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It's intentional. Anyone thinking otherwise hasn't been listening to Treasury Sec Bissent talk these last two months. The goal to lower prices is to "increase s

It's intentional. Anyone thinking otherwise hasn't been listening to Treasury Sec Bissent talk these last two months. The goal to lower prices is to "increase supply and lower demand," and yes that's a direct quote. You don't lower demand by asking people to stop buying things. You lower demand by reducing people's ability to buy things.

bad_user 2y ago
I mean, sure, inducing a recession works for lowering prices, but it's freaking stupid and makes people poorer.
- ModernMech 2y ago
  It's a stupid decision from the perspective of the people getting poorer, but what about the people who are getting richer? It' a great decision for them.
SlightlyLeftPad 2y ago
How do tariffs fit into the stated goal of “increasing supply?”
- yieldcrv 2y ago
  Entrepreneurs are supposed to offer domestic versions at their own risk
  - SlightlyLeftPad 2y ago
    With how quickly the tariffs are added and removed, if I were an entrepreneur I’d find it difficult to lean in on a risky investment that may be undermined or undercut by the eventual and sudden removal of tariffs. I’m curious how this plays out in reality.
    - yieldcrv 2y ago
      so far, Apple says they'll invest $500bn to bring their supply chain stateside, Softbank $100bn-$200bn, "Stargate" Group is supposed to be $65bn and that was just to curry favor as well as get in front of the tariff plans we'll see if they follow through, but those count as American entrepreneurs too if there are disruptions on smaller scales, some people will take the risk, and there will be winners and losers as with everything else.
      - SlightlyLeftPad 2y ago
        It’s definitely interesting. I’m starting to think of the potential upside there and it’s going to be a relatively long road to move all that back here. There’s an issue of raw materials supply as well and I’m curious if this is more of an “assembled in USA” type of thing or the whole chain will move. Time will tell.
      - intended 2y ago
        Tariffs don’t achieve this, and it misdiagnoses the problem in the first place. Manufacturing is now increasingly automated, so it doesn’t employ as many people anymore. This is an issue India faces as does every developing economy. Economic growth is increasingly dependent on service sector growth. Moving supply chains also requires weaker labor laws, and lower salaries for workers, than minimum wage, to be competitive. OSHA is a problem for factory owners, because it increases costs with the tradeoff of higher worker safety. In contrast, there are suicide nets around factories in China. The American populace doesn’t want to work jobs at lower wages. The price for competitive goods requires firms to be cheap. You are going to be subsidizing people to work in factories, for decades, if not a full century. All the while people will take aim at the subsidy, and then blame minimum wages and people who support labor laws. Ad infinitum.
        yieldcrv 2y ago
        America has many American workers at minimum wage and above. (and below) In this specific sector, the entire industry including retail has shown they will pay many multiples of a higher price for GPUs and cloud services. So if a US grown supply already cost that much out the gate, there is already examples of the market being able to bare that.
yieldcrv 2y ago
[flagged]
rayiner 2y ago
That’s not some secret plan, that’s how policymakers historically address inflation: https://www.vox.com/future-perfect/2022/7/13/23188455/inflation-paul-volcker-shock-recession-1970s https://www.vox.com/future-perfect/2022/7/13/23188455/inflat... > Higher interest rates generally reduce inflation by reducing spending, which in turn slows the economy and can lead to mass unemployment. > One of the people who denounced Volcker’s moves was then-Senate Majority Leader Robert Byrd, who declared after Volcker announced his new effort in October 1979, “Attempting to control inflation or protect the dollar by throwing legions of people out of work and shutting down shifts in our factories and mines is a hopeless policy.“ The question is if the recession can be structured to disproportionately hit financialized and knowledge industries while sparing manufacturing.
- iamtheworstdev 2y ago
  > Higher interest rates generally reduce inflation by reducing spending, which in turn slows the economy and can lead to mass unemployment. But higher interest rates aren't what the Whitehouse wants.
  - rayiner 2y ago
    The article is about interest rates, but the relevant point here is that higher interest rates are a way of slowing the economy, which reduces demand, which in turn reduces inflation. The White House wants to reduce prices without raising interest rates. So you need some other way of slowing down the economy. There’s lots of ways to do that, such as laying off federal workers.
    - intended 2y ago
      That’s like saying amputation is a way to handle getting a paper cut. It’s in “not even wrong” territories of incorrectness. Higher interest rates are about shifting investment priorities and loan rates. It increases the cost of lending, which results in people making choices about taking on risk and debt. The reduction in loans being written, and the increase in interest being paid means that people start moving their money into savings, reducing the velocity of Money. Laying off people from the government reduces the amount of money being used productively, but doesn’t do a thing to stop loans being written or money being printed. It destroys the ability of the system to be efficient, resulting in more waste, and with more risk appetite + weaker regulators it results in the ability for people to break laws with impunity, resulting in captured or rent seeking markets. This results in a recession, and a failed economy.
stefan_ 2y ago
The same people also say "tariffs are going to bring us so much money" and "we are going to call it the External Revenue Service". So maybe don't read rationality into clueless vibe statements.
- gs17 2y ago
  > we are going to call it the External Revenue Service To be fair to them (even if they're likely unaware), that was effectively a thing back in the 1800s: https://en.wikipedia.org/wiki/United_States_Revenue_Cutter_Service https://en.wikipedia.org/wiki/United_States_Revenue_Cutter_S... > The federal government desperately needed revenue, and determined to raise it chiefly from tariffs on imports. Strong enforcement of tariff laws could blunt rampant smuggling. Urged on by Secretary of the Treasury Alexander Hamilton, the United States Congress on 4 August 1790 established the Revenue-Marine, later renamed the Revenue Cutter Service by act of 31 July 1894 (28 Stat. 171)
  - intended 2y ago
    1800s

bad_user 2y ago

I mean, sure, inducing a recession works for lowering prices, but it's freaking stupid and makes people poorer.

