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I don't know the intention of the author, but I see like a lot of "Look, it's happening! The economy is going down!" posts pop up these days. Which may be true,

I don't know the intention of the author, but I see like a lot of "Look, it's happening! The economy is going down!" posts pop up these days. Which may be true, but it can also be a self-fulfilling profecy if everyone is doing that on all platforms. Which would be a shame. I'm not saying HN and other platforms should censor (/ take action) either. It's just a thought I have on this subject, and I don't know if there is a solution.

battery_glasses 4y ago
This could be considered a good thing. The whole point of increasing interest rates is to lower business investment and consumer purchasing power, which is what we need to do to combat inflation (or magically fix all supply chain issues.)
- citilife 4y ago
  > This could be considered a good thing. Lower wages, lower job mobility, asset deflation, consumable inflation -- YAY! ...
  - slg 4y ago
    It is still wild to me that this is the approach we are taking, things are getting too expensive so let's shrink the economy. That can't be the best solution. We are throwing the baby out with the bathwater.
    - xapata 4y ago
      Not shrink. Slow the growth of. Decelerate is different from stop. The real problem isn't any particular position, velocity, nor even acceleration. Those can all be planned for. It's the 4th time-derivative, jerk, that messes us up.
      - slg 4y ago
        That is a semantic debate on whether we cross an axis on a graph and we won't know whether that will happen until after the fact. We are intervening to make the economy smaller than if we didn't intervene. I think that qualifies as "shrinking" even if the growth is what is shrinking and not the overall economy.
        xapata 4y ago
        > We are intervening to make the economy smaller than if we didn't intervene. Depends on what time scale we're thinking about. True in the short-term, but I think the long-term expectation is that growth will be more stable, and therefore greater, with this short-term intervention. > I think that qualifies as "shrinking" Yes, and no. Yes, in that oh-so-important technical, relative sense. No, in that it's not the best choice of words.
      - caeril 4y ago
        > Those can all be planned for. Literally nothing can be planned for. Compare the Fed dot plots at any given meeting since 2008 with actual rates a year, or three years hence. Look at the BoE and BoJ flail wildly around right now, absolutely shocked by the consequences of their own actions less than a year ago. These people have arguably a worse predictive ability than the canonical South Park Chicken ritual. Central Banking is the only industry I know of in which you can be catastrophically wrong, always, and retain job security. Great gig, if you can swing it.
    - pbz 4y ago
      It's the only way we know of to stop greed/fomo running rampant. Folks need to be put in a time-out to cool off and force them to reprioritize. We like to think of the market as this calculated and rational entity. It's far from that, in fact it's closer to the opposite of that. The other option is to do price control, but that won't fly in capitalism.
      - slg 4y ago
        There are other levers that can be pulled. Taxes are one example that could be much more targeted at the specific sources of the "greed/fomo running rampant". We instead chose to take it out on everyone.
        pbz 4y ago
        I'd put taxation in the same bucket as price control because for this to be effective the taxes would need to be on the rich (in effect to drain liquidity) and that's as likely as price control.
        slg 4y ago
        I don't disagree with the unlikely nature of new taxes on the rich. That was basically my original point. It is wild that we decided that we would rather go into a recession than tax the rich and I don't understand why there is seemingly no public pushback against this.
        pbz 4y ago
        There's historic precedence that increasing rates controls inflation. Yes, it's a very blunt and crude instrument. However, when you know this tool works, trying another tool is too risky to experiment with (in case it fails). Inflation does have the risk of getting out of hand and being even harder to control. The risk analysis is that whatever pain increasing the rates would cause it pales in comparison to having hyperinflation. As far as the lack of a pushback: My guess is a combination of apathy and the fact that it doesn't affect the average person quite as much as inflation.
    - fundad 4y ago
      The interest rate hikes serve to squash the glimmer of worker power that has the ownership class so worried.
  - deleted 4y ago
    [deleted]
  - NaturalPhallacy 4y ago
    Not to mention the greatest wealth transfer in history from the poor to the rich: https://www.newsweek.com/were-living-through-greatest-transfer-wealth-middle-class-elites-history-opinion-1641614 https://www.newsweek.com/were-living-through-greatest-transf...
    - speakfreely 4y ago
      Inflation is dumping rocket fuel on that fire. There's a reason that they're fighting inflation with disregard for other consequences: the resulting inequality of continued unchecked inflation is a legitimate threat to the stability of our social system.
  - speakfreely 4y ago
    Asset deflation is a good thing for wage earners. Inflation is the worst possible thing for anyone who works for their money, as it means the wealth of the people who own assets (think 8-9 figure business portfolios, not a single residence) is skyrocketing away from the middle class in both relative and absolute terms.
- tsunamifury 4y ago
  This isn’t 1980, raising interest rates doesn’t fix supply chain issues. This isn’t inflation it’s a real supply shortage. By the fed doesn’t seem to know how to help with that so, let’s just tank everything. Killing demand to get workers back to lower wages and unemployment up seems to be that real goal.
  - baggy_trough 4y ago
    It's both.
  - Matticus_Rex 4y ago
    There is a supply shortage in some areas... and there is price inflation as well. That's actually what you'd expect with a supply shortage that isn't very evenly distributed anyway, but when you add dramatic expansion of the money supply in a period of very low interest rates on top of that, you'd certainly expect to see dramatic price inflation to match, as we have. The idea that a supply shortage is causing all of this seems insane.
    - mywittyname 4y ago
      The "expansion in the money supply" has been going on for 15 years. The supply issues started 2.5 years ago. The inflation started about 2 years ago. So only one of those factors is correlated with serious inflation. The explicit goal of expanding the money supply in 2009 was to drive inflation in order to combat deflation. It didn't work. We ended up with a decade+ long period of low/no inflation. Even today, the USD is growing stronger relative to other currencies. So in spite of this continued money supply expansion, Americans are experiencing inflation the least of anyone in the developed world.
      - zeroonetwothree 4y ago
        Money supply has roughly doubled since 2020. So you are not correct. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
- llampx 4y ago
  Zimbabwe has 200% interest rates and 280% inflation iirc https://www.africanews.com/2022/06/28/zimbabwes-key-interest-rate-rises-to-record-200-in-the-face-of-inflation/ https://www.africanews.com/2022/06/28/zimbabwes-key-interest... Why am I being downvoted? All this is is a data point showing that rising interest rates don't have to bring down inflation.
  - giantrobot 4y ago
    Zimbabwe's economy is non-functional. Stats for inflation and interest rates aren't meaningful to anywhere else. There's no real applicable lessons other than to look at it and feel bad for Zimbabweans stuck in that situation.
  - whatshisface 4y ago
    I don't think people should downvote you for disagreement, but I do disagree with your analysis. The US has a system where the Fed lets banks manage the money creation, and they control that by changing the interest rates to change the bank's incentives. In Zimbabwe, the government prints money directly (or at least they did under the Mugabe government, I am not up to date on their current affairs), which means that the central bank interest rate doesn't restrain their money supply growth. That does have some relevance to the US because the federal government can borrow+spend way more than a small country with a bad credit score - but since the interest rates they borrow at are coupled to the Fed rate, rising rates should in theory slow that down.
    - User23 4y ago
      The Fed is a creature of Congress, which is to say that Congress completely controls the Fed. All talk of the Fed's independence has no constitutional basis. The Fed was created by an act of Congress and can be restructured, abolished, or otherwise changed however Congress likes by subsequent acts of Congress. Indeed, in the history of US central banking, Congress has done so before. Therefore, the Fed's continued existence is predicated on not motivating a congressional majority plus the executive or alternatively a veto-proof congressional majority to change things. Practically and observably speaking, that means when Congress says "print" the Fed says "brrrrrrrrrrrrrrrrrrrrrrrrr." There is no operational limit on how much money Congress can spend. There are real limits though, in particular the productive capacity of the economic zone that does business in US dollars. If, for example, China were to withdraw from the dollar denominated global market, it would be a severe supply shock and result in massive inflation. Furthermore, most money in the USA isn't even reserves, but rather bank deposits. Theoretically bank deposits are supposedly somehow constrained by reserves, but that hasn't really been true for well over a decade. Raising rates doesn't directly impair banks ability to originate as many new loans and corresponding deposits as they care to. Conceivably, higher rates could reduce the demand for loans from credit-worthy borrowers, or even reduce the pool of credit-worthy borrowers directly, but I'm not sure it doesn't end up being a wash after accounting for inflation. Personally I suspect most of the effects that we do see are related to hysteresis rather than a fundamental transmission mechanism from interest rates. That is to say, the shocking effects we see from rate increases aren't due to a fundamental change, but rather a lag while market participants to catch up with the new rules of the game. Another important factor is the prestige media using all of its persuasive powers to convince market participants that Fed actions will result in a downturn. There certainly is a large psychological component to economic activity.
- User23 4y ago
  Another option for lowering inflation is increasing productivity to allow the same amount of money to chase more goods and services, thus resulting in lower prices.
WheatMillington 4y ago
- actually_a_dog 4y ago
  You know what they say, right? Economists have predicted 9 of the last 5 recessions. Talk is just talk until people start believing it.
  - ptmcc 4y ago
    Indeed, and more like 20 out of the last 1.
godelski 4y ago
> Which may be true, but it can also be a self-fulfilling prophecy if everyone is doing that on all platforms. Which would be a shame. This also happens with inflation. It is probably because people start acting differently. The hypothesis is that if people are preparing for a recession then demand goes down, which pushes prices up, which is identical to inflation. Obviously this model is far too simplistic but it is still interesting.
- etrautmann 4y ago
  What? That’s opposite of how it should work. Lower demand depresses prices.
  - godelski 4y ago
    Not if you want to make the same profits.
    - rvbissell 4y ago
      That's not how it works. Revenue is the area of the rectangle "price times volume". (Profit is "revenue minus costs".) Businesses want to maximize the area of that rectangle. If a business thinks they can keep the area of that rectangle the same by increasing the price dimension, that will cause buyers to react by shrinking the volume dimension. That might yield the same effective area for the rectangle, but then also might not.
    - interpenetrate 4y ago
      Well empirically lower demand does not lead to higher prices. The hopes and dreams of sustained profits are dashed by the coercive forces of competition. It's very sad.
- rvbissell 4y ago
  Why do you say that softening demand will cause prices to go up? That sounds contrary to every economics lesson I've ever had.
mountaineer 4y ago
I believe the intent is to share as a possible leading indicator. I don't know the OP's exact reasoning, but I have tracked this data for years at hntrends.com and it was my original thesis that this thread is a leading indicator of the tech job market at a minimum.
- whatshisface 4y ago
  How can you call it a leading indicator of the tech job market when it is a tech job market?
  - zdragnar 4y ago
    It is a pretty narrow segment of a much larger market, presumably.
    - whatshisface 4y ago
      "Startups quit hiring first," sounds like a leading indicator on the surface, but if you think about it that also means that they will stop hiring during smaller dips that later pick back up. Every big dip has to do through the smaller dip state, but since plenty of smaller dips recover it is still a martingale - unless it isn't, but if it isn't that's the cause of my surprise.
      - hn_throwaway_99 4y ago
        That's basically true of all "leading indicators", and is summarized in the popular joke that "Economists have predicted 8 of the last 5 recessions".
    - TedDoesntTalk 4y ago
      Yeah, there are literally thousands of tech companies that don’t use HN.
  - Jiocus 4y ago
    Not the author but I would assume they mean that "Who is hiring" was indicative of the job market outside the HN thread itself, in a macro-perspective.
interpenetrate 4y ago
