Czar for one example, and the military's control of Egypt after the revolution that overthrew Mubarak for another.
To be truly successful revolutions can't just replace one elite with another, but have to really empower the people.
You absolutely should worry about that when, for example, you are voting for a president or in general elections. It does actually matter in terms of how your country will deal with that threat.
No, they are telling people to worry when it matters - when they are voting. I personally think that's a good and responsible position. It's quite different than saying you should worry all the time!
The problem with dictators is that they don’t stop at their borders. In fact they don’t do boundaries and behave as though there’s nothing outside of their control or influence, including you and your children.
Plenty of people should worry about it. People have to physically remove themselves from these environments in order to seek opportunities for their own children and assure their long term opportunities. Millions of people are being displaced today by the whims of a Russian dictator, and we should assume dictatorship is good and well?
Not worrying is the correct choice in my opinion. More frightening are always those that want a dictatorship in your own country and western nations tend to call the domestic part of that "emergency situations".
One essentially mobster is accosting another country with soldiers seemingly reluctant, in what might be no more complex than a clear mobster survival ploy in a country plagued by poverty for all but his cronies.
I ask that because it seems reminiscent of Slobodan Milosevic 23 years ago in Serbia.
I disagree. This is Russia we're talking about. The whole post-war western security policy was, in no small part based around Russia / USSR. Russia declaring war in Europe is a MAJOR event in European history whatever the outcome of this. It changes things geopolitically forever. This moment is at least as big as 1989. I suspect we'll look back on this later in the C21 as a major step towards a multipolar world, with China at the helm of one of those poles. That's super significant even if this war is just a chapter in that bigger story. Maybe the effect will be something else but this is part of a game-changing narrative playing itself out. I'm certain history is being written before our eyes.
I wanted to say that i really respect all you responded, of course hope things don't turn out so dire, but agree every one of your points is entirely plausible.
I don't think the world has ever not been multi-polar, although the poles change; while America had "top nation" power from the 1990s, it was never entirely hegemonic.
It's a question of the strength of the respective poles then. The Western pole of US / EU and its postwar institutions of the UN, IMF, NATO etc were pretty hegemonic I'd argue. Wasn't the war in Iraq and Afghanistan predicated on exporting our western liberal worldview as if it was inevitable that all countries would benefit from our system and actually want it. For all that Francis Fukayama's "End of History" was discredited, I think many in the west implicitly saw the world like that up until recently.
The parallels to WW1 are fairly strong. The World economy may simply be too broad relative to the power structures that sustain it. China and Russia do not want to participate in a global free economy that they do not dominate.
The risk here is that the Russia and China will use their military power to stamp out democracy for an undefined sphere of client states. History through the cold war shows that tolerating this behavior simply invites further escalation.
There was a chilling effect from swarms a "you're praying for a recession" about 3 years ago but it certainly wore off. The real power players make money coming and going so real economic growth and wage growth is the last thing they and the executives at media companies want.
The news media is addicted to economic doom stories IMHO. They generate a lot of viewer interest even when most people are barely affected. Even when times are good there are always stories about how it's all illusory and in fact we're all moments away from disaster.
for the media, every year is 1929, 2007, or 2008. crisis is always around the corner. everything is the start of ww3 or a depression. democracy is always on the brink.
Same here. The last 30 years have given me a very steady growth. The last five or so have been insane. I took a hit when Putin decided to ruin his country, but, if we don't go up in a fireball, things will be good, afterwards (except, maybe, in Russia. I really hope that they don't go back to Stalin-era privation, after having a few years, experiencing Western decadence/freedom. I've really enjoyed working with Russians, and this is pretty depressing).
Our financial markets are basically casinos by now and highly influence by emotion. So negative press will inevitably have a real impact on the economy as sad as that is.
>>How has consumer confidence been affected in older middle and lower class folks?
Broadly the same negative sentiment, according to the University of Michigan US consumer sentiment survey data broken down by age, income, education, region and gender.[1] I believe updated data will provided on March 25th in two days' time.
The Federal Reserve Economic Data (FRED) consumer sentiment and consumer inflation expectation data series[2] charts the UMich's surveys.
Such an odd title. Clearly, as the article even suggests, it’s actually people that understand finance and economics that are the ones that are concerned. Wealth is only tangentially related.
Regardless of the semantics, I am very much of the opinion that we are in for some rough ass times.
Recession+inflation=stagflation. Not sure what you call it when you add in energy crisis, risk of WW3, a push for a new global hegemony, an increasingly hawkish Fed, extreme political divisions, a looming food/fertilizer crises, and a globe still snarled by covid.
associative thinking is great for learning, not great for thinking about major disaster.. tough times call for details and specifics, not "a list of everything that can go horribly wrong" .. its bad for mental health, literally, right?
Higher-income people are business people. Business people are always worried, deep down, even when they won't admit it to anyone. The worst whiners I've ever met were wealthy shopkeepers and industrialists - they know it can all go in an instant.
Ive found mostly the opposite true. Higher income people are mostly just spoiled and clueless. They don't know it can all go because they've rarely if never been in a situation where it has all went before.
Given that $100k is the income bracket where people are highly leveraged on college loans (and housing prices), it makes sense that they are often more sensitive to economic conditions than those working lower-income jobs.
You NEED a strong economy to stay above water on the debt — you took out $200k in college + law school loans to accelerate your career and if you can't get a high-income job in your specialty you simply can't fall back to a low-income job without being in crushing debt forever.
Given the desire and investment in project/process, we could probably take half of the $100k+ workforce and replace with automation and a dumber, cheaper workforce. Economic crises often drive those decisions.
High income people are the least safe - $300k doctors are being treated like factory workers and replaced by $125k nurse practitioners.
> we could probably take half of the $100k+ workforce and replace with automation and a dumber, cheaper workforce.
That's basically what i'm doing. I was at first automating a secretary's job, now i'm automating my "SRE and security manager" job. With some resistance, so i'm starting with the most boring part of his job, but my goal is to automate him away. It's my secret, secondary job description. I hope i do that within a year.
Once you have something you worry about losing it.
My dads good friend was a playboy, after getting out of Vietnam he went hippie, partied hard, lived fast. Then he hit the stock jackpot, riding Intel and Microsoft, etc in the 80s and 90s and cashing out with ~$20M.
Then he retired, moved to a golf course in South Carolina and turned into an ardent conservative defender of traditional values.
I tell the story as it illustrates the transformation - face death and risk at war, come back and embrace life, accumulate wealth and return to fear… guilt about what you have been able to do, fear of losing what you have.
We’re all animals at the end of the day, it’s difficult for us humans to process what life hands to us sometimes, good and bad. Deep down, the insecure business guy knows that he is mortal, and knows that a misstep can be fatal.
I mean most Boomers did this transformation and it didn't really have anything to do with their life trajectory.
It's just a very solipsistic generation culturally.
When they were in their 20's they thought everyone should pay attention to them and that their drug use and weekend music festivals were unusually profound.
When they were in their 40's they thought everyone should pay attention to their property tax bills.
When they got to their 60's and 70's they thought everything should just stay exactly the same as the way they remember it and that everyone should consider their fears and confused elderly outbursts as valid expressions of reality.
I don’t believe that people in aggregate change much if at all. We may evolve in different ways at different times, but the carrots and sticks that drive behavior are the same.
We tend to idolize the distant past more because we’re at arms length, and we miss what’s around us because we lack perspective.
The boomer guy who will let the world burn to protect his property values is the same as the old Italian guy holdout in the declining urban neighborhoods that I grew up with in the 80s.
If you look at the article data, the lower income bracket have FAR less confidence than higher income brackets.
Also, I think it actually doesn't all go in an instant. I've worked with local businesses that are over a hundred years old and seen many market turns both positive and negative. During recessions they'll make a reduction in employees or other costs and be able to stay open on that until profits rise again... or worst case, they sell the business or real estate and pocket a huge amount of money even though it closed.
The folks that have it all go in an instant are the ones living paycheck to paycheck who get laid off at the first sign of trouble. Their losses insulate the businesses and owners.
This is HN nobody gives a shit about the working poor. And neither does our political system.
There are entire neighborhoods were only 40% of voters turn up.
Wonder if these are the same people as the 33% of home buyers who bought as investments. I too would be worried buying at the peak of a bubble realizing nobody can afford to buy the flip at the extremely inflated prices with mortgage rates increasing. Or that few people can afford to pay rent at the price of inflated mortgage + profit margin
I'm sure we'll find a way to keep inflating housing prices. I'm in my 30s and my entire adult life I've been thinking "no way it can keep going up" and it kept going up.
IMO there’s a pretty simple rule that you can apply. If you’re planning to stay somewhere for at least 7 years, then buy your home. If not, renting gives more peace of mind.