ModernMech 2y ago
It's a stupid decision from the perspective of the people getting poorer, but what about the people who are getting richer? It' a great decision for them.

SlightlyLeftPad 2y ago

How do tariffs fit into the stated goal of “increasing supply?”

yieldcrv 2y ago
Entrepreneurs are supposed to offer domestic versions at their own risk
- SlightlyLeftPad 2y ago
  With how quickly the tariffs are added and removed, if I were an entrepreneur I’d find it difficult to lean in on a risky investment that may be undermined or undercut by the eventual and sudden removal of tariffs. I’m curious how this plays out in reality.
  - yieldcrv 2y ago
    so far, Apple says they'll invest $500bn to bring their supply chain stateside, Softbank $100bn-$200bn, "Stargate" Group is supposed to be $65bn and that was just to curry favor as well as get in front of the tariff plans we'll see if they follow through, but those count as American entrepreneurs too if there are disruptions on smaller scales, some people will take the risk, and there will be winners and losers as with everything else.
    - SlightlyLeftPad 2y ago
      It’s definitely interesting. I’m starting to think of the potential upside there and it’s going to be a relatively long road to move all that back here. There’s an issue of raw materials supply as well and I’m curious if this is more of an “assembled in USA” type of thing or the whole chain will move. Time will tell.
    - intended 2y ago
      Tariffs don’t achieve this, and it misdiagnoses the problem in the first place. Manufacturing is now increasingly automated, so it doesn’t employ as many people anymore. This is an issue India faces as does every developing economy. Economic growth is increasingly dependent on service sector growth. Moving supply chains also requires weaker labor laws, and lower salaries for workers, than minimum wage, to be competitive. OSHA is a problem for factory owners, because it increases costs with the tradeoff of higher worker safety. In contrast, there are suicide nets around factories in China. The American populace doesn’t want to work jobs at lower wages. The price for competitive goods requires firms to be cheap. You are going to be subsidizing people to work in factories, for decades, if not a full century. All the while people will take aim at the subsidy, and then blame minimum wages and people who support labor laws. Ad infinitum.
      - yieldcrv 2y ago
        America has many American workers at minimum wage and above. (and below) In this specific sector, the entire industry including retail has shown they will pay many multiples of a higher price for GPUs and cloud services. So if a US grown supply already cost that much out the gate, there is already examples of the market being able to bare that.

yieldcrv 2y ago

[flagged]

rayiner 2y ago

That’s not some secret plan, that’s how policymakers historically address inflation: https://www.vox.com/future-perfect/2022/7/13/23188455/inflation-paul-volcker-shock-recession-1970s https://www.vox.com/future-perfect/2022/7/13/23188455/inflat... > Higher interest rates generally reduce inflation by reducing spending, which in turn slows the economy and can lead to mass unemployment. > One of the people who denounced Volcker’s moves was then-Senate Majority Leader Robert Byrd, who declared after Volcker announced his new effort in October 1979, “Attempting to control inflation or protect the dollar by throwing legions of people out of work and shutting down shifts in our factories and mines is a hopeless policy.“ The question is if the recession can be structured to disproportionately hit financialized and knowledge industries while sparing manufacturing.

iamtheworstdev 2y ago
> Higher interest rates generally reduce inflation by reducing spending, which in turn slows the economy and can lead to mass unemployment. But higher interest rates aren't what the Whitehouse wants.
- rayiner 2y ago
  The article is about interest rates, but the relevant point here is that higher interest rates are a way of slowing the economy, which reduces demand, which in turn reduces inflation. The White House wants to reduce prices without raising interest rates. So you need some other way of slowing down the economy. There’s lots of ways to do that, such as laying off federal workers.
  - intended 2y ago
    That’s like saying amputation is a way to handle getting a paper cut. It’s in “not even wrong” territories of incorrectness. Higher interest rates are about shifting investment priorities and loan rates. It increases the cost of lending, which results in people making choices about taking on risk and debt. The reduction in loans being written, and the increase in interest being paid means that people start moving their money into savings, reducing the velocity of Money. Laying off people from the government reduces the amount of money being used productively, but doesn’t do a thing to stop loans being written or money being printed. It destroys the ability of the system to be efficient, resulting in more waste, and with more risk appetite + weaker regulators it results in the ability for people to break laws with impunity, resulting in captured or rent seeking markets. This results in a recession, and a failed economy.

stefan_ 2y ago

The same people also say "tariffs are going to bring us so much money" and "we are going to call it the External Revenue Service". So maybe don't read rationality into clueless vibe statements.

gs17 2y ago
> we are going to call it the External Revenue Service To be fair to them (even if they're likely unaware), that was effectively a thing back in the 1800s: https://en.wikipedia.org/wiki/United_States_Revenue_Cutter_Service https://en.wikipedia.org/wiki/United_States_Revenue_Cutter_S... > The federal government desperately needed revenue, and determined to raise it chiefly from tariffs on imports. Strong enforcement of tariff laws could blunt rampant smuggling. Urged on by Secretary of the Treasury Alexander Hamilton, the United States Congress on 4 August 1790 established the Revenue-Marine, later renamed the Revenue Cutter Service by act of 31 July 1894 (28 Stat. 171)
- intended 2y ago
  1800s