9 ms·

Do not mistake a resilient global economy for populist success

213 points by andsoitis 10mo ago

BrenBarn 10mo ago
Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.
- p0pularopinion 10mo ago
  I try to see it positive. With the AI bubble, I finally habe a tangible example to point to when I say that GDP growth is a bad indicator for economic success
  - p-e-w 10mo ago
    Unless you can demonstrate that there is in fact an AI bubble, that is simply begging the question. Notice how the term “housing bubble” is used much less frequently today than 10 years ago? That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. The Dotcom bubble was in many ways an outlier.
    - Epa095 10mo ago
      OT: I enjoyed seeing a dictionary-correct use of the term 'begging the question' in the wild :-)
      - p-e-w 10mo ago
        What other uses are there? I only know the phrase as a synonym for “assuming the conclusion”, i.e., a type of circular reasoning.
        Epa095 10mo ago
        People often use it instead of 'raises the question'. E.g "There was very little fallout to the Y2K bug, which begs the question: was the Y2K crisis real and well handled or not really a crisis at all?" E.g https://hn.algolia.com/?q=%22begs+the+question%22 https://hn.algolia.com/?q=%22begs+the+question%22
        p-e-w 10mo ago
        Wow, now that you pointed this out, that interpretation actually makes far more sense than the “correct” one.
    - watwut 10mo ago
      It is cause housing bubble was a thing of 2000 and burst in 2008 https://en.wikipedia.org/wiki/2000s_United_States_housing_bubble https://en.wikipedia.org/wiki/2000s_United_States_housing_bu... People dont talk about housing bubble as much, because it is history at this point. Not something that would go on now. And no, housing being expensive is not the same thing as a bubble. We dont have bubble in housing now.
      - Quarrel 10mo ago
        > It is cause housing bubble was a thing of 2000 and burst in 2008 <Australia weeps>
    - mschuster91 10mo ago
      > That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. That's because Boomers live far longer than prior generations thanks to medical advances. The housing bubble will collapse (at least outside of the megalopolises) once the Boomers finally start to die en masse due to their over-representation in demographics. But before that, the pension systems will crash hard. For people in systems with redistributions (like most of Europe), there simply aren't enough working age people contributing payments for the pensioners, and for people in stonk-based systems (e.g. US 401k), they will run into the issue that someone has to buy the stocks that the pensioners sell off to fund their retirement, and ain't no one of my generation buying stocks, thanks to us having to spend insane amounts of rent.
      - eecc 10mo ago
        Well, that rent and the debts incurred to finance consumption is also keeping the profits up and thus stonks valuations
        mschuster91 10mo ago
        The problem is, people more and more can't manage to pay these rents, so they're either cutting back on any absolutely not necessary spending or going homeless outright. For now, there are enough desperate people that still have some money to pay rent... but retail, no matter which industry, is feeling the impact of people having no spending money hard. Without the AI bubble artificially propping up the GDP, it is most likely the US economy is in a recession [1]. [1] https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks-potential-us-recession-analyst-warns.html https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks...
    - Tade0 10mo ago
      It's bursting as we speak, but certain actors are pulling every lever there is to slow down the process: https://tradingeconomics.com/china/housing-index https://tradingeconomics.com/china/housing-index Unsuccessfully, I might add.
      - torginus 10mo ago
        I think housing as an appreciating is a weird Western capitalist socio-cultural artifact - in order to enter the middle class, you have to buy one, and the way to go about it smartly is to get a bank loan. Most people have no way of affording one otherwise, and if they did, paying sticker price for it would be dumb. So everyone who's not considered a deadbeat shall be indebted to the bank for decades to come. Their prices are also supported by the collective power of the people - for whatever unreasonable price they're charging for it, you can be certain that someone (or some bank) has paid it, therefore it's in the best interest of significant chucks of regular folks that house prices don't go down. Imo something similar is going on with retail investing. Btw housing in China is not an appreciating asset, because you don't own the land, you merely lease it from the government for 70-100 years, which is about the natural lifespan of a lot of buildings, after which maintaining them becomes more expensiv than rebuilding them.
    - dijit 10mo ago
      The longer it takes to burst, the worse the outcome. Housing is being propped up by the governments of the west because it was already so problematic if it fails that millions of people would be severely impacted. Even the housing backed mortgage crisis of 2008 was as large a shock as the great depression, the reason we’re not all using money as toilet paper is due to government intervention. Rightly or wrongly. Some people believe that this intervention makes something worse bound to happen later- and based on the cost of housing I tend to believe them. It is not sustainable to keep housing at its current cost, and the financial model requires that they continue to increase in price. If house prices fall it is a disaster for millions.
    - p0pularopinion 10mo ago
      There are a few noticeable differences between housing as an asset and AI datacenters. Beyond the obvious difference that a house has a depreciation in the order of decades, whereas AI GPUs are a few years. Then there is the fact that housing is a fundamental human need whereas AI, as frequently demonstrated, isn‘t even a want by many people. I am not saying that AI cannot demonstrate todays value 20 years into the future. But there is zero reason to believe the short to medium term payoffs on AI investment will be proportional to the investment we‘ve seen over the past few years
      - p-e-w 10mo ago
        > a house has a depreciation in the order of decades, whereas AI GPUs are a few years. That’s no longer true for datacenter-class GPUs. The A100 came out six years ago, and it still sells for $15k+, with no meaningful drop in the foreseeable future.
  - theozaurus 10mo ago
    The book the 'Growth Delusion' has some great examples on this as well. To quote the FTs[1] review of the book. "The official protocols define the scope of GDP as measuring all monetised activity between willing parties in a given period. It is a pragmatic definition, but leads to some counterintuitive results. The sale of stolen goods for cash contributes positively to GDP, for example — so theft is good for growth. A parent’s housework and childcare, however, being unpaid, are excluded — resulting, by one recent evaluation, in a $3.8 trillion underestimate of the size of the US economy." I vaguely remember a similar one around traffic jams as well. [1] https://www.ft.com/content/b6182440-f21e-11e7-bb7d-c3edfe974e9f https://www.ft.com/content/b6182440-f21e-11e7-bb7d-c3edfe974...
    - BrenBarn 10mo ago
      There is also a book called "Mismeasuring our lives" that makes some similar points about the overreliance on GDP as "the" measure of economic health.
    - graemep 10mo ago
      The UK is just starting official statistics that include the value of household self supply. I do not know whether there is good enough historical data to compare it with.
  - bojan 10mo ago
    You could have used the example of Ireland before. They score extremely well on GDP, and yet the quality of life of an average Irish person is on par with the rest of the Western Europe, with the costs of housing pressuring everything else.
    - refurb 10mo ago
      Yeah, but everyone knows why. The IMF has called out that 40% of Ireland’s GDP isn’t real because it flows into and back out (back to the US mostly) due to tax schemes.
- EZ-E 10mo ago
  What is a good measure of meaningful growth? Genuinely asking. I imagine all measures have pros and cons.
  - adaml_623 10mo ago
    Infant mortality
    - Manuel_D 10mo ago
      Sure, but once countries hit a moderate level of development the bulk of preventable infant deaths are handled. E.g. Frances' rate has been flat since the turn of the millennium.
    - MattDamonSpace 10mo ago
      Seems like you’d asymptotically approach 0% and then this metric would ignore eg space travel or food production efficiency
  - the8472 10mo ago