The problem with buying is that it’s a single large transaction that you can’t spread over time. Over time ownership turns a profit, but if the time span is less than seven years, you may end up buying at the peak and having to sell near a bottom.
It's admittedly a small sample range, but if I'd taken this advice when I started buying houses around '09 (never more than 1 at a time, but I've moved just about every two years since then), I'd be at least $250,000 poorer. And I didn't come anywhere near optimizing for profit—it's mostly been happenstance and the fact that houses just keep going up in price, plus an initial bump from coming in right after the housing bubble burst (though house prices around here never got down to where they "should" have been if they'd tracked inflation since the start of the bubble, and only seemed cheap relative to the peak). I also started with one hell of a lot less capital than, say, a FAANG employee ought to be able to save in a couple years. Think, like, $25,000.
("But you could have invested that money instead and the market's gone crazy over that same time span, so maybe you actually lost money, opportunity-cost wise!" sure, but not really, since rent exceeds TCO for houses in my area so I'd have just bled money to that in exchange for no equity whatsoever and probably living somewhere worse)
For another data point, the Manhattan apartment which I'm renting was recently sold. The previous landlord had purchased it in 2016 for $200k higher than the sale price now, over five years later.
I'm renting because I know I'll be moving again within the year. If I had bought a place in NYC when I moved here, I'd have lost a lot more money than I've paid in rent.
The opposite was statistically much more likely to happen. The high transaction costs alone are enough to eat up any "profits". But the risk of buying a dud goes up as you move more frequently. Etc.
Your outcome is pretty close to a best case scenario. And I'm happy for you that things went so swimmingly.
The main question for any investment, ever, should be: you have some amount of money...what will net you the highest return on that money. You can modify this with considerations for risk and diversification, but the name of the game is always opportunity cost.
People stop thinking about opportunity cost when it comes to housing for some reason because they just can't stop thinking of paying rent as "throwing away money," without understanding that you're always throwing away money.
To take a simple example, let's say that you have $500k in cash.
Scenario 1: you pay $50k per year in rent from salary, park that $500k in a $2M investment property that returns $85k in rental returns. In this scenario, your returns are property appreciation and rental income. Your costs are mortgage, property tax, home insurance, home repair, and the rent you pay.
Scenario 2: you pay $0 per year in rent from salary, park that $500k in a $2M property that you live in that returns $0 in rental returns (because you live there). In this scenario, your returns are property appreciation. Your costs are mortgage, property tax, home insurance, home repair.
It's entirely possible, and common, for these scenarios to work out to be exactly the same. If you prioritize the purchase of properties that yield very high rents compared to the property value, it's very common for the numbers to work out in favor of owning investment property. And that can include "throwing away" money on rent.
TL;DR: you're never not renting. Even if you pay $0 in rent, the price you pay is the opportunity cost of not renting your house, and not maximizing returns on the money you've parked in it.
Prices will keep going up while there is more demand than supply, and the supply shortage is mostly political. I advise you and everyone else feeling locked out of the housing market to pressure your representatives to allow more housing to be built.
Housing developers are sitting on huge swathes of land that have planning permission (every council has a housing development plan), but by building slower, and with no real penalties for not using the land (LVT or similar) they can pad their profit margins by trickling properties onto the market.
> I advise you and everyone else feeling locked out of the housing market to pressure your representatives to allow more housing to be built.
I'm currently building a house and the problem is getting people to come out and do the damn work. Not sure what complaining to a politician is going to do about this. Even white collar workers are hard to get. I went through three architects.
There are plenty of housing developments going up. Just not a large enough pool of people to work in them.
Mostly, not entirely. Furthermore, this housing crunch has been decades in the making, not something that's suddenly happened, as evidenced by prices spiraling out of control. It's no surprise that trying to build a new home during a worldwide labor and supply chain crunch is especially difficult.
Complaining to a politician may not provide immediate relief now, but in the long term if supply was able to meet demand, prices should stabilize.
The best time to plant a tree was 20 years ago, the second best time is today.
Most of the country never (in recent times) had a housing shortage before now. So it might be a political issue for the people who live in a handful of coastal cities, but this isn't a political issue in most states.
I have years worth of zillow pricing emails in my inbox, if I go back to '18, YoY price increases were like <1% in most zip codes and 2-3% in the nicer ones. Recent emails have prices going up 20%+ all over town.
I'm in the coast, so I won't pretend to fully understand the markets elsewhere, however, it should be noted that ~50% of the U.S. population lives near the coast, or a constraining border limiting expansion.
For a very very large portion of the population it's land use and zoning rules that are constraining supply and causing everyone else to pay more than they otherwise would.
At the same time because of supply and demand, even when more and more apartments are being built I would expect single family homes to still go for top of market rates and be in very high demand forever. The supply we are adding into most built out areas is just apartment stock mostly optimized for the recent college grad vs a family with children (e.g. mostly 1 or 2 bedrooms, and a pool/hottub area clearly optimized for people drinking alcohol than kids playing), because these areas are built out by definition and there isn't available land to add any more greenfield single family home stock to the local inventory. That single family home stock imo will always be constrained in cities and will never get cheaper. Apartments and condos might see their costs not swell so much, but not ever detached homes imo.
Detached homes are a very specific type of housing well suited to specific needs. The problem [In the U.S.] has been that suburbian-style has been prescribed, with little flexibility to accommodate other needs. Lawns, backyards/front yards, and setbacks are great if that's what one desires and is willing to pay for.
However, not everyone wants that, yet is forced to pay for it through zoning rules requiring them. Tall multi-storey townhomes are a great middleground that reduces land costs and retain many of the benefits of SFHs, yet are literally illegal to build in much of the US.
A ton of land in competitive markets is being wasted through zoning, to many people's [And the climate's] detriment.
Prices are too high and there are too few foreclosures. Pros with a bunch of money in the bank and inside info can still do it, but the days of being able to snag a foreclosure that's scaring everyone off because it needs some drywall work and paint and maybe a little flooring but is basically fine, and is sitting on a totally ordinary public real estate listing for weeks or months so you know you can lowball and they'll probably accept, are long gone. That situation only lasted (around here, anyway) until maybe 2012 or 2013.
I don't think this mentions anything about housing or mortgages. I think it's a bit simpler than this. Higher income people currently already have their basic needs met and have a good amount saved up for eventual retirement. When people's current needs are met, they think about the future, the economy affects it. Lower income people are currently struggling to make ends meet. You'd already be worrying about it everyday, the economy getting worse basically feels like noise that you don't have time to add to your worries.
For my family, and probably many like mine, our concern is watching our savings evaporate. I lived through 08, so I remember massive recessions. But things are different when you're just starting out and watching your modest "retirement" account fall, than they are when you have a significant life that you've built. I know pragmatically that the markets will rebound, but it's still jarring to see your net worth move so dramatically in a matter of weeks.
I'm also not very concerned about housing. Even though I definitely overpaid, living through 08 gave me the mentality that houses are places you live, not investments you make.
Buying at the bubble only hurts short term flippers. If you bought at the peak of the last bubble in 2007 in markets actually worth buying in, you would have probably seen yourself back in the money in a few years and have been making money hand over fist on your investment since.
The takeaway bullets seem almost non-sequitur. I don't know what those numbers mean for consumer sentiment index, but the absolute level of consumer confidence is still higher for higher income groups. The fact that it has dropped for everything, but more steeply for higher income, doesn't seem like it has to be related to any causal phenomenon beyond basic diminishing marginal utility. When you're down in the dumps already, you don't have as far to fall. You may as well draw a bunch of weird conclusions about mindsets and possible reasons when you find an MMA fighter at the end of a fight half passed out on the mat, kick him in the face, also kick a random bystander in the face, and find the random bystander has more of a reaction. The first hit hurts a lot more than the 100th.
Is there any explanation for why previous stimulus during Obama administration didn't cause inflation. Lots of my friends are convinced that printing money doens't necessarily cause inflation and use that an example to support their case.
Far, far lower. We're so casually throwing around plans priced in the trillions these days, when just a few years ago people thought billions of dollars was a lot of money.
> Is there any explanation for why previous stimulus during Obama administration didn't cause inflation
It did, compared to what would have existed without the stimulus.
But the underlying economic problem it addressed wasn't like the pandemic and the control measures directed at it, particularly in the rapidity with which things could spring back from it. What caused visible inflation wasn't the stimulus, but the rapid rebound in the underlying economy, which wasn't a direct product of the stimulus, though the stimulus mitigated second-order damage that might have prevented the rebound.
The slower emergence from the conditions prompting the Obama-era stimulus meant that slowly-tapering monetary response could buffer most net inflation effects.
The 2008 bailouts spanned both the Bush and Obama administrations, we can even round them up to $1T each for a total of $2T. Keep in mind those 2 bailouts took the economy from near failure to the longest bull run in history.
