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I think it's always important to consider incentives when thinking about what institutional leaders are saying. > In a productivity boom such as this, a rise i

I think it's always important to consider incentives when thinking about what institutional leaders are saying. > In a productivity boom such as this, a rise in unemployment may not indicate increased slack. As such, our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure I'm not saying AI isn't impacting the employment market, but this statement isn't really about AI so much as it is an advance warning that inflationary monetary policy is unavoidable if all the people saying that software engineering is dead are correct.

selridge 7mo ago
Or that the fed is preparing us to expect higher levels of unemployment for the same level of inflation.
- root_axis 7mo ago
  Perhaps, but her phrasing seems to imply they will act to reduce unemployment, and we can also assume Trump will mandate that they do so once he takes control of the fed.
  - almostdeadguy 7mo ago
    As any president should in that scenario? I'm sorry, we're going to nuke professional class workers and let tech executives keep their 2026 money from the proceeds and let the losers go jobless? Not likely if you don't want a bloodbath. Let me be clear: fuck Trump, but any president who doesn't do that is out of their mind.
    - selridge 7mo ago
      It is not at all clear that monetary policy can actually work here, which is what the statement is saying. When your demand side policy doesn't work, it's just pushing rope. It doesn't matter if or how bad you want a certain outcome.
    - dghlsakjg 7mo ago
      The fed was very intentionally set up to be resistant to tampering from political forces, and especially the executive. The entire governance structure is so that they can take actions that may be painful in the short term without being stopped by politicians. Before Trump it was, for good reason, incredibly taboo to place pressure on the fed or even hint at interfering. Most economists are pretty horrified that particular barrier has been crossed. The fed has a pretty big stick, and a mandate to try to balance inflation with unemployment. Throwing politics into the mix is a very bad idea since politicians worry about very different things, and adhere to election timelines. The president has no business getting involved here.
      - recursivedoubts 7mo ago
        the fed was set up to protect the big banks the rest, and in particular the economics profession, is window dressing
        selridge 7mo ago
        any other pearls of wisdom from the Mises institute you want to share?
        recursivedoubts 7mo ago
        nope, i'm not a libertarian and don't agree with a lot of what they say i think gold is a terrible money, for example. great savings vehicle though, should be tax free to convert money into and from. they'd throw me out on my ear
        selridge 7mo ago
        Then what about banking & finance pre central bank era are you nostalgic for? Because if the current system favors the bankers, the previous system sure as hell favored the bankers. Is it the bank runs? I guess I should say this is all academic now, since we're about a month an a half away from Weimarizing the dollar lmfao. We've been kicking the institutional legs out from the stool for a while and we will discover the virtue of an independent central bank whether we like it or not.
    - selridge 7mo ago
      The whole point is to not have the central bank in the control of the executive!
      - fuzzfactor 7mo ago
        Maybe too late. Trump just walked on stage for the SOTU and Gold either jumped up a bit or the dollar declined in value, whichever way you want to look at it.
    - awesomeMilou 7mo ago
      What bloodbath lmao, most of the "professional class" in the US isn't unionized.
  - selridge 7mo ago
    We'll see seigniorage. That's about all we can predict from that particular breakdown of civil society.
twoodfin 7mo ago
Monetary policy isn’t inflationary if it’s on par with real production gains. More money chasing even more more goods is deflationary.
- measurablefunc 7mo ago
  What goods?
  - AnimalMuppet 7mo ago
    Software is a "good", as far as economic statistics go. AI is helping produce more software, right? Including more software that is for sale?[1] Or more online services that are for sale? [1] One of the interesting things here is going to be liability. You can vibecode an app. You can throw together a corporation to sell it. But if it malfunctions and causes damage, your thrown-together corporation won't have the resources to pay for it. Yeah, you can just have the company declare bankruptcy and walk away, leaving the user high and dry. After that happens a few times, the commercial market for vibecoded apps may get kind of thin. In fact, the market for software sold by any kind of startup may also get thin.
    - measurablefunc 7mo ago
      So is the premise here that making more software is going to have a deflationary effect on the entire economy of material goods? If so then that's obviously nonsensical.
      - AnimalMuppet 7mo ago
        That's not what I said, no. More software is going to have a deflationary effect on software, which is part of the "goods" economy if it's sold in a box, or even (I think) if it's sold as a download. If it's just online, it's probably considered a service. Either way, more of it, more cheaply produced, decreases the value of each piece.

