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I prefer my economic takes from economists, or people who actually study these things. -there is more to an economy than manufacturing. Using manufacturing met

I prefer my economic takes from economists, or people who actually study these things. -there is more to an economy than manufacturing. Using manufacturing metrics to rate an economy is like scoring a soccer game based on how far your players run: in some contexts correlated with “winning” but in others it’s not. -gold is not a good currency or basis for monetary policy. -these ideas only sound self consistent without economic context. But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere. For my money, you’re better off reading Krugman, Brad Delong, and (my personal favorite) Michael Pettis. I’ll read Geohot when it’s about engineering or self driving cars.

gjsman-1000 2y ago
“there is more to an economy than manufacturing” Not really, no. If China cut off the US, for any reason, who gets hurt more? Who has a bigger house of cards to collapse? Who will have a harder time rebuilding? If the next leader is bolder than Xi, and is of the same kind that once killed tens of millions of people, losing an arm and a leg to behead an enemy might be a viable strategy.
- ryandamm 2y ago
  Arguing that manufacturing is strategic is not the same thing as manufacturing being “all that matters in an economy.” There’s a logical fallacy in your rebuttal.
  - gjsman-1000 2y ago
    How about I put it this way: Manufacturing is the bedrock of power. Everything else above it, particularly fiat currency, is built on that bedrock. While those cards can be mighty attractive, losing the bedrock for any reason would destroy everything. Apple isn’t going to be worth $3 trillion when they can’t sell an iPhone for the next decade. Heck, General Mills won’t be selling much breakfast cereal, when the parts to the equipment can’t be imported. How much do you think a bare shelves Walmart is worth? Heck, how will American manufacturing rebuild when the CNC motors are made in China? When even a Prusa uses motors from China (LDO)? Will software sales save us with no hardware to run it on? The value of everything on the stock market collapses in such a scenario, and the power of the US Dollar goes with it.
    - throw678937 2y ago
      [dead]
    - ryandamm 2y ago
      The endpoint of this argument is pure self-reliance, for strategic reasons. And that endpoint is North Korea. https://en.wikipedia.org/wiki/Juche https://en.wikipedia.org/wiki/Juche
  - corimaith 2y ago
    Exactly, people forget we build things for the sake of consumption, not the other way around. You can build a thousand factories for some good but it's dead weight if there is no one to buy their outputs.
    - almaight 2y ago
      The Soviet Union had strong consumption power, but they did not know how to manufacture. The final result was obvious.
      - philipkglass 2y ago
        I would say that the Soviet Union had strong manufacturing power but they manufactured too many units of things that their citizens didn't want, and not enough of what they did want. By the end they could make more tanks and tractors than anyone needed but household goods were in short supply.
      - ryandamm 2y ago
        Yeah I think this might actually be backwards; the Soviet Union had explicit production targets, and (iirc) in like the 70s they actually had more industrial output than the US. Remember the "missile gap," when the US was concerned that the industrial might of the USSR would bury the US? But the output was mismatched to demand; it was a classic example of "when the measurement becomes the target, it ceases to become a good measurement" -- the centrally-planned industrial targets were inefficient, so a lot of that industrial production went to waste. And to be fair, this is what's hard about economics: you can't just count tractors, or tons of steel, or whatever, as the output of an economy. Because every marginal ton of steel matters a different amount based on demand. The genius of capitalism (yes, I said it!) is it is an extremely elegant system for optimizing an incredibly high-dimensional system with a slippery, dynamic cost function, by incentivizing a bunch of independent agents to collaborate in price setting (and therefore sending signals about production via pricing, vis a vis supply and demand). This is also why China's economy has done better than the USSR; let's not forget that Deng Xiaoping's "limited market reforms" helped unleash the modern Chinese economy. The structural issues in the Chinese economy now stem from the lack of development of consumer demand, which does echo some of what the USSR struggled from. But China has come very far; the criticisms of its current economy that I like best are well-articulated by Michael Pettis, fwiw. But I'd encourage you to do your own reading and form your own opinions.
  - janalsncm 2y ago
    There are other important outcomes of an economy, like better healthcare, education, housing, and well-being. But it seems like those real, tangible outcomes have become decoupled from “the line goes up” economy. I think the original reply was itself a strawman of the point the article was trying to make. Manufacturing isn’t the only important thing about an economy but it’s an important one.
    - ryandamm 2y ago
      I don't think my point was straw-manning the article. The article directly conflates economic output with manufacturing output, by using manufacturing signals (like power consumption!) as a corollary for some hidden, Real Economy. That's crackpottery. I was succinct in my criticism, but there is plenty of room for elaboration. If the essay instead took those economic indicators and delved into why manufacturing output should matter more than other output in determining the Real Economy, then hey, we've got an essay to discuss. But just eliding that and saying "manufacturing is real because atoms are real, everything else is b.s." -- that's not really an argument, that's just laying your biases extremely bare. Which I pointed out. That said, geohot is close to some real points, I just don't think he has the background to articulate it rigorously. And for the record, I do think the US economy is entirely too financialized. But again, that's a different -- likely better -- essay.
- paxys 2y ago
  > Not really, no. If China cut off the US, for any reason, who gets hurt more? China gets hurt more. They are an export economy. US will face some temporary pain, sure, but other countries build stuff as well. Meanwhile what does China do with all the materials piling up, millions out of jobs and a half a trillion dollar hole in their economy?
  - gjsman-1000 2y ago
    China’s current government quite literally killed 30 million people under the cultural revolution and Great Leap Forward, and until 2015, killed all children past the first. China is not motivated by what makes economic sense. The party openly says this - the very fact corporations exist is a concession to not having achieved pure communism yet. The party openly hates the fact they need an economy, after having failed for the first few decades to operate without one. All it takes, quite literally, is one hardcore communist after Xi who isn’t afraid of a second cultural revolution. Maybe a chance to fix all their consumption, housing, and youth issues once and for all in one painful societal restructuring? The very economic and social issues we point to as why they would never do it, I fear, might actually become reasons they will do it.
    - tokioyoyo 2y ago
      I swear, “Chinese collapse” has been on the news headlines since 2000s. At some point people need to give up on the idea that their system doesn’t work. Yes, it sucks from our perspective, because we would have less rights and freedom. But quality of life of an average Chinese has been increasing YoY, despite some hiccups. They obviously screw up big time (pandemic lockdowns, current above average youth unemployment), but they don’t mind pivoting hard. Baseless hate when a country fails to compete is just sad to watch as an outsider who has no skin in the game.
      - cookiemonsieur 2y ago
        It's a coping mechanism that needs to be parroted to keep the people in the west from questioning the status quo. "Look china/russia/iran/india bad ! Sure, we're not doing well and your quality of life is eroding year on year but hey ! In china you can't question tienanmen square so there's that" It's sad, but as long as people continue to believe in this mythology of "absolute freedom", it will continue to work.
- Aeolun 2y ago
  I daresay the US has all the resources it currently gets from China on its own landmass as well. It’s just not doing anything with it.
Spartan-S63 2y ago
> But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere. Even better, let them keep their visa and if they revoke their citizenship, we'll relocate their entire family if they come from a repressive regime. Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Additionally, we should be funding basic research at historic levels and incentivizing, via the tax code, corporations to productize and apply this basic research. We should be expanding the frontier of knowledge without regard to its immediate application.
- rayiner 2y ago
  > Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Why should we want that instead of an orderly, well-governed democracy? Do you think people in Sweden or Denmark are upset their countries aren't hegemons? And what would that do to the country? Do you really think that, say, the top 5% of India and China (100 million people) would do better maintaining a democracy than median Iowans? That's a real bet that your assumptions about how society works actually reflect reality.
  - rat87 2y ago
    India despite flaws is a democracy same as the US. It's a very different country then China. Plenty of immigrants from tyrannical countries are as if not more committed to democracy as those born here And just because someone was born in China or India it doesn't make them any less American then someone born in Iowa. Their children might be born in Iowa
    - rayiner 2y ago
      Democracy isn't created by intentions or "commitment," but rather the culture of the people, their attitudes, and mental processes. An Iowan born in Iowa to Iowan parents who were born to Iowan parents is steeped from birth in a culture that is very different from someone born in India or China--or even the American-born children of Indians and Chinese immigrants. Immigrants may become legally American overnight, but they don't become culturally American overnight. Cultural attitudes are extrmely durable (https://www.sup.org/books/economics-and-finance/culture-transplant https://www.sup.org/books/economics-and-finance/culture-tran...). My mom has lived here for 36 years, and she's still a low-social-trust south asian who has distinctly south asian views on credentialism, education, social hierarchy, etc. Are those attitudes compatible with the kind of egalitarian, self-governed democracy Alexis de Tocqueville wrote about? I am skeptical that's true at scale. Even having grown up here, my cultural attitudes are very different--and again, distinctly south asian--compared to my wife's (whose family has been here since the early 1700s). If you took 1,000 people like my wife and put them on an island, you'd recreate America--including the parts of America I find perplexing and frustrating. I'm not persuaded that if you took 1,000 people like me and put them on an island you'd recreate America.
janalsncm 2y ago
> like scoring a soccer game based on how far your players run That’s a pretty good analogy for what GDP is counting, actually. But I think the larger point is that manufacturing is grounded in something real. It’s a measure of how many tanks and fighter jets you can make, no matter how much they cost to make.
- dbtc 2y ago
  Interesting, so to extend the metaphor - in the game of soccer it's the scoring of goals that matters, not the raw physical stamina of the player, but if that facade of civilized competition breaks down, then it's back to the basics.
  - TeMPOraL 2y ago
    Right. This facade is what makes soccer a sport instead of a brawl. In sports, and in life in general, there's all sorts of extra rules that make activities interesting and/or prevent them from decaying into violence. Playing for keeps - like, really, seriously, going for the win no matter what, is universally frowned upon and basically a telltale sign of dangerously pathological sociopathy.