    The kardashev scale? https://energyforgrowth.org/article/watch-countries-climb-the-energy-ladder/ https://energyforgrowth.org/article/watch-countries-climb-th...
  - jandrewrogers 10mo ago
    Most meaningful alternative measures of growth very strongly correlate with GDP. Which is why we just go with GDP. It has issues but GDP has practical utility.
  - vbezhenar 10mo ago
    You can't estimate a country with a single number. It makes no sense and actually hurts when someone decides to optimise for that number.
  - toenail 10mo ago
    - Time to affordability ratios (Hours of work for food, energy, housing etc) - Intergenerational social mobility trend Not doing great on either.
- TacticalCoder 10mo ago
  It is an indicator and it's not totally non-meaningful. But GDP growth, when it's at the price of increasing the public debt and inflation, is no real growth. Instead of looking at the US, let's look at what used to be a relevant ally... In the eurozone, for example, politicians are hiding the lack of growth behind a growing mountain of public debt and the GDP growth ain't even beating inflation since the 2008 crisis. In 2008 the eurozone represented about 25% of the world's GDP. Now it's not even 15% anymore. Falling into irrelevancy doesn't begin to describe the state of things for the eurozone: from 25% of the world's GDP to less than 15% in 17 years is more than alarming. And yet if you look at the eurozone in Euro, it looks like it's been growing since 2008. But it's actually been stuck since nearly two decades now and there aren't signs of anything getting any better in the eurozone. German carmarkers, the number one export of the eurozone, are in huge trouble (with China eating their lunch). The US and China are, obviously, less fucked than the eurozone but the USA's growth has also been achieved at the cost of a runaway public debt and runaway inflation. I don't know what protectionism can and cannot do for the US and it's not clear if manufacturing can really come back to the US but one thing is certain: the eurozone is a failure and whatever it is that they did or do should definitely not be copied. Unelected bureaucrats have managed, in 17 years, to drive the eurozone into the ground. It's mostly true for non-eurozone EU countries as well but some, like Poland (which is in the EU but not in the eurozone), are doing fine. Basically: if you want to slash your part of the world's GDP by 40% in 17 years, do what the eurozone did. Now we must understand this: the eurozone didn't just slash it's part of the global GDP by 40% in 17 years... They did so while, at the same time, creating a gigantic mountain of public debt and experiencing inflation. Another 17 years of this, so another 40% loss, and the eurozone would only represent 9% of the world's GDP. And these unelected bureaucrats are so incompetent that I don't discard the possibility that they'll actually be able to crash the eurozone even faster than that. For example at the moment, while german carmarkers are in trouble, EU bureaucrats are hard at work trying to kill them for good. Anti-americanism and anti-trumpism is a thing on HN but people should really look more closely at what's happening elsewhere. What about an article from The Economist as to the reasons the eurozone managed to lose 40% of their share of the world's GDP since the 2008 financial crisis?
  - watwut 10mo ago
- baxtr 10mo ago
  I think it’s not perfect but probably the best we have. People forgot or simply don’t realize how much worse life was just a couple of decades ago (in terms of nutrition, access to knowledge, clean water, material wealth).
  - djtango 10mo ago
    Simpson's paradox does allow for the possibility that nutrition, access to knowledge, clean water and material wealth has improved in the aggregate while it getting worse for subpopulations. A lot of people in the world are angry and one of the things that fuels this anger is the "gaslighting" that the data shows their lives are better while their lived reality is the opposite. Don't forget that Millennials are the first generation to be poorer than their parents in a long time...
    - zmgsabst 10mo ago
      Millennials are 30-45, roughly. There’s now a large segment (and several generations) of society for whom the system has never worked, even if the growth of retirement accounts masks the loss of wealth and well-being.
    - huhkerrf 10mo ago
      > Don't forget that Millennials are the first generation to be poorer than their parents in a long time... This is simply not true. At some point, we do need to rely on data other than "lived experience," which compares one's quality of life at 22 to someone's quality of life at 50. "Younger Americans (millennials and Gen Zers) owned $1.23 for every $1 of wealth owned by Gen Xers at the same age." "Younger Americans (millennials and Gen Zers) owned $1.35 for every $1 of wealth owned by baby boomers at the same age." https://www.stlouisfed.org/open-vault/2025/june/the-state-of-us-household-wealth https://www.stlouisfed.org/open-vault/2025/june/the-state-of...
      - vanviegen 10mo ago
        If they ever want to own a house they won't need just 23% or 35% more wealth, but more like 200% and 1000% respectively. You do need to start at lived experience to know which data to look at.
- wewxjfq 10mo ago
  > Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. Robert F. Kennedy, Remarks at the University of Kansas, March 18, 1968
- jmward01 10mo ago
  Agreed. Long term economic health is always tied to long term social health. We should be, ultimately, trying to look at a broader index than some simplistic view of just money. It is a hard problem though to pin down an index for social health. As soon as we name a measure or index it becomes a target and its value drops. I tried to think of a more 'universal' index, one that could be applied to civilizations in the past and present and the best I could come up with is the healthier a civilization the more people can live together, longer, without killing each other. Not rigorous, but in general when I view history it seems to fit reasonably well.
- HPsquared 10mo ago
  GDP as a concept, and "growth" and "inflation" figures, remind me of that line from HBO's Chernobyl: "They gave them the propaganda number".
- intended 10mo ago
  Do not mistake indicators by using them for things they do not measure. There’s a lot of work being done by the term “all other things being equal” when using a measure like GDP. I don’t think we are in times when all else is equal.
- refurb 10mo ago
  Unless you have better alternatives you’re not really saying much. And I don’t think anyone relies only on GDP. Typically you’d look at employment rates, inflation, etc.
- gadders 10mo ago
  GDP per person should be the measure. The UK managed to make GDP go up while making GDP per person go down.
  - BrenBarn 10mo ago
    GDP per capita has basically all the same problems.
    - gadders 10mo ago
      I'm sure it has problems, but if I look at the top of this list (and exclude the tax havens) the answer to "Would I like to live there?" is Yes. Likewise for the bottom of the list it's an emphatic No. Is it a completely accurate indicator? Probably not. Is it directionally accurate? Yes. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
      - BrenBarn 10mo ago
        Part of the problem though is that people often try to use GDP (or GDP per capita) to compare within the top of the list. Like they try to draw conclusions about whether "Germany is doing better than Italy". It's true that big differences in GDP per capita can distinguish between really good and really bad places, but so can many other measures (like life expectancy or education expectancy). Plus, even on a coarse rubric GDP isn't perfect. I'm pretty sure I'd rather live in Spain than Qatar or Greenland. :-)
  - p0pularopinion 10mo ago
    GDP is not useful to measure how good an economy works. The core problem of GDP is that it does not account for usefulness of spending. GDP also ignores volunteer work and other non market transactions, completely dismisses externalities for health and the environment, and also has no indication of the distribution of said wealth.
    - 10mo ago
- ErigmolCt 10mo ago
  GDP and growth are blunt instruments, but they're not meaningless... They tell you something about aggregate capacity, incomes, and whether the system is shrinking or expanding
- ernst_klim 10mo ago
  > meaningful measures of economic health As someone who lived in a handful of countries with GDP per capita ranging from $3k to $70k I must say that GDP is a great proxy of the QoL and median citizen wealth. Not the only one and not the perfectly correlated one, but a very good one.
_wire_ 10mo ago
This is an unusually perceptive lede.
ggm 10mo ago
https://archive.is/POmBn https://archive.is/POmBn
deleted 10mo ago
