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Yeah all the layoffs all across tech are 100% a result of raising interest rates, but everyone wants to frame it with whatever their political ideology is (oh,

Yeah all the layoffs all across tech are 100% a result of raising interest rates, but everyone wants to frame it with whatever their political ideology is (oh, it's DEI, oh, it's capitalist profiteering, whatever). People didn't like inflation, but they loved inflated salaries. When people said "tackle inflation", they meant "lower prices", but didn't really consider that their salary increases were _also_ a result of inflation. When you pull money out of the economy, companies cut spending and the single largest expense of tech companies is "salaries", so of course they're going to cut salaries. The end result of this should all balance out, but in the mean time, everyone was mad about rising prices and didn't complain about rising salaries, and now they're mad about falling salaries and don't complain about falling prices. In conclusion, (too much) inflation is bad and we should stop doing that.

Loughla 3y ago
>falling prices. Where?
- empath-nirvana 3y ago
  Currently mostly energy and things whose prices depend mostly on energy like airline tickets, but inflation _generally_ doesn't end with prices falling over all, just not going up any more.
- ajmurmann 3y ago
  Yeah, prices should stop increasing quickly, but not fall. Nobody wants deflation.
  - Calamitous 3y ago
    > Nobody wants deflation. I hear this argument regularly, but I’ve never understood why. Hyperinflation is historically a bad thing, but whenever I ask about deflation, I just get hand-waving about the Great Depression. Is there any reading that lays out the dangers of deflation?
    - nikanj 3y ago
      Deflation throws on the breaks in the economy, because X is cheaper if you postpone it. With X representing essentially all economic activities like buying a new phone / hiring a programmer / going on vacation / etc This would be great for the environment, but absolutely terrible for the economy
      - ajmurmann 3y ago
        To add to this, it's also very hard to get out of as we've seen for decades in Japan. Some countries get stuck in recurring waves of inflation as well, as we set with Argentina, but that's arguably more sure to avoidable policy choices.
      - thaumasiotes 3y ago
        > Deflation throws on the breaks in the economy, because X is cheaper if you postpone it. With X representing essentially all economic activities Sometimes I think about this as promoting investment in cash. Deflation over time means cash yields a profit. But since cash doesn't actually do anything, investing in cash instead of something else is harmful. One implication of both of our comments is that unanticipated deflation is good. What causes problems is the reaction people take to anticipating that deflation will occur -- they wait it out -- not the fact that things are cheaper. The necessary refinement would be that unanticipated deflation that comes from an increase in the amount of stuff is good, and unanticipated deflation that comes from a reduction in the amount of money is [?]. Introducing that dimension asks us to fill out the grid: - anticipated deflation from an increase in the amount of stuff: [?] - anticipated deflation from a reduction in the amount of money: bad
        ajmurmann 3y ago
        > not the fact that things are cheaper In these discussions it's easy to forget that it's not only things that get cheaper or more expensive. Services and people's salaries also adjust the same way. With deflation your salary will also go down.

Loughla 3y ago

>falling prices. Where?

empath-nirvana 3y ago
Currently mostly energy and things whose prices depend mostly on energy like airline tickets, but inflation _generally_ doesn't end with prices falling over all, just not going up any more.
ajmurmann 3y ago
Yeah, prices should stop increasing quickly, but not fall. Nobody wants deflation.
- Calamitous 3y ago
  > Nobody wants deflation. I hear this argument regularly, but I’ve never understood why. Hyperinflation is historically a bad thing, but whenever I ask about deflation, I just get hand-waving about the Great Depression. Is there any reading that lays out the dangers of deflation?
  - nikanj 3y ago
    Deflation throws on the breaks in the economy, because X is cheaper if you postpone it. With X representing essentially all economic activities like buying a new phone / hiring a programmer / going on vacation / etc This would be great for the environment, but absolutely terrible for the economy
    - ajmurmann 3y ago
      To add to this, it's also very hard to get out of as we've seen for decades in Japan. Some countries get stuck in recurring waves of inflation as well, as we set with Argentina, but that's arguably more sure to avoidable policy choices.
    - thaumasiotes 3y ago
      > Deflation throws on the breaks in the economy, because X is cheaper if you postpone it. With X representing essentially all economic activities Sometimes I think about this as promoting investment in cash. Deflation over time means cash yields a profit. But since cash doesn't actually do anything, investing in cash instead of something else is harmful. One implication of both of our comments is that unanticipated deflation is good. What causes problems is the reaction people take to anticipating that deflation will occur -- they wait it out -- not the fact that things are cheaper. The necessary refinement would be that unanticipated deflation that comes from an increase in the amount of stuff is good, and unanticipated deflation that comes from a reduction in the amount of money is [?]. Introducing that dimension asks us to fill out the grid: - anticipated deflation from an increase in the amount of stuff: [?] - anticipated deflation from a reduction in the amount of money: bad
      - ajmurmann 3y ago
        > not the fact that things are cheaper In these discussions it's easy to forget that it's not only things that get cheaper or more expensive. Services and people's salaries also adjust the same way. With deflation your salary will also go down.