The size of the bailouts - excuse me stimulus packages - in the last 2 years make 2008 look like a joke in comparison, and it looks like every few months a new “stimulus” will be passed that is larger than any 1 of the 2008 bailouts.
My back of the envelope thought is that the majority of the QE given out during the 2008 financial crisis was given out via the banks who then proceeded to lend/hand it out to Fortune 500 type corporations to keep them (and the banks) from collapsing. The stuff that got inflated/propped up were "assets" that wealthy corporations and individuals buy (i.e. risky VC startups, stocks, bonds, income property such as single family rental homes) - which is not stuff tracked by CPI.
In the Covid pandemic most of the QE stimulus was to enable low interest debt in order to allow Congress to give it out to "the people" via government stimulus checks. "The people" then proceeded to buy stuff that normal people buy - i.e. consumer staples/discretionary goods which is stuff tracked by CPI.
The majority of the covid money went to the Paycheck protection act and the terms where so opaque that the rich got a lot richer. The peanuts handed out in direct relief was and is a non-issue except that supply chains shut down because of lock downs and reduced demand. After lock downs the economy has rebounded so now we have many dollars looking for products but the supply chains can't keep up.
My back of the envelope thought is that both stimulus checks and Paycheck Protection checks went to stuff that is much more closely tracked by CPI. Its mostly rich small business owners that are getting PP checks and using it to build out outdoor dining/service areas of their business and perhaps the occasional personal home remodeling projects or staycation homes which drives purchases of house hold appliances, etc. Perhaps some bitcoin and GME stock as well.
Financial Crisis bailouts went to big corps who bought out over-leveraged competitors, questionable startups (Uber, WeWork - basically anything Softbank related), etc. which aren't tracked by CPI measures.
Covid caused production to shutdown. This was not as much of a problem with 2007-2009. The result was a huge squeeze in prices and demand because everyone in early 2020 was expecting a repeat of 2008 or some prolonged recession, but instead the economy, stock market, GDP ,etc. went nuts.
Printing money doesn't cause inflation if it doesn't get used.
If the Fed chair hands me a $100T check and I hide it under my mattress then it has no effect on prices. That check has to get put to use in order for it to start having effects on prices. I have to start buying properties and stuff and then the people that I buy the properties from go and put that money to use.
That is extreme but its an example of how money actually has to get used to have an effect on prices.
And we're seeing companies and the 1% and 0.1% sitting on massive piles of wealth. They invest that into safe short-term securities which pushes down interest rates. You see bubbles in things like certain rare baseball trading cards.
What we haven't seen is wage-price inflation, because that doesn't translate down into the broader real economy. We aren't fixing all the infrastructure and potholes in the nation and putting middle class people to work, who would then go out an buy groceries, middle class houses, etc. SWEs, of course, have been the exception to that rule. But the wage-productivity coupling broke back in 1980s when "inflation" (wage inflation) was put under control.
What is strange about the past year or two though is that there's now real upwards pressure on wages outside of tech workers. Don't know how much of that is due to COVID and long COVID removing workers from workforce and how much of that is workers looking at the pandemic and deciding that they weren't going to put up with any more bullshit HR cheerleading. The direct stimmy checks and eviction freeze may have helped with that as well -- although I think the indirect effect there was that many people were able to take a sabbatical and "just learn to code" and therefore hop up the wage ladder. I don't think we printed enough money there to really matter that much, but we gave everyone a 6+ month break so they actually spend some time jumping up the ladder rather than coming home from work too tired every day.
The fact that we now see some hard signs of wage-price inflation in the data is the thing which is going to really freak the Fed out, and ultimately they're going to hit the brakes hard, once enough of the pandemic/ukraine supply-shock is in the rear view mirror. It actually is "different this time" because of the rise in wages across the board. The next crisis I think is going to be due to the Fed stomping on the brakes (and possibly the crypto ponzi imploding). Then they'll flip back to ZIRP again, but I think they may not be able to print enough money to get out of the next crisis (which is the problem of "pushing on a string" which everyone has totally forgotten that Keynes used to talk about).
I lost 3/4 my money (it wasn't much) when I was 20 in 2008 since I decided it was time to start putting my savings into the market like a responsible adult (August '08 is when I did this).
The traumatic psychological fall out from that completely destroyed any innate faith I could have in markets and I still suffer from it today regardless of how illogical it is. I basically lived the "...And it's gone" meme.
> completely destroyed any innate faith I could have in markets
Faith is a bad advisor. I had a similar experience in 2000 (was a millionaire for a while, then abruptly returned to middle-class). Brazilian economy also provided me numerous opportunities (such as when BRL and USD were untied and, suddenly, my friends who were leasing cars in USD had to pay twice as much) to lose faith in markets and capitalism overall.
On the bright side, we don't need faith. We just need to learn to use markets to our benefit.
About the same age, and I don't think there has been a point in my life where I didn't think the economy was on the verge of collapse. My whole life, even now, I think everything will be taken from me any second. Guessing it has to do a lot with the financial stress my soviet-immigrant parents experienced while I was growing up.
I just tune it out. There will always be negative headlines, reasons to sell stocks. Reasons to be pessimistic. Instead, I stay invested. What is supposed to be a crisis almost always comes to pass. What is supposed to be ww3 is just self-limited. Ukraine vs. Russia is not Germany vs Poland. We will get through this.
People I know who were recently unable to buy houses in California include a long-time staff engineer at Google and a heart surgeon married to a brain surgeon. I know this data is nationwide but the crisis in California has become so acute that even people with 98th-percentile incomes are looking around and saying how fucked up everything is.
I'm sure they'll both eventually find houses but given a certain size family and desire to not move away from current schools and work, inventory is in the single digits. One of these people has been consistently outbid on offers even though they are offering well above list prices, the other had to walk away from their most recent offer after the seller demanded another half million dollars on top of an all-cash, no-contingency offer that was half a million above asking.
Incumbent land speculators are taking literally all of the money out of the California economy.
It's basically a hedge against rent and cost of living. In many markets rent is now higher than a mortgage. The goal is you are over a lifetime net-zero in housing cost or maybe make something back. Flippers and builders usually make 30% b/c they have cost advantages.
Is rent really higher than a mortgage though or does that fail to take into consideration things like taxes, HOA, etc.? If rent were higher than a mortgage, wouldn't that suggest that most of the tech folks CAN in fact afford property in these markets?
Rent is usually simultaneously lower than the extras-included mortgage payment but higher than the net worth hit. A Bay Area $1m home might rent for $4k, have a $6k mortgage new, but only drain your net worth $2k. (because of $ towards principal, housing appreciation/inflation, tax deductions, etc.)
nice dodge. why not tackle head-on the brutal reality that even very-well-paid individuals can no longer afford to purchase a dwelling in the same city they work in? we're moving from a 99/1 economy to a 99.99/0.01 economy
It's not a dodge, it's a genuine question. The same tech bro's crying that they can't afford to own a house in SF can comfortably afford the rent, so what's the big deal?
The significant rise in price of housing has left people who own housing a whole lot richer, at least on paper. Those who don't own housing want to also become rich and they see emulation as the way to achieve that.
Case in point: Ten years ago I pointed some people living in the higher cost big city complaining about the high cost of housing in the city to a home for sale in a small town for $80,000; something they considered cheap. At the time the prices were stagnant, though. Their response: "Why would I want to own that? That would be awful." A similar home in the same neighbourhood just sold for $436,000 after two days on the market. Now that price is rising, making it look like a way to get rich, everyone suddenly wants to own it. It is still every bit as awful to own the house, but the quest for riches offsets that.
Should housing lose its ability to make people rich, interest will quickly wane. People will move on to the next get rich quick scheme.
They have to either be horrible at managing money or have other expenses or are being impractical. I am sure a 200-500k salary is enough to buy a decent home almost anywhere in California. Just run the numbers. "According to website HowMuch.net, your household needs to make roughly $95,000 a year to be able to afford the median home in L.A. which they value at around $480,000."
Yes, their personal habits are so awful that they are out on the market making all-cash offers for $3 million. Give me a break.
To illustrate how out of touch someone like you who obviously lives in a house bought by some other person is, please consider that the actual median home price in L.A. is $950k, double what you mentioned, while the actual median household income is $65,290, only a fraction of what you cited.
California, and especially the bay area, has been in housing crisis for most of my adult life. A 98th percentile income doesn't give you much buying leverage if you're only competing with other people in the 98th percentile (or higher).
If a heart and brain surgeon can’t afford a house in California, they need to look at their spending. Are they trying to qualify for a 20 million dollar mortgage or what?