selridge 7mo ago

Or that the fed is preparing us to expect higher levels of unemployment for the same level of inflation.

root_axis 7mo ago
Perhaps, but her phrasing seems to imply they will act to reduce unemployment, and we can also assume Trump will mandate that they do so once he takes control of the fed.
- almostdeadguy 7mo ago
  As any president should in that scenario? I'm sorry, we're going to nuke professional class workers and let tech executives keep their 2026 money from the proceeds and let the losers go jobless? Not likely if you don't want a bloodbath. Let me be clear: fuck Trump, but any president who doesn't do that is out of their mind.
  - selridge 7mo ago
    It is not at all clear that monetary policy can actually work here, which is what the statement is saying. When your demand side policy doesn't work, it's just pushing rope. It doesn't matter if or how bad you want a certain outcome.
  - dghlsakjg 7mo ago
    The fed was very intentionally set up to be resistant to tampering from political forces, and especially the executive. The entire governance structure is so that they can take actions that may be painful in the short term without being stopped by politicians. Before Trump it was, for good reason, incredibly taboo to place pressure on the fed or even hint at interfering. Most economists are pretty horrified that particular barrier has been crossed. The fed has a pretty big stick, and a mandate to try to balance inflation with unemployment. Throwing politics into the mix is a very bad idea since politicians worry about very different things, and adhere to election timelines. The president has no business getting involved here.
    - recursivedoubts 7mo ago
      the fed was set up to protect the big banks the rest, and in particular the economics profession, is window dressing
      - selridge 7mo ago
        any other pearls of wisdom from the Mises institute you want to share?
        recursivedoubts 7mo ago
        nope, i'm not a libertarian and don't agree with a lot of what they say i think gold is a terrible money, for example. great savings vehicle though, should be tax free to convert money into and from. they'd throw me out on my ear
        selridge 7mo ago
        Then what about banking & finance pre central bank era are you nostalgic for? Because if the current system favors the bankers, the previous system sure as hell favored the bankers. Is it the bank runs? I guess I should say this is all academic now, since we're about a month an a half away from Weimarizing the dollar lmfao. We've been kicking the institutional legs out from the stool for a while and we will discover the virtue of an independent central bank whether we like it or not.
  - selridge 7mo ago
    The whole point is to not have the central bank in the control of the executive!
    - fuzzfactor 7mo ago
      Maybe too late. Trump just walked on stage for the SOTU and Gold either jumped up a bit or the dollar declined in value, whichever way you want to look at it.
  - awesomeMilou 7mo ago
    What bloodbath lmao, most of the "professional class" in the US isn't unionized.
- selridge 7mo ago
  We'll see seigniorage. That's about all we can predict from that particular breakdown of civil society.

twoodfin 7mo ago

Monetary policy isn’t inflationary if it’s on par with real production gains. More money chasing even more more goods is deflationary.

measurablefunc 7mo ago
What goods?
- AnimalMuppet 7mo ago
  Software is a "good", as far as economic statistics go. AI is helping produce more software, right? Including more software that is for sale?[1] Or more online services that are for sale? [1] One of the interesting things here is going to be liability. You can vibecode an app. You can throw together a corporation to sell it. But if it malfunctions and causes damage, your thrown-together corporation won't have the resources to pay for it. Yeah, you can just have the company declare bankruptcy and walk away, leaving the user high and dry. After that happens a few times, the commercial market for vibecoded apps may get kind of thin. In fact, the market for software sold by any kind of startup may also get thin.
  - measurablefunc 7mo ago
    So is the premise here that making more software is going to have a deflationary effect on the entire economy of material goods? If so then that's obviously nonsensical.
    - AnimalMuppet 7mo ago
      That's not what I said, no. More software is going to have a deflationary effect on software, which is part of the "goods" economy if it's sold in a box, or even (I think) if it's sold as a download. If it's just online, it's probably considered a service. Either way, more of it, more cheaply produced, decreases the value of each piece.