Within a single firm, particularly large ones, surpluses and deficits can be communicated absolutely and crises can be practically eliminated. (It would be unthinkable for Amazon to leave the coordination of its processes up to some sort of internal free market.) As for action between firms, the anarchy of the market is fundamental to capitalism. Real competition is a basic characteristic of capitalism and so perfect information is not a tendency of the system (despite its theoretical elevation in neoclassical economics). So, no, there is no solution. To avoid crises of overproduction (including the subsequent adjustments), the planning that takes place within the capitalist firm has to be extended to the global network of production.
- cercatrova 4y ago
  It seems you're advocating for a centrally planned economy, but from history we see that it doesn't work. It seems that there is simply too much in an economy for one entity to wholly plan. It can work in a smaller organization like Amazon (and even then, I'm sure teams compete for allocation of resources, it's not all centrally planned) but not at large. We see that people in centrally planned economies revert to underground black markets, signifying that somehow markets are a key to functioning economies.
  - interpenetrate 4y ago
    There are differences between the systems of a private capital and of a nation (or for that matter, the entire globe, which has never been planned centrally; incidentally this explains black markets). The difference in goods is a mere quantitative difference. (Amazon sells literally everything.) Still, the amount and diversity of crap managed by Amazon is much greater than that of North Korea (comparing net sales vs. GDP). "It seems that there is simply too much in an economy for one entity to wholly plan" has to be tongue-in-cheek if it's not simply a mindless mantra. It's a staggering ideological contradiction whose poles the Hacker News crowd must oscillate between. On one hand, we're on the cusp of generalized artificial intelligence, and on the other we can't figure out the linear algebra needed to maintain a input-output table that changes over time. But the difference in competition is a qualitative difference. The laws that determine the "competition" between teams at Amazon are different (opposite, even) than the laws of competition between capitalist firms. This is an empirical question. We can certainly imagine Amazons teams undercutting each other's "prices" in order to maximize private "profit," leading to a centralization and concentration of "capital" in the hands of a "monopolistic" team, but this simply does not happen in practice. The categories of intra-firm operation are totally different than those of inter-firm operation.
robertk 4y ago
https://www.financialsamurai.com/best-time-to-start-a-business-is-during-a-downturn/ https://www.financialsamurai.com/best-time-to-start-a-busine... “ The Best Time To Start A Business Is During A Downturn”
- brookside 4y ago
  Financial Samurai strikes me as sadistic. His post about Mr. Money Mustache's divorce is pretty horrible example of soulless SEO headings kicking a rival blogger when down https://www.financialsamurai.com/mmm-divorce/ https://www.financialsamurai.com/mmm-divorce/
  - galfarragem 4y ago
    I have mixed feelings. It’s sadistic but too relevant to ignore. It’s an hit in the aircraft carrier of the FIRE poster child.
  - conductr 4y ago
    I can see it both way. I never liked MMM types because they preach what I consider extreme frugality. As a core principle of my finances, I focus on the uncapped income side of the equation and practice what I consider modesty in my expenses. I have no desire to be flashy or flaunt the wealth I do have. But I’m sure as hell not living off the grid in the middle of nowhere because it cost 10% of a home in a metro area. Thing is, I’d never even consider it because my wife doesn’t want that, and it’s important for people to be fully aligned on that. I found the post you linked to overly verbose as these bloggers often are. They make lists and sections and go on tangents on what could be a 300-500 word essay. I think he could have excluded the backstory and just focused on how important it is that your partner be onboard the FIRE/extreme frugality lifestyle. So I think it’s poorly written and not an enjoyable article. However, it’s a pretty damn important message and difficult to talk about until someone prominent that is serving as a poster child for the FIRE niche like MMM goes through it publicly.
  - outworlder 4y ago
    ESH He's kicking someone else when they are down, but that seems to be petty revenge in retribution for perceived attacks.
giantg2 4y ago
"Look, it's happening! The economy is going down!" I agree this can be a self fulfilling prophecy. A lot of larger tech companies were announcing hiring freezes or restructuring months ago to get ahead of the downturn. But I also think we could restate the quote above in ways that are actually true. For example, a lot of these posts are startups and monetary policy is slowing or shrinking the money available for VC. It makes sense that we see slower hiring. The past few years have probably been above historical VC funding levels anyways, so we may be returning to a more historical level for the next few years (or who knows?).
- claytongulick 4y ago
  > A lot of larger tech companies were announcing hiring freezes or restructuring months ago to get ahead of the downturn Alternately, I think a lot of companies are using the spector of a recession as cover for reducing unproductive or unnecessary headcount. Over-hiring is an issue that's difficult to correct. If you do a round of layoffs, the perception is that you're in financial duress. This can affect investor and consumer confidence. It's also difficult to explain to the public and to employees "oops, mia culpa! We asked you to upend your life to take a job with us, but our bad, we don't really need you." I see it as similar to the way a lot of businesses implemented cost-cutting measures during covid that they had very much wanted to do, but couldn't because of the worry that they'd lose a competitive edge. Many of these measures had nothing to do with public safety and everything to do with cost cutting.
  - giantg2 4y ago
    Even if that is the case with some, it would still have the self-fulfilling prophecy component.
- tootie 4y ago
  Most recessions are self-fulfilling. Outside of true exogenous disruptions (ie a pandemic or a war) recessions are largely driven by collective bad vibes creating a vicious cycle. In most cases, we could probably power through dips in consumer spending or specific industries shrinking or fuel prices rising but in reality the bad feelings trickle outward until they affect everyone very broadly. Then when we've had enough, things recover. Keynes called it Animal Spirits.
VictorPath 4y ago
> a self-fulfilling profecy (sic) I think Powell jacking up the fed funds rate is going to have a much larger effect than some random HN post.
NaturalPhallacy 4y ago
We're also heading into the holiday season, and notably "Open Enrollment" for health insurance, which is titanic industry who typically freezes their code in September. Lots of companies slack off or halt their hiring, particularly health insurance during this period. And also all the inflation and recession action going on. So it's likely a combination of the two.
- ternaryoperator 4y ago
  The first factor, if valid, would have shown up in previous years too, no?
rapind 4y ago
> I don't know the intention of the author Why does his intent matter unless you think the data is being skewed or misrepresented? Seems like a fairly objective factual post to me (but I didn’t run the numbers myself). I would appreciate if data observations like this always included the script so people could easily (and quickly) verify the results, but that’s just a personal knit pick.
- gpm 4y ago
  > Why does his intent matter unless you think the data is being skewed or misrepresented? Because the data can be cherry-picked, intentionally or un-intentionally, similar to https://xkcd.com/882/ https://xkcd.com/882/ If you believe a trend exists (or just want to find evidence for it for other reasons) and you keep looking for statistical evidence of it, you're going to find it.
  - rapind 4y ago
    Yes for sure, but no conclusions were drawn. No summary or opinion was posited. Of course results can be skewed. Seems unlikely in this case, but it's easy enough to verify. I mean if I was going to criticize the data, I'd probably just verify it myself first, and then question intent. Thinking about it, I could verify post counts for a hand full of these pretty easily using the dev console. No one even questioned the data though, it was more along the lines of; what's the hidden agenda...
- trenning 4y ago
  My biggest takeaway from submitting this, is that most people (by top upvoted comments) had a negative knee jerk reaction to my 'intentions'. I just thought it was observationally interesting.
theptip 4y ago
I see what you are saying, but I think the impact of a post like this on something so intangible as "market sentiment" is extremely tenuous. It's hard to measure/quantify but I'd be shocked if it's more than a rounding error. On the other hand, there are actual fundamentals like economy-wide inflation, employment numbers, GDP growth, supply/demand curves, etc., and it's important as an operator to have information about how the economy actually is, and more importantly how it's changing. I think the benefit of a post like this is much less tenuous; it provides insight into how the broader market conditions are panning out in our specific corner of the economy. So yes, every measurement perturbs the system under measurement. In some cases that can be substantial. But in this case I don't think it is so.
- blablabla123 4y ago
  Yeah also looking at what jobs are in demand at recruiters from LinkedIn, I can see already since the pandemic it's more from companies with proven business models and rather small startups. Good to see some real numbers actually. But of course the effect is there, job seekers and companies get more cautious. Still, better than hiding this data. Also I don't think there is a real reason to worry within tech
ouid 4y ago
The economy "going down" is not necessarily pessimism.
sulam 4y ago
It’s true, I depend on HN posts to tell me whether or not I should put the brakes on my spending. /s
tengbretson 4y ago
Despite two quarters of negative GDP growth, the current justification for saying we are not currently in a recession is that the unemployment rate is so low. The current stated goal of the Federal Reserve is to raise the unemployment rate from 3.7% to a target of 4.4%. What you are remarking on as possibly a self-fulfilling prophecy is instead the result of official policy achieving its goal.
- baremetal 4y ago
  >Despite falling GDP, the current justification for saying we are not currently in a recession is that jobs and employment numbers are high. Pretty sure a recession is two quarters of negative growth. Rationalization hamster wheels notwithstanding.
  - zeroonetwothree 4y ago
    We have had 2 quarters of negative growth before without an official NBER recession (though not since the 50s).
    - lurquer 4y ago
      Until recently, a recession has meant two quarters of negative growth. The term is used to describe economic conditions in various countries. The NBER is not part of the designation. Indeed, it would be impossible for an economist to observe that Egypt, for instance, was in a recession as the NBER issues no opinions on the Egyptian economy. No, conditioning the definition of a recession on the NBER was a silly political stunt by the current admin. Don’t go along with these redefinitions… it’s silly and illogical.
      - SantalBlush 4y ago
        As someone with an MA in econ, most of what you've said here is false. While two quarters of negative growth is often used as an informal measure of recession, the NBER definition is the one that has been used in the US for quite some time by economists. Historically, here in the US we haven't used the Egyptian definition of recession when talking about the US economy, so what you think about their definition is irrelevant. That isn't to say that we're not currently in a recession, but economists don't know yet, and neither do you.
conductr 4y ago
Official measures are lagging indicators, so a recession always exists before it exists.
randomsearch 4y ago
If sites like HN were that influential we’d all be running Linux on the desktop and listening to our nomads. Not sure if that’s a good or bad thing.
- wombatpm 4y ago
  I find my zune to be a perfectly cromulent device
kortilla 4y ago
If data upsets you it may be worth thinking about why. It’s just saying that hiring appears to be cooling off and that’s showing up in other places too (layoffs/freezes at FAANG, the BLS job opening stats just this morning: https://www.reuters.com/markets/us/us-job-openings-post-biggest-drop-nearly-2-12-years-august-2022-10-04/ https://www.reuters.com/markets/us/us-job-openings-post-bigg...). This isn’t some insidious campaign to crash the economy by showing that the economy is finally cooling off. Getting inflation under control is good long term but it will be painful.
pitched 4y ago
“The vibes are off” is the best way I’ve heard this explained: https://www.npr.org/2022/09/15/1123281909/vibecession-vibes-session https://www.npr.org/2022/09/15/1123281909/vibecession-vibes-...
- fundad 4y ago
  We are teetering on theocracy which doesn't bode well for employment.
speby 4y ago
I mean, it's not just anecdotal, or only looking for bad news. New job postings in general are down markedly: https://www.cnbc.com/2022/10/04/jolts-august-2022.html https://www.cnbc.com/2022/10/04/jolts-august-2022.html
fundad 4y ago
People want ANOTHER round of layoffs because the high demand doesn’t help their candidates
a-dub 4y ago
yes, this has been my joke. "maybe it won't be a recession. maybe it will be. what i can tell you for sure is that it will be the first of its kind in real-time, full surround, three dimensional, quintophonic social media stereo." economics is the study of population behavior. remember that.
riffic 4y ago
> self-fulfilling profecy that's not really how it works though, and it should absolutely not be a concern (it's quite common to get a sort of tech-industry tunnel vision while discounting the bigger picture or regional focuses.) I've always argued that downturns are a natural part of every business cycle and perhaps instead of trying to avoid them, we plan for their inevitable occurrence.
Sophistifunk 4y ago
If HN can sink the economy it was going down either way
kristopolous 4y ago
times like those are the greatest opportunities for new things.