    - deleted 2y ago
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- jazzyjackson 2y ago
  Right, velocity of money! I think this is the meatier part of the essay and I wish geohot would have skipped the bit about the gold standard - our main measure of growth is how quickly we hand money back and forth (is there another measure that allows expenditures to cancel out ? Net Domestic Product ?) The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I know there's a 2 year wait-list to even have your energy production considered to be hooked up to the grid, but I assumed there was some at least some throughput, now we're taking about onsite mini nukes while China is building.
_heimdall 2y ago
> or people who actually study these things How do you define "actually study" here, and what makes you think the author didn't study the topic at all? Its totally fine if you disagree with the author's view or have additional information that they missed or didn't consider. Writing it off as coming from someone who didn't "actually study" the topic is unnecessarily dismissive.
- jazzyjackson 2y ago
  Well, it's deferring to experts, but whether economists are experts at anything is a hot debate.
  - ryandamm 2y ago
    I have a lot of respect for economists, I know several. They are among the most rational people you shall ever meet. And they are very aware of how incomplete their tools are. But they do a lot with such tools that is worth knowing.
  - ikiris 2y ago
    It's only a debate if you reject the very principals of science. I realize we're getting there for a lot of people, but merely disbelieving in science is not a refutal of it. This ignores so called Austrian economists however, who are just flat out lying to either themselves or everyone else depending on the person.
    - harimau777 2y ago
      I think the problem might be that it's difficult to perform experiments in economics due to the size of the thing being measured and the fact that the people making up the economy generally aren't going to be alright with you performing experiments on them.
      - intended 2y ago
        Many economic concepts are part of our daily life. Supply and demand, comparative advantage, for example. Multiple experiments are conducted using historic data, for example the 2024 Nobel.
zzzeek 2y ago
seemed like a good article until he went into "back the dollar on gold" and revealed he was a total crackpot, sad
- GuinansEyebrows 2y ago
  For me it was “Socialism Bad”
  - ks2048 2y ago
    Especially since the core of the article is China is surpassing the US.
- tmn 2y ago
  Care to elaborate? It’s thought provoking as a mechanism to reduce all of this zero sum (or even worse, parasitic) effort that dominates our system.
  - erikerikson 2y ago
    There's a history. How does the rate we pull gold out of the ground relate to the rate of production and value growth?
  - Panzer04 2y ago
    Making an inelastic resource (gold) the unit of exchange in a growing economy is a recipe for deflation. You don't want the most economically sensible decision to be holding onto capital, since that results in precisely nothing useful being done.
    - tony69 2y ago
      Deflation is fairer and reduces moral hazard in finance. The weak point of gold is that it’s too slow to settle transactions (you have to move it), so a paper gold system on top of it inevitably arises. [0] “broken money” by Lyn Alden
systemf_omega 2y ago
The US is already the brain drain destination #1. Nowhere else can highly skilled people generate comparable levels of income.
- lxgr 2y ago
  Adjust for living expenses and the situation already looks very different. Then adjust for quality of life...
  - systemf_omega 2y ago
    This has been done before, and America comes out consistently on top. Even the median purchasing power parity (PPP) in the US is frequently ranked highest in the world. The majority of American households in the poorest US states are doing better than the majority of Europeans. This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close. Put on top the rising costs of living, and 45% top tax brackets (France, UK, Germany, Spain), the US is incomparable.
    - lxgr 2y ago
      Yes, if you're a professional in high demand, you can live a great life in the US. But how does the quality of life of everybody below the median look like? > This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close. But what does that buy you really, in a high cost of living area? What if you ever want to do something else? What if demands for your profession change? How expensive is it to raise children? I have first hand experience of both the US and Europe, and while nominal salaries are (much) lower in the latter, subjective feelings of safety and quality of life seem much more comparable than the numbers might make you believe. That said, the US system of highly rewarding relatively few people at the top certainly motivates the masses like few others: Most people are bad at statistics and like playing the lottery.
Barrin92 2y ago
>there is more to an economy than manufacturing. Not really. Most developed economies are basically 70% Baumol's cost disease[1]. The 20% of the American GDP that goes to healthcare, half of the military budget that goes into salaries, public services, the police isn't billed on productivity. Those are non-tradeable services whose compensation inflates with growth in the productivity gaining sectors of the economy. That's why you can go not to a wealthy Tier 1 city in China, but to a Tier 2 or 3 city and it has better public services despite having like 10% of the per capita budget of a US city. Most compensation is.. fake. If you want to know what an economy does look at the stuff they make. [1]https://en.wikipedia.org/wiki/Baumol_effect https://en.wikipedia.org/wiki/Baumol_effect
- ryani 2y ago
  How is "Baumol effect" different from supply and demand for any limited resource? Let's say that some new use for copper is discovered, that drastically increases the demand for copper. The cost of existing items that use copper is going to go up, even if those items are no more productive than they used to be, because the new items are now in high demand. You can see this effect in real life with GPUs; it's much more expensive to buy a gaming graphics card today than it was a decade ago, because GPUs are in high demand for other applications. So, increasing the productivity of labor in some sector is going to do the same thing supply and demand does to anything else -- the cost of labor goes up, but not as much as the productivity in that sector, and the producers of labor will enjoy higher demand.
  - Barrin92 2y ago
    >How is "Baumol effect" different from supply and demand for any limited resource? It isn't, but nominal growth as a consequence of demand without increase in real output makes you no better off, that's the "fake" part. More practical example than graphics cards is houses. Large chunk of the US market, constantly goes up in price, but not because housing is becoming more productive. It's because money from other sectors spills over. Good for landlords, bad way to measure real economic activity. You'd be better off if you could roll houses from the conveyor belt and collapse prices. Rising education prices don't reflect greater quality in education, faster teachers, or more graduates, i.e. output, which is what we ought to care about, but just higher spending funded by real gains in other sectors.
45511ff515f7 2y ago
> But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere. At what quantile of an R1 does graduate education become something other than a visa scam? What domestic student is going to toil for years for poverty-level wages? The further pursuance of policies that are turning research institutions into immigration scams is a bad idea.
- selimthegrim 2y ago
  >What domestic student is going to toil for years for poverty-level wages? Do you want entire swathes of the country to have no exposure to higher education personnel?
stego-tech 2y ago
That's what kills me about these sorts of takes: the action plan is on the money, but their ideology shows they haven't actually learned anything of value from the failures of the current systems. They're essentially just looking at how others do a thing, rather than also looking at how we do a thing, and why we do that thing in that way, and what the knock-on effects of that process are. He gives away the game at the end when he decries socialism (because of course he does, it's practically a Free Space on the "Highly Intelligent Engineer has Opinions on Things" BINGO card) and fingerpoints at Europe, despite China having Communism on some scale yet is also somehow what we should be emulating for growth? It reveals the naivety of his position, assuming he's making the argument in good faith. But getting back to his action plans (which are, generally, not bad), I totally agree that a good step forward is reforming immigration to promote movement of people provided they're willing to contribute to society. He couches his standards in nebulous vagaries like "production" and "productivity", but the core concept is sound, even if his rationalizations leave a lot to be desired. We should be courting smarter and harder workers with pathways to Citizenship, not highly exploitable visas like H1Bs or the various farmworker visas, and we should be holding companies' feet to the fire in ensuring imported talent stays here, on American wages, in American living standards. I've been screaming the same to my EU friends of late, stating that now is the best time since Operation Paperclip for a foreign power to import brilliant talent from a failing state. On the topic of the EU, something I'd like to challenge is this popular (with laissez-faire Capitalists and Libertarians) narrative that the EU is somehow failing because it hasn't exploded with growth like the USA or China. From what I've seen, Europe has been remarkably stable on the whole (with pockets of success and failure, a la the United States) precisely because it built up modern infrastructure when it could, maintained a diversified economy, and didn't give in to scams or grifts - like the ones he cites in the American economy as artificially inflating the economic numbers to create the appearance of growth where none has really occurred. If we had real growth, like China, we'd have the same amenities - high speed rail, modern freeways, high levels of infrastructure replacement and improvements, and a burgeoning middle class. China built these things as part of its rapid industrialization over the past century, whereas we squandered our post-war advantage on corporate subsidies and hawkish conflicts abroad for decades. If anything, I'd argue that the EU may very well be a model of a sustainable economy of sorts, provided there's not some crisis boiling beneath the surface that could cause a collapse; the people there generally have everything they need, and healthy regulations minimize the risk of exploitative or anti-consumer practices. But I digress. The TL;DR is that he has valid points, but man does he undermine his argument with the same tired tripe at the end exposing his ignorance on the subject.
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csomar 2y ago
Ibn Khaldoun said that once a state economics start deteriorating, everyone becomes an expert. The way I see it, if the markets led by PhD and Noble laureates fails, people start looking for alternatives. Since the "establishment" has been proven useless, the door is open for "anyone" to chime in. The reality is that the economist at the top do not want to see the deficiencies because they have their salaries on the line.
- ryandamm 2y ago
  I don't think economics itself has gone wrong -- I think the US economy in particular has done a poor job of distributing the wealth it has created. Ironically, that has created a populist backlash that has vaulted even worse economic ideas into power. Anyone read "Capitalism in the 21st Century"? It's long and dense, but it does make some excellent, well-supported points about the structure of an economy that explains the current situation very well with historical antecedents. This won't do it justice, but: inequality always increases, by definition, if the returns on capital outstrip the overall growth in the economy. (Think through that if it's not obvious; it's literally a mathematical truth.) The book argues that history is a series of long, slow accretions of wealth, with increasing inequality, until some shock (usually a violent revolution) overthrows the old system, resets inequality, and the cycle starts again. The latter half of the 20th century, for the US, was one notable exception: growth outstripped returns to capital, so the benefits of that growth were widely shared: inequality decreased. That trend ended in the ~1980s, and the widening inequality gap has fueled unrest. And the book points out that we've seen this show before. I think we're in the "history repeating itself as farce" phase, though.
