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Their plan to curtail inflation has always been demand destruction. Which means callous layoffs, unemployment, and misery for the workforce. We are just now see

Their plan to curtail inflation has always been demand destruction. Which means callous layoffs, unemployment, and misery for the workforce. We are just now seeing the effects, so expect it to get worse from here. We are a few more earnings misses, fumble of the debt ceiling, and another bank collapse away from a depression.

jbm 3y ago
Why a depression and not simply a recession?
Grimburger 3y ago
> callous layoffs, unemployment, and misery for the workforce US unemployment is hovering around 50 years lows. Probably better to look at the actual stats rather than listen to the constant doom-peddling that comes from the media. https://tradingeconomics.com/united-states/unemployment-rate https://tradingeconomics.com/united-states/unemployment-rate
- stonogo 3y ago
  US labor force participation rate is also at historic lows. A low unemployment rate only considers the active labor force. There aren't as many people working as a fraction of population as you think. Doom peddling and stats can line up. https://www.macrotrends.net/countries/USA/united-states/labor-force-participation-rate https://www.macrotrends.net/countries/USA/united-states/labo...
  - Grimburger 3y ago
    An ageing population means that participation rate is always trending downwards. People get strange about unemployment figures and how they are determined but the methodology hasn't changed in decades.
  - dragonwriter 3y ago
    > US labor force participation rate is also at historic lows. No, its not. It was at a local (but not historic) low during the deepest part of the pandemic recession, and has been recovering rapidly since, looking set to soon reach prepandemic levels and continue the upward trend that was general course since the post-2000 decline bottomed out in 2016.
  - chx 3y ago
    > US labor force participation rate is also at historic lows. Looking at the graph you linked it seems this historic low is the new baseline as it has not changed significantly since 2010 aside from a temporary dip in 2020 (gee, I can't imagine why that happened).
  - Majromax 3y ago
    You're seeing demographics at work, rather than the upthread theory of "demand destruction." If you look specifically at the prime-age labor force participation rate (25-54 years, https://fred.stlouisfed.org/graph/?g=15nxN https://fred.stlouisfed.org/graph/?g=15nxN), the current figures match pre-pandemic highs, which in turn match the 2004-7 level (pre-financial crisis).
- matwood 3y ago
  Yeah, when we see headlines about the big tech layoffs it's important to look at just how insane the hiring has been over the last few years. They monopolized much of the talent the last few years. Is there a stat that tracks time to new job after a layoff? I'm betting most of those people found new positions very quickly.
noduerme 3y ago
>> Their plan to curtail inflation has always been demand destruction Callous or otherwise, demand was outstripping supply during the pandemic years. Supply could only increase if actual value could be exchanged to pay for it, but we were in a situation where not enough new value was created, and our currency inflated at the same time a lot of people demanded what was in limited supply. E.g., regardless how many inflationary dollars you were willing to pay for it, you still couldn't get a PS5. The supply has still not increased, because dollars are worth less (because everyone has more of them). So cutting demand by making dollars more expensive is the only rational decision. Anything else would be chasing a dragon down an inflationary spiral. Tl;dr, not everyone can own the newest thing, (because there are fewer of those things than the dollars in circulation) and in order to make the value of dollars reflect that, you kind of have to chop down the demand side by making dollars more valuable / harder to obtain. The opposite approach is exemplified by the well-meaning but catastrophic attempts over and over in countries like Argentina and Venezuela to fix prices on the supply side to enforce artificial value on an already inflated currency. It's a fool's errand. When people say their dollars are worth less, the most obvious way to rectify that is to get other people to stop bidding prices up on shit they don't need which they're putting on credit. The only way to do that without further restricting supply is to make credit more expensive.

jbm 3y ago

Why a depression and not simply a recession?

Grimburger 3y ago

> callous layoffs, unemployment, and misery for the workforce US unemployment is hovering around 50 years lows. Probably better to look at the actual stats rather than listen to the constant doom-peddling that comes from the media. https://tradingeconomics.com/united-states/unemployment-rate https://tradingeconomics.com/united-states/unemployment-rate

stonogo 3y ago
US labor force participation rate is also at historic lows. A low unemployment rate only considers the active labor force. There aren't as many people working as a fraction of population as you think. Doom peddling and stats can line up. https://www.macrotrends.net/countries/USA/united-states/labor-force-participation-rate https://www.macrotrends.net/countries/USA/united-states/labo...
- Grimburger 3y ago
  An ageing population means that participation rate is always trending downwards. People get strange about unemployment figures and how they are determined but the methodology hasn't changed in decades.
- dragonwriter 3y ago
  > US labor force participation rate is also at historic lows. No, its not. It was at a local (but not historic) low during the deepest part of the pandemic recession, and has been recovering rapidly since, looking set to soon reach prepandemic levels and continue the upward trend that was general course since the post-2000 decline bottomed out in 2016.
- chx 3y ago
  > US labor force participation rate is also at historic lows. Looking at the graph you linked it seems this historic low is the new baseline as it has not changed significantly since 2010 aside from a temporary dip in 2020 (gee, I can't imagine why that happened).
- Majromax 3y ago
  You're seeing demographics at work, rather than the upthread theory of "demand destruction." If you look specifically at the prime-age labor force participation rate (25-54 years, https://fred.stlouisfed.org/graph/?g=15nxN https://fred.stlouisfed.org/graph/?g=15nxN), the current figures match pre-pandemic highs, which in turn match the 2004-7 level (pre-financial crisis).
matwood 3y ago
Yeah, when we see headlines about the big tech layoffs it's important to look at just how insane the hiring has been over the last few years. They monopolized much of the talent the last few years. Is there a stat that tracks time to new job after a layoff? I'm betting most of those people found new positions very quickly.

noduerme 3y ago

>> Their plan to curtail inflation has always been demand destruction Callous or otherwise, demand was outstripping supply during the pandemic years. Supply could only increase if actual value could be exchanged to pay for it, but we were in a situation where not enough new value was created, and our currency inflated at the same time a lot of people demanded what was in limited supply. E.g., regardless how many inflationary dollars you were willing to pay for it, you still couldn't get a PS5. The supply has still not increased, because dollars are worth less (because everyone has more of them). So cutting demand by making dollars more expensive is the only rational decision. Anything else would be chasing a dragon down an inflationary spiral. Tl;dr, not everyone can own the newest thing, (because there are fewer of those things than the dollars in circulation) and in order to make the value of dollars reflect that, you kind of have to chop down the demand side by making dollars more valuable / harder to obtain. The opposite approach is exemplified by the well-meaning but catastrophic attempts over and over in countries like Argentina and Venezuela to fix prices on the supply side to enforce artificial value on an already inflated currency. It's a fool's errand. When people say their dollars are worth less, the most obvious way to rectify that is to get other people to stop bidding prices up on shit they don't need which they're putting on credit. The only way to do that without further restricting supply is to make credit more expensive.