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DiscourseFan 10mo ago
> And it is America’s private sector, not industrial planners in Washington, which is chiefly responsible for the ai boom. The ongoing success of free markets is obscuring the damage protectionism is doing. The AI boom is also largely being funded by defense spending on both sides of the Pacific. Without state investment this technological boom would also suffer.
- kcorbitt 10mo ago
  Is it?
- energy123 10mo ago
  Public funding of STEM in universities too. Foundational research is underprovisioned by the market because it's a non-rivalrous and non-excludable public good. It's a market failure that is best addressed by governments fulfilling their role as providers of positive sum public goods. Solar went through a similar cycle with German and US funding for foundational R&D in the 1970s, which was eventually picked up by China's industry when it was mature enough. SpaceX too. There's a yin and yang to public and private that populists on all sides are ideologically incapable of appreciating.
- seanmcdirmid 10mo ago
  So another Apollo project? Didn’t that turn out well for us even though it was expensive?
- intalentive 10mo ago
  Also — what industrial plan? As far as I can tell, we just have tariffs without a complementary plan to encourage investment, build infrastructure, train workers, reduce labor costs, etc.
- silisili 10mo ago
  One could argue we wouldn't even have EUV without state research funds, which I'd say could be seen as a necessary precursor to the AI boom.
LucaMo 10mo ago
The chart they put doesn't prove a point since the difference between today and the last elections in the US can't be appreciated (aside from the fact that in the entire period the drop is caused by automation too). Additionally you have to account for the time it takes to move production from a country to another. This is not to say that just setting random tariffs to punish other countries is an effective strategy, but I do think that targeted limitation of imports are necessary in a society that is becoming extremely materialistic. My bet is that France's surcharge on Shein products will be the first of many
- ErigmolCt 10mo ago
  Where I'm more skeptical is the jump from "the data can't yet show effects" to "import limits are therefore necessary." Those are different claims.
layman51 10mo ago
Well in the U.S., a majority of households are invested in the stock market via 401(k)’s. When their investments do well, the average Joe will give the incumbent president the credit.
- kubb 10mo ago
  I think that largely didn’t happen with Biden. But if it’s true then it makes divesting from US stocks a priority for countries targeted by the US administration.
- zmgsabst 10mo ago
  Only if there’s a net increase in their well-being. If their 401k is up, but so is cost of living and job prospects are down, most families are not invested enough to view that as a positive.
  - tonyedgecombe 10mo ago
    Some people prefer to believe the media they consume over their lived reality. My parents fall into this trap, they keep telling me things have never been so bad yet they live materially better lives than their own parents and their children.
p0pularopinion 10mo ago
I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.
- baxtr 10mo ago
  I noticed this as well. I haven’t found a good cure for this other than diversifying globally.
  - hahahahhaah 10mo ago
    Everyone wants to park some money and have other people work hard to increase the real value of said parked money. Not everyone can win big. Storing value is actually pretty amazing thing and that it can be profitable is magic. Of course the environment and poorest pays some of the free lunch.
    - agobineau 10mo ago
      it really depends on whether or not there is a global capital shortage. this is very easy to do when the economy requires much more capital than is available. and in the inverse, it is self explanatory
    - Mountain_Skies 10mo ago
      An investor friend once told me that the US needs to always be in debt because treasuries give investors a risk-free place to park their money between investments. The sense of entitlement was astounding.
      - lametti 10mo ago
        I don't think this is necessarily entitlement. There are heteredox but popular economic theories (such as MMT) that view public debt issuance at least in part as a method to satisfy the demand for private savings.
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zmgsabst 10mo ago
Populism is best understood as the general public asserting elites have “broken the deal” that legitimizes their rule — and the public withdrawing their assent from the regime. They are correct that the technocratic managerialists on the past century have failed — and failed in a way damaging to the state/nation. (For US and EU at least.) In so far as we’re all discussing that (and have been for several years), they’ve been wildly successful.
- justonceokay 10mo ago
  Of course populism is a wonderful tool for “elites” to abuse power, so maybe the story is more complicated
- Nursie 10mo ago
  Agreed. I am not a supporter of Nigel Farage and his many different parties in the UK ('Reform' just being the latest incarnation), and I don't believe his policies offer any real answers. But what the rise of Reform does show us is the utter disillusionment with the mainstream parties of the UK, who have spent the last several decades afraid to make meaningful changes. They tell people they can't have what they want because it would be too risky/expensive/whatever. We can't do that, the bond markets won't like it. We're running high on debt so we can't afford to make this better. Here, I'm going to add 0.4% to this tax so we can give this service an extra 0.3% budget. All the while government takes more in tax every year but the country feels like it's in a state of managed decline as services struggle. People wonder where all the money is going and there's no particularly good answer. And the managerial politicians' cautious approach hasn't led to economic growth either, so people don't feel like things are getting any easier. With that background it's hardly surprising that the populace flock to someone loudly offering change, even if it's bullshit change. (I left the UK a few years ago but I do visit and keep up on the news. Australia is on a similar path but less extreme, though with accelerating house prices and other forms of inequality, and the collapse of our traditional centre-right, expect things to get more populist in the coming years)
  - throwaway132448 10mo ago
    I agree. Reform's success is utterly predictable. > I don't believe his policies offer any real answers. Indeed, it's a shame that people are too dumb to realise they're just lining themselves up to be fleeced by a different "elite", instead of actual change.
almosthere 10mo ago
layoffs.fyi - 2025 was the best year since 2022. I'm fairly certain democrats want me destitute.
- drd0rk 10mo ago
  Well at some point there's just nobody left to be layed off, if you know what I mean...
ath3nd 10mo ago
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deleted 10mo ago
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fooker 10mo ago
When the conclusions don't match your predictions, examine your priors. Do not "do not mistake..." ...
fedeb95 10mo ago
Do not mistake a year on year profit for a resilient global economy.
Animats 10mo ago
Protectionism is failing to revive manufacturing Yes. The rare earths situation is embarrassing. This has been a political football for years now, but the efforts to fix it aren't working very well. First, you need a mine site and a mine. The US has a big one at Mountain Pass, California, and it's producing. But in the past twenty years, it's gone bankrupt twice and has been through three owners, because there were a few rare earth gluts and the price crashed. Also, they once had a big spill from a retention pond, and that was expensive. Mountain Pass isn't the only ore deposit in the US. There's what's supposed to be a good one in Montana. But the company developing it has been doing "studies" since at least 2023.[2] There are a few other rare earth "mining" companies which don't produce anything yet. There's one in Tennessee with a "definitive feasibility study" underway. I'm tempted to say that the real product is the stock. Anyway, it's not like there's a need to go to Ukraine or Greenland for rare earths. It's all available in the US, with a decent climate, good road access, and no wars. Second, you need a beneficiation plant at the mine. This takes in rock and dirt, pulls out ore with a reasonable fraction of rare earths, and outputs almost as much waste as it takes in ore. This is a somewhat messy process. In China, the settling ponds are visible from space. Mountain Pass has a better process (the Sierra Club approves) and doesn't make such a mess. The waste is dried, the fluids are reused, and the dry waste can be put back where it came from eventually. This is now a known technology and is being replicated at some Australian mines. Then you need a separating plant, where the actual rare earths are separated out. The US has very little capability in this area. Not for any good reason. There's a small startup.