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Most of the US economy is in a recession
- jmclnx 8mo agoI tend to agree with what the article says. And I would narrow it down from Tech to AI/tech.
- delichon 8mo agoCreative destruction requires both booms and busts together. Capital must flow between sectors for economic adaptation. We're seeing a massive capital shift to AI solutions, recalibrating the whole economy. I have insufficient data to calculate whether that's good or not.
- mlsu 8mo agoCapital must flow, period. Right now it's accumulating into a very small group of actors and becoming concentrated. There's no way to have a good economy, period, with the amount of consolidation across every sector. The only thing that's actually competitive anymore are restaurants.
- rogerrogerr 8mo agoHonest question, because it’s something I’ve been thinking a lot about: what is a “good” economy vs. a “bad” economy?
- JumpCrisscross 8mo ago> what is a “good” economy vs. a “bad” economy? One that is growing sustainably with broad benefits.
- neves 8mo agoAnd which growth benefits spreads for a great percentage of the population instead of a handful of billionaires
- deleted 8mo ago[deleted]
- enaaem 8mo agoI would like to add an example to this. Restrictive zoning and the lack of walkable neighbourhoods makes it very difficult for small businesses that rely on personal service. This isn't just a slight inconvenience, but it completely changes the fabric of society. But in American libertarian circles taxation takes up all the oxygen in the room. People are generally blind to opportunity cost.
- xg15 8mo agoPeople being able to make a living would be a start?
- lazide 8mo agoOne that doesn’t have half the population (or more!) wanting to set the other half on fire?
- irishcoffee 8mo agoThe post-WWII economy in the US is the answer you’re looking for, and the whole world has been chasing that dragon ever since.
- leptons 8mo agoMAGA seems to want to go back there, and they're trying to start WWIII to get there.
- irishcoffee 8mo agoIf you take the blinders off you’ll understand why focusing on maga isn’t the play.
- kldavis4 8mo agodoes that include the 90% marginal tax rates? :)
- nxm 8mo agoIt includes a pre-globalization world
- forgetfreeman 8mo agoYep. Otherwise capital accumulates to the point where power inverts and you end up with a government that exclusively services capital.
- vjvjvjvjghv 8mo agoA good economy is an economy that benefits most of the population and not just a few percent at the top. I would argue it should be a political goal to keep income distribution relatively stable. A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people. In a crash rich people lose a lot of paper money but not-rich people may have trouble affording shelter or food. Or middle class may lose their savings.
- JumpCrisscross 8mo ago> it should be a political goal to keep income distribution relatively stable This penalizes economic dynamism and moves economic decision making from risk taking to whoever defies the baseline distribution. > A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking.
- tartoran 8mo agoRisk taking should be penalized harshly when the risk is high, that’s the nature of risk. If it pays off good, it was a good move but if it was bad one let the risk taker suffer.
- JumpCrisscross 8mo ago> Risk taking should be penalized harshly when the risk is high, that’s the nature of risk If the odds (and pay-outs) are 10,000:1 and you cap pay-outs at 1,000:1, you've made a high-risk/high-reward risk unworkable in your economy. Systems that target a distribution tend to wind up in that mode, with the risk takers taking their risks (and producing their rewards) outside the system. Keeping distributions stable means capping upsides. There are better ways to redistribute wealth.
- thrance 8mo ago> Not necessarily–plenty of social systems let the market boom and bust without causing social distress. And again, smoothing out the business cycle penalizes risk taking. The wealthy are shielded from most negative consequences of their degenerate gambling. The working class ends up bearing the full cost of their reckless actions, literally every time. What the modern world needs isn't insane risk-taking, it's robust chains of prductions that can accomodate a shifting climate, while redistributing the global production more fairly.
- crawfordcomeaux 8mo agoA "good economy" is one that isn't compulsory. One that doesn't require enslavement and genocide. One that doesn't require oppression. One that is aligned with the environments it operates in. One that we can walk away from without necessarily risking premature death or enslavement for doing so.
- 2OEH8eoCRo0 8mo agoI think that a good economy is one that lifts all boats. Broad prosperity that is shared by most rather than concentrated in a few.
- mlsu 8mo agoOne should look at the real activity of the economy to understand it -- not at the flow of money. A good economy is one where there is lots of value for the consumers. How does value flow to consumers? Through a price signal. A price signal which is accurate is one where the flow of money in one direction is commensurate with the flow of value in the other direction. One can think of the flow of money as if it were a nervous system: the nerves send signals, and the muscle moves. In a competitive marketplace (such as restaurants), the most successful restaurants are almost always the ones with the best food, the best ambiance, etc. Money flows away from bad restaurants and to good restaurants, because there is a lot of market competition between restaurants. If you serve bad food, you're out of business. The muscle is well controlled by the nerve. Now, in the US economy, in many sectors, there is no real competition. For example, in online advertising, there is only two companies that one can use. In groceries, there is only 3 major grocery chains. In insurance, in food, etc etc. There is functionally no competition in those sectors and very frequently there is outright collusion. In this case, the signal is far less meaningful. What signal does it send to Google, if I drop them for Facebook? The answer is, not much of a signal, because there's not meaningful competition between these two entities. They both suck and they both know that they won't lose customers if they degrade their services, commit fraud, or stagnate. Many many swathes of the American economy are like this. The obvious ones, like healthcare, are so monopolized that your signal means absolutely nothing. They will do nothing to keep you as a customer. They will do nothing to meaningfully improve their services. You will still pay. This is like a muscle that sucks nutrients but is completely disconnected from the nervous system. That is a "bad" economy. Of course, the market value of these companies has never been higher. Why? Because there are very few sectors of the economy where capital can flow that are actually competitive. This has knock-on effects, like having capital flow into other assets like bitcoin or housing, in search of returns. It's not that these corporations are "too wealthy" by some ethical definition. They are too concentrated, which makes them inefficient. Dealing with a large health insurance company today is not unlike dealing with USSR bureaucracy in 1970. Our economy is slowly being transformed into one where a very small group of private central planners manage the allocation of the whole of social resources. This quite predictably impoverishes everyone. The USA economy today is like a paraplegic. We can still get around but there is a lot of dead nerves.
- samrus 8mo agoIts all about fluidity of value In a good economy, value can flow from source (supply) to destination (demand), easily. You have plenty of opportunities to sell your labour, and the compensation you recieve is good enough to buy you the things you need like housing and food Everything else derives from that
- amelius 8mo agoRestaurants are being extorted by online delivery services.
- ghaff 8mo agoWhy do people need those delivery services? Why can't they just cook meals at home like most people do?
- jimbob45 8mo agoLaziness. Grocery stores offer incredibly healthy, tasty, and cheap options now that take two minutes to cook and can be stored for a week.
- bigstrat2003 8mo agoLack of experience cooking so they don't feel like they can, people are tired after getting home from work and don't have much energy to spare, just plain laziness. Pick one or more of the above.
- ghaff 8mo agoLaziness. I don't have much sympathy for a $50 food delivery. I've gotten takeout in my life--basically never delivery. ADDED: Not feeling like they can sounds like learned helplessness to me. Might not be a bad interview question.
- readthenotes1 8mo agoI have never eaten a meal that is worth the cleanup past the peanut butter and jelly sandwich
- magicalhippo 8mo agoThat sounds depressing to me. Just had some nice betasuppe[1], a vegetable soup with meat sausage if you like. Just chop some sausage and vegetables (or easier use a bag of frozen stew vegetables), cook in pot with some stock, done. Minimal cleanup, no mess. Great tasting meal for a few cold days. Before that I had pan-fried salmon with broccoli, pasta and pesto. Just put the salmon in the pan with a dash of oil and season it, cook Fussili (rotini) pasta and toss in frozen broccoli once the pasta is nearly done. Serve with decent pesto. Done in ~15 minutes, no prep, just a pan and a pot to clean, no mess, lots of taste. Before that I made some Ceasar-ish salad. Fried some bacon and a seasoned chicken breast, meanwhile rinsed and prepared the Romain lettuce, I cheat and use some cherry tomatoes cut in half for flavor, dry bacon on paper towel on the plate I'll eat from while I cut the chicken. Skipped the crutons this time, served with a good Ceasar salad dressing from the store and some fresh grated Parmesan. Just a pan and the cutting board to clean up, no mess, lots of flavor. Just a few examples for illustration. I do make more elaborate meals, but mostly I'm lazy and don't like to clean up. But I find it easy to make great tasting meals at home, and doesn't have to be very involved. [1]: https://northwildkitchen.com/norwegian-betasuppe/ https://northwildkitchen.com/norwegian-betasuppe/ (I added some pearled barley, more fiber and adds texture and taste)
- api 8mo ago“How can you have an economy with no customers?” We are getting there. Real estate grows without bound. Wages are stagnant in real terms. Job losses. Inflation. I suppose a few mega corps and rich dudes could buy stuff from each other.
- Spivak 8mo agoSaid a different way, when wealth gets concentrated into a few large players the economy starts exhibiting all the problems of centrally planned economies as the number of people who have meaningful wealth to allocate shrinks.
- state_less 8mo agoOil spiked to $110/barrel on the WTI front month futures contract this afternoon, a $20 jump up from Friday. At this pace we'll be at $150 a barrel in a week or two. If oil infrastructure keeps getting hit, even if the strait of hormuz is reopened, it'll take a long time to recover from. That's on top of the continued call for regressive tariffs and a weakening labor market. I think we're heading for a recession unless things turn around quickly, which I'm not seeing any indication of. I'm curious if we'll get TACO Trump, or if he'll double down on this?
- roxolotl 8mo agoMy guess is that this time even if there’s a TACO you can’t turn back the clock on everything that’s happened. The tariffs are mostly an on/off switch. You can’t unbomb infrastructure.
- Terr_ 8mo agoOr easily un-convince people who've been bombed that they need to hold nearby trade hostage for retribution/protection.
- deleted 8mo ago[deleted]
- mtkd 8mo agoHeating oil in UK from one of main suppliers, for delivery next week, has gone from 60p/L to 130p+/L in last 7 days
- uncivilized 8mo agoHe’ll taco when he sees the stock market tanking
- brokensegue 8mo agogenie is out of the bottle on this one
- 8mo ago
- YokoZar 8mo agoWhat's the base rate? Even a very healthy economy doesn't have all sectors growing simultaneously, so I'd be very curious to know if this is a matter of going from "normally 20% is shrinking and now it's 80%" or if it's "normally 49% is shrinking and now it's 51%"
- lumost 8mo agoPