I was thinking about this today. I think this is fundamentally different than the situation during the pandemic recession or the 2008 crash. In both of those cases there were parts of the US economy that were growing and the crash occurred elsewhere, not affecting them directly. Once the capital/labour problems were resolved, the growing parts of the economy kept growing, the stock market recovered reflecting the expected future profits from those growing parts. This time around the only thing that’s growing is the thing that’s under threat of destruction. Thus once it dies, there’s no obvious other bit of the economy to throw money at that could expand and grow productively. So I think given Trump and his sycophants predispositions, this one is gonna last significantly longer than the previous two before a growing part of the economy emerges and recovery is seen. I don’t think they’ll have the ideological predisposition to begin massive infrastructure projects with public employment, which is a known working solution. I think if the AI bubble pops they’re in for a bad time for a while, and anyone else who’s hitched to this wagon, like us (Canada), and it might look more like 1929 than 2008.
This time around the only thing that’s growing is the thing that’s under threat of destruction. Thus once it dies, there’s no obvious other bit of the economy to throw money at that could expand and grow productively.
It’s almost as the good old real work where you produce goods and services has been forgotten. I mean since a long time, but it worked out okay because people still worked and ofset the bullshit jobs (office, lots in finances, rich parasites etc), maybe we’re at the cusp of something new?
People will try to push the old stuff that didn’t work like communism etc. I hope there will be something new, like take the best of the known systems sort of thing. One can dream eh ☺️
Oh I’m not even talking about him regarding communism. I’m referring to Marx’es most significant work - the analysis of the workings of the capitalist system. He (they) created that work (Das Kapital and related works) in the mid-1800s. I’m reading and it describes in striking accuracy what’s happening around us today, often with uncanny predictive ability.
One other theory I’ve heard is that the oligarch class are searching for a radically disruptive tech in terms of economic impact (mass market home computers, internet, smartphones), but there is no guarantee that “AI” will be as disruptive or offer the same ROI values.
Oh yeah, they are def doing that. I think this theory answers the question of why they’re doing what they’re doing. Why they piled up money in various tire fires since the Great Recession, the latest one being AI. And if the ROI doesn’t show signs that there’s ungodly money to be made in AI, the money would move elsewhere, by selling off AI assets, thus crashing AI asset prices (NVIDIA stock, OpenAI valuations, etc.) Once that occurs, if it occurs, is where my hypothesis begins. I’m basically saying that there isn’t an obvious thing for them to throw money at, at similar rate they’re throwing it to AI. If there’s nowehere for them to throw money at as they take it out of AI. Nothing will grow until they find something new, since we know the rest of the economy isn’t growing.
BTW, perhaps less obviously, if AI actually shows it would return the huge ROI the market is expecting, I really don’t see how that ROI actually going to materialize. At first there will be high returns as firms displace workers with AI, partially (more work per worker, layoff some) or fully. But as more and more firms do this, I highly doubt the economy would be able to quickly find jobs of equivalent pay for all those laid off workers. That means rising unemployment and/or deskilling/downward mobility/lower pay. Which means lower aggregate demand. Which means at one point there won’t be enough demand to buy the output of the firms displacing workers with AI. At that point they won’t be able to get further returns on their AI investment. That would also likely produce an economic crisis and social unrest as it has in the past.
We’re a lot more comfortable these days though. I think more people are struggling and stressed, but what counts as poverty is still better than the poverty of 1900s recession, as living standards have risen. It’s when people get hungry that violence begins and I don know that enough people are hungry to cause violent upheaval. It’s a good thing, but a lesson to the ruling class about the limits hey can push.
However, with Trump in control, I don’t know that those limits will be as precise or as considered. So, we may speedrun to it.
As a counter arguement (not necessarily in the US context), commoners in say 1100 had it way worse than than commoners in 1900.
By 1900 there were already certain moral standards and expectations, nothing like we have now especially in more developed countries, but in comparison 1900 is much closer to 2025 than to 1100.
