6 ms·

High interest rates + tariff terror -> less investment -> less jobs But let's blame AI

by kerblang 1y ago

random3 1y ago
I'm sorry, have you read the paper, or did you just want to recite those here?
carabiner 1y ago
2 things can be true
- aurareturn 1y ago
  But usually one is more true. I'm on the camp of high interests and high tariffs being the cause more.
an0malous 1y ago
Is there some central authority that’s telling people to blame this all on AI, or how is everyone reaching this conclusion and ignoring the other obvious factors you stated?
- ajkjk 1y ago
  It is in their interest to find explanations for reductions in labor that don't assign the blame to corporate greed. For example, a call center might use the excuse of AI to fire a bunch of people. They would have liked to just arbitrarily fire people a few years ago, but if they did that people would notice the reduction in quality and perhaps realize it was done out of self-serving greed (executives get bigger bonuses / look better, etc). The AI excuse means that their service might be worse, perhaps inexcusably so, but no one is going to scrutinize it that closely because there is a palatable justification for why it was done. This is certainly the type of effect I feel like underlies every story of AI firing I've heard about.
  - HumblyTossed 1y ago
    > It is in their interest to find explanations for reductions in labor that don't assign the blame to corporate greed. Exactly.
  - jclulow 1y ago
    How is firing a bunch of people because you made a machine that you believe can do their jobs not textbook corporate greed? It seems like the worst impulses of Taylorism made manifest?
    - ajkjk 1y ago
      This is worse: this is just pretending like the machine does their jobs because it benefits them. The big (biggest? ) problem of modernity is that quality is decorrelated from profit. There's a lot more money in having the optics of doing a good job than in actually doing it; the economy is so abstracted and distributed that the mechanism of competition to punish bad behavior, shitty customer service, low standards, crappy work, fraud... is very weak. There is too much information asymmetry, and the timescale of information propagation is too long to have much of an effect. As long as no one notices what you're fucking up very quickly you can get away with it for a long time. Seems even worse to me. At least in the 'competition' paradigm there's a mechanism for things getting better for consumers. No such thing here.
- samrus 1y ago
  It doesnt need to be a conspiracy. Incentives allign sometimes. Alot of people are invested in AI replacing jobs and it would be nice for them if the buzz was that it is actually the case
add-sub-mul-div 1y ago
> But let's blame AI The thing whose exact purpose is to replace labor? Must be a conspiracy going on to suggest its linked to reducing labor. Bias! Agenda!
- johnnienaked 1y ago
  The jobs are going overseas
folkrav 1y ago
Do you consider things to be that single-faceted, that other factors cannot realistically be a part of the equation?
- trollbridge 1y ago
  I have to admit that something is "single-faceted" would be a nice break from hearing that something is "complex and multifaceted".
pokstad 1y ago
How does that make sense? Wouldn’t high interest rates and tariffs cause more expensive engineers to have disproportionate opportunity? I remember during 2008 it was much easier for my employer to justify junior engineers than senior ones.
jameslk 1y ago
Since this article is about AI, and since this comment seems rather low effort compared to the Stanford study, I went ahead and used low effort to analyze the report compare it to this comment. Here's my low effort AI response: > Prompt: Attached is a paper. Below is an argument made against it. Is there anything in the paper that addresses the argument?: High interest rates + tariff terror -> less investment -> less jobs > High rates/firm shocks: They add firm–time fixed effects that absorb broad firm shocks (like interest-rate changes), and the within-firm drop for 22–25-year-olds in AI-exposed roles remains. > “Less investment” story: They note the 2022 §174 R&D amortization change and show the pattern persists even after excluding computer occupations and information-sector firms. > Other non-AI explanations: The decline shows up in both teleworkable and non-teleworkable jobs and isn’t explained by pandemic-era education issues. > Tariffs: Tariffs aren’t analyzed directly; broad tariff impacts would be soaked up by the firm–time controls, but a tariff-specific, task-level channel isn’t separately tested.
- blharr 1y ago
  Fitting, since it came up with unrelated information (the R&D tax thing) and the 3rd bullet point. Also started talking about tariffs as if it had addressed them, then notes that it doesn't address them.
ToValueFunfetti 1y ago
You really do have to account for why this is mainly happening in industries that are adopting AI, why it's almost exclusively impacting entry-level positions (with senior positions steady or growing), and why controlling for broad economic conditions failed to correct this. I doubt very much that these three Stanford professors would be blindsided by the concept of rates and tarriffs.
- b112 1y ago