  - logicchains 2y ago
    > I think the US economy in particular has done a poor job of distributing the wealth it has created. The US financial system is structurally orientated towards distributing wealth poorly. It's an unavoidable economic fact that when someone spends newly created money there's a wealth transfer from currency holders to them (that's why counterfeiting is illegal), and in the US means there's a persistent, systematic transfer of wealth from currency holders to the banking/financial system. Which is extremely regressive, as poorer people hold the largest fraction of their wealth in cash, while the middle and upper classes have more of it in assets like housing and stock. Economists funded by the banking system will try to distract you by arguing about inflation vs deflation, but it's a smoke screen. It's perfectly possible to have a non-regressive inflationary economic system, e.g. one where the government directly prints money and gives it to the poor, and such a system would avoid the systematic transfer of wealth from the lower classes to the financial industry.
hayst4ck 2y ago
I think I disagree, specifically because geohot does security. Security is fundamentally about finding the difference between what people wish or think is true, and what is actually true on a mechanical physical real and actionable level. That involves deep analysis skills and disregarding common consensuses in order to rebuild how things actually work from the ground up. Questioning establishment dogma is largely forbidden, no matter what your establishment is, so it's absolutely worth considering outsider assessments. Wars test base assumptions. It seems obvious that in a war, ability to take things out of the ground, turn them into bullets/drones/etc, and then get them to the front line is what matters, not what the stock market says, and not claims made with the backing of a military (such as how much the US dollar is worth, or who owns what IP). I don't necessarily agree with his conclusions, although I understand where they come from.
- fwipsy 2y ago
  Your first paragraph is like saying "this train conductor does transportation, so we should let him fly a plane." Perhaps knowing security proves that the author is intelligent, and perhaps some of the same skills apply, but it's not a given that he will have good ideas, especially on fraught topics where it's easy to be misled by ideological bias. The author doesn't deserve any more consideration than any other outsider perspective.
  - ryandamm 2y ago
    Yeah, there's a known problem with smart, technical people approaching fields about which they know very little. The analysis, to a third party, often sounds smart (the author is undeniably smart!), but without having expert context, you miss why it's so, so, so wrong. And I'm not even an economics expert. I've just read more about it, or read more critically, than geohot. And I can tell you he's wrong, not because he's an outsider but because his analysis does not make sense. Copernicus had well-reasoned, self-consistent arguments that incorporated previous models, and produced better results. This doesn't. There is a rubric for how one should score outsider contributions, even if you want to allow for revolutions in a particular field. This essay doesn't rise to that level. In fact, it matches the first pattern -- smart person outside their field, makes ass of self -- much better. https://en.wikipedia.org/wiki/Nobel_disease https://en.wikipedia.org/wiki/Nobel_disease
karel-3d 2y ago
Well at least he is not writing how he got himself addicted to meth because he wanted an extra challenge
unclebucknasty 2y ago
>there is more to an economy than manufacturing I don't agree with all of his premises or conclusions either, but I believe he's exactly right about the financial engineering and outsized rewards that frequently accrue to non-productive activity in general. I see the manufacturing fall-off he notes as a proxy for that. It's not the only evidence, but it's one piece.
l0ng1nu5 2y ago
> I prefer my economic takes from economists, or people who actually study these things. Keynesian economists and now mmt advocates are the reason that most of the productivity gains of the last hundred years have ended up in the hands of a few hundred people while most struggle. I'd say it's high time to stop listening to these people who are nothing more than useful idiots of the elites.
- amrocha 2y ago
  Can you give an example of countries listening to MMT economists?
  - l0ng1nu5 2y ago
    The US since the GFC is probably the most obvious one. As I understand it, pretty much every developed country employed mmt practice in response to covid. Now we have (even more) rampant inflation and wealth inequality with no sign of slowing down.
    - t-3 2y ago
      "Pretty much every country" couldn't possibly employ "mmt practice" - a significant number of countries don't have sovereign currencies. That's ignoring the fact that MMT is descriptive rather than prescriptive, it doesn't have practices, it is a theory used to describe how a modern economy with sovereign fiat currency works.
      - l0ng1nu5 2y ago
        I said developed country which is a pretty major distinction. Maybe my definition is off but it appears to prescribe the printing of currency which is consistent with what we've seen in most major economies and low and behold - we have rising inflation and wealth inequality.
        t-3 2y ago
        Most of Europe doesn't fit in with your idea of "developed countries" though. Printing currency in order to have more money is as old as currency itself, what does that have to do with MMT? Give me a citation or quote where someone is advocating just printing more money as the MMT solution to anything.
OriginalMrPink 2y ago
Yes, please. But you know, these days, everyone is doing their own research, and think they nailed it. But it's often sloppy research, unfunded arguments, etc. Just looking at the map in this article, and whatever source this comes from (some people don't seem to bother sharing sources) - it seems not accurate. (e.g. why is Greenland a different color than Denmark...)
raxxorraxor 2y ago
I don't think economists overall, even when generalizing, have a good track record. Too often hidden interests modify the core of their messages. Krugman for example has a poor record on predictions, not sure about the other ones. That said, this isn't all "gold" either in my opinion. Money is still tied to productivity. At least it works as long as people believe debts can be repaid. If they wouldn't, there would be runaway inflation. It is more sensible to back that debt with productivity or "economic potential" instead of gold, but the idea isn't that far off as people generally say it is. In general it still is more loosely tied to real productivity though and that is a problem. The solution isn't to return to gold backing though. And there is a development of poor economic ideas, like that creating debt is always good on a national economic level. You should never neglect to mention that this new debt would require something like a hegemonic military position to underline the "securities" of said debt.
- grumpy-de-sre 2y ago
  The interesting question would be how to tie the currency to real productivity in a way that makes financial engineering, and fraud unattractive. Not a crypto shill but proof of work isn't so terrible, particularly something ASIC resistant. Energy isn't such a bad thing to peg your currency to (lot more flexible than gold). But nonetheless you still end up with a lot of weird distortions. The legacy of ZIRP, and the effects of decoupling the financial and real world, are going to be felt for years to come.
- Ekaros 2y ago
  I always find gold weird. It has value for exactly same reason any money has. People believe they can later trade it for something else. And main argument for proponents seem to be that it was always valuable so it should also be now and in future. And when market changes drastically(extra gold, or lot of removed supply). The value also swings a lot. Possibly even more than with other currencies. Some level of floating currency is clearly most reasonable solution. But just how is still very open question.
  - rsync 2y ago
    “Some level of floating currency is clearly most reasonable solution. But just how is still very open question.” I think the answer is to tie it to lifespan. How many years does it take for a family to purchase a home on the gold standard? 200? 350? In our time, we have turned the dial so far that some families can purchase a home in five years. So it becomes a question of expansion over time for real people - and nobody wants to live in a world where it takes 400 years to save for a house. Perhaps, however, it should take more than five…
paganel 2y ago
> there is more to an economy than manufacturing And what would that be? "Services"? The author tried to explain how that is basically a scam. And, getting back to our present, hobbes-ian world, services won't help you put tanks on the ground and airplanes in the air in the event of a grand war, you need a pretty solid manufacturing base to back it up, you need to be the "arsenal of democracy".
PeterStuer 2y ago
It ain't necessarily gold, but a dollar 'IOU' in the end should give the holder something to concretely purchase besides military equipment. You can argue dollars can also buy 'IP', but IP is virtual and only as good as the police and military enforcement of its regulation. You can argue dollars buy oil, but once again only because of military enforcement of the imposed rules of not to trade in other currency. In the end an empire based on massive consumption of the world's resources in return for not much else besides the threat of 'take this paper or we bomb you' will not hold. As for the brain-drain. This was/is still a huge thing. But it hinges on the desirability of attracting the right brains. If you abandon meritocracy as the US has been speed-running, why would a capable person want to go/stay there? Seems like the attraction incentives are there more for the subpar performer in the 'modern' US.
lll-o-lll 2y ago
> I prefer my economic takes from economists, or people who actually study these things. I think the ideas are interesting and worthy of discussion. If you want an actual credentialed economist talking about similar issues — here’s one: https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-economic-masterplan-unherd/ https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-econ... But you need to recognise that there is an “orthodoxy” and challenges to that. You aren’t going to hear the questioning of the status quo without looking outside the “establishment”. Here’s a taste (note that Yanis is old school left as far as politics goes) “Faced with President Trump’s economic moves, his centrist critics oscillate between desperation and a touching faith that his tariff frenzy will fizzle out. They assume that Trump will huff and puff until reality exposes the emptiness of his economic rationale. They have not been paying attention: Trump’s tariff fixation is part of a global economic plan that is solid — albeit inherently risky.”
- ryandamm 2y ago
  I like Varoufakis; watched a short video interview he did just a few days ago. I doubt he'd agree with geohot's take.
  - lll-o-lll 2y ago
    Oh definitely, he would not agree with the proposal, but the problems identified I think he would. That’s why I’m saying the general ideas are worth discussing.
powerapple 2y ago
What is a good economy and what's the purpose of economy?
- TeMPOraL 2y ago
  Arguably, the economy just is. It has no purpose, other than what it does[0]. It's not like anyone designed it, or has any control over it. Some people are in position to make adjustments, nudge some aspect of it towards a desired goal or away from undesirable one, but there's only so much they can do - it's all strongly path-dependent. Put another way, the shape of the economy is just an exercise of descending down the gradient. Any individual or group has very little control over this, and major changes to the economy basically only happen when war or technological inventions reshape the entire gradient. -- [0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_what_it_does https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