It is absurd. Bay Area prices are far too high, but there are still many suburbs in Bay Area proper that are $6k/mth payments. With current 1.5% 30-year mortgage premiums over 10-year treasury rates, you're effectively only paying (1.5% * mortgage) per month + property tax, because most of that money is saved going into principal of the house loan and the house price keeping with inflation. So net worth wise, you're only wasting around $2k/mth to live there... (out of a $30k/mth after-tax making staff engineer, and assuredly a $35k+/mth after-tax making surgeon couple)
Of course, if you're too uppity to live in places like San Leandro, that's a you problem.
It makes me physically ill seeing what houses have gone for in the bay after all the bids are in. A couple I know have been searching for a year and they’ve been consistently outbid by people offering 40% over ask which is obnoxious.
Bad title. Based on their own chart, higher-income people (defined as those earning more than $100k) have more confidence than any other group. That confidence just dropped more than the others'. This is a story about a derivative. Given the higher baseline, it may not be a story at all.
Even worse about the title, lower income people all had the same drop. They just did it earlier. Really bad analysis and narrative building by the author.
Having seen a small fraction of the tooling that the Fed uses behind the scenes, I am now convinced that there is a fairly big gap between the publicly available analysis + expertise v. the capabilities accessible to decision makers.
When the policy makers are running millions of simulations with real-time transaction data + inputs, what utility does all of the fretting and "analysis" in the media have?
The system has become extremely dense and opaque, and what is in the public realm seems to be decoupled from the policy making + expertise. At best, the public can learn from footnotes that the Fed intends to (and has) pursued simulations to track, forecast & calibrate its policies,
> 29 To facilitate analysis of settlement disruptions, systems may need to develop the capability to simulate credit and liquidity effects on participants and on the system resulting from one or more participant defaults, or other possible sources of settlement disruption. Such simulations may need to include, if appropriate, the effects of changes in market prices, volatilities, or other factors.
Tools are only as good as the people who use them. We need more transparency into the decision making aids, as well as greater access to help people understand how the economy is managed as a system.
But until then, all this media doom and gloom isn't helping.
I tend to trust the Fed as well. They saved us from total collapse in '08, and made the COVID recession the shortest one on record. I think after 40 years of practice we're starting to get pretty good at this MMT thing.
I don't "trust" them, because I don't trust any small group of extremely smart people. It's easy for group think to occur, and for the group to construct brittle systems that go horribly wrong.
If we had more eyes + more critiques, we could debug their thinking & see where it's going.
That being said, the policy makers and the economists at the Fed are far more capable than most people think. They've gotten a lot right, and proven most naysayers wrong. But the question is, how long will that record last?
I have complete confidence that the economists at the Fed are as qualified as anyone to be leading us right now. I have complete confidence that nobody has any way to know what the best policy is right now.
> If we had more eyes + more critiques, we could debug their thinking & see where it's going.
The Fed is rather transparent (both with policy thinking and data), and I can't think of any area with more eyes and more critiques than US monetary policy.
>I don't "trust" them, because I don't trust any small group of extremely smart people. It's easy for group think to occur, and for the group to construct brittle systems that go horribly wrong.
I should say "trust" in the sense that I trust my doctor to be infinitely more knowledgeable than myself with regards to health, to the point that I am able to confidently outsource my decision making to him. Not "trust" in the sense that you would blindly trust a family member or friend.
MMT requires excess reserves to be absorbed by taxation. Taxation has not be increased since the beginning of the quantitative easing interventions. MMT has never been tested.
MMT isn't something you test, it's a framework for explaining what happens in economies. Regardless of what policy decisions are made, MMT has been very accurate at predicting market reactions.
MMT isn't just an explanation. It's also predictions - if the Fed and the Treasury do X, the result will be Y. And even recommendations: if the circumstances are A, the correct policy response is B. Those things can be tested - and haven't been. So far, nobody has taken the policy recommendations where they differ from mainstream econ, and (to my knowledge) we haven't been in places where MMT's predictions differ from mainstream econ's.
This is what it took to reverse 2008's recession. Every time I read this single page document I get a little shiver.
Item #2 is by my interpretation has "any and all means" finality.
("2 Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.")
Who is "us" in this case? A lot of people lost their homes/savings. The primary entities saved were the same ones that caused the crisis in the first place. I think it's fair to argue that in the short term a collapse of several major banks might have hurt "the working class" worse. But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
Not OP, but I'm guessing he's referring to people who rely directly or indirectly on the financial sector. Basically a vast majority of the worlds population.
> A lot of people lost their homes/savings.
Yes, agreed. Unless you are saying things couldn't have been worse for them, but I don't think you are based on the rest of what you wrote...
> The primary entities saved were the same ones that caused the crisis in the first place.
Was this the fed's decision?
> But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
I'd suggest that lack of prosecution and public take-overs were the biggest problem. From my perspective, the fed did what it needed to do within it's power. They couldn't let the major banks go under without systemic consequences. But you're right we should have prosecuted those liable, and failing too-big-to-fail institutions should have been publicly taken over and (arguably) re-privatized after the crisis. We didn't let markets work how they were supposed to.
I think of it as the "big two" and it's housing and healthcare :-/ No other one thing exceeds half of either one of those.
[EDIT] Necessarily exceeds, I guess I should say. My food budget exceeds half of either of those, but that's mostly laziness and luxury. I could easily cut that a ton and barely even suffer for it.
The most worrying thing is that congress has to drastically cut spending and/or raise taxes so the fed can raise rates while still allowing the government to service it's debt.
I believe the government absolutely blew its load propping up lots of entities during the early pandemic who actually did not need propping up at all (in retrospect). In an idealized case, the government would go around and ask everyone "Hey, if you didn't actually need that money, could you give it back?" and people would honestly return it.
Obviously not going to happen though.
It's so manipulative to 1) use income and 2) break society into those low brackets of <$50k, $50-100k, and $100k+... as of they aren't all working-class people.
That might be where people are starting to escape the working class and enter the middle class, but certainly not "rich" or "high" class, as the article suggests. If your family has a net worth of $2-4 Million and are making $100-200k/yr, then you might... own one Arby's franchise.
I like Arby's and kinda wish I had that for lunch, but folks who own one Arby's are not exactly major competitors in the world of capitalism (in an individual sense). They're the middle class (to the extent that one even exists). Those are people who - together with many other small businesses - could form a community that shapes the market and provides a strong stabilizing force... but they're still "consumers."
Um, duh...? The people making less don't have much in the market, and a large part of that will be in highly restricted accounts like (most) 401k plans with just a few funds to pick from.
Once you have nothing to lose anymore, getting the rest of society down to your level is a step forward; at least then we can begin to build something better together.
S&P 500 is down 7% this year and inflation is running at 8%. Those compound so folks are seeing 15% declines in wealth in 3 months.
The Fed can only choose one of those "problems" to solve -- let asset prices fall and tame inflation, or prop up asset prices and let inflation run wild.
That's an odd way of using inflation numbers. 8% is a YoY change. What makes you able to sum that up with a 3-month metric of SPX to yield anything useful?
It's 0.6% and 0.8% MoM so far [1], so if we're simply summing up an approximation for YTD and extrapolating to March, I'd suggest -(7% + 0.6% + 0.8% + 0.8%) for -9%.
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[ 3.4 ms ] story [ 263 ms ] threadAlso, Russia's rockets still seem to be working pretty well as evidenced by the fact that they were used to send American astronauts to space for the last 10 years[1].
[1] https://en.wikipedia.org/wiki/Soyuz_(rocket_family)#ISS_crew...
Besides, a nuclear attack would already be covered under the much larger war mentioned, which is something that was deemed less concerning.
The direct damage would be massive but not civilization-destroying.
The higher income class is de facto in power in our democracies. No conspiracy here, just a class phenomenon. The poor don't vote ; the popular and middle classes tend to elect people from the higher income class. Their economic success give them credits for handling things.
The higher income class doesn't care about 1/ the health of people 2/ if the wages are enough to have a modest but at leat descent life 3/ the environment
They care about 1/ their own wealth, health 2/ having no social constraints whatsoever (in the name of freedom, which is a right for all but they are the ones who have the means to act as free persons) 3/ order: they want a super policed society. So the poor are over-repressed by the police but they escape the law (connections, bribery, very good lawyers).
On climate disruption and biodiversity annihilation, our "elite" reveals that they don't even care for their grandchildren. The 0.1%, the top of the income elite, do care and buy large pieces of land in New Zealand with 100% self-sustainable houses and food production. And armed security and heliports.
Depending on which institute you track the current estimates looking 12 months out are between 5 and 10%. So I think you should update your assumptions.
For instance:
https://seekingalpha.com/news/3810284-theres-a-10-change-of-...
I educate myself about nuclear and general War situation.
Oh, and who ends up winning elections and whether people where I live buy Russian propaganda is suddenly important, so I opposed that instead of being silent and keeping good relationships.
Not really surprising given the sharp disconnection of a large chunk of the world's economy and the blockading and shelling of a smaller part.
Sure, but they always are - as they should: they are the first to be affected and the last to see the effects of recovery.
Are they? Financial markets are usually hit first. Low-income people don't have financial assets. They're hit the hardest, because losing a job and losing money in a retirement account are night and day. And they're hit the longest. But they aren't hit first.
No, because they spend everything they get. When they cease to get money because a company lost X money and needs to close Y positions so that the balance sheet isn't so red for the next shareholder meeting, the low-income folk end up ceasing to pay for food or housing, with the usual side-effects.
I know a couple people who had to radically downsize (as in 4-dorm to 2-dorm rental and 1-job to 2-jobs each) in 2008, and, guess what, none of them was in finance.
OTOH, another friend of mine was forced to sell one of his boats. He may have been hit first, as in he had to start thinking about which assets he would need to sell, before the low-income ones, but, definitely, their lifestyle didn't change before the others.
Granted, from a resource point of view, they are important.
Also, "getting nervous" is better terminology than "worried," since absolute consumer confidence is still higher among the higher-income group, it just decreased at a greater rate recently.
In each event I was significantly more impacted by the media salivating about the potential for a coming economic collapse than I was actually living through them.
Certainly my companies were impacted negatively at the outset of each, but emerged stronger to take advantage of the clear skies and sunny days that proceeded each event.
We've been playing on easy mode for the past 10 years in many ways - it's difficult to truly innovate without challenge, and today I embrace the potential for the board to shift, to find new opportunities to innovate, and to embrace change.
Now, there are less greenfield spaces, more competition, and less barriers to get started. Much much harder to start a successful business today.
1990 had none of that.
Maybe blockchains and NFTs are the 2020s version of the internet as far as greenfield goes. I'm not convinced, but then I've always been too cynical for my own good.
Google: 1998, Salesforce 1999, Overstock 1999,, Bet365 2000, Grubhub 2001, Etsy 2002, Logmein 2003, Shopify 2004
Nothing around 1990. Amazon, Ebay, Expedia etc in the mid 90s sure.
1998 and 1999 did better than 2000, but from 1990-1995 there are 9 on the list, from 2000-2005 there are 19 on the list, from 2010-2015 there are 14.
Starting in 2000 put you in a great position to capitalise on the real growth of the internet when mobile devices came on.
Pre-2015 there were a lot of opportunities to get a running start without much investment. A cool new web-thing would spread organically, could be coded pretty fast, etc.
Now, it's easier to raise money and use that to build a business. A not uncommon strategy is paying Google and Facebook $200 to acquire a $100. It loses money, but shows growth.
For some people, the new way is easy mode. For a lot of people, the ability to raise, pay yourself a real salary and also recruit a well paid team is easy mode. For some people, three dudes and some ramen is easy mode.
1. Everyone using FB ads and the days of FB ad arbitrage and cheap ad prices were going away
2. Cloud computing started to become more mainstream and building your own product became even easier
3. Instagram and YouTube started to really take over peoples attention and the days of getting attention by simply building something cool was disappearing.
The 1998 Russia crisis is particularly interesting:
- Russia was put under FMI (IMF) leadership with huge monetary injection,
- Financial games made that this money didn’t help the populace but only helped to create a new billionaire class in Russia.
- We have a dozen thousand Russian multimillionaires here on the French Côte d’Azur (Nice) coming from that period; and the other half of the oligarchs created the Putin regime.
Talk about a grave crisis, Ukraine is a ripple effect of the IMF stuffup.
Capitalist economy is fundamentally predicated on confidence cycles, so anything hitting that confidence will inevitably speed up the coming of the next downturn. However, the downturn would eventually come anyway.
> the 2008 they talked so much about was way smoother than the 1995-1998 crisis
That really depended on where you were and a bunch of other factors. Entire neighbourhoods in the US were gutted by repossessions, in London we had meaningless riots, in the arts sector they saw budgets slashed, etc etc.
> Ukraine is a ripple effect of the IMF stuffup.
Undoubtedly. Also of the post-2001 US doctrine on the use of force in international relations. And a bunch of other things. Nothing ever happens just because somebody woke up that day feeling like starting a war.
I see the spread of disinformation and propaganda as something that will inoculate the populace ultimately.
I think Russia (and China) has done the West a favor. Hopefully the West will start offering integration into our economies as a reward for democratic reforms instead of as an incentive, because god knows that hasn't produced the desired result.
That's not my understanding.
I'm far from an expert, but from what I've read there was a radical change in the US military from a focus on large-scale warfare to small-scale warfare focused on urban combat and quick responses to multiple small threats.
There are also way, way less nuclear weapons (on both sides) than there used to be. I think there were something like 30,000 nuclear weapons in the US at the peak of nuclear proliferation, and now there are closer to 5,000 (and roughly the same in Russia).
So the military posture of both countries has definitely changed.
Unfortunately, it seems we're headed back towards a Cold War, if not a hot war... so the arms race is likely to heat up and preparations for large-scale combat will likely increase.
This will make the world a much more dangerous place.
It just wastes money and deludes trigger happy people in to believing a war between nuclear powers can be "won".
I'm sorry to say that it makes the most sense to simply not worry about it, unless it's your job to.
We tend to forget that dictatorship is the default human civilization. It also happens to be the "normal" structure of the family, even in liberal countries, for the simple reason that kids are, by definition, incompetent. So I'm not sure if it makes sense to "stamp out dictatorship" when so many people legitimately want to live under one. So that leaves getting rid of nukes - a problem most of us assumed would solve itself over time after the fall of the Soviet Union. This backsliding is worrisome, but the path to success remains the same. But when the next Soviet Union falls, we should pursue denuclearification much much more seriously.
Unless you are able to directly exercise nonzero control over the foreign policy of a nuclear power, the threat of a nuclear apocalypse is sufficiently far removed from anything you can do anything about, that it's tantamount to worrying about a large asteroid impacting the earth. It would be devastating, sure, but it's not productive to genuinely concern yourself with it, because it's unlikely you'll survive and there's not much you can do to change the likelihood of the event or your survival.
New Zealand will probably not be hit in an exchange. It would be a safer place to live in event of nuclear war.
Your best bet is to move somewhere in the southern hemisphere, such as New Zealand. Hey ... that's where a lot of the mega rich have been buying property of late ...
The editors of the Daily Mail and The Sun, donors like the Elliotts, and whoever has financial kompromat.
There are basic rules of human decency which we as a species have agreed to in the form of human rights, people may choose an alternate mode of government to democracy (and this is always a choice on some level, no dictatorship can rule an entirely unwilling populace), but nothing they choose can morally deny them their human rights.
Totally agree with the main point of denuclearization, it needs to be pursued even more aggressively in the future. The current 12,000 nukes is yes way lower than Cold War, but it's an insane level / irrational overall.
If Ukraine had kept their nuclear weapons, do you think Putin would even consider invading? I don't think so.
A better solution to denuclearization, in my opinion is to adopt a "No First Use" policy [1]. I suspect internally the US and NATO do follow this policy but will not disclose it publicly for strategic reasons.
[1]: https://en.wikipedia.org/wiki/No_first_use
An order from the US president to launch nuclear weapons can only be rescinded by the US president: https://asia.nikkei.com/Politics/Nuclear-button-U.S.-has-no-...
This is well known, there was a submarine captain who was dismissed for inquiring about it in the US Navy.
War is not peace, cold or otherwise.
[1] https://acoup.blog/2022/03/11/collections-nuclear-deterrence...
We sort of see this in democracies when the simple majority want to force a large minority to do or not do things (sometimes contrary to law). We want a dictatorship, just so long as it's one that we agree with.
Edit: why downvote?
Are there actually people that think this would work on a large scale in the US?
On the other side, isn't Switzerland sort of close to direct democracy, at least in the way they require referendums?
Overall we didn't had much time not under some form of emergency powers. Terrorism, war, insurrections... there is always a reason the be afraid.
In the end, it probably doesn't matter; the Fermi paradox strongly implies no civilization makes it out of their tiny radio bubble alive. Consider that our own radio waves have only traveled 122 light-years into the void, and already our civilization has been at risk several times from nuclear weapons, and is now at risk because of climate change and biosphere degradation. A civilization desiring interstellar contact must prioritize it's own longevity above all else. That humans might be the first in our galaxy does not bode well for humanity's chances! Which brings me to my own favorite tool to disspel fear: zoom out, remember it's all temporary at some timescale, and enjoy the good stuff while it lasts.
Well, I'm not sure about that. I feel that we are all responsible for our government to some degree. If the gov is really doing evil things without accountability, then it is the people's responsibility to change it.