battery_glasses 4y ago

This could be considered a good thing. The whole point of increasing interest rates is to lower business investment and consumer purchasing power, which is what we need to do to combat inflation (or magically fix all supply chain issues.)

citilife 4y ago
> This could be considered a good thing. Lower wages, lower job mobility, asset deflation, consumable inflation -- YAY! ...
- slg 4y ago
  It is still wild to me that this is the approach we are taking, things are getting too expensive so let's shrink the economy. That can't be the best solution. We are throwing the baby out with the bathwater.
  - xapata 4y ago
    Not shrink. Slow the growth of. Decelerate is different from stop. The real problem isn't any particular position, velocity, nor even acceleration. Those can all be planned for. It's the 4th time-derivative, jerk, that messes us up.
    - slg 4y ago
      That is a semantic debate on whether we cross an axis on a graph and we won't know whether that will happen until after the fact. We are intervening to make the economy smaller than if we didn't intervene. I think that qualifies as "shrinking" even if the growth is what is shrinking and not the overall economy.
      - xapata 4y ago
        > We are intervening to make the economy smaller than if we didn't intervene. Depends on what time scale we're thinking about. True in the short-term, but I think the long-term expectation is that growth will be more stable, and therefore greater, with this short-term intervention. > I think that qualifies as "shrinking" Yes, and no. Yes, in that oh-so-important technical, relative sense. No, in that it's not the best choice of words.
    - caeril 4y ago
      > Those can all be planned for. Literally nothing can be planned for. Compare the Fed dot plots at any given meeting since 2008 with actual rates a year, or three years hence. Look at the BoE and BoJ flail wildly around right now, absolutely shocked by the consequences of their own actions less than a year ago. These people have arguably a worse predictive ability than the canonical South Park Chicken ritual. Central Banking is the only industry I know of in which you can be catastrophically wrong, always, and retain job security. Great gig, if you can swing it.
  - pbz 4y ago
    It's the only way we know of to stop greed/fomo running rampant. Folks need to be put in a time-out to cool off and force them to reprioritize. We like to think of the market as this calculated and rational entity. It's far from that, in fact it's closer to the opposite of that. The other option is to do price control, but that won't fly in capitalism.
    - slg 4y ago
      There are other levers that can be pulled. Taxes are one example that could be much more targeted at the specific sources of the "greed/fomo running rampant". We instead chose to take it out on everyone.
      - pbz 4y ago
        I'd put taxation in the same bucket as price control because for this to be effective the taxes would need to be on the rich (in effect to drain liquidity) and that's as likely as price control.
        slg 4y ago
        I don't disagree with the unlikely nature of new taxes on the rich. That was basically my original point. It is wild that we decided that we would rather go into a recession than tax the rich and I don't understand why there is seemingly no public pushback against this.
        pbz 4y ago
        There's historic precedence that increasing rates controls inflation. Yes, it's a very blunt and crude instrument. However, when you know this tool works, trying another tool is too risky to experiment with (in case it fails). Inflation does have the risk of getting out of hand and being even harder to control. The risk analysis is that whatever pain increasing the rates would cause it pales in comparison to having hyperinflation. As far as the lack of a pushback: My guess is a combination of apathy and the fact that it doesn't affect the average person quite as much as inflation.
  - fundad 4y ago
    The interest rate hikes serve to squash the glimmer of worker power that has the ownership class so worried.
- deleted 4y ago
  [deleted]
- NaturalPhallacy 4y ago
  Not to mention the greatest wealth transfer in history from the poor to the rich: https://www.newsweek.com/were-living-through-greatest-transfer-wealth-middle-class-elites-history-opinion-1641614 https://www.newsweek.com/were-living-through-greatest-transf...
  - speakfreely 4y ago
    Inflation is dumping rocket fuel on that fire. There's a reason that they're fighting inflation with disregard for other consequences: the resulting inequality of continued unchecked inflation is a legitimate threat to the stability of our social system.
- speakfreely 4y ago
  Asset deflation is a good thing for wage earners. Inflation is the worst possible thing for anyone who works for their money, as it means the wealth of the people who own assets (think 8-9 figure business portfolios, not a single residence) is skyrocketing away from the middle class in both relative and absolute terms.
tsunamifury 4y ago
This isn’t 1980, raising interest rates doesn’t fix supply chain issues. This isn’t inflation it’s a real supply shortage. By the fed doesn’t seem to know how to help with that so, let’s just tank everything. Killing demand to get workers back to lower wages and unemployment up seems to be that real goal.
- baggy_trough 4y ago
  It's both.
- Matticus_Rex 4y ago
  There is a supply shortage in some areas... and there is price inflation as well. That's actually what you'd expect with a supply shortage that isn't very evenly distributed anyway, but when you add dramatic expansion of the money supply in a period of very low interest rates on top of that, you'd certainly expect to see dramatic price inflation to match, as we have. The idea that a supply shortage is causing all of this seems insane.
  - mywittyname 4y ago
    The "expansion in the money supply" has been going on for 15 years. The supply issues started 2.5 years ago. The inflation started about 2 years ago. So only one of those factors is correlated with serious inflation. The explicit goal of expanding the money supply in 2009 was to drive inflation in order to combat deflation. It didn't work. We ended up with a decade+ long period of low/no inflation. Even today, the USD is growing stronger relative to other currencies. So in spite of this continued money supply expansion, Americans are experiencing inflation the least of anyone in the developed world.
    - zeroonetwothree 4y ago
      Money supply has roughly doubled since 2020. So you are not correct. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
llampx 4y ago
Zimbabwe has 200% interest rates and 280% inflation iirc https://www.africanews.com/2022/06/28/zimbabwes-key-interest-rate-rises-to-record-200-in-the-face-of-inflation/ https://www.africanews.com/2022/06/28/zimbabwes-key-interest... Why am I being downvoted? All this is is a data point showing that rising interest rates don't have to bring down inflation.
- giantrobot 4y ago
  Zimbabwe's economy is non-functional. Stats for inflation and interest rates aren't meaningful to anywhere else. There's no real applicable lessons other than to look at it and feel bad for Zimbabweans stuck in that situation.
- whatshisface 4y ago
  I don't think people should downvote you for disagreement, but I do disagree with your analysis. The US has a system where the Fed lets banks manage the money creation, and they control that by changing the interest rates to change the bank's incentives. In Zimbabwe, the government prints money directly (or at least they did under the Mugabe government, I am not up to date on their current affairs), which means that the central bank interest rate doesn't restrain their money supply growth. That does have some relevance to the US because the federal government can borrow+spend way more than a small country with a bad credit score - but since the interest rates they borrow at are coupled to the Fed rate, rising rates should in theory slow that down.
  - User23 4y ago
    The Fed is a creature of Congress, which is to say that Congress completely controls the Fed. All talk of the Fed's independence has no constitutional basis. The Fed was created by an act of Congress and can be restructured, abolished, or otherwise changed however Congress likes by subsequent acts of Congress. Indeed, in the history of US central banking, Congress has done so before. Therefore, the Fed's continued existence is predicated on not motivating a congressional majority plus the executive or alternatively a veto-proof congressional majority to change things. Practically and observably speaking, that means when Congress says "print" the Fed says "brrrrrrrrrrrrrrrrrrrrrrrrr." There is no operational limit on how much money Congress can spend. There are real limits though, in particular the productive capacity of the economic zone that does business in US dollars. If, for example, China were to withdraw from the dollar denominated global market, it would be a severe supply shock and result in massive inflation. Furthermore, most money in the USA isn't even reserves, but rather bank deposits. Theoretically bank deposits are supposedly somehow constrained by reserves, but that hasn't really been true for well over a decade. Raising rates doesn't directly impair banks ability to originate as many new loans and corresponding deposits as they care to. Conceivably, higher rates could reduce the demand for loans from credit-worthy borrowers, or even reduce the pool of credit-worthy borrowers directly, but I'm not sure it doesn't end up being a wash after accounting for inflation. Personally I suspect most of the effects that we do see are related to hysteresis rather than a fundamental transmission mechanism from interest rates. That is to say, the shocking effects we see from rate increases aren't due to a fundamental change, but rather a lag while market participants to catch up with the new rules of the game. Another important factor is the prestige media using all of its persuasive powers to convince market participants that Fed actions will result in a downturn. There certainly is a large psychological component to economic activity.
User23 4y ago
Another option for lowering inflation is increasing productivity to allow the same amount of money to chase more goods and services, thus resulting in lower prices.