[1] They're slowly scaling up. Production in 2027. There's another startup, Medallion (then Gabo, then Gamma) which has been fooling around since 2020 without building much. That's one of those companies where you read five years of press releases and they're all about financing, reorgs, and management changes, with no actual product. Here's another one, RER. They've been at this since 2021, and they have a little demo plant in Wyoming.[3] Then you need a smelting and magnet making plant. This is a modest size operation, because it processes tons, not millions of tons, of material. One has been built in an industrial park in Texas. That took funding from DoD and General Motors. Not big enough to replace all imported magnets. This is US postmodern capitalism. The US financial system just doesn't seem to be able to bring a complicated heavy industrial project to completion in a reasonable period of time. [1] https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-award-to-scale-up-u-s-heavy-rare-earth-refining-but-significant-questions-remain/ https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-... [2] https://uscriticalmaterials.com https://uscriticalmaterials.com [3] https://www.rareelementresources.com/technology/ https://www.rareelementresources.com/technology/
eimrine 10mo ago
Is ancap economists from Austrian school considers economics correctly? They say a lot of things but I still can not decide whether they geniuses or populists?
- dgb23 10mo ago
  From a contemporary standpoint these categories are basically just ideologies. There has been a steady shift in economics towards empiricism, dynamic modeling and so on since a while now. Ideologies always have glaring blindspots, so their predictions and perspectives never really match up with reality.
Al-Khwarizmi 10mo ago
I hate Trump, but this piece doesn't seem to prove or argue anything at all. It's basically free market fanaticism, it says that economic metrics are good in spite of protectionism and not because of it because how could it be otherwise? Invisible hand, etc. It's totally begging the question. If the free market economy is so resilient to threats, why didn't it thrive also in 2008?
- jacquesm 10mo ago
  That's a good question. So, 2008 was a major problem and financial institutions brought that on themselves. But that's - fortunately, even though there were significant knock on effects - limited to one very important slice of the market, not unlike say when Enron went bust or when the .com bust happened. The rest of the free market is what pulled us out of those things. Free markets are on balance a good thing, assuming a level playing field and regulations to curb externalization and monopolization as well as cartel forming.
  - consp 10mo ago
    So you are arguing for a regulated market, not a free one. Heavy anti-trust legislation and enforcement is needed for a healthy economy. This might lower the year-over-year stock raise but at least keeps the negative excesses somewhat in check (monopolization, power concentration, rent-seeking).
    - jacquesm 10mo ago
      All markets are to some degree regulated. Saying that these are then not free markets is a fairly hardcore libertarian viewpoint, which tries to make it a 'black and white' issue, whereas in reality things are often more nuanced.
- epolanski 10mo ago
  I think 2008+ if anything shows that free market economies indeed are resilient to threats even in the worst times.
MORPHOICES 10mo ago
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- Folcon 10mo ago
  You've reminded me of the forest fire simulator[0], there's a potential second dynamic how reducing the occurrence of negative events might also increase their impact when they do eventually occur Reduce lightning strikes and increase rate of tree growth, no idea if it applies here as much? Black swan[1] talks about this and the housing crisis was a significant event, but you can make an argument against this position as well -[0]: https://www.veritasium.com/simulation5 https://www.veritasium.com/simulation5 -[1]: https://en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_the_Highly_Improbable https://en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_...
- ErigmolCt 10mo ago
  What's more important than growth, to me, is adaptability. An economy that can reallocate people, capital, and ideas quickly will generate growth eventually. One that optimizes for stability alone may look fine for a while, but becomes fragile in ways the headline numbers won't show until it's too late
- cal_dent 10mo ago
  This is a wider concern. And partly the issue where economies have become very reliant on monetary policy being the controlling mechanism rather than a better mix of monetary and fiscal policy. The fear now comes in the rock and a hard place issue that is ongoing here, whereby interest rates/monetary policy are arguably still not in restrictive territory enough that if a downturn was to occur, our coping tool is to loosen policy further but that would likely stoke further asset inflation and potentially general inflation compounding other issues. It's why you get more leaning to the view that it might be necessary to just let things fail as a resetting mechanism, which I'm personally not sure about.
instagraham 10mo ago
There's a quote by Mahatma Gandhi that resonates whenever I see contrasting debates about this economic indicator or that: "I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away." India's IT outsourcing-led GDP growth can benefit many almost-poor and poor people by giving them access to more spending by the "middle-class" (a very debatable minority in India) and the rich. But it will not benefit the poorest - social welfare schemes do that, but anti-homeless measures cancel it out. Access to formalised lending can do that, but anti-immigrant schemes and the Kafkaesque labyrinth of getting an id-card in India will negate that. And banks won't give you a loan if you're poor (so they go to loansharks). You can have all the Apples and the Facebooks of the world in California, but putting spikes in places where homeless people could sleep makes Gandhi's talisman stand out far better than any macro-economic indicator. Inflation can be positive or negative but if you're living in a place with less supply than demand, your rent will go up by far more than the price of eggs. This will hurt you completely independently of the price of eggs. All this to say - if you care about the poorest, you'll find little to cheer about. But should you care about the poorest? Is that a good measure of healthy economic growth? Is economic growth the only priority after 1991? You can be poor and destitute in a capitalist dystopia and you can be poor and destitute in a communist dystopia. This is why I hate the language of the Cold War so much - we lose an infinite amount of nuance with terms like "Capitalism" "socialism" "communism" and "GDP"
- leosanchez 10mo ago
  > But it will not benefit the poorest - social welfare schemes do that, but anti-homeless measures cancel it out. Can you explain what you mean by anti-homeless measures ?
  - ambicapter 10mo ago
refurb 10mo ago
I wish I had the kind of hubris to make a bunch of predictions that all turned out not to happen (high inflation, recession, etc) then come back a year later with more predictions and a “trust me bro, I’m 100% sure this time”
13uttercup 10mo ago
[dead]
gadders 10mo ago
"Do not mistake global economic resilience for a triumph by the likes of Mr Trump. " Trans: The facts do not match the Economist's predictions, and therefore the facts are wrong.
ErigmolCt 10mo ago
What stands out to me is the disconnect between macro resilience and the stated goals of populist industrial policy. Growth holding up doesn't mean tariffs or subsidies are working, it mostly means firms are very good at routing around damage
A4ET8a8uTh0_v2 10mo ago
<< Do not mistake global economic resilience for a triumph by the likes of Mr Trump. You know.. it is a little hard to take legacy media seriously if the reporting they do amounts to: 'economy is working, but it is not thanks to ANYTHING Trump does' Give him some credit; try to make it believable.
ghtbircshotbe 10mo ago
The actual average tariff rate has been lower than than advertised rate https://www.nytimes.com/2026/01/03/business/economy/trump-tariffs-prices-impact.html https://www.nytimes.com/2026/01/03/business/economy/trump-ta...