The problem is that it is very easy to move from democracy to dictatorship, and very hard to move from dictatorship to democracy, with the latter transition almost always requiring the use of force. Its a big, gigantic step. It's starts when Russian mothers and fathers, Russian neighbors and shopkeepers, start whispering about really taking up arms against Putin.
This is a very problematic line to cross, mainly because people are stupid and will trigger 'a revolution' about anything and everything. The information landscape is treacherous for false positives, now more than ever. Consider the example of the pitiable 1/6 insurrectionists. Every one of them thought they were defending their country against a threat. But they were all badly wrong, and now they suffer for it. But the instinct to put their lives on the line for their constitution is, in my old-fashioned belief system, admirable. They just got tricked into fighting for the wrong side.
- Monarchy/Dictatorship: Power in the hands of one, one person is authority
- Oligarchy/Republic: Power in the hands of a few, aristocrats are authority
- Democracy: Power in the hands of many, majority is authority
- Anarchy: Power in everyone's hands, everyone is authority (or no one is depending on how you look at it)
In reality, society only works when there's a power hierarchy; it's the natural order of things. The more power is equally distributed amongst people, the more dysfunctional/less orderly/more bureaucratic society becomes. When you're in complete Anarchy, might/ability is what ultimately determines the outcomes in conflicts, and those who wield it typically end up becoming the "authority". Hence, over time, Anarchy will naturally develop into the other more stable forms of government. Notice however, all forms of government have the following issue: when there's a conflict in wants between people, someone (ie authority) will have their way, someone won't. You can't get rid of this reality, no matter how you structure government, which is to say: oppression is unavoidable so long as there exists conflicts in what people want.
Thus, I honestly don't see why people think a dictatorship is necessarily more oppressive than other forms of government. Some people are quite happy with their dictators, even if there's other people living under the same dictator that aren't; but this is true of any form of government. And it's not hard to see why there can be people happy with their dictators, as dictatorships are highly efficient and effective at carrying out policy. If your dicator is competent & beneveloent towards your wishes, it's arguably the best - most effective form of government. But understandably, if your dicator is not competent or benevolent to you, its among the worst...
Otherwise very nicely put, but surely there is a useful distinction between "not getting what you want" and "oppression"! I think we can all agree that even losing the vote on every issue is far preferable to losing the ability to vote on any issue. But that's not true if, by losing a vote, or a court case, or an administrative decision, you consider yourself 'oppressed'. You lost, true. Maybe unfairly. But that's necessary but not sufficient to prove oppression! Like, if I could wave a magic wand and grant all American voters the (apparent) super-power of gracefully losing, I would.
If every loss is oppression, then winning becomes a moral imperative, possibly requiring escalation to violence. No-one wants to live in that world, so we need to give people a way to take their licks at the polls and then work together to solve the world's problems. And you know what, if you want to go to war over abortion, have at it, but do you really want to die on that hill? Aren't there issues that are more urgent, and more clearly dire than abortion? Or gay people? Or racist people? Aren't we ALL kind of in the same boat with respect to climate change, nuclear armaggedon, income inequality and the backsliding of democracies into autocracies? And aren't all of these at least 5 orders-of-magnitude more important than whether or not a trans woman can compete in NCAA sport?
(Why don't we hear our senators debating the important issues of the day? Why aren't they erudite men, well versed in many fields of endeavor, hosting daily podcasts of debates, singly and in groups? Is this not their job? And isn't it our job to second-guess all of them mercilessly??)
Wants themselves do have ranks, as does the amount of oppression felt by not getting them. As you can imagine, there are likely some people who want 2nd vacation homes, but would prefer not having a 2nd home over not having food if they were ever forced into a situation where they had to compromise. But it's not as black and white as you'd might think. People don't all share the same wants, let alone to the same degree. There are people in this world who would prefer to own 3 homes not caring that there are homeless people wanting just 1 (greed). There are people out there who prefer to go without buying food, dumpster dive, and work minimum wage jobs despite having better offers, all in order to save up to buy a house (I personally know a guy - and this is pride). People who like to go without food (ie fast) for weeks (me). And yet, people who prefer to remain homeless, people who want to help the homeless, and people who don't want to help.
>If every loss is oppression, then winning becomes a moral imperative, possibly requiring escalation to violence
Whether something is a moral imperative is subject to opinion - whether you personally deem it so. But yes, especially at some extreme point, that is reality, and you cannot escape it. This is exactly the sort of thing political philosophers such as Hobbes and Locke argued in their social contract theories. It's why when loss is deemed to be so terribly bad under tyrannical governments, that there are violent revolutions. It's the reason for wars. It's literally what lead to the foundation of the United States.
That said, you can learn to go without most wants. It's what Buddhist monks teach and practice. Additionally, wants have ranks, as I mentioned above. So winning is not always a moral imperative for everyone in every case. Some people simply don't care that much about certain topics, and don't care if they lose the outcome.
>No-one wants to live in that world
Yes, that's why true Anarchy doesn't last long. Anarchy, or the state of nature, can often be brutally violent. Wild animals often kill each other just for fun, it's called surplus killing. Power hierarchies naturally form within same species, just to avoid constantly having to violently fight to determine the outcomes for conflicts. The suffering of being subjugated is often preferred to the suffering of being violently maimed (or mere risk of it) by your neighbor, but pushed to a point it can obviously flip, leading you back into a revolution. As you put it, no one wants to live in that violent world, (at least not very long), so a hierarchy eventually forms in order to avoid having to live in it.
>Aren't we ALL kind of in the same boat with respect to climate change ...
Yes and no depending on how you look at it. Do we all have opinions on those topics? Yes. Do they affect us in some way? Yes. Do we all share the same opinions over them? No. Do we all rank those issues at the same level of importance? Probably relatively to some degree, but ultimately no.
Hardly ever true. Most dictatorships are unstable and unable to do anything more than a bare minimum.
Hierarchy is not the same as dictatorship. Dictatorships means unlimited power. There is also hierarchy in democracies, but it is more about the separation of power, rather than of concentration.
Dictatorships are only as effective as their leaders competence, so you can make that argument. But relavtive to other forms of governments, dictatorships are efficient and effective at carrying out policy simply because there is minimal questions, debates, delibrations over decisions and conflicts. In democracy, you MUST debate, vote, count votes, and come to an agreement about a topic amongst many people, before you can enact policy. This is often a lengthy (ie inefficient/bureaucratic) process. In dictatorships, this is a shorter process, as one man decides, and it's do as your told, no questions asked. In this aspect, dictatorships are faster at enacting/delivering policy.
>Hierarchy is not the same as dictatorship
A heirarchy is a system or organization in which people or groups are ranked one above the other according to status or authority. Dictatorships are a heirarchy, namely a heirarchy consisting of 1 man having unlimited authority over everyone. But not all heirarchies are dictatorships, as you can have many other possible forms of heirarchies.
You're conflating effectiveness at "making good policy" with effectivness in "delivering policy". I never said they were most effective at "making good policy" but in "carrying out policy" (meaning time to deliver policy).
>So no, there is no law of nature decreeing dictatorships are more efficient or effective than other forms of government
And again, I never made that claim (if you mean efficient/effective at making good policy). I said they were when it came to delivering policy (whether that's good or bad policy) and it depends on their competence. IF their leaders are competent (in making good policy and decisions), they naturally are more efficient and effective governments. This holds true, because, of the words 'if' and 'competent' and the reasons I explained prior.
As far as waiting for input vs skipping input goes, it's a double edged sword not a one way street. Extra time spent in gathering input means slower to act. Slower to act means missed action/opportunities, which is a terrible aspect to have in an immediate crisis. This is exactly the reason why the executive branch of the US functions more similarly to a dictatorship than a democracy - it's so that it can respond faster in times of crisis. It's because dictatorships are actually better in this aspect, when compared to other forms of government.
> I honestly don't see why people think a dictatorship is necessarily more oppressive than other forms of government.
To be honest, that isn't too creative of you.
The people who want to live under a dictator do it either because they're greatly benefiting from the status quo (these tend to be an elite minority) or those who have been brainwashed by a state-controlled media and education system to not realize how oppressed they are.
Free access to the internet lets people see outside their tightly controlled propaganda bubble, which is why totalitarian regimes such as China try to censor it. They are afraid of the internet for good reason: because once people start to find out what really happened in their country (like at Tiananmen Square) they'll start to wonder if their own government is as benevolent and if the outside world is so horrible as state-controlled media and education tells them. That could contribute to the overthrow of the old regime.
Free access to information is only one piece of the puzzle, but revolutions and deposing of dictators can and has happened.
Unfortunately, what replaces dictators is sometimes just as bad or worse than the dictator. See the results of the Communist overthrow of the Russian Czar for one example, and the military's control of Egypt after the revolution that overthrew Mubarak for another.
To be truly successful revolutions can't just replace one elite with another, but have to really empower the people.
I saying, choices in aggregate matters.
Plenty of people should worry about it. People have to physically remove themselves from these environments in order to seek opportunities for their own children and assure their long term opportunities. Millions of people are being displaced today by the whims of a Russian dictator, and we should assume dictatorship is good and well?
https://thehill.com/blogs/pundits-blog/civil-rights/214857-w...
https://www.cambridge.org/core/journals/perspectives-on-poli...
Is it really, despite being horrific?
One essentially mobster is accosting another country with soldiers seemingly reluctant, in what might be no more complex than a clear mobster survival ploy in a country plagued by poverty for all but his cronies.
I ask that because it seems reminiscent of Slobodan Milosevic 23 years ago in Serbia.
thanks for the thoughtful response.
The risk here is that the Russia and China will use their military power to stamp out democracy for an undefined sphere of client states. History through the cold war shows that tolerating this behavior simply invites further escalation.
So pull the damn manufacturing back to your own shores and start having a bit a self-sufficiency!
Shifting things halfway around the world to save 2 pennies was never a good idea.
And, we have learned NOTHING. How many hospitals are back to buying masks from solely from Asian suppliers again?
>They also tend to be older, and may remember living through inflation decades ago. "Young people don't know, and they'll soon find out."
How has consumer confidence been affected in older middle and lower class folks?
Broadly the same negative sentiment, according to the University of Michigan US consumer sentiment survey data broken down by age, income, education, region and gender.[1] I believe updated data will provided on March 25th in two days' time.
The Federal Reserve Economic Data (FRED) consumer sentiment and consumer inflation expectation data series[2] charts the UMich's surveys.
[1] https://data.sca.isr.umich.edu/charts.php?demographic=income...
[2] https://fred.stlouisfed.org/searchresults/?st=university%20o...
Regardless of the semantics, I am very much of the opinion that we are in for some rough ass times.
Recession+inflation=stagflation. Not sure what you call it when you add in energy crisis, risk of WW3, a push for a new global hegemony, an increasingly hawkish Fed, extreme political divisions, a looming food/fertilizer crises, and a globe still snarled by covid.
These data define "higher-income people" as those earning more than $100k. That's a very broad spectrum.
You NEED a strong economy to stay above water on the debt — you took out $200k in college + law school loans to accelerate your career and if you can't get a high-income job in your specialty you simply can't fall back to a low-income job without being in crushing debt forever.
Given the desire and investment in project/process, we could probably take half of the $100k+ workforce and replace with automation and a dumber, cheaper workforce. Economic crises often drive those decisions.
High income people are the least safe - $300k doctors are being treated like factory workers and replaced by $125k nurse practitioners.
That's basically what i'm doing. I was at first automating a secretary's job, now i'm automating my "SRE and security manager" job. With some resistance, so i'm starting with the most boring part of his job, but my goal is to automate him away. It's my secret, secondary job description. I hope i do that within a year.
My dads good friend was a playboy, after getting out of Vietnam he went hippie, partied hard, lived fast. Then he hit the stock jackpot, riding Intel and Microsoft, etc in the 80s and 90s and cashing out with ~$20M.
Then he retired, moved to a golf course in South Carolina and turned into an ardent conservative defender of traditional values.
I tell the story as it illustrates the transformation - face death and risk at war, come back and embrace life, accumulate wealth and return to fear… guilt about what you have been able to do, fear of losing what you have.
We’re all animals at the end of the day, it’s difficult for us humans to process what life hands to us sometimes, good and bad. Deep down, the insecure business guy knows that he is mortal, and knows that a misstep can be fatal.
It's just a very solipsistic generation culturally.
When they were in their 20's they thought everyone should pay attention to them and that their drug use and weekend music festivals were unusually profound.
When they were in their 40's they thought everyone should pay attention to their property tax bills.
When they got to their 60's and 70's they thought everything should just stay exactly the same as the way they remember it and that everyone should consider their fears and confused elderly outbursts as valid expressions of reality.
Not sure it's generalizable.
You were able to tap into the thoughts of the younger ages, but failed for the 60's and 70's.
We tend to idolize the distant past more because we’re at arms length, and we miss what’s around us because we lack perspective.
The boomer guy who will let the world burn to protect his property values is the same as the old Italian guy holdout in the declining urban neighborhoods that I grew up with in the 80s.
Also, I think it actually doesn't all go in an instant. I've worked with local businesses that are over a hundred years old and seen many market turns both positive and negative. During recessions they'll make a reduction in employees or other costs and be able to stay open on that until profits rise again... or worst case, they sell the business or real estate and pocket a huge amount of money even though it closed.
The folks that have it all go in an instant are the ones living paycheck to paycheck who get laid off at the first sign of trouble. Their losses insulate the businesses and owners.
The problem with buying is that it’s a single large transaction that you can’t spread over time. Over time ownership turns a profit, but if the time span is less than seven years, you may end up buying at the peak and having to sell near a bottom.
("But you could have invested that money instead and the market's gone crazy over that same time span, so maybe you actually lost money, opportunity-cost wise!" sure, but not really, since rent exceeds TCO for houses in my area so I'd have just bled money to that in exchange for no equity whatsoever and probably living somewhere worse)
For another data point, the Manhattan apartment which I'm renting was recently sold. The previous landlord had purchased it in 2016 for $200k higher than the sale price now, over five years later.
I'm renting because I know I'll be moving again within the year. If I had bought a place in NYC when I moved here, I'd have lost a lot more money than I've paid in rent.
Your outcome is pretty close to a best case scenario. And I'm happy for you that things went so swimmingly.
People stop thinking about opportunity cost when it comes to housing for some reason because they just can't stop thinking of paying rent as "throwing away money," without understanding that you're always throwing away money.
To take a simple example, let's say that you have $500k in cash.
Scenario 1: you pay $50k per year in rent from salary, park that $500k in a $2M investment property that returns $85k in rental returns. In this scenario, your returns are property appreciation and rental income. Your costs are mortgage, property tax, home insurance, home repair, and the rent you pay.
Scenario 2: you pay $0 per year in rent from salary, park that $500k in a $2M property that you live in that returns $0 in rental returns (because you live there). In this scenario, your returns are property appreciation. Your costs are mortgage, property tax, home insurance, home repair.
It's entirely possible, and common, for these scenarios to work out to be exactly the same. If you prioritize the purchase of properties that yield very high rents compared to the property value, it's very common for the numbers to work out in favor of owning investment property. And that can include "throwing away" money on rent.
TL;DR: you're never not renting. Even if you pay $0 in rent, the price you pay is the opportunity cost of not renting your house, and not maximizing returns on the money you've parked in it.
Housing developers are sitting on huge swathes of land that have planning permission (every council has a housing development plan), but by building slower, and with no real penalties for not using the land (LVT or similar) they can pad their profit margins by trickling properties onto the market.
I'm currently building a house and the problem is getting people to come out and do the damn work. Not sure what complaining to a politician is going to do about this. Even white collar workers are hard to get. I went through three architects.
There are plenty of housing developments going up. Just not a large enough pool of people to work in them.
Mostly, not entirely. Furthermore, this housing crunch has been decades in the making, not something that's suddenly happened, as evidenced by prices spiraling out of control. It's no surprise that trying to build a new home during a worldwide labor and supply chain crunch is especially difficult.
Complaining to a politician may not provide immediate relief now, but in the long term if supply was able to meet demand, prices should stabilize.
The best time to plant a tree was 20 years ago, the second best time is today.
I have years worth of zillow pricing emails in my inbox, if I go back to '18, YoY price increases were like <1% in most zip codes and 2-3% in the nicer ones. Recent emails have prices going up 20%+ all over town.
For a very very large portion of the population it's land use and zoning rules that are constraining supply and causing everyone else to pay more than they otherwise would.
However, not everyone wants that, yet is forced to pay for it through zoning rules requiring them. Tall multi-storey townhomes are a great middleground that reduces land costs and retain many of the benefits of SFHs, yet are literally illegal to build in much of the US.
A ton of land in competitive markets is being wasted through zoning, to many people's [And the climate's] detriment.
I follow a couple of markets pretty closely and hardly see any houses that are bought and sold within a short time.
I'm also not very concerned about housing. Even though I definitely overpaid, living through 08 gave me the mentality that houses are places you live, not investments you make.
It did, compared to what would have existed without the stimulus.
But the underlying economic problem it addressed wasn't like the pandemic and the control measures directed at it, particularly in the rapidity with which things could spring back from it. What caused visible inflation wasn't the stimulus, but the rapid rebound in the underlying economy, which wasn't a direct product of the stimulus, though the stimulus mitigated second-order damage that might have prevented the rebound.
The slower emergence from the conditions prompting the Obama-era stimulus meant that slowly-tapering monetary response could buffer most net inflation effects.