WheatMillington 4y ago

actually_a_dog 4y ago
You know what they say, right? Economists have predicted 9 of the last 5 recessions. Talk is just talk until people start believing it.
- ptmcc 4y ago
  Indeed, and more like 20 out of the last 1.

godelski 4y ago

> Which may be true, but it can also be a self-fulfilling prophecy if everyone is doing that on all platforms. Which would be a shame. This also happens with inflation. It is probably because people start acting differently. The hypothesis is that if people are preparing for a recession then demand goes down, which pushes prices up, which is identical to inflation. Obviously this model is far too simplistic but it is still interesting.

etrautmann 4y ago
What? That’s opposite of how it should work. Lower demand depresses prices.
- godelski 4y ago
  Not if you want to make the same profits.
  - rvbissell 4y ago
    That's not how it works. Revenue is the area of the rectangle "price times volume". (Profit is "revenue minus costs".) Businesses want to maximize the area of that rectangle. If a business thinks they can keep the area of that rectangle the same by increasing the price dimension, that will cause buyers to react by shrinking the volume dimension. That might yield the same effective area for the rectangle, but then also might not.
  - interpenetrate 4y ago
    Well empirically lower demand does not lead to higher prices. The hopes and dreams of sustained profits are dashed by the coercive forces of competition. It's very sad.
rvbissell 4y ago
Why do you say that softening demand will cause prices to go up? That sounds contrary to every economics lesson I've ever had.

mountaineer 4y ago

I believe the intent is to share as a possible leading indicator. I don't know the OP's exact reasoning, but I have tracked this data for years at hntrends.com and it was my original thesis that this thread is a leading indicator of the tech job market at a minimum.

whatshisface 4y ago
How can you call it a leading indicator of the tech job market when it is a tech job market?
- zdragnar 4y ago
  It is a pretty narrow segment of a much larger market, presumably.
  - whatshisface 4y ago
    "Startups quit hiring first," sounds like a leading indicator on the surface, but if you think about it that also means that they will stop hiring during smaller dips that later pick back up. Every big dip has to do through the smaller dip state, but since plenty of smaller dips recover it is still a martingale - unless it isn't, but if it isn't that's the cause of my surprise.
    - hn_throwaway_99 4y ago
      That's basically true of all "leading indicators", and is summarized in the popular joke that "Economists have predicted 8 of the last 5 recessions".
  - TedDoesntTalk 4y ago
    Yeah, there are literally thousands of tech companies that don’t use HN.
- Jiocus 4y ago
  Not the author but I would assume they mean that "Who is hiring" was indicative of the job market outside the HN thread itself, in a macro-perspective.

interpenetrate 4y ago

Within a single firm, particularly large ones, surpluses and deficits can be communicated absolutely and crises can be practically eliminated. (It would be unthinkable for Amazon to leave the coordination of its processes up to some sort of internal free market.) As for action between firms, the anarchy of the market is fundamental to capitalism. Real competition is a basic characteristic of capitalism and so perfect information is not a tendency of the system (despite its theoretical elevation in neoclassical economics). So, no, there is no solution. To avoid crises of overproduction (including the subsequent adjustments), the planning that takes place within the capitalist firm has to be extended to the global network of production.

