4 ms·

I don’t think high unemployment is a certain outcome. Layoffs are trending higher, but not because of bad economic metrics. Companies are laying off employees i

by axg11 4y ago

I don’t think high unemployment is a certain outcome. Layoffs are trending higher, but not because of bad economic metrics. Companies are laying off employees in anticipation of bad times. There’s a scenario where inflation returns to lower levels and the economy doesn’t deteriorate.

spywaregorilla 4y ago
I think there's a non trivial chance that the inflation reverses a bit because it was never actually the currency's problem but rather things just getting more expensive due to war and covid and shipping.
- ethbr0 4y ago
  That seems more likely, but can just as easily lead to an inflationary spiral. Prices go up because of supply shocks, companies raise wages, people are able to afford higher prices, prices increase further to increase (or maintain previous) profits, expectations set in, cycle continues with wage increases. That's the entire point of central banks boosting rates to crush inflation / slow economic expansion. It hurts, but as least it's a shorter hurt.
  - foogazi 4y ago
    > Prices go up because of supply shocks, companies raise wages, Why would companies raise wages ? More likely: Prices go up because of supply shocks, demand slows down because of price increase, supply normalizes
    - ethbr0 4y ago
      Because it's a competitive labor market with low unemployment.
      - foogazi 4y ago
        But that has nothing to do with supply shock and inflation
        ethbr0 4y ago
        No, but my point was that a supply shock + that feedback (which is what our current labor market looks like) can create an inflationary spiral.
- howmayiannoyyou 4y ago
  None of the supply issues that preceded price inflation have been resolved and the demand destruction that has followed and will continue is what is giving rise to increasing job losses.
  - spywaregorilla 4y ago
    Sure. And in fact will probably get much worse if Europe gets truly cut off from russian gas long term. Yet the fear that the power of the american dollar is declining, in my opinion, is incorrect.
scarface74 4y ago
Most of the tech companies that are laying off people are money losing startups that have been spending other people’s money like a crackhead - or crypto.

by axg11 4y ago

spywaregorilla 4y ago

I think there's a non trivial chance that the inflation reverses a bit because it was never actually the currency's problem but rather things just getting more expensive due to war and covid and shipping.

ethbr0 4y ago
That seems more likely, but can just as easily lead to an inflationary spiral. Prices go up because of supply shocks, companies raise wages, people are able to afford higher prices, prices increase further to increase (or maintain previous) profits, expectations set in, cycle continues with wage increases. That's the entire point of central banks boosting rates to crush inflation / slow economic expansion. It hurts, but as least it's a shorter hurt.
- foogazi 4y ago
  > Prices go up because of supply shocks, companies raise wages, Why would companies raise wages ? More likely: Prices go up because of supply shocks, demand slows down because of price increase, supply normalizes
  - ethbr0 4y ago
    Because it's a competitive labor market with low unemployment.
    - foogazi 4y ago
      But that has nothing to do with supply shock and inflation
      - ethbr0 4y ago
        No, but my point was that a supply shock + that feedback (which is what our current labor market looks like) can create an inflationary spiral.
howmayiannoyyou 4y ago
None of the supply issues that preceded price inflation have been resolved and the demand destruction that has followed and will continue is what is giving rise to increasing job losses.
- spywaregorilla 4y ago
  Sure. And in fact will probably get much worse if Europe gets truly cut off from russian gas long term. Yet the fear that the power of the american dollar is declining, in my opinion, is incorrect.

scarface74 4y ago

Most of the tech companies that are laying off people are money losing startups that have been spending other people’s money like a crackhead - or crypto.