213 points by andsoitis 10mo ago

BrenBarn 10mo ago

Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.

p0pularopinion 10mo ago
I try to see it positive. With the AI bubble, I finally habe a tangible example to point to when I say that GDP growth is a bad indicator for economic success
- p-e-w 10mo ago
  Unless you can demonstrate that there is in fact an AI bubble, that is simply begging the question. Notice how the term “housing bubble” is used much less frequently today than 10 years ago? That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. The Dotcom bubble was in many ways an outlier.
  - Epa095 10mo ago
    OT: I enjoyed seeing a dictionary-correct use of the term 'begging the question' in the wild :-)
    - p-e-w 10mo ago
      What other uses are there? I only know the phrase as a synonym for “assuming the conclusion”, i.e., a type of circular reasoning.
      - Epa095 10mo ago
        People often use it instead of 'raises the question'. E.g "There was very little fallout to the Y2K bug, which begs the question: was the Y2K crisis real and well handled or not really a crisis at all?" E.g https://hn.algolia.com/?q=%22begs+the+question%22 https://hn.algolia.com/?q=%22begs+the+question%22
        p-e-w 10mo ago
        Wow, now that you pointed this out, that interpretation actually makes far more sense than the “correct” one.
  - watwut 10mo ago
    It is cause housing bubble was a thing of 2000 and burst in 2008 https://en.wikipedia.org/wiki/2000s_United_States_housing_bubble https://en.wikipedia.org/wiki/2000s_United_States_housing_bu... People dont talk about housing bubble as much, because it is history at this point. Not something that would go on now. And no, housing being expensive is not the same thing as a bubble. We dont have bubble in housing now.
    - Quarrel 10mo ago
      > It is cause housing bubble was a thing of 2000 and burst in 2008 <Australia weeps>
  - mschuster91 10mo ago
    > That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. That's because Boomers live far longer than prior generations thanks to medical advances. The housing bubble will collapse (at least outside of the megalopolises) once the Boomers finally start to die en masse due to their over-representation in demographics. But before that, the pension systems will crash hard. For people in systems with redistributions (like most of Europe), there simply aren't enough working age people contributing payments for the pensioners, and for people in stonk-based systems (e.g. US 401k), they will run into the issue that someone has to buy the stocks that the pensioners sell off to fund their retirement, and ain't no one of my generation buying stocks, thanks to us having to spend insane amounts of rent.
    - eecc 10mo ago
      Well, that rent and the debts incurred to finance consumption is also keeping the profits up and thus stonks valuations
      - mschuster91 10mo ago
        The problem is, people more and more can't manage to pay these rents, so they're either cutting back on any absolutely not necessary spending or going homeless outright. For now, there are enough desperate people that still have some money to pay rent... but retail, no matter which industry, is feeling the impact of people having no spending money hard. Without the AI bubble artificially propping up the GDP, it is most likely the US economy is in a recession [1]. [1] https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks-potential-us-recession-analyst-warns.html https://www.cnbc.com/2025/10/14/ai-infrastructure-boom-masks...
  - Tade0 10mo ago
    It's bursting as we speak, but certain actors are pulling every lever there is to slow down the process: https://tradingeconomics.com/china/housing-index https://tradingeconomics.com/china/housing-index Unsuccessfully, I might add.
    - torginus 10mo ago
      I think housing as an appreciating is a weird Western capitalist socio-cultural artifact - in order to enter the middle class, you have to buy one, and the way to go about it smartly is to get a bank loan. Most people have no way of affording one otherwise, and if they did, paying sticker price for it would be dumb. So everyone who's not considered a deadbeat shall be indebted to the bank for decades to come. Their prices are also supported by the collective power of the people - for whatever unreasonable price they're charging for it, you can be certain that someone (or some bank) has paid it, therefore it's in the best interest of significant chucks of regular folks that house prices don't go down. Imo something similar is going on with retail investing. Btw housing in China is not an appreciating asset, because you don't own the land, you merely lease it from the government for 70-100 years, which is about the natural lifespan of a lot of buildings, after which maintaining them becomes more expensiv than rebuilding them.
  - dijit 10mo ago
    The longer it takes to burst, the worse the outcome. Housing is being propped up by the governments of the west because it was already so problematic if it fails that millions of people would be severely impacted. Even the housing backed mortgage crisis of 2008 was as large a shock as the great depression, the reason we’re not all using money as toilet paper is due to government intervention. Rightly or wrongly. Some people believe that this intervention makes something worse bound to happen later- and based on the cost of housing I tend to believe them. It is not sustainable to keep housing at its current cost, and the financial model requires that they continue to increase in price. If house prices fall it is a disaster for millions.
  - p0pularopinion 10mo ago
    There are a few noticeable differences between housing as an asset and AI datacenters. Beyond the obvious difference that a house has a depreciation in the order of decades, whereas AI GPUs are a few years. Then there is the fact that housing is a fundamental human need whereas AI, as frequently demonstrated, isn‘t even a want by many people. I am not saying that AI cannot demonstrate todays value 20 years into the future. But there is zero reason to believe the short to medium term payoffs on AI investment will be proportional to the investment we‘ve seen over the past few years
    - p-e-w 10mo ago
      > a house has a depreciation in the order of decades, whereas AI GPUs are a few years. That’s no longer true for datacenter-class GPUs. The A100 came out six years ago, and it still sells for $15k+, with no meaningful drop in the foreseeable future.
- theozaurus 10mo ago
  The book the 'Growth Delusion' has some great examples on this as well. To quote the FTs[1] review of the book. "The official protocols define the scope of GDP as measuring all monetised activity between willing parties in a given period. It is a pragmatic definition, but leads to some counterintuitive results. The sale of stolen goods for cash contributes positively to GDP, for example — so theft is good for growth. A parent’s housework and childcare, however, being unpaid, are excluded — resulting, by one recent evaluation, in a $3.8 trillion underestimate of the size of the US economy." I vaguely remember a similar one around traffic jams as well. [1] https://www.ft.com/content/b6182440-f21e-11e7-bb7d-c3edfe974e9f https://www.ft.com/content/b6182440-f21e-11e7-bb7d-c3edfe974...
  - BrenBarn 10mo ago
    There is also a book called "Mismeasuring our lives" that makes some similar points about the overreliance on GDP as "the" measure of economic health.
  - graemep 10mo ago
    The UK is just starting official statistics that include the value of household self supply. I do not know whether there is good enough historical data to compare it with.
- bojan 10mo ago
  You could have used the example of Ireland before. They score extremely well on GDP, and yet the quality of life of an average Irish person is on par with the rest of the Western Europe, with the costs of housing pressuring everything else.
  - refurb 10mo ago
    Yeah, but everyone knows why. The IMF has called out that 40% of Ireland’s GDP isn’t real because it flows into and back out (back to the US mostly) due to tax schemes.
EZ-E 10mo ago
What is a good measure of meaningful growth? Genuinely asking. I imagine all measures have pros and cons.
- adaml_623 10mo ago
  Infant mortality
  - Manuel_D 10mo ago
    Sure, but once countries hit a moderate level of development the bulk of preventable infant deaths are handled. E.g. Frances' rate has been flat since the turn of the millennium.
  - MattDamonSpace 10mo ago
    Seems like you’d asymptotically approach 0% and then this metric would ignore eg space travel or food production efficiency