cercatrova 4y ago
It seems you're advocating for a centrally planned economy, but from history we see that it doesn't work. It seems that there is simply too much in an economy for one entity to wholly plan. It can work in a smaller organization like Amazon (and even then, I'm sure teams compete for allocation of resources, it's not all centrally planned) but not at large. We see that people in centrally planned economies revert to underground black markets, signifying that somehow markets are a key to functioning economies.
- interpenetrate 4y ago
  There are differences between the systems of a private capital and of a nation (or for that matter, the entire globe, which has never been planned centrally; incidentally this explains black markets). The difference in goods is a mere quantitative difference. (Amazon sells literally everything.) Still, the amount and diversity of crap managed by Amazon is much greater than that of North Korea (comparing net sales vs. GDP). "It seems that there is simply too much in an economy for one entity to wholly plan" has to be tongue-in-cheek if it's not simply a mindless mantra. It's a staggering ideological contradiction whose poles the Hacker News crowd must oscillate between. On one hand, we're on the cusp of generalized artificial intelligence, and on the other we can't figure out the linear algebra needed to maintain a input-output table that changes over time. But the difference in competition is a qualitative difference. The laws that determine the "competition" between teams at Amazon are different (opposite, even) than the laws of competition between capitalist firms. This is an empirical question. We can certainly imagine Amazons teams undercutting each other's "prices" in order to maximize private "profit," leading to a centralization and concentration of "capital" in the hands of a "monopolistic" team, but this simply does not happen in practice. The categories of intra-firm operation are totally different than those of inter-firm operation.

robertk 4y ago

https://www.financialsamurai.com/best-time-to-start-a-business-is-during-a-downturn/ https://www.financialsamurai.com/best-time-to-start-a-busine... “ The Best Time To Start A Business Is During A Downturn”

brookside 4y ago
Financial Samurai strikes me as sadistic. His post about Mr. Money Mustache's divorce is pretty horrible example of soulless SEO headings kicking a rival blogger when down https://www.financialsamurai.com/mmm-divorce/ https://www.financialsamurai.com/mmm-divorce/
- galfarragem 4y ago
  I have mixed feelings. It’s sadistic but too relevant to ignore. It’s an hit in the aircraft carrier of the FIRE poster child.
- conductr 4y ago
  I can see it both way. I never liked MMM types because they preach what I consider extreme frugality. As a core principle of my finances, I focus on the uncapped income side of the equation and practice what I consider modesty in my expenses. I have no desire to be flashy or flaunt the wealth I do have. But I’m sure as hell not living off the grid in the middle of nowhere because it cost 10% of a home in a metro area. Thing is, I’d never even consider it because my wife doesn’t want that, and it’s important for people to be fully aligned on that. I found the post you linked to overly verbose as these bloggers often are. They make lists and sections and go on tangents on what could be a 300-500 word essay. I think he could have excluded the backstory and just focused on how important it is that your partner be onboard the FIRE/extreme frugality lifestyle. So I think it’s poorly written and not an enjoyable article. However, it’s a pretty damn important message and difficult to talk about until someone prominent that is serving as a poster child for the FIRE niche like MMM goes through it publicly.
- outworlder 4y ago
  ESH He's kicking someone else when they are down, but that seems to be petty revenge in retribution for perceived attacks.

giantg2 4y ago

"Look, it's happening! The economy is going down!" I agree this can be a self fulfilling prophecy. A lot of larger tech companies were announcing hiring freezes or restructuring months ago to get ahead of the downturn. But I also think we could restate the quote above in ways that are actually true. For example, a lot of these posts are startups and monetary policy is slowing or shrinking the money available for VC. It makes sense that we see slower hiring. The past few years have probably been above historical VC funding levels anyways, so we may be returning to a more historical level for the next few years (or who knows?).

claytongulick 4y ago
> A lot of larger tech companies were announcing hiring freezes or restructuring months ago to get ahead of the downturn Alternately, I think a lot of companies are using the spector of a recession as cover for reducing unproductive or unnecessary headcount. Over-hiring is an issue that's difficult to correct. If you do a round of layoffs, the perception is that you're in financial duress. This can affect investor and consumer confidence. It's also difficult to explain to the public and to employees "oops, mia culpa! We asked you to upend your life to take a job with us, but our bad, we don't really need you." I see it as similar to the way a lot of businesses implemented cost-cutting measures during covid that they had very much wanted to do, but couldn't because of the worry that they'd lose a competitive edge. Many of these measures had nothing to do with public safety and everything to do with cost cutting.
- giantg2 4y ago
  Even if that is the case with some, it would still have the self-fulfilling prophecy component.
tootie 4y ago
Most recessions are self-fulfilling. Outside of true exogenous disruptions (ie a pandemic or a war) recessions are largely driven by collective bad vibes creating a vicious cycle. In most cases, we could probably power through dips in consumer spending or specific industries shrinking or fuel prices rising but in reality the bad feelings trickle outward until they affect everyone very broadly. Then when we've had enough, things recover. Keynes called it Animal Spirits.

VictorPath 4y ago

> a self-fulfilling profecy (sic) I think Powell jacking up the fed funds rate is going to have a much larger effect than some random HN post.