  Juniors become seniors. If we replace all juniors with AI, in a few years there won't be skilled talent for senior positions. AI assistance is a lot different than AI running the company. Making expensive decisions. While it could progress, bear in mind that some seniors continue to move up in the ranks. Will AI eventually be the CEO? We all dislike how some CEOs behave, but will AI really value life at all? CEOs have to have some place to live, after all.
  - tialaramex 1y ago
    The AI will at least be cheaper than a CEO, it might also be more competent and more ethical. The argument against making a Large Language Model the CEO seems to mostly be about protecting the feelings of the existing CEO, maybe the Board should look past these "feelings" and be bold ?
    - b112 1y ago
      I'll re-explain. A human CEO might do morally questionable things. All do not, of course, but some may. Yet even so, they need a planet with air, water, and some way to survive. They also may what their kids to survive. An AI may not care. It could be taking "bad CEO" behaviour to a whole new level. And even if the AI had human ethics, humans play "us vs them" games all the time. You don't get much more "them" than an entirely different lifeform.
      - pessimizer 1y ago
        The AI most certainly does not care, because it is a computer program. It also doesn't want to buy a boat.
bb88 1y ago
Here's the study: https://digitaleconomy.stanford.edu/publications/canaries-in-the-coal-mine/ https://digitaleconomy.stanford.edu/publications/canaries-in... It looks like they're looking at data for the last few years, not just the last few months. I haven't read it, and maybe you can disagree with their opinions, but there does appear to be a slow down in college graduates recently.
deleted 1y ago
[deleted]
myhf 1y ago
More investment -> more return on investment -> "AI is increasing worker efficiency" -> This is good for AI. Less investment -> more layoffs -> "AI is replacing workers" -> This is good for AI. A computer does something good -> "That's AI" -> This is good for AI. A computer does something bad -> "It needs more AI" -> This is good for AI.
- nateglims 1y ago
  It seems more true than the "this is good for bitcoin" meme now that bitcoin seems to track the dollar very closely
dgfitz 1y ago
Less investment? You must be trolling. I encourage you to look at the about of stupid money that has been “invested” into LLMs.
HumblyTossed 1y ago
Well, you do have CEOs out there saying it...
tennisflyi 1y ago
(High interest rates + tariff terror -> less investment -> less jobs) + AI
giantg2 1y ago
I generally agree that AI is the scapegoat, but not for those same reasons. Despite the lack of job growth and the tariffs, recent data shows the economy grew about 3%. Even if it's not AI as the primary driver, efficiency seems to have increased.
o999 1y ago
Blaming AI is better because it helps corporations convince the working class that there jobs are in long-term danger so they collectively settle for less favorable work terms and compensation, unlike if they are convinced that it is going to gradually improve with the upcoming monetary easing cycle..
esafak 1y ago
Let's read the paper instead: https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf https://digitaleconomy.stanford.edu/wp-content/uploads/2025/... It presents a difference-in-differences (https://en.wikipedia.org/wiki/Difference_in_differences https://en.wikipedia.org/wiki/Difference_in_differences) design that exploits staggered adoption of generative AI to estimate the causal effect on productivity. It compares headcount over time by age group across several occupations, showing significant differentials across age groups. Page 3: "We test for a class of such confounders by controlling for firm-time effects in an event study regression, absorbing aggregate firm shocks that impact all workers at a firm regardless of AI exposure. For workers aged 22-25, we find a 12 log-point decline in relative employment for the most AI-exposed quintiles compared to the least exposed quintile, a large and statistically significant effect."
- lucasjans 1y ago
  I appreciate the link to differences in differences, I didn't know what to call this method. The OP's point could still be valid: it’s still possible that macro factors like inflation, interest rates, or tariffs land harder on the exact group they label ‘AI-exposed.’ That makes the attribution messy.
  - esafak 1y ago
    Those fixed effects are estimated separately for each age group, controlling for that. pg. 19, "We run this regression separately for each age group."
- jvanderbot 1y ago
  Were entry level jobs the first to go in earlier developer downturns? Is AI being used to attempt to mitigate that effect? I don't think their methods or any statistical method could decouple a perfectly correlated signal. Without AI, would junior jobs have grown as quickly as other?
  - jvanderbot 1y ago
linkjuice4all 1y ago
End of ZIRP and the Sec. 179 change for engineering salaries probably explains more of this (plus the increase in outsourcing). I’m sure some decision makers also threw AI into the mix but the financials of hiring software engineers in the US was already challenging before AI “took everyone’s job”.
rr808 1y ago
I was here in the 90s dotcom boom and interest rates were higher than today.