I was thinking about this today. I think this is fundamentally different than the situation during the pandemic recession or the 2008 crash. In both of those cases there were parts of the US economy that were growing and the crash occurred elsewhere, not affecting them directly. Once the capital/labour problems were resolved, the growing parts of the economy kept growing, the stock market recovered reflecting the expected future profits from those growing parts. This time around the only thing that’s growing is the thing that’s under threat of destruction. Thus once it dies, there’s no obvious other bit of the economy to throw money at that could expand and grow productively. So I think given Trump and his sycophants predispositions, this one is gonna last significantly longer than the previous two before a growing part of the economy emerges and recovery is seen. I don’t think they’ll have the ideological predisposition to begin massive infrastructure projects with public employment, which is a known working solution. I think if the AI bubble pops they’re in for a bad time for a while, and anyone else who’s hitched to this wagon, like us (Canada), and it might look more like 1929 than 2008.
Tariffs are expanding and growing productively.
☠️
It’s almost as the good old real work where you produce goods and services has been forgotten. I mean since a long time, but it worked out okay because people still worked and ofset the bullshit jobs (office, lots in finances, rich parasites etc), maybe we’re at the cusp of something new?
Personally I think we’re about to get another reminder that Marx was right. But we’ll see.
People will try to push the old stuff that didn’t work like communism etc. I hope there will be something new, like take the best of the known systems sort of thing. One can dream eh ☺️
Oh I’m not even talking about him regarding communism. I’m referring to Marx’es most significant work - the analysis of the workings of the capitalist system. He (they) created that work (Das Kapital and related works) in the mid-1800s. I’m reading and it describes in striking accuracy what’s happening around us today, often with uncanny predictive ability.
So, any new fresh ideas 😁 ?
Ima ask AI and get right back to you.
When will they invent Science 2.0? Liberal minds never cease to amaze, so empty yet so confident.
Oh no, a tankie.
One other theory I’ve heard is that the oligarch class are searching for a radically disruptive tech in terms of economic impact (mass market home computers, internet, smartphones), but there is no guarantee that “AI” will be as disruptive or offer the same ROI values.
Oh yeah, they are def doing that. I think this theory answers the question of why they’re doing what they’re doing. Why they piled up money in various tire fires since the Great Recession, the latest one being AI. And if the ROI doesn’t show signs that there’s ungodly money to be made in AI, the money would move elsewhere, by selling off AI assets, thus crashing AI asset prices (NVIDIA stock, OpenAI valuations, etc.) Once that occurs, if it occurs, is where my hypothesis begins. I’m basically saying that there isn’t an obvious thing for them to throw money at, at similar rate they’re throwing it to AI. If there’s nowehere for them to throw money at as they take it out of AI. Nothing will grow until they find something new, since we know the rest of the economy isn’t growing.
BTW, perhaps less obviously, if AI actually shows it would return the huge ROI the market is expecting, I really don’t see how that ROI actually going to materialize. At first there will be high returns as firms displace workers with AI, partially (more work per worker, layoff some) or fully. But as more and more firms do this, I highly doubt the economy would be able to quickly find jobs of equivalent pay for all those laid off workers. That means rising unemployment and/or deskilling/downward mobility/lower pay. Which means lower aggregate demand. Which means at one point there won’t be enough demand to buy the output of the firms displacing workers with AI. At that point they won’t be able to get further returns on their AI investment. That would also likely produce an economic crisis and social unrest as it has in the past.
Agreed, much of the American-style faux-optimism is based on the ignorance of history.
Push the plebs too far and there is some risk that they will rebel. No LLM or smartphone is going to change that.
We’re a lot more comfortable these days though. I think more people are struggling and stressed, but what counts as poverty is still better than the poverty of 1900s recession, as living standards have risen. It’s when people get hungry that violence begins and I don know that enough people are hungry to cause violent upheaval. It’s a good thing, but a lesson to the ruling class about the limits hey can push.
However, with Trump in control, I don’t know that those limits will be as precise or as considered. So, we may speedrun to it.
As a counter arguement (not necessarily in the US context), commoners in say 1100 had it way worse than than commoners in 1900.
By 1900 there were already certain moral standards and expectations, nothing like we have now especially in more developed countries, but in comparison 1900 is much closer to 2025 than to 1100.