NaturalPhallacy 4y ago

We're also heading into the holiday season, and notably "Open Enrollment" for health insurance, which is titanic industry who typically freezes their code in September. Lots of companies slack off or halt their hiring, particularly health insurance during this period. And also all the inflation and recession action going on. So it's likely a combination of the two.

ternaryoperator 4y ago
The first factor, if valid, would have shown up in previous years too, no?

rapind 4y ago

> I don't know the intention of the author Why does his intent matter unless you think the data is being skewed or misrepresented? Seems like a fairly objective factual post to me (but I didn’t run the numbers myself). I would appreciate if data observations like this always included the script so people could easily (and quickly) verify the results, but that’s just a personal knit pick.

gpm 4y ago
> Why does his intent matter unless you think the data is being skewed or misrepresented? Because the data can be cherry-picked, intentionally or un-intentionally, similar to https://xkcd.com/882/ https://xkcd.com/882/ If you believe a trend exists (or just want to find evidence for it for other reasons) and you keep looking for statistical evidence of it, you're going to find it.
- rapind 4y ago
  Yes for sure, but no conclusions were drawn. No summary or opinion was posited. Of course results can be skewed. Seems unlikely in this case, but it's easy enough to verify. I mean if I was going to criticize the data, I'd probably just verify it myself first, and then question intent. Thinking about it, I could verify post counts for a hand full of these pretty easily using the dev console. No one even questioned the data though, it was more along the lines of; what's the hidden agenda...
trenning 4y ago
My biggest takeaway from submitting this, is that most people (by top upvoted comments) had a negative knee jerk reaction to my 'intentions'. I just thought it was observationally interesting.

theptip 4y ago

I see what you are saying, but I think the impact of a post like this on something so intangible as "market sentiment" is extremely tenuous. It's hard to measure/quantify but I'd be shocked if it's more than a rounding error. On the other hand, there are actual fundamentals like economy-wide inflation, employment numbers, GDP growth, supply/demand curves, etc., and it's important as an operator to have information about how the economy actually is, and more importantly how it's changing. I think the benefit of a post like this is much less tenuous; it provides insight into how the broader market conditions are panning out in our specific corner of the economy. So yes, every measurement perturbs the system under measurement. In some cases that can be substantial. But in this case I don't think it is so.

blablabla123 4y ago
Yeah also looking at what jobs are in demand at recruiters from LinkedIn, I can see already since the pandemic it's more from companies with proven business models and rather small startups. Good to see some real numbers actually. But of course the effect is there, job seekers and companies get more cautious. Still, better than hiding this data. Also I don't think there is a real reason to worry within tech

ouid 4y ago

The economy "going down" is not necessarily pessimism.

sulam 4y ago

It’s true, I depend on HN posts to tell me whether or not I should put the brakes on my spending. /s

tengbretson 4y ago

Despite two quarters of negative GDP growth, the current justification for saying we are not currently in a recession is that the unemployment rate is so low. The current stated goal of the Federal Reserve is to raise the unemployment rate from 3.7% to a target of 4.4%. What you are remarking on as possibly a self-fulfilling prophecy is instead the result of official policy achieving its goal.

baremetal 4y ago
>Despite falling GDP, the current justification for saying we are not currently in a recession is that jobs and employment numbers are high. Pretty sure a recession is two quarters of negative growth. Rationalization hamster wheels notwithstanding.
- zeroonetwothree 4y ago
  We have had 2 quarters of negative growth before without an official NBER recession (though not since the 50s).
  - lurquer 4y ago
    Until recently, a recession has meant two quarters of negative growth. The term is used to describe economic conditions in various countries. The NBER is not part of the designation. Indeed, it would be impossible for an economist to observe that Egypt, for instance, was in a recession as the NBER issues no opinions on the Egyptian economy. No, conditioning the definition of a recession on the NBER was a silly political stunt by the current admin. Don’t go along with these redefinitions… it’s silly and illogical.
    - SantalBlush 4y ago
      As someone with an MA in econ, most of what you've said here is false. While two quarters of negative growth is often used as an informal measure of recession, the NBER definition is the one that has been used in the US for quite some time by economists. Historically, here in the US we haven't used the Egyptian definition of recession when talking about the US economy, so what you think about their definition is irrelevant. That isn't to say that we're not currently in a recession, but economists don't know yet, and neither do you.

conductr 4y ago

Official measures are lagging indicators, so a recession always exists before it exists.

randomsearch 4y ago

If sites like HN were that influential we’d all be running Linux on the desktop and listening to our nomads. Not sure if that’s a good or bad thing.

wombatpm 4y ago
I find my zune to be a perfectly cromulent device

kortilla 4y ago

If data upsets you it may be worth thinking about why. It’s just saying that hiring appears to be cooling off and that’s showing up in other places too (layoffs/freezes at FAANG, the BLS job opening stats just this morning: https://www.reuters.com/markets/us/us-job-openings-post-biggest-drop-nearly-2-12-years-august-2022-10-04/ https://www.reuters.com/markets/us/us-job-openings-post-bigg...). This isn’t some insidious campaign to crash the economy by showing that the economy is finally cooling off. Getting inflation under control is good long term but it will be painful.

pitched 4y ago

“The vibes are off” is the best way I’ve heard this explained: https://www.npr.org/2022/09/15/1123281909/vibecession-vibes-session https://www.npr.org/2022/09/15/1123281909/vibecession-vibes-...

fundad 4y ago
We are teetering on theocracy which doesn't bode well for employment.

speby 4y ago

I mean, it's not just anecdotal, or only looking for bad news. New job postings in general are down markedly: https://www.cnbc.com/2022/10/04/jolts-august-2022.html https://www.cnbc.com/2022/10/04/jolts-august-2022.html

fundad 4y ago

People want ANOTHER round of layoffs because the high demand doesn’t help their candidates

a-dub 4y ago

yes, this has been my joke. "maybe it won't be a recession. maybe it will be. what i can tell you for sure is that it will be the first of its kind in real-time, full surround, three dimensional, quintophonic social media stereo." economics is the study of population behavior. remember that.

riffic 4y ago

> self-fulfilling profecy that's not really how it works though, and it should absolutely not be a concern (it's quite common to get a sort of tech-industry tunnel vision while discounting the bigger picture or regional focuses.) I've always argued that downturns are a natural part of every business cycle and perhaps instead of trying to avoid them, we plan for their inevitable occurrence.

Sophistifunk 4y ago

If HN can sink the economy it was going down either way

kristopolous 4y ago

times like those are the greatest opportunities for new things.