- the8472 10mo ago
  The kardashev scale? https://energyforgrowth.org/article/watch-countries-climb-the-energy-ladder/ https://energyforgrowth.org/article/watch-countries-climb-th...
- jandrewrogers 10mo ago
  Most meaningful alternative measures of growth very strongly correlate with GDP. Which is why we just go with GDP. It has issues but GDP has practical utility.
- vbezhenar 10mo ago
  You can't estimate a country with a single number. It makes no sense and actually hurts when someone decides to optimise for that number.
- toenail 10mo ago
  - Time to affordability ratios (Hours of work for food, energy, housing etc) - Intergenerational social mobility trend Not doing great on either.
TacticalCoder 10mo ago
It is an indicator and it's not totally non-meaningful. But GDP growth, when it's at the price of increasing the public debt and inflation, is no real growth. Instead of looking at the US, let's look at what used to be a relevant ally... In the eurozone, for example, politicians are hiding the lack of growth behind a growing mountain of public debt and the GDP growth ain't even beating inflation since the 2008 crisis. In 2008 the eurozone represented about 25% of the world's GDP. Now it's not even 15% anymore. Falling into irrelevancy doesn't begin to describe the state of things for the eurozone: from 25% of the world's GDP to less than 15% in 17 years is more than alarming. And yet if you look at the eurozone in Euro, it looks like it's been growing since 2008. But it's actually been stuck since nearly two decades now and there aren't signs of anything getting any better in the eurozone. German carmarkers, the number one export of the eurozone, are in huge trouble (with China eating their lunch). The US and China are, obviously, less fucked than the eurozone but the USA's growth has also been achieved at the cost of a runaway public debt and runaway inflation. I don't know what protectionism can and cannot do for the US and it's not clear if manufacturing can really come back to the US but one thing is certain: the eurozone is a failure and whatever it is that they did or do should definitely not be copied. Unelected bureaucrats have managed, in 17 years, to drive the eurozone into the ground. It's mostly true for non-eurozone EU countries as well but some, like Poland (which is in the EU but not in the eurozone), are doing fine. Basically: if you want to slash your part of the world's GDP by 40% in 17 years, do what the eurozone did. Now we must understand this: the eurozone didn't just slash it's part of the global GDP by 40% in 17 years... They did so while, at the same time, creating a gigantic mountain of public debt and experiencing inflation. Another 17 years of this, so another 40% loss, and the eurozone would only represent 9% of the world's GDP. And these unelected bureaucrats are so incompetent that I don't discard the possibility that they'll actually be able to crash the eurozone even faster than that. For example at the moment, while german carmarkers are in trouble, EU bureaucrats are hard at work trying to kill them for good. Anti-americanism and anti-trumpism is a thing on HN but people should really look more closely at what's happening elsewhere. What about an article from The Economist as to the reasons the eurozone managed to lose 40% of their share of the world's GDP since the 2008 financial crisis?
- watwut 10mo ago
baxtr 10mo ago
I think it’s not perfect but probably the best we have. People forgot or simply don’t realize how much worse life was just a couple of decades ago (in terms of nutrition, access to knowledge, clean water, material wealth).
- djtango 10mo ago
  Simpson's paradox does allow for the possibility that nutrition, access to knowledge, clean water and material wealth has improved in the aggregate while it getting worse for subpopulations. A lot of people in the world are angry and one of the things that fuels this anger is the "gaslighting" that the data shows their lives are better while their lived reality is the opposite. Don't forget that Millennials are the first generation to be poorer than their parents in a long time...
  - zmgsabst 10mo ago
    Millennials are 30-45, roughly. There’s now a large segment (and several generations) of society for whom the system has never worked, even if the growth of retirement accounts masks the loss of wealth and well-being.
  - huhkerrf 10mo ago
    > Don't forget that Millennials are the first generation to be poorer than their parents in a long time... This is simply not true. At some point, we do need to rely on data other than "lived experience," which compares one's quality of life at 22 to someone's quality of life at 50. "Younger Americans (millennials and Gen Zers) owned $1.23 for every $1 of wealth owned by Gen Xers at the same age." "Younger Americans (millennials and Gen Zers) owned $1.35 for every $1 of wealth owned by baby boomers at the same age." https://www.stlouisfed.org/open-vault/2025/june/the-state-of-us-household-wealth https://www.stlouisfed.org/open-vault/2025/june/the-state-of...
    - vanviegen 10mo ago
      If they ever want to own a house they won't need just 23% or 35% more wealth, but more like 200% and 1000% respectively. You do need to start at lived experience to know which data to look at.
wewxjfq 10mo ago
> Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. Robert F. Kennedy, Remarks at the University of Kansas, March 18, 1968
jmward01 10mo ago
Agreed. Long term economic health is always tied to long term social health. We should be, ultimately, trying to look at a broader index than some simplistic view of just money. It is a hard problem though to pin down an index for social health. As soon as we name a measure or index it becomes a target and its value drops. I tried to think of a more 'universal' index, one that could be applied to civilizations in the past and present and the best I could come up with is the healthier a civilization the more people can live together, longer, without killing each other. Not rigorous, but in general when I view history it seems to fit reasonably well.
HPsquared 10mo ago
GDP as a concept, and "growth" and "inflation" figures, remind me of that line from HBO's Chernobyl: "They gave them the propaganda number".
intended 10mo ago
Do not mistake indicators by using them for things they do not measure. There’s a lot of work being done by the term “all other things being equal” when using a measure like GDP. I don’t think we are in times when all else is equal.
refurb 10mo ago
Unless you have better alternatives you’re not really saying much. And I don’t think anyone relies only on GDP. Typically you’d look at employment rates, inflation, etc.
gadders 10mo ago
GDP per person should be the measure. The UK managed to make GDP go up while making GDP per person go down.
- BrenBarn 10mo ago
  GDP per capita has basically all the same problems.
  - gadders 10mo ago
    I'm sure it has problems, but if I look at the top of this list (and exclude the tax havens) the answer to "Would I like to live there?" is Yes. Likewise for the bottom of the list it's an emphatic No. Is it a completely accurate indicator? Probably not. Is it directionally accurate? Yes. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
    - BrenBarn 10mo ago
      Part of the problem though is that people often try to use GDP (or GDP per capita) to compare within the top of the list. Like they try to draw conclusions about whether "Germany is doing better than Italy". It's true that big differences in GDP per capita can distinguish between really good and really bad places, but so can many other measures (like life expectancy or education expectancy). Plus, even on a coarse rubric GDP isn't perfect. I'm pretty sure I'd rather live in Spain than Qatar or Greenland. :-)
- p0pularopinion 10mo ago
  GDP is not useful to measure how good an economy works. The core problem of GDP is that it does not account for usefulness of spending. GDP also ignores volunteer work and other non market transactions, completely dismisses externalities for health and the environment, and also has no indication of the distribution of said wealth.
  - 10mo ago
ErigmolCt 10mo ago
GDP and growth are blunt instruments, but they're not meaningless... They tell you something about aggregate capacity, incomes, and whether the system is shrinking or expanding
ernst_klim 10mo ago
> meaningful measures of economic health As someone who lived in a handful of countries with GDP per capita ranging from $3k to $70k I must say that GDP is a great proxy of the QoL and median citizen wealth. Not the only one and not the perfectly correlated one, but a very good one.

_wire_ 10mo ago

This is an unusually perceptive lede.

ggm 10mo ago

https://archive.is/POmBn https://archive.is/POmBn

deleted 10mo ago

[deleted]

DiscourseFan 10mo ago

> And it is America’s private sector, not industrial planners in Washington, which is chiefly responsible for the ai boom. The ongoing success of free markets is obscuring the damage protectionism is doing. The AI boom is also largely being funded by defense spending on both sides of the Pacific. Without state investment this technological boom would also suffer.

kcorbitt 10mo ago
Is it?
energy123 10mo ago
Public funding of STEM in universities too. Foundational research is underprovisioned by the market because it's a non-rivalrous and non-excludable public good. It's a market failure that is best addressed by governments fulfilling their role as providers of positive sum public goods. Solar went through a similar cycle with German and US funding for foundational R&D in the 1970s, which was eventually picked up by China's industry when it was mature enough. SpaceX too. There's a yin and yang to public and private that populists on all sides are ideologically incapable of appreciating.
seanmcdirmid 10mo ago
So another Apollo project? Didn’t that turn out well for us even though it was expensive?
intalentive 10mo ago
Also — what industrial plan? As far as I can tell, we just have tariffs without a complementary plan to encourage investment, build infrastructure, train workers, reduce labor costs, etc.
silisili 10mo ago
One could argue we wouldn't even have EUV without state research funds, which I'd say could be seen as a necessary precursor to the AI boom.

LucaMo 10mo ago

The chart they put doesn't prove a point since the difference between today and the last elections in the US can't be appreciated (aside from the fact that in the entire period the drop is caused by automation too). Additionally you have to account for the time it takes to move production from a country to another. This is not to say that just setting random tariffs to punish other countries is an effective strategy, but I do think that targeted limitation of imports are necessary in a society that is becoming extremely materialistic. My bet is that France's surcharge on Shein products will be the first of many

ErigmolCt 10mo ago
Where I'm more skeptical is the jump from "the data can't yet show effects" to "import limits are therefore necessary." Those are different claims.

layman51 10mo ago

Well in the U.S., a majority of households are invested in the stock market via 401(k)’s. When their investments do well, the average Joe will give the incumbent president the credit.

kubb 10mo ago
I think that largely didn’t happen with Biden. But if it’s true then it makes divesting from US stocks a priority for countries targeted by the US administration.
zmgsabst 10mo ago
Only if there’s a net increase in their well-being. If their 401k is up, but so is cost of living and job prospects are down, most families are not invested enough to view that as a positive.
- tonyedgecombe 10mo ago
  Some people prefer to believe the media they consume over their lived reality. My parents fall into this trap, they keep telling me things have never been so bad yet they live materially better lives than their own parents and their children.

p0pularopinion 10mo ago

I find the S&P500 to be interesting as a demonstration for currency risk. Denoted in US, it went up ~18% or so. For me as an EUR investor, it went up just 4.6% when accounting for the loss of the USD. Comparing that to indicies that usually do not perform that well, Euro Stoxx 50 is up ~22% and MSCI Emerging Markets ~21%.

baxtr 10mo ago
I noticed this as well. I haven’t found a good cure for this other than diversifying globally.
- hahahahhaah 10mo ago
  Everyone wants to park some money and have other people work hard to increase the real value of said parked money. Not everyone can win big. Storing value is actually pretty amazing thing and that it can be profitable is magic. Of course the environment and poorest pays some of the free lunch.
  - agobineau 10mo ago
    it really depends on whether or not there is a global capital shortage. this is very easy to do when the economy requires much more capital than is available. and in the inverse, it is self explanatory
  - Mountain_Skies 10mo ago
    An investor friend once told me that the US needs to always be in debt because treasuries give investors a risk-free place to park their money between investments. The sense of entitlement was astounding.
    - lametti 10mo ago
      I don't think this is necessarily entitlement. There are heteredox but popular economic theories (such as MMT) that view public debt issuance at least in part as a method to satisfy the demand for private savings.

deleted 10mo ago

[deleted]

zmgsabst 10mo ago

Populism is best understood as the general public asserting elites have “broken the deal” that legitimizes their rule — and the public withdrawing their assent from the regime. They are correct that the technocratic managerialists on the past century have failed — and failed in a way damaging to the state/nation. (For US and EU at least.) In so far as we’re all discussing that (and have been for several years), they’ve been wildly successful.

justonceokay 10mo ago
Of course populism is a wonderful tool for “elites” to abuse power, so maybe the story is more complicated
Nursie 10mo ago
Agreed. I am not a supporter of Nigel Farage and his many different parties in the UK ('Reform' just being the latest incarnation), and I don't believe his policies offer any real answers. But what the rise of Reform does show us is the utter disillusionment with the mainstream parties of the UK, who have spent the last several decades afraid to make meaningful changes. They tell people they can't have what they want because it would be too risky/expensive/whatever. We can't do that, the bond markets won't like it. We're running high on debt so we can't afford to make this better. Here, I'm going to add 0.4% to this tax so we can give this service an extra 0.3% budget. All the while government takes more in tax every year but the country feels like it's in a state of managed decline as services struggle. People wonder where all the money is going and there's no particularly good answer. And the managerial politicians' cautious approach hasn't led to economic growth either, so people don't feel like things are getting any easier. With that background it's hardly surprising that the populace flock to someone loudly offering change, even if it's bullshit change. (I left the UK a few years ago but I do visit and keep up on the news. Australia is on a similar path but less extreme, though with accelerating house prices and other forms of inequality, and the collapse of our traditional centre-right, expect things to get more populist in the coming years)
- throwaway132448 10mo ago
  I agree. Reform's success is utterly predictable. > I don't believe his policies offer any real answers. Indeed, it's a shame that people are too dumb to realise they're just lining themselves up to be fleeced by a different "elite", instead of actual change.

almosthere 10mo ago

layoffs.fyi - 2025 was the best year since 2022. I'm fairly certain democrats want me destitute.

drd0rk 10mo ago
Well at some point there's just nobody left to be layed off, if you know what I mean...

ath3nd 10mo ago

[dead]

deleted 10mo ago

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fooker 10mo ago

When the conclusions don't match your predictions, examine your priors. Do not "do not mistake..." ...

fedeb95 10mo ago

Do not mistake a year on year profit for a resilient global economy.