High interest rates + tariff terror -> less investment -> less jobs But let's blame AI

random3 1y ago

I'm sorry, have you read the paper, or did you just want to recite those here?

carabiner 1y ago

2 things can be true

aurareturn 1y ago
But usually one is more true. I'm on the camp of high interests and high tariffs being the cause more.

an0malous 1y ago

Is there some central authority that’s telling people to blame this all on AI, or how is everyone reaching this conclusion and ignoring the other obvious factors you stated?

ajkjk 1y ago
It is in their interest to find explanations for reductions in labor that don't assign the blame to corporate greed. For example, a call center might use the excuse of AI to fire a bunch of people. They would have liked to just arbitrarily fire people a few years ago, but if they did that people would notice the reduction in quality and perhaps realize it was done out of self-serving greed (executives get bigger bonuses / look better, etc). The AI excuse means that their service might be worse, perhaps inexcusably so, but no one is going to scrutinize it that closely because there is a palatable justification for why it was done. This is certainly the type of effect I feel like underlies every story of AI firing I've heard about.
- HumblyTossed 1y ago
  > It is in their interest to find explanations for reductions in labor that don't assign the blame to corporate greed. Exactly.
- jclulow 1y ago
  How is firing a bunch of people because you made a machine that you believe can do their jobs not textbook corporate greed? It seems like the worst impulses of Taylorism made manifest?
  - ajkjk 1y ago
    This is worse: this is just pretending like the machine does their jobs because it benefits them. The big (biggest? ) problem of modernity is that quality is decorrelated from profit. There's a lot more money in having the optics of doing a good job than in actually doing it; the economy is so abstracted and distributed that the mechanism of competition to punish bad behavior, shitty customer service, low standards, crappy work, fraud... is very weak. There is too much information asymmetry, and the timescale of information propagation is too long to have much of an effect. As long as no one notices what you're fucking up very quickly you can get away with it for a long time. Seems even worse to me. At least in the 'competition' paradigm there's a mechanism for things getting better for consumers. No such thing here.
samrus 1y ago
It doesnt need to be a conspiracy. Incentives allign sometimes. Alot of people are invested in AI replacing jobs and it would be nice for them if the buzz was that it is actually the case

add-sub-mul-div 1y ago

> But let's blame AI The thing whose exact purpose is to replace labor? Must be a conspiracy going on to suggest its linked to reducing labor. Bias! Agenda!

johnnienaked 1y ago
The jobs are going overseas

folkrav 1y ago

Do you consider things to be that single-faceted, that other factors cannot realistically be a part of the equation?

trollbridge 1y ago
I have to admit that something is "single-faceted" would be a nice break from hearing that something is "complex and multifaceted".

pokstad 1y ago

How does that make sense? Wouldn’t high interest rates and tariffs cause more expensive engineers to have disproportionate opportunity? I remember during 2008 it was much easier for my employer to justify junior engineers than senior ones.

jameslk 1y ago

Since this article is about AI, and since this comment seems rather low effort compared to the Stanford study, I went ahead and used low effort to analyze the report compare it to this comment. Here's my low effort AI response: > Prompt: Attached is a paper. Below is an argument made against it. Is there anything in the paper that addresses the argument?: High interest rates + tariff terror -> less investment -> less jobs > High rates/firm shocks: They add firm–time fixed effects that absorb broad firm shocks (like interest-rate changes), and the within-firm drop for 22–25-year-olds in AI-exposed roles remains. > “Less investment” story: They note the 2022 §174 R&D amortization change and show the pattern persists even after excluding computer occupations and information-sector firms. > Other non-AI explanations: The decline shows up in both teleworkable and non-teleworkable jobs and isn’t explained by pandemic-era education issues. > Tariffs: Tariffs aren’t analyzed directly; broad tariff impacts would be soaked up by the firm–time controls, but a tariff-specific, task-level channel isn’t separately tested.

blharr 1y ago
Fitting, since it came up with unrelated information (the R&D tax thing) and the 3rd bullet point. Also started talking about tariffs as if it had addressed them, then notes that it doesn't address them.