  - sebastianz 2y ago
    Many countries in the former soviet block would very much contradict this take. Entire economies were indeed planned and designed, and their shape was controlled and changed at will. Individuals and groups had control, and did do major changes, including but not limited to forced resettlement and labor camps. You can of course argue that this ended almost universally in failures, but people did try, and the amount of control over economies is very much a spectrum.
    - TeMPOraL 2y ago
      I don't disagree - in fact, this is a great study. It shows both just how much it takes to have any noticeable, direct control over the economy, and also how little it amounts to anyway. Specifically, to have this level of control, you basically have to go full-totalitarian and rule with iron fist, and sustain this rule even as The Economy pushes back, in form of unrest, civil war, revolutions, military coups, as well as sabotage or direct attack by foreign forces. Yes, all this is part of the economy too. And, if you somehow manage to keep control in spite of all that, you'll quickly see the rest of the world, with its uncontrolled economy, zip past you in terms of wealth and power, and find yourself at its mercy. Fundamentally, people want to trade; they both need this to survive and want it to improve their lot. If you make trade hard for them, they'll invent workarounds - alternate currencies (see e.g. use of dollar in the soviet block to work around rationing), barter, smuggling of goods; if you crack down on it, they'll conspire to depose you - and yes, even your military and security personnel, at every level, would like to make the lives of themselves and their families better too. There's only so much blood you can spill before you run out of people to kill, or out of goodwill of people doing the killing. And, as history shows, The Economy will win anyway. As for sane, free, democratic countries - there's shit all you can do there, as the economy will push back through support of the voters and other politicians, strongly limiting the kind of decisions that are possible to implement. Try to make too big a changes, you'll get sidelined and removed from position of power.
throwawaymaths 2y ago
> I prefer my economic takes from economists, or people who actually study these things. hows that going? economists have been giving advice to policymakers for decades, and we have a widening gap between the haves and the have nots, society increasingly in debt, etc. Maybe economists have it wrong.
- tsupiroti 2y ago
  The gap between haves and have nots is more related to politics than economics IMO. It's about how the value is (re)distributed.
  - throwawaymaths 2y ago
    Specifically, krugman believes that inflation is required to confuse laborers to stay in their jobs and not take pay cuts (sorry, can't find ref), which creates labor stability. so yes, it is about economists. interest rate policy is crafted around this principle and designed to screw the have nots (it is not only krugman, it is encoded in the fed's dual mandate). since every country has a central bank with a similar mandate its hard to know if gettimg screwed is inherent in captalism or if it's only a feature of central bank capitalism. It's maybe telling that the nordic central banks have the lowest interest rates in general > The gap between haves and have nots is more related to politics than economics IMO in human history there have been few societies that haven't had a widening gap; gaps typically have contracted during times of revolution. no social democracy in the current epoch doesn't feature a widening gap, so i would doubt that active redistribution helps all that much (inflation is a compounding effect that overtakes all redistribution)
    - throwawaymaths 2y ago
      Citation: https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/0...
      - 2y ago
megamix 2y ago
Uh oh, go read Taleb if you want to know about economists. They are also behind some of the chaos we have today.
deleted 2y ago
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alecco 2y ago
> I prefer my economic takes from economists, or people who actually study these things. Hmm > you’re better off reading Krugman It used to be kind of a meme to make fun on how wrong Krugman was but now it's kind of like beating a dead horse. https://foreignpolicy.com/2019/10/22/economists-globalization-trade-paul-krugman-china/ https://foreignpolicy.com/2019/10/22/economists-globalizatio... https://www.theguardian.com/commentisfree/2018/jan/10/paul-krugman-mistake-white-working-class-voters-republicans https://www.theguardian.com/commentisfree/2018/jan/10/paul-k... In particular, Krugman was the flag bearer of "countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt". (paraphrasing) This was incredibly wrong. It ended up in sky high debt and now interests on it are non-zero. And most of the added money ended up in the top 10% making inequality much, much worse.
- mu53 2y ago
  Also, his article on why the internet is going nowhere. Definitely missed a few things
  - ryandamm 2y ago
    Krugman discussing the Internet might be like geohot discussing economics. Or are you referring to the fact that he said it didn’t show up as having caused growth in the underlying economic data? I think he was pointing out something quantitative at the time, and in recent years he speculated that the strong growth in US GDP was finally reflecting efficiency and productivity gains from IT and the Internet. (The US’s strong growth until very very recently was an outgrowth of strong and rare increases in worker productivity.)
- AnthonyMouse 2y ago
  And that sort of thing is predictably wrong. It's premised on the combination of low interest rates and a lack of inflation, even though low interest rates generally cause inflation. As soon as you get inflation, keeping interest rates low would make it worse, but raising them explodes the interest rate on the debt. And your other alternative to paying the high interest is to print the money to pay the debt, which also worsens inflation. So taking on that much debt is just a bomb that goes off as soon as inflation becomes non-trivial, and on top of that, is a thing that generally causes inflation. To understand how people like that succeed, realize that there is always a market for someone who will tell you what you want to hear.
RivieraKid 2y ago
Krugman and Pettis are among the small group of economics / finance people I follow. Do you have any other recommendations of people to follow? Regarding Pettis, I still haven't decided whether I agree with (and understand) his worldview.
- ryandamm 2y ago
  I took Krugman's advice to read DeLong at one point and don't regret it, though he's not on my regular rotation: https://braddelong.substack.com https://braddelong.substack.com
- ryandamm 2y ago
  Oh, and of course I read Patrick McKenzie: https://www.bitsaboutmoney.com https://www.bitsaboutmoney.com And subscribe to Bloomberg's Matt Levine's "Money Stuff" newsletter and podcast: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff
tossandthrow 2y ago
The issue with mainstream economy is that it is way too abstract. It does not discriminate between USD 100 worth of marketing consulting and USD 100 worth of crops. Yes, water it cheap. But you die if you can't access it for just a couple of weeks - this is a risk based approach. And this is something traditional economists do not look at too much.
xyst 2y ago
People like Krugman are one of the reasons USA is in a hot mess and wealth has concentrated into a select few. Neoclassical economists have been selling themselves as “scientists” (think physicists) for decades and their theories are cited as reasons for economic policies in the USA. One of these days I’ll write a post on it. But one of the areas they get wrong repeatedly is on the minimum wage. Neoclassical economists would argue that increasing minimum wage ultimately hurts the people it’s trying to help. For example, by increasing minimum wage you would see a decrease in businesses and/or number of jobs available. In neoclassical theory and “Econ 101”, they would chalk it up to supply and demand. However, this has been disproven in regions or states where the minimum wage has well exceeded the federal minimum wage. Take Seattle, WA for example where min wage is ~$20/hr. Local restaurant industry didn’t collapse. Region itself didn’t collapse. Sure jobs or businesses closed (Subway franchises, lol), but were eventually replaced by ones that could compete. Likely local businesses. And since all businesses pay the same wage to remain competitive, workers get more money in their pockets. This leads to increased spending by those same people. There’s a ton of other factors as well but it’s well beyond commenting here.
fuzzfactor 2y ago
>economists, or people who actually study these things. From my experiences over the decades, the Venn diagram that includes both and have worthwhile understanding is a small minority of either group, and even smaller when you consider the total of those outside the set as the mainstream. When this showed up on HN, there were no comments for quite a while. I had casually heard of Hotz as a recognized hacker, interestingly one who was respected for figuring things out that other people could not. But with no real familiarity, I couldn't recall what he had hacked or where he had worked. Maybe I had retained the impression that he started out quite young. And then he comes out with this. Last time I heard of him, I knew he was smart, I just didn't remember why any more. This time it's different. Something must have escalated. All I could think of now was "How did he get to be so smart?" That would have been my entire comment, which I didn't post because I thought it was not very substantial, and I was wondering if there would be any comments anyway. No interest was being shown at all. Study takes many forms and some people can figure things out better than others. No one person can solve all the problems, or even recognize them, and when you start looking from fundamental principles you can end up so far off the mainstream that there is overwhelming misunderstanding that can not be overcome. Any mainstream can look so sensible across-the-board because the experts are standing on the shoulders of those who came before, and some of these are lifetimes of intense study. It can add up to more than one person can usually do in a single lifetime themself. But if the foundation is wrong to begin with, or turns out that way later, it can be like a pro-cheerleader pyramid where the top rallying cry comes from someone who can still not see out of the pit of their own making, not actually elevated above the crowd like it appears. What could be incorrect about all the shoulders they are balancing on and the adoring crowd of high-dollar ticketholders to boot? One thing's for sure and I don't think it's the title by accident. "The Demoralization is just Beginning" I've seen this movie before. He doesn't even try to discuss this main point at all. People are nowhere near ready for that, look at the comments, many from quite educated positions pooh-poohing him from different directions. All anyone can do in a short blogpost like this is throw out a little evidence and people can decide for themselves how demoralizing it already is, or how it might turn out. Which is what people are doing, as righteously as they can, bless their hearts. So my advice to Hotz at this point is keep doing what you are doing, and illegitimi non carborundum. No different than the comment that popped into mind at first, now just a little more substantial than a quick drive-by.
adverbly 2y ago
They really should, but nobody listens to economists :( If they did, we'd have had a land value tax for a century by now...
mdnahas 2y ago
As a quant who went back and took the PhD economics classes, I can tell you that macroeconomists are not experts. The number that predicted the Great Financial Crisis is a handful. They study these things, but they know little. The microeconomists know a bunch and have some powerful mathematical tools. I have some confidence in those studying trade and cities. But comparing and measuring countries is messy and hard. And I totally agree we should lure other countries’ brains here. The return on investment for a STEM degree is about 3 times the stock market index and we should get as much as we can.

gjsman-1000 2y ago

“there is more to an economy than manufacturing” Not really, no. If China cut off the US, for any reason, who gets hurt more? Who has a bigger house of cards to collapse? Who will have a harder time rebuilding? If the next leader is bolder than Xi, and is of the same kind that once killed tens of millions of people, losing an arm and a leg to behead an enemy might be a viable strategy.

ryandamm 2y ago
Arguing that manufacturing is strategic is not the same thing as manufacturing being “all that matters in an economy.” There’s a logical fallacy in your rebuttal.
- gjsman-1000 2y ago
  How about I put it this way: Manufacturing is the bedrock of power. Everything else above it, particularly fiat currency, is built on that bedrock. While those cards can be mighty attractive, losing the bedrock for any reason would destroy everything. Apple isn’t going to be worth $3 trillion when they can’t sell an iPhone for the next decade. Heck, General Mills won’t be selling much breakfast cereal, when the parts to the equipment can’t be imported. How much do you think a bare shelves Walmart is worth? Heck, how will American manufacturing rebuild when the CNC motors are made in China? When even a Prusa uses motors from China (LDO)? Will software sales save us with no hardware to run it on? The value of everything on the stock market collapses in such a scenario, and the power of the US Dollar goes with it.
  - throw678937 2y ago
    [dead]
  - ryandamm 2y ago
    The endpoint of this argument is pure self-reliance, for strategic reasons. And that endpoint is North Korea. https://en.wikipedia.org/wiki/Juche https://en.wikipedia.org/wiki/Juche
- corimaith 2y ago
  Exactly, people forget we build things for the sake of consumption, not the other way around. You can build a thousand factories for some good but it's dead weight if there is no one to buy their outputs.
  - almaight 2y ago
    The Soviet Union had strong consumption power, but they did not know how to manufacture. The final result was obvious.
    - philipkglass 2y ago
      I would say that the Soviet Union had strong manufacturing power but they manufactured too many units of things that their citizens didn't want, and not enough of what they did want. By the end they could make more tanks and tractors than anyone needed but household goods were in short supply.
    - ryandamm 2y ago
      Yeah I think this might actually be backwards; the Soviet Union had explicit production targets, and (iirc) in like the 70s they actually had more industrial output than the US. Remember the "missile gap," when the US was concerned that the industrial might of the USSR would bury the US? But the output was mismatched to demand; it was a classic example of "when the measurement becomes the target, it ceases to become a good measurement" -- the centrally-planned industrial targets were inefficient, so a lot of that industrial production went to waste. And to be fair, this is what's hard about economics: you can't just count tractors, or tons of steel, or whatever, as the output of an economy. Because every marginal ton of steel matters a different amount based on demand. The genius of capitalism (yes, I said it!) is it is an extremely elegant system for optimizing an incredibly high-dimensional system with a slippery, dynamic cost function, by incentivizing a bunch of independent agents to collaborate in price setting (and therefore sending signals about production via pricing, vis a vis supply and demand). This is also why China's economy has done better than the USSR; let's not forget that Deng Xiaoping's "limited market reforms" helped unleash the modern Chinese economy. The structural issues in the Chinese economy now stem from the lack of development of consumer demand, which does echo some of what the USSR struggled from. But China has come very far; the criticisms of its current economy that I like best are well-articulated by Michael Pettis, fwiw. But I'd encourage you to do your own reading and form your own opinions.
- janalsncm 2y ago
  There are other important outcomes of an economy, like better healthcare, education, housing, and well-being. But it seems like those real, tangible outcomes have become decoupled from “the line goes up” economy. I think the original reply was itself a strawman of the point the article was trying to make. Manufacturing isn’t the only important thing about an economy but it’s an important one.
  - ryandamm 2y ago
    I don't think my point was straw-manning the article. The article directly conflates economic output with manufacturing output, by using manufacturing signals (like power consumption!) as a corollary for some hidden, Real Economy. That's crackpottery. I was succinct in my criticism, but there is plenty of room for elaboration. If the essay instead took those economic indicators and delved into why manufacturing output should matter more than other output in determining the Real Economy, then hey, we've got an essay to discuss. But just eliding that and saying "manufacturing is real because atoms are real, everything else is b.s." -- that's not really an argument, that's just laying your biases extremely bare. Which I pointed out. That said, geohot is close to some real points, I just don't think he has the background to articulate it rigorously. And for the record, I do think the US economy is entirely too financialized. But again, that's a different -- likely better -- essay.
paxys 2y ago
> Not really, no. If China cut off the US, for any reason, who gets hurt more? China gets hurt more. They are an export economy. US will face some temporary pain, sure, but other countries build stuff as well. Meanwhile what does China do with all the materials piling up, millions out of jobs and a half a trillion dollar hole in their economy?
- gjsman-1000 2y ago
  China’s current government quite literally killed 30 million people under the cultural revolution and Great Leap Forward, and until 2015, killed all children past the first. China is not motivated by what makes economic sense. The party openly says this - the very fact corporations exist is a concession to not having achieved pure communism yet. The party openly hates the fact they need an economy, after having failed for the first few decades to operate without one. All it takes, quite literally, is one hardcore communist after Xi who isn’t afraid of a second cultural revolution. Maybe a chance to fix all their consumption, housing, and youth issues once and for all in one painful societal restructuring? The very economic and social issues we point to as why they would never do it, I fear, might actually become reasons they will do it.
  - tokioyoyo 2y ago
    I swear, “Chinese collapse” has been on the news headlines since 2000s. At some point people need to give up on the idea that their system doesn’t work. Yes, it sucks from our perspective, because we would have less rights and freedom. But quality of life of an average Chinese has been increasing YoY, despite some hiccups. They obviously screw up big time (pandemic lockdowns, current above average youth unemployment), but they don’t mind pivoting hard. Baseless hate when a country fails to compete is just sad to watch as an outsider who has no skin in the game.
    - cookiemonsieur 2y ago
      It's a coping mechanism that needs to be parroted to keep the people in the west from questioning the status quo. "Look china/russia/iran/india bad ! Sure, we're not doing well and your quality of life is eroding year on year but hey ! In china you can't question tienanmen square so there's that" It's sad, but as long as people continue to believe in this mythology of "absolute freedom", it will continue to work.
Aeolun 2y ago
I daresay the US has all the resources it currently gets from China on its own landmass as well. It’s just not doing anything with it.

Spartan-S63 2y ago

> But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere. Even better, let them keep their visa and if they revoke their citizenship, we'll relocate their entire family if they come from a repressive regime. Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Additionally, we should be funding basic research at historic levels and incentivizing, via the tax code, corporations to productize and apply this basic research. We should be expanding the frontier of knowledge without regard to its immediate application.

rayiner 2y ago
> Brain-draining the world is really the key to cementing American Hegemony in a post-Cold War world. Why should we want that instead of an orderly, well-governed democracy? Do you think people in Sweden or Denmark are upset their countries aren't hegemons? And what would that do to the country? Do you really think that, say, the top 5% of India and China (100 million people) would do better maintaining a democracy than median Iowans? That's a real bet that your assumptions about how society works actually reflect reality.
- rat87 2y ago
  India despite flaws is a democracy same as the US. It's a very different country then China. Plenty of immigrants from tyrannical countries are as if not more committed to democracy as those born here And just because someone was born in China or India it doesn't make them any less American then someone born in Iowa. Their children might be born in Iowa
  - rayiner 2y ago
    Democracy isn't created by intentions or "commitment," but rather the culture of the people, their attitudes, and mental processes. An Iowan born in Iowa to Iowan parents who were born to Iowan parents is steeped from birth in a culture that is very different from someone born in India or China--or even the American-born children of Indians and Chinese immigrants. Immigrants may become legally American overnight, but they don't become culturally American overnight. Cultural attitudes are extrmely durable (https://www.sup.org/books/economics-and-finance/culture-transplant https://www.sup.org/books/economics-and-finance/culture-tran...). My mom has lived here for 36 years, and she's still a low-social-trust south asian who has distinctly south asian views on credentialism, education, social hierarchy, etc. Are those attitudes compatible with the kind of egalitarian, self-governed democracy Alexis de Tocqueville wrote about? I am skeptical that's true at scale. Even having grown up here, my cultural attitudes are very different--and again, distinctly south asian--compared to my wife's (whose family has been here since the early 1700s). If you took 1,000 people like my wife and put them on an island, you'd recreate America--including the parts of America I find perplexing and frustrating. I'm not persuaded that if you took 1,000 people like me and put them on an island you'd recreate America.

janalsncm 2y ago

> like scoring a soccer game based on how far your players run That’s a pretty good analogy for what GDP is counting, actually. But I think the larger point is that manufacturing is grounded in something real. It’s a measure of how many tanks and fighter jets you can make, no matter how much they cost to make.

dbtc 2y ago
Interesting, so to extend the metaphor - in the game of soccer it's the scoring of goals that matters, not the raw physical stamina of the player, but if that facade of civilized competition breaks down, then it's back to the basics.
- TeMPOraL 2y ago
  Right. This facade is what makes soccer a sport instead of a brawl. In sports, and in life in general, there's all sorts of extra rules that make activities interesting and/or prevent them from decaying into violence. Playing for keeps - like, really, seriously, going for the win no matter what, is universally frowned upon and basically a telltale sign of dangerously pathological sociopathy.
  - deleted 2y ago
    [deleted]
jazzyjackson 2y ago
Right, velocity of money! I think this is the meatier part of the essay and I wish geohot would have skipped the bit about the gold standard - our main measure of growth is how quickly we hand money back and forth (is there another measure that allows expenditures to cancel out ? Net Domestic Product ?) The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I know there's a 2 year wait-list to even have your energy production considered to be hooked up to the grid, but I assumed there was some at least some throughput, now we're taking about onsite mini nukes while China is building.

_heimdall 2y ago

> or people who actually study these things How do you define "actually study" here, and what makes you think the author didn't study the topic at all? Its totally fine if you disagree with the author's view or have additional information that they missed or didn't consider. Writing it off as coming from someone who didn't "actually study" the topic is unnecessarily dismissive.

jazzyjackson 2y ago
Well, it's deferring to experts, but whether economists are experts at anything is a hot debate.
- ryandamm 2y ago
  I have a lot of respect for economists, I know several. They are among the most rational people you shall ever meet. And they are very aware of how incomplete their tools are. But they do a lot with such tools that is worth knowing.
- ikiris 2y ago
  It's only a debate if you reject the very principals of science. I realize we're getting there for a lot of people, but merely disbelieving in science is not a refutal of it. This ignores so called Austrian economists however, who are just flat out lying to either themselves or everyone else depending on the person.
  - harimau777 2y ago
    I think the problem might be that it's difficult to perform experiments in economics due to the size of the thing being measured and the fact that the people making up the economy generally aren't going to be alright with you performing experiments on them.
    - intended 2y ago
      Many economic concepts are part of our daily life. Supply and demand, comparative advantage, for example. Multiple experiments are conducted using historic data, for example the 2024 Nobel.

zzzeek 2y ago

seemed like a good article until he went into "back the dollar on gold" and revealed he was a total crackpot, sad

GuinansEyebrows 2y ago
For me it was “Socialism Bad”
- ks2048 2y ago
  Especially since the core of the article is China is surpassing the US.
tmn 2y ago
Care to elaborate? It’s thought provoking as a mechanism to reduce all of this zero sum (or even worse, parasitic) effort that dominates our system.
- erikerikson 2y ago
  There's a history. How does the rate we pull gold out of the ground relate to the rate of production and value growth?
- Panzer04 2y ago
  Making an inelastic resource (gold) the unit of exchange in a growing economy is a recipe for deflation. You don't want the most economically sensible decision to be holding onto capital, since that results in precisely nothing useful being done.
  - tony69 2y ago
    Deflation is fairer and reduces moral hazard in finance. The weak point of gold is that it’s too slow to settle transactions (you have to move it), so a paper gold system on top of it inevitably arises. [0] “broken money” by Lyn Alden

systemf_omega 2y ago

The US is already the brain drain destination #1. Nowhere else can highly skilled people generate comparable levels of income.

lxgr 2y ago
Adjust for living expenses and the situation already looks very different. Then adjust for quality of life...
- systemf_omega 2y ago
  This has been done before, and America comes out consistently on top. Even the median purchasing power parity (PPP) in the US is frequently ranked highest in the world. The majority of American households in the poorest US states are doing better than the majority of Europeans. This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close. Put on top the rising costs of living, and 45% top tax brackets (France, UK, Germany, Spain), the US is incomparable.
  - lxgr 2y ago
    Yes, if you're a professional in high demand, you can live a great life in the US. But how does the quality of life of everybody below the median look like? > This gets amplified if you're a highly sought after professional. Top senior engineers are getting paid $500k-$1M in the US. These are figures you'll never find in Europe or Asia, not even close. But what does that buy you really, in a high cost of living area? What if you ever want to do something else? What if demands for your profession change? How expensive is it to raise children? I have first hand experience of both the US and Europe, and while nominal salaries are (much) lower in the latter, subjective feelings of safety and quality of life seem much more comparable than the numbers might make you believe. That said, the US system of highly rewarding relatively few people at the top certainly motivates the masses like few others: Most people are bad at statistics and like playing the lottery.

Barrin92 2y ago

>there is more to an economy than manufacturing. Not really. Most developed economies are basically 70% Baumol's cost disease[1]. The 20% of the American GDP that goes to healthcare, half of the military budget that goes into salaries, public services, the police isn't billed on productivity. Those are non-tradeable services whose compensation inflates with growth in the productivity gaining sectors of the economy. That's why you can go not to a wealthy Tier 1 city in China, but to a Tier 2 or 3 city and it has better public services despite having like 10% of the per capita budget of a US city. Most compensation is.. fake. If you want to know what an economy does look at the stuff they make. [1]https://en.wikipedia.org/wiki/Baumol_effect https://en.wikipedia.org/wiki/Baumol_effect

ryani 2y ago
How is "Baumol effect" different from supply and demand for any limited resource? Let's say that some new use for copper is discovered, that drastically increases the demand for copper. The cost of existing items that use copper is going to go up, even if those items are no more productive than they used to be, because the new items are now in high demand. You can see this effect in real life with GPUs; it's much more expensive to buy a gaming graphics card today than it was a decade ago, because GPUs are in high demand for other applications. So, increasing the productivity of labor in some sector is going to do the same thing supply and demand does to anything else -- the cost of labor goes up, but not as much as the productivity in that sector, and the producers of labor will enjoy higher demand.
- Barrin92 2y ago
  >How is "Baumol effect" different from supply and demand for any limited resource? It isn't, but nominal growth as a consequence of demand without increase in real output makes you no better off, that's the "fake" part. More practical example than graphics cards is houses. Large chunk of the US market, constantly goes up in price, but not because housing is becoming more productive. It's because money from other sectors spills over. Good for landlords, bad way to measure real economic activity. You'd be better off if you could roll houses from the conveyor belt and collapse prices. Rising education prices don't reflect greater quality in education, faster teachers, or more graduates, i.e. output, which is what we ought to care about, but just higher spending funded by real gains in other sectors.

45511ff515f7 2y ago

> But solution point 1 — brain drain the rest of the world — is an absolutely first rate policy. The fact that the US requires newly-minted PhDs educated here to get a different visa or leave is absolutely self-defeating. We should be welcoming skilled immigration from everywhere. At what quantile of an R1 does graduate education become something other than a visa scam? What domestic student is going to toil for years for poverty-level wages? The further pursuance of policies that are turning research institutions into immigration scams is a bad idea.

selimthegrim 2y ago
>What domestic student is going to toil for years for poverty-level wages? Do you want entire swathes of the country to have no exposure to higher education personnel?

stego-tech 2y ago

That's what kills me about these sorts of takes: the action plan is on the money, but their ideology shows they haven't actually learned anything of value from the failures of the current systems. They're essentially just looking at how others do a thing, rather than also looking at how we do a thing, and why we do that thing in that way, and what the knock-on effects of that process are. He gives away the game at the end when he decries socialism (because of course he does, it's practically a Free Space on the "Highly Intelligent Engineer has Opinions on Things" BINGO card) and fingerpoints at Europe, despite China having Communism on some scale yet is also somehow what we should be emulating for growth? It reveals the naivety of his position, assuming he's making the argument in good faith. But getting back to his action plans (which are, generally, not bad), I totally agree that a good step forward is reforming immigration to promote movement of people provided they're willing to contribute to society. He couches his standards in nebulous vagaries like "production" and "productivity", but the core concept is sound, even if his rationalizations leave a lot to be desired. We should be courting smarter and harder workers with pathways to Citizenship, not highly exploitable visas like H1Bs or the various farmworker visas, and we should be holding companies' feet to the fire in ensuring imported talent stays here, on American wages, in American living standards. I've been screaming the same to my EU friends of late, stating that now is the best time since Operation Paperclip for a foreign power to import brilliant talent from a failing state. On the topic of the EU, something I'd like to challenge is this popular (with laissez-faire Capitalists and Libertarians) narrative that the EU is somehow failing because it hasn't exploded with growth like the USA or China. From what I've seen, Europe has been remarkably stable on the whole (with pockets of success and failure, a la the United States) precisely because it built up modern infrastructure when it could, maintained a diversified economy, and didn't give in to scams or grifts - like the ones he cites in the American economy as artificially inflating the economic numbers to create the appearance of growth where none has really occurred. If we had real growth, like China, we'd have the same amenities - high speed rail, modern freeways, high levels of infrastructure replacement and improvements, and a burgeoning middle class. China built these things as part of its rapid industrialization over the past century, whereas we squandered our post-war advantage on corporate subsidies and hawkish conflicts abroad for decades. If anything, I'd argue that the EU may very well be a model of a sustainable economy of sorts, provided there's not some crisis boiling beneath the surface that could cause a collapse; the people there generally have everything they need, and healthy regulations minimize the risk of exploitative or anti-consumer practices. But I digress. The TL;DR is that he has valid points, but man does he undermine his argument with the same tired tripe at the end exposing his ignorance on the subject.