The size of the bailouts - excuse me stimulus packages - in the last 2 years make 2008 look like a joke in comparison, and it looks like every few months a new “stimulus” will be passed that is larger than any 1 of the 2008 bailouts.
In the Covid pandemic most of the QE stimulus was to enable low interest debt in order to allow Congress to give it out to "the people" via government stimulus checks. "The people" then proceeded to buy stuff that normal people buy - i.e. consumer staples/discretionary goods which is stuff tracked by CPI.
Financial Crisis bailouts went to big corps who bought out over-leveraged competitors, questionable startups (Uber, WeWork - basically anything Softbank related), etc. which aren't tracked by CPI measures.
If the Fed chair hands me a $100T check and I hide it under my mattress then it has no effect on prices. That check has to get put to use in order for it to start having effects on prices. I have to start buying properties and stuff and then the people that I buy the properties from go and put that money to use.
That is extreme but its an example of how money actually has to get used to have an effect on prices.
And we're seeing companies and the 1% and 0.1% sitting on massive piles of wealth. They invest that into safe short-term securities which pushes down interest rates. You see bubbles in things like certain rare baseball trading cards.
What we haven't seen is wage-price inflation, because that doesn't translate down into the broader real economy. We aren't fixing all the infrastructure and potholes in the nation and putting middle class people to work, who would then go out an buy groceries, middle class houses, etc. SWEs, of course, have been the exception to that rule. But the wage-productivity coupling broke back in 1980s when "inflation" (wage inflation) was put under control.
What is strange about the past year or two though is that there's now real upwards pressure on wages outside of tech workers. Don't know how much of that is due to COVID and long COVID removing workers from workforce and how much of that is workers looking at the pandemic and deciding that they weren't going to put up with any more bullshit HR cheerleading. The direct stimmy checks and eviction freeze may have helped with that as well -- although I think the indirect effect there was that many people were able to take a sabbatical and "just learn to code" and therefore hop up the wage ladder. I don't think we printed enough money there to really matter that much, but we gave everyone a 6+ month break so they actually spend some time jumping up the ladder rather than coming home from work too tired every day.
The fact that we now see some hard signs of wage-price inflation in the data is the thing which is going to really freak the Fed out, and ultimately they're going to hit the brakes hard, once enough of the pandemic/ukraine supply-shock is in the rear view mirror. It actually is "different this time" because of the rise in wages across the board. The next crisis I think is going to be due to the Fed stomping on the brakes (and possibly the crypto ponzi imploding). Then they'll flip back to ZIRP again, but I think they may not be able to print enough money to get out of the next crisis (which is the problem of "pushing on a string" which everyone has totally forgotten that Keynes used to talk about).
The traumatic psychological fall out from that completely destroyed any innate faith I could have in markets and I still suffer from it today regardless of how illogical it is. I basically lived the "...And it's gone" meme.
Faith is a bad advisor. I had a similar experience in 2000 (was a millionaire for a while, then abruptly returned to middle-class). Brazilian economy also provided me numerous opportunities (such as when BRL and USD were untied and, suddenly, my friends who were leasing cars in USD had to pay twice as much) to lose faith in markets and capitalism overall.
On the bright side, we don't need faith. We just need to learn to use markets to our benefit.
Incumbent land speculators are taking literally all of the money out of the California economy.
Case in point: Ten years ago I pointed some people living in the higher cost big city complaining about the high cost of housing in the city to a home for sale in a small town for $80,000; something they considered cheap. At the time the prices were stagnant, though. Their response: "Why would I want to own that? That would be awful." A similar home in the same neighbourhood just sold for $436,000 after two days on the market. Now that price is rising, making it look like a way to get rich, everyone suddenly wants to own it. It is still every bit as awful to own the house, but the quest for riches offsets that.
Should housing lose its ability to make people rich, interest will quickly wane. People will move on to the next get rich quick scheme.
Owning provides both of these and renting does not.
To illustrate how out of touch someone like you who obviously lives in a house bought by some other person is, please consider that the actual median home price in L.A. is $950k, double what you mentioned, while the actual median household income is $65,290, only a fraction of what you cited.
That’s an absurd anecdote.
Of course, if you're too uppity to live in places like San Leandro, that's a you problem.
All decisions made by the Fed are made using comprehensive and sophisticated simulation tools, including tools that I'm under NDA and can't talk about. (However, I can say that the Fed is a customer, as that is publicly available information) Only a small fraction of this tooling is available publicly in the form of, FRB/US - https://www.federalreserve.gov/econres/us-models-package.htm , FLARE - https://www.federalreserve.gov/econres/notes/feds-notes/test... and whatever ABBA is, https://search.usa.gov/search?affiliate=ofr&query=agent-base...
When the policy makers are running millions of simulations with real-time transaction data + inputs, what utility does all of the fretting and "analysis" in the media have?
The system has become extremely dense and opaque, and what is in the public realm seems to be decoupled from the policy making + expertise. At best, the public can learn from footnotes that the Fed intends to (and has) pursued simulations to track, forecast & calibrate its policies,
> 29 To facilitate analysis of settlement disruptions, systems may need to develop the capability to simulate credit and liquidity effects on participants and on the system resulting from one or more participant defaults, or other possible sources of settlement disruption. Such simulations may need to include, if appropriate, the effects of changes in market prices, volatilities, or other factors.
Tools are only as good as the people who use them. We need more transparency into the decision making aids, as well as greater access to help people understand how the economy is managed as a system.
But until then, all this media doom and gloom isn't helping.
If we had more eyes + more critiques, we could debug their thinking & see where it's going.
That being said, the policy makers and the economists at the Fed are far more capable than most people think. They've gotten a lot right, and proven most naysayers wrong. But the question is, how long will that record last?
The Fed is rather transparent (both with policy thinking and data), and I can't think of any area with more eyes and more critiques than US monetary policy.
I should say "trust" in the sense that I trust my doctor to be infinitely more knowledgeable than myself with regards to health, to the point that I am able to confidently outsource my decision making to him. Not "trust" in the sense that you would blindly trust a family member or friend.
This is what it took to reverse 2008's recession. Every time I read this single page document I get a little shiver.
Item #2 is by my interpretation has "any and all means" finality.
("2 Take all necessary steps to unfreeze credit and money markets and ensure that banks and other financial institutions have broad access to liquidity and funding.")
Who is "us" in this case? A lot of people lost their homes/savings. The primary entities saved were the same ones that caused the crisis in the first place. I think it's fair to argue that in the short term a collapse of several major banks might have hurt "the working class" worse. But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
Not OP, but I'm guessing he's referring to people who rely directly or indirectly on the financial sector. Basically a vast majority of the worlds population.
> A lot of people lost their homes/savings.
Yes, agreed. Unless you are saying things couldn't have been worse for them, but I don't think you are based on the rest of what you wrote...
> The primary entities saved were the same ones that caused the crisis in the first place.
Was this the fed's decision?
> But the in the medium to long term I'm not sure that pulling out all the stops to fix the financial industry's fuckups was the right call.
I'd suggest that lack of prosecution and public take-overs were the biggest problem. From my perspective, the fed did what it needed to do within it's power. They couldn't let the major banks go under without systemic consequences. But you're right we should have prosecuted those liable, and failing too-big-to-fail institutions should have been publicly taken over and (arguably) re-privatized after the crisis. We didn't let markets work how they were supposed to.
How does anyone think anyone except those of us making high wages can make it? People are treading water at this point.
[EDIT] Necessarily exceeds, I guess I should say. My food budget exceeds half of either of those, but that's mostly laziness and luxury. I could easily cut that a ton and barely even suffer for it.
I believe the government absolutely blew its load propping up lots of entities during the early pandemic who actually did not need propping up at all (in retrospect). In an idealized case, the government would go around and ask everyone "Hey, if you didn't actually need that money, could you give it back?" and people would honestly return it. Obviously not going to happen though.
That might be where people are starting to escape the working class and enter the middle class, but certainly not "rich" or "high" class, as the article suggests. If your family has a net worth of $2-4 Million and are making $100-200k/yr, then you might... own one Arby's franchise.
I like Arby's and kinda wish I had that for lunch, but folks who own one Arby's are not exactly major competitors in the world of capitalism (in an individual sense). They're the middle class (to the extent that one even exists). Those are people who - together with many other small businesses - could form a community that shapes the market and provides a strong stabilizing force... but they're still "consumers."
The Fed can only choose one of those "problems" to solve -- let asset prices fall and tame inflation, or prop up asset prices and let inflation run wild.
It's 0.6% and 0.8% MoM so far [1], so if we're simply summing up an approximation for YTD and extrapolating to March, I'd suggest -(7% + 0.6% + 0.8% + 0.8%) for -9%.
[1] https://tradingeconomics.com/united-states/inflation-rate-mo...