ToValueFunfetti 1y ago

You really do have to account for why this is mainly happening in industries that are adopting AI, why it's almost exclusively impacting entry-level positions (with senior positions steady or growing), and why controlling for broad economic conditions failed to correct this. I doubt very much that these three Stanford professors would be blindsided by the concept of rates and tarriffs.

b112 1y ago
Juniors become seniors. If we replace all juniors with AI, in a few years there won't be skilled talent for senior positions. AI assistance is a lot different than AI running the company. Making expensive decisions. While it could progress, bear in mind that some seniors continue to move up in the ranks. Will AI eventually be the CEO? We all dislike how some CEOs behave, but will AI really value life at all? CEOs have to have some place to live, after all.
- tialaramex 1y ago
  The AI will at least be cheaper than a CEO, it might also be more competent and more ethical. The argument against making a Large Language Model the CEO seems to mostly be about protecting the feelings of the existing CEO, maybe the Board should look past these "feelings" and be bold ?
  - b112 1y ago
    I'll re-explain. A human CEO might do morally questionable things. All do not, of course, but some may. Yet even so, they need a planet with air, water, and some way to survive. They also may what their kids to survive. An AI may not care. It could be taking "bad CEO" behaviour to a whole new level. And even if the AI had human ethics, humans play "us vs them" games all the time. You don't get much more "them" than an entirely different lifeform.
    - pessimizer 1y ago
      The AI most certainly does not care, because it is a computer program. It also doesn't want to buy a boat.

bb88 1y ago

Here's the study: https://digitaleconomy.stanford.edu/publications/canaries-in-the-coal-mine/ https://digitaleconomy.stanford.edu/publications/canaries-in... It looks like they're looking at data for the last few years, not just the last few months. I haven't read it, and maybe you can disagree with their opinions, but there does appear to be a slow down in college graduates recently.

deleted 1y ago

[deleted]

myhf 1y ago

More investment -> more return on investment -> "AI is increasing worker efficiency" -> This is good for AI. Less investment -> more layoffs -> "AI is replacing workers" -> This is good for AI. A computer does something good -> "That's AI" -> This is good for AI. A computer does something bad -> "It needs more AI" -> This is good for AI.

nateglims 1y ago
It seems more true than the "this is good for bitcoin" meme now that bitcoin seems to track the dollar very closely

dgfitz 1y ago

Less investment? You must be trolling. I encourage you to look at the about of stupid money that has been “invested” into LLMs.

HumblyTossed 1y ago

Well, you do have CEOs out there saying it...

tennisflyi 1y ago

(High interest rates + tariff terror -> less investment -> less jobs) + AI

giantg2 1y ago

I generally agree that AI is the scapegoat, but not for those same reasons. Despite the lack of job growth and the tariffs, recent data shows the economy grew about 3%. Even if it's not AI as the primary driver, efficiency seems to have increased.

o999 1y ago

Blaming AI is better because it helps corporations convince the working class that there jobs are in long-term danger so they collectively settle for less favorable work terms and compensation, unlike if they are convinced that it is going to gradually improve with the upcoming monetary easing cycle..

esafak 1y ago

Let's read the paper instead: https://digitaleconomy.stanford.edu/wp-content/uploads/2025/08/Canaries_BrynjolfssonChandarChen.pdf https://digitaleconomy.stanford.edu/wp-content/uploads/2025/... It presents a difference-in-differences (https://en.wikipedia.org/wiki/Difference_in_differences https://en.wikipedia.org/wiki/Difference_in_differences) design that exploits staggered adoption of generative AI to estimate the causal effect on productivity. It compares headcount over time by age group across several occupations, showing significant differentials across age groups. Page 3: "We test for a class of such confounders by controlling for firm-time effects in an event study regression, absorbing aggregate firm shocks that impact all workers at a firm regardless of AI exposure. For workers aged 22-25, we find a 12 log-point decline in relative employment for the most AI-exposed quintiles compared to the least exposed quintile, a large and statistically significant effect."

lucasjans 1y ago
I appreciate the link to differences in differences, I didn't know what to call this method. The OP's point could still be valid: it’s still possible that macro factors like inflation, interest rates, or tariffs land harder on the exact group they label ‘AI-exposed.’ That makes the attribution messy.
- esafak 1y ago
  Those fixed effects are estimated separately for each age group, controlling for that. pg. 19, "We run this regression separately for each age group."
jvanderbot 1y ago
Were entry level jobs the first to go in earlier developer downturns? Is AI being used to attempt to mitigate that effect? I don't think their methods or any statistical method could decouple a perfectly correlated signal. Without AI, would junior jobs have grown as quickly as other?
- jvanderbot 1y ago

linkjuice4all 1y ago

End of ZIRP and the Sec. 179 change for engineering salaries probably explains more of this (plus the increase in outsourcing). I’m sure some decision makers also threw AI into the mix but the financials of hiring software engineers in the US was already challenging before AI “took everyone’s job”.

rr808 1y ago

I was here in the 90s dotcom boom and interest rates were higher than today.