Animats 10mo ago

Protectionism is failing to revive manufacturing Yes. The rare earths situation is embarrassing. This has been a political football for years now, but the efforts to fix it aren't working very well. First, you need a mine site and a mine. The US has a big one at Mountain Pass, California, and it's producing. But in the past twenty years, it's gone bankrupt twice and has been through three owners, because there were a few rare earth gluts and the price crashed. Also, they once had a big spill from a retention pond, and that was expensive. Mountain Pass isn't the only ore deposit in the US. There's what's supposed to be a good one in Montana. But the company developing it has been doing "studies" since at least 2023.[2] There are a few other rare earth "mining" companies which don't produce anything yet. There's one in Tennessee with a "definitive feasibility study" underway. I'm tempted to say that the real product is the stock. Anyway, it's not like there's a need to go to Ukraine or Greenland for rare earths. It's all available in the US, with a decent climate, good road access, and no wars. Second, you need a beneficiation plant at the mine. This takes in rock and dirt, pulls out ore with a reasonable fraction of rare earths, and outputs almost as much waste as it takes in ore. This is a somewhat messy process. In China, the settling ponds are visible from space. Mountain Pass has a better process (the Sierra Club approves) and doesn't make such a mess. The waste is dried, the fluids are reused, and the dry waste can be put back where it came from eventually. This is now a known technology and is being replicated at some Australian mines. Then you need a separating plant, where the actual rare earths are separated out. The US has very little capability in this area. Not for any good reason. There's a small startup.[1] They're slowly scaling up. Production in 2027. There's another startup, Medallion (then Gabo, then Gamma) which has been fooling around since 2020 without building much. That's one of those companies where you read five years of press releases and they're all about financing, reorgs, and management changes, with no actual product. Here's another one, RER. They've been at this since 2021, and they have a little demo plant in Wyoming.[3] Then you need a smelting and magnet making plant. This is a modest size operation, because it processes tons, not millions of tons, of material. One has been built in an industrial park in Texas. That took funding from DoD and General Motors. Not big enough to replace all imported magnets. This is US postmodern capitalism. The US financial system just doesn't seem to be able to bring a complicated heavy industrial project to completion in a reasonable period of time. [1] https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-award-to-scale-up-u-s-heavy-rare-earth-refining-but-significant-questions-remain/ https://rareearthexchanges.com/news/ucore-secures-18-4m-dod-... [2] https://uscriticalmaterials.com https://uscriticalmaterials.com [3] https://www.rareelementresources.com/technology/ https://www.rareelementresources.com/technology/

eimrine 10mo ago

Is ancap economists from Austrian school considers economics correctly? They say a lot of things but I still can not decide whether they geniuses or populists?

dgb23 10mo ago
From a contemporary standpoint these categories are basically just ideologies. There has been a steady shift in economics towards empiricism, dynamic modeling and so on since a while now. Ideologies always have glaring blindspots, so their predictions and perspectives never really match up with reality.

Al-Khwarizmi 10mo ago

I hate Trump, but this piece doesn't seem to prove or argue anything at all. It's basically free market fanaticism, it says that economic metrics are good in spite of protectionism and not because of it because how could it be otherwise? Invisible hand, etc. It's totally begging the question. If the free market economy is so resilient to threats, why didn't it thrive also in 2008?

jacquesm 10mo ago
That's a good question. So, 2008 was a major problem and financial institutions brought that on themselves. But that's - fortunately, even though there were significant knock on effects - limited to one very important slice of the market, not unlike say when Enron went bust or when the .com bust happened. The rest of the free market is what pulled us out of those things. Free markets are on balance a good thing, assuming a level playing field and regulations to curb externalization and monopolization as well as cartel forming.
- consp 10mo ago
  So you are arguing for a regulated market, not a free one. Heavy anti-trust legislation and enforcement is needed for a healthy economy. This might lower the year-over-year stock raise but at least keeps the negative excesses somewhat in check (monopolization, power concentration, rent-seeking).
  - jacquesm 10mo ago
    All markets are to some degree regulated. Saying that these are then not free markets is a fairly hardcore libertarian viewpoint, which tries to make it a 'black and white' issue, whereas in reality things are often more nuanced.
epolanski 10mo ago
I think 2008+ if anything shows that free market economies indeed are resilient to threats even in the worst times.

MORPHOICES 10mo ago

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Folcon 10mo ago
You've reminded me of the forest fire simulator[0], there's a potential second dynamic how reducing the occurrence of negative events might also increase their impact when they do eventually occur Reduce lightning strikes and increase rate of tree growth, no idea if it applies here as much? Black swan[1] talks about this and the housing crisis was a significant event, but you can make an argument against this position as well -[0]: https://www.veritasium.com/simulation5 https://www.veritasium.com/simulation5 -[1]: https://en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_the_Highly_Improbable https://en.wikipedia.org/wiki/The_Black_Swan:_The_Impact_of_...
ErigmolCt 10mo ago
What's more important than growth, to me, is adaptability. An economy that can reallocate people, capital, and ideas quickly will generate growth eventually. One that optimizes for stability alone may look fine for a while, but becomes fragile in ways the headline numbers won't show until it's too late
cal_dent 10mo ago
This is a wider concern. And partly the issue where economies have become very reliant on monetary policy being the controlling mechanism rather than a better mix of monetary and fiscal policy. The fear now comes in the rock and a hard place issue that is ongoing here, whereby interest rates/monetary policy are arguably still not in restrictive territory enough that if a downturn was to occur, our coping tool is to loosen policy further but that would likely stoke further asset inflation and potentially general inflation compounding other issues. It's why you get more leaning to the view that it might be necessary to just let things fail as a resetting mechanism, which I'm personally not sure about.

instagraham 10mo ago

There's a quote by Mahatma Gandhi that resonates whenever I see contrasting debates about this economic indicator or that: "I will give you a talisman. Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and your self melt away." India's IT outsourcing-led GDP growth can benefit many almost-poor and poor people by giving them access to more spending by the "middle-class" (a very debatable minority in India) and the rich. But it will not benefit the poorest - social welfare schemes do that, but anti-homeless measures cancel it out. Access to formalised lending can do that, but anti-immigrant schemes and the Kafkaesque labyrinth of getting an id-card in India will negate that. And banks won't give you a loan if you're poor (so they go to loansharks). You can have all the Apples and the Facebooks of the world in California, but putting spikes in places where homeless people could sleep makes Gandhi's talisman stand out far better than any macro-economic indicator. Inflation can be positive or negative but if you're living in a place with less supply than demand, your rent will go up by far more than the price of eggs. This will hurt you completely independently of the price of eggs. All this to say - if you care about the poorest, you'll find little to cheer about. But should you care about the poorest? Is that a good measure of healthy economic growth? Is economic growth the only priority after 1991? You can be poor and destitute in a capitalist dystopia and you can be poor and destitute in a communist dystopia. This is why I hate the language of the Cold War so much - we lose an infinite amount of nuance with terms like "Capitalism" "socialism" "communism" and "GDP"

leosanchez 10mo ago
> But it will not benefit the poorest - social welfare schemes do that, but anti-homeless measures cancel it out. Can you explain what you mean by anti-homeless measures ?
- ambicapter 10mo ago

refurb 10mo ago

I wish I had the kind of hubris to make a bunch of predictions that all turned out not to happen (high inflation, recession, etc) then come back a year later with more predictions and a “trust me bro, I’m 100% sure this time”

13uttercup 10mo ago

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gadders 10mo ago

"Do not mistake global economic resilience for a triumph by the likes of Mr Trump. " Trans: The facts do not match the Economist's predictions, and therefore the facts are wrong.

ErigmolCt 10mo ago

What stands out to me is the disconnect between macro resilience and the stated goals of populist industrial policy. Growth holding up doesn't mean tariffs or subsidies are working, it mostly means firms are very good at routing around damage

A4ET8a8uTh0_v2 10mo ago

<< Do not mistake global economic resilience for a triumph by the likes of Mr Trump. You know.. it is a little hard to take legacy media seriously if the reporting they do amounts to: 'economy is working, but it is not thanks to ANYTHING Trump does' Give him some credit; try to make it believable.

ghtbircshotbe 10mo ago

The actual average tariff rate has been lower than than advertised rate https://www.nytimes.com/2026/01/03/business/economy/trump-tariffs-prices-impact.html https://www.nytimes.com/2026/01/03/business/economy/trump-ta...