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csomar 2y ago

Ibn Khaldoun said that once a state economics start deteriorating, everyone becomes an expert. The way I see it, if the markets led by PhD and Noble laureates fails, people start looking for alternatives. Since the "establishment" has been proven useless, the door is open for "anyone" to chime in. The reality is that the economist at the top do not want to see the deficiencies because they have their salaries on the line.

ryandamm 2y ago
I don't think economics itself has gone wrong -- I think the US economy in particular has done a poor job of distributing the wealth it has created. Ironically, that has created a populist backlash that has vaulted even worse economic ideas into power. Anyone read "Capitalism in the 21st Century"? It's long and dense, but it does make some excellent, well-supported points about the structure of an economy that explains the current situation very well with historical antecedents. This won't do it justice, but: inequality always increases, by definition, if the returns on capital outstrip the overall growth in the economy. (Think through that if it's not obvious; it's literally a mathematical truth.) The book argues that history is a series of long, slow accretions of wealth, with increasing inequality, until some shock (usually a violent revolution) overthrows the old system, resets inequality, and the cycle starts again. The latter half of the 20th century, for the US, was one notable exception: growth outstripped returns to capital, so the benefits of that growth were widely shared: inequality decreased. That trend ended in the ~1980s, and the widening inequality gap has fueled unrest. And the book points out that we've seen this show before. I think we're in the "history repeating itself as farce" phase, though.
- logicchains 2y ago
  > I think the US economy in particular has done a poor job of distributing the wealth it has created. The US financial system is structurally orientated towards distributing wealth poorly. It's an unavoidable economic fact that when someone spends newly created money there's a wealth transfer from currency holders to them (that's why counterfeiting is illegal), and in the US means there's a persistent, systematic transfer of wealth from currency holders to the banking/financial system. Which is extremely regressive, as poorer people hold the largest fraction of their wealth in cash, while the middle and upper classes have more of it in assets like housing and stock. Economists funded by the banking system will try to distract you by arguing about inflation vs deflation, but it's a smoke screen. It's perfectly possible to have a non-regressive inflationary economic system, e.g. one where the government directly prints money and gives it to the poor, and such a system would avoid the systematic transfer of wealth from the lower classes to the financial industry.

hayst4ck 2y ago

I think I disagree, specifically because geohot does security. Security is fundamentally about finding the difference between what people wish or think is true, and what is actually true on a mechanical physical real and actionable level. That involves deep analysis skills and disregarding common consensuses in order to rebuild how things actually work from the ground up. Questioning establishment dogma is largely forbidden, no matter what your establishment is, so it's absolutely worth considering outsider assessments. Wars test base assumptions. It seems obvious that in a war, ability to take things out of the ground, turn them into bullets/drones/etc, and then get them to the front line is what matters, not what the stock market says, and not claims made with the backing of a military (such as how much the US dollar is worth, or who owns what IP). I don't necessarily agree with his conclusions, although I understand where they come from.

fwipsy 2y ago
Your first paragraph is like saying "this train conductor does transportation, so we should let him fly a plane." Perhaps knowing security proves that the author is intelligent, and perhaps some of the same skills apply, but it's not a given that he will have good ideas, especially on fraught topics where it's easy to be misled by ideological bias. The author doesn't deserve any more consideration than any other outsider perspective.
- ryandamm 2y ago
  Yeah, there's a known problem with smart, technical people approaching fields about which they know very little. The analysis, to a third party, often sounds smart (the author is undeniably smart!), but without having expert context, you miss why it's so, so, so wrong. And I'm not even an economics expert. I've just read more about it, or read more critically, than geohot. And I can tell you he's wrong, not because he's an outsider but because his analysis does not make sense. Copernicus had well-reasoned, self-consistent arguments that incorporated previous models, and produced better results. This doesn't. There is a rubric for how one should score outsider contributions, even if you want to allow for revolutions in a particular field. This essay doesn't rise to that level. In fact, it matches the first pattern -- smart person outside their field, makes ass of self -- much better. https://en.wikipedia.org/wiki/Nobel_disease https://en.wikipedia.org/wiki/Nobel_disease

karel-3d 2y ago

Well at least he is not writing how he got himself addicted to meth because he wanted an extra challenge

unclebucknasty 2y ago

>there is more to an economy than manufacturing I don't agree with all of his premises or conclusions either, but I believe he's exactly right about the financial engineering and outsized rewards that frequently accrue to non-productive activity in general. I see the manufacturing fall-off he notes as a proxy for that. It's not the only evidence, but it's one piece.

l0ng1nu5 2y ago

> I prefer my economic takes from economists, or people who actually study these things. Keynesian economists and now mmt advocates are the reason that most of the productivity gains of the last hundred years have ended up in the hands of a few hundred people while most struggle. I'd say it's high time to stop listening to these people who are nothing more than useful idiots of the elites.

amrocha 2y ago
Can you give an example of countries listening to MMT economists?
- l0ng1nu5 2y ago
  The US since the GFC is probably the most obvious one. As I understand it, pretty much every developed country employed mmt practice in response to covid. Now we have (even more) rampant inflation and wealth inequality with no sign of slowing down.
  - t-3 2y ago
    "Pretty much every country" couldn't possibly employ "mmt practice" - a significant number of countries don't have sovereign currencies. That's ignoring the fact that MMT is descriptive rather than prescriptive, it doesn't have practices, it is a theory used to describe how a modern economy with sovereign fiat currency works.
    - l0ng1nu5 2y ago
      I said developed country which is a pretty major distinction. Maybe my definition is off but it appears to prescribe the printing of currency which is consistent with what we've seen in most major economies and low and behold - we have rising inflation and wealth inequality.
      - t-3 2y ago
        Most of Europe doesn't fit in with your idea of "developed countries" though. Printing currency in order to have more money is as old as currency itself, what does that have to do with MMT? Give me a citation or quote where someone is advocating just printing more money as the MMT solution to anything.

OriginalMrPink 2y ago

Yes, please. But you know, these days, everyone is doing their own research, and think they nailed it. But it's often sloppy research, unfunded arguments, etc. Just looking at the map in this article, and whatever source this comes from (some people don't seem to bother sharing sources) - it seems not accurate. (e.g. why is Greenland a different color than Denmark...)

raxxorraxor 2y ago

I don't think economists overall, even when generalizing, have a good track record. Too often hidden interests modify the core of their messages. Krugman for example has a poor record on predictions, not sure about the other ones. That said, this isn't all "gold" either in my opinion. Money is still tied to productivity. At least it works as long as people believe debts can be repaid. If they wouldn't, there would be runaway inflation. It is more sensible to back that debt with productivity or "economic potential" instead of gold, but the idea isn't that far off as people generally say it is. In general it still is more loosely tied to real productivity though and that is a problem. The solution isn't to return to gold backing though. And there is a development of poor economic ideas, like that creating debt is always good on a national economic level. You should never neglect to mention that this new debt would require something like a hegemonic military position to underline the "securities" of said debt.

grumpy-de-sre 2y ago
The interesting question would be how to tie the currency to real productivity in a way that makes financial engineering, and fraud unattractive. Not a crypto shill but proof of work isn't so terrible, particularly something ASIC resistant. Energy isn't such a bad thing to peg your currency to (lot more flexible than gold). But nonetheless you still end up with a lot of weird distortions. The legacy of ZIRP, and the effects of decoupling the financial and real world, are going to be felt for years to come.
Ekaros 2y ago
I always find gold weird. It has value for exactly same reason any money has. People believe they can later trade it for something else. And main argument for proponents seem to be that it was always valuable so it should also be now and in future. And when market changes drastically(extra gold, or lot of removed supply). The value also swings a lot. Possibly even more than with other currencies. Some level of floating currency is clearly most reasonable solution. But just how is still very open question.
- rsync 2y ago
  “Some level of floating currency is clearly most reasonable solution. But just how is still very open question.” I think the answer is to tie it to lifespan. How many years does it take for a family to purchase a home on the gold standard? 200? 350? In our time, we have turned the dial so far that some families can purchase a home in five years. So it becomes a question of expansion over time for real people - and nobody wants to live in a world where it takes 400 years to save for a house. Perhaps, however, it should take more than five…

paganel 2y ago

> there is more to an economy than manufacturing And what would that be? "Services"? The author tried to explain how that is basically a scam. And, getting back to our present, hobbes-ian world, services won't help you put tanks on the ground and airplanes in the air in the event of a grand war, you need a pretty solid manufacturing base to back it up, you need to be the "arsenal of democracy".

PeterStuer 2y ago

It ain't necessarily gold, but a dollar 'IOU' in the end should give the holder something to concretely purchase besides military equipment. You can argue dollars can also buy 'IP', but IP is virtual and only as good as the police and military enforcement of its regulation. You can argue dollars buy oil, but once again only because of military enforcement of the imposed rules of not to trade in other currency. In the end an empire based on massive consumption of the world's resources in return for not much else besides the threat of 'take this paper or we bomb you' will not hold. As for the brain-drain. This was/is still a huge thing. But it hinges on the desirability of attracting the right brains. If you abandon meritocracy as the US has been speed-running, why would a capable person want to go/stay there? Seems like the attraction incentives are there more for the subpar performer in the 'modern' US.

lll-o-lll 2y ago

> I prefer my economic takes from economists, or people who actually study these things. I think the ideas are interesting and worthy of discussion. If you want an actual credentialed economist talking about similar issues — here’s one: https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-economic-masterplan-unherd/ https://www.yanisvaroufakis.eu/2025/02/21/donald-trumps-econ... But you need to recognise that there is an “orthodoxy” and challenges to that. You aren’t going to hear the questioning of the status quo without looking outside the “establishment”. Here’s a taste (note that Yanis is old school left as far as politics goes) “Faced with President Trump’s economic moves, his centrist critics oscillate between desperation and a touching faith that his tariff frenzy will fizzle out. They assume that Trump will huff and puff until reality exposes the emptiness of his economic rationale. They have not been paying attention: Trump’s tariff fixation is part of a global economic plan that is solid — albeit inherently risky.”

ryandamm 2y ago
I like Varoufakis; watched a short video interview he did just a few days ago. I doubt he'd agree with geohot's take.
- lll-o-lll 2y ago
  Oh definitely, he would not agree with the proposal, but the problems identified I think he would. That’s why I’m saying the general ideas are worth discussing.

powerapple 2y ago

What is a good economy and what's the purpose of economy?

TeMPOraL 2y ago
Arguably, the economy just is. It has no purpose, other than what it does[0]. It's not like anyone designed it, or has any control over it. Some people are in position to make adjustments, nudge some aspect of it towards a desired goal or away from undesirable one, but there's only so much they can do - it's all strongly path-dependent. Put another way, the shape of the economy is just an exercise of descending down the gradient. Any individual or group has very little control over this, and major changes to the economy basically only happen when war or technological inventions reshape the entire gradient. -- [0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_what_it_does https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
- sebastianz 2y ago
  Many countries in the former soviet block would very much contradict this take. Entire economies were indeed planned and designed, and their shape was controlled and changed at will. Individuals and groups had control, and did do major changes, including but not limited to forced resettlement and labor camps. You can of course argue that this ended almost universally in failures, but people did try, and the amount of control over economies is very much a spectrum.
  - TeMPOraL 2y ago
    I don't disagree - in fact, this is a great study. It shows both just how much it takes to have any noticeable, direct control over the economy, and also how little it amounts to anyway. Specifically, to have this level of control, you basically have to go full-totalitarian and rule with iron fist, and sustain this rule even as The Economy pushes back, in form of unrest, civil war, revolutions, military coups, as well as sabotage or direct attack by foreign forces. Yes, all this is part of the economy too. And, if you somehow manage to keep control in spite of all that, you'll quickly see the rest of the world, with its uncontrolled economy, zip past you in terms of wealth and power, and find yourself at its mercy. Fundamentally, people want to trade; they both need this to survive and want it to improve their lot. If you make trade hard for them, they'll invent workarounds - alternate currencies (see e.g. use of dollar in the soviet block to work around rationing), barter, smuggling of goods; if you crack down on it, they'll conspire to depose you - and yes, even your military and security personnel, at every level, would like to make the lives of themselves and their families better too. There's only so much blood you can spill before you run out of people to kill, or out of goodwill of people doing the killing. And, as history shows, The Economy will win anyway. As for sane, free, democratic countries - there's shit all you can do there, as the economy will push back through support of the voters and other politicians, strongly limiting the kind of decisions that are possible to implement. Try to make too big a changes, you'll get sidelined and removed from position of power.

throwawaymaths 2y ago

> I prefer my economic takes from economists, or people who actually study these things. hows that going? economists have been giving advice to policymakers for decades, and we have a widening gap between the haves and the have nots, society increasingly in debt, etc. Maybe economists have it wrong.

tsupiroti 2y ago
The gap between haves and have nots is more related to politics than economics IMO. It's about how the value is (re)distributed.
- throwawaymaths 2y ago
  Specifically, krugman believes that inflation is required to confuse laborers to stay in their jobs and not take pay cuts (sorry, can't find ref), which creates labor stability. so yes, it is about economists. interest rate policy is crafted around this principle and designed to screw the have nots (it is not only krugman, it is encoded in the fed's dual mandate). since every country has a central bank with a similar mandate its hard to know if gettimg screwed is inherent in captalism or if it's only a feature of central bank capitalism. It's maybe telling that the nordic central banks have the lowest interest rates in general > The gap between haves and have nots is more related to politics than economics IMO in human history there have been few societies that haven't had a widening gap; gaps typically have contracted during times of revolution. no social democracy in the current epoch doesn't feature a widening gap, so i would doubt that active redistribution helps all that much (inflation is a compounding effect that overtakes all redistribution)
  - throwawaymaths 2y ago
    Citation: https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/02/13/the-case-for-higher-inflation/ https://archive.nytimes.com/krugman.blogs.nytimes.com/2010/0...
    - 2y ago

megamix 2y ago

Uh oh, go read Taleb if you want to know about economists. They are also behind some of the chaos we have today.

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alecco 2y ago

> I prefer my economic takes from economists, or people who actually study these things. Hmm > you’re better off reading Krugman It used to be kind of a meme to make fun on how wrong Krugman was but now it's kind of like beating a dead horse. https://foreignpolicy.com/2019/10/22/economists-globalization-trade-paul-krugman-china/ https://foreignpolicy.com/2019/10/22/economists-globalizatio... https://www.theguardian.com/commentisfree/2018/jan/10/paul-krugman-mistake-white-working-class-voters-republicans https://www.theguardian.com/commentisfree/2018/jan/10/paul-k... In particular, Krugman was the flag bearer of "countries that borrow in their own currency should not worry about government deficits because they can always create money to finance their debt". (paraphrasing) This was incredibly wrong. It ended up in sky high debt and now interests on it are non-zero. And most of the added money ended up in the top 10% making inequality much, much worse.

mu53 2y ago
Also, his article on why the internet is going nowhere. Definitely missed a few things
- ryandamm 2y ago
  Krugman discussing the Internet might be like geohot discussing economics. Or are you referring to the fact that he said it didn’t show up as having caused growth in the underlying economic data? I think he was pointing out something quantitative at the time, and in recent years he speculated that the strong growth in US GDP was finally reflecting efficiency and productivity gains from IT and the Internet. (The US’s strong growth until very very recently was an outgrowth of strong and rare increases in worker productivity.)
AnthonyMouse 2y ago
And that sort of thing is predictably wrong. It's premised on the combination of low interest rates and a lack of inflation, even though low interest rates generally cause inflation. As soon as you get inflation, keeping interest rates low would make it worse, but raising them explodes the interest rate on the debt. And your other alternative to paying the high interest is to print the money to pay the debt, which also worsens inflation. So taking on that much debt is just a bomb that goes off as soon as inflation becomes non-trivial, and on top of that, is a thing that generally causes inflation. To understand how people like that succeed, realize that there is always a market for someone who will tell you what you want to hear.

RivieraKid 2y ago

Krugman and Pettis are among the small group of economics / finance people I follow. Do you have any other recommendations of people to follow? Regarding Pettis, I still haven't decided whether I agree with (and understand) his worldview.

ryandamm 2y ago
I took Krugman's advice to read DeLong at one point and don't regret it, though he's not on my regular rotation: https://braddelong.substack.com https://braddelong.substack.com
ryandamm 2y ago
Oh, and of course I read Patrick McKenzie: https://www.bitsaboutmoney.com https://www.bitsaboutmoney.com And subscribe to Bloomberg's Matt Levine's "Money Stuff" newsletter and podcast: https://www.bloomberg.com/account/newsletters/money-stuff https://www.bloomberg.com/account/newsletters/money-stuff

tossandthrow 2y ago

The issue with mainstream economy is that it is way too abstract. It does not discriminate between USD 100 worth of marketing consulting and USD 100 worth of crops. Yes, water it cheap. But you die if you can't access it for just a couple of weeks - this is a risk based approach. And this is something traditional economists do not look at too much.

xyst 2y ago

People like Krugman are one of the reasons USA is in a hot mess and wealth has concentrated into a select few. Neoclassical economists have been selling themselves as “scientists” (think physicists) for decades and their theories are cited as reasons for economic policies in the USA. One of these days I’ll write a post on it. But one of the areas they get wrong repeatedly is on the minimum wage. Neoclassical economists would argue that increasing minimum wage ultimately hurts the people it’s trying to help. For example, by increasing minimum wage you would see a decrease in businesses and/or number of jobs available. In neoclassical theory and “Econ 101”, they would chalk it up to supply and demand. However, this has been disproven in regions or states where the minimum wage has well exceeded the federal minimum wage. Take Seattle, WA for example where min wage is ~$20/hr. Local restaurant industry didn’t collapse. Region itself didn’t collapse. Sure jobs or businesses closed (Subway franchises, lol), but were eventually replaced by ones that could compete. Likely local businesses. And since all businesses pay the same wage to remain competitive, workers get more money in their pockets. This leads to increased spending by those same people. There’s a ton of other factors as well but it’s well beyond commenting here.

fuzzfactor 2y ago

>economists, or people who actually study these things. From my experiences over the decades, the Venn diagram that includes both and have worthwhile understanding is a small minority of either group, and even smaller when you consider the total of those outside the set as the mainstream. When this showed up on HN, there were no comments for quite a while. I had casually heard of Hotz as a recognized hacker, interestingly one who was respected for figuring things out that other people could not. But with no real familiarity, I couldn't recall what he had hacked or where he had worked. Maybe I had retained the impression that he started out quite young. And then he comes out with this. Last time I heard of him, I knew he was smart, I just didn't remember why any more. This time it's different. Something must have escalated. All I could think of now was "How did he get to be so smart?" That would have been my entire comment, which I didn't post because I thought it was not very substantial, and I was wondering if there would be any comments anyway. No interest was being shown at all. Study takes many forms and some people can figure things out better than others. No one person can solve all the problems, or even recognize them, and when you start looking from fundamental principles you can end up so far off the mainstream that there is overwhelming misunderstanding that can not be overcome. Any mainstream can look so sensible across-the-board because the experts are standing on the shoulders of those who came before, and some of these are lifetimes of intense study. It can add up to more than one person can usually do in a single lifetime themself. But if the foundation is wrong to begin with, or turns out that way later, it can be like a pro-cheerleader pyramid where the top rallying cry comes from someone who can still not see out of the pit of their own making, not actually elevated above the crowd like it appears. What could be incorrect about all the shoulders they are balancing on and the adoring crowd of high-dollar ticketholders to boot? One thing's for sure and I don't think it's the title by accident. "The Demoralization is just Beginning" I've seen this movie before. He doesn't even try to discuss this main point at all. People are nowhere near ready for that, look at the comments, many from quite educated positions pooh-poohing him from different directions. All anyone can do in a short blogpost like this is throw out a little evidence and people can decide for themselves how demoralizing it already is, or how it might turn out. Which is what people are doing, as righteously as they can, bless their hearts. So my advice to Hotz at this point is keep doing what you are doing, and illegitimi non carborundum. No different than the comment that popped into mind at first, now just a little more substantial than a quick drive-by.

adverbly 2y ago

They really should, but nobody listens to economists :( If they did, we'd have had a land value tax for a century by now...

mdnahas 2y ago

As a quant who went back and took the PhD economics classes, I can tell you that macroeconomists are not experts. The number that predicted the Great Financial Crisis is a handful. They study these things, but they know little. The microeconomists know a bunch and have some powerful mathematical tools. I have some confidence in those studying trade and cities. But comparing and measuring countries is messy and hard. And I totally agree we should lure other countries’ brains here. The return on investment for a STEM degree is about 3 times the stock market index and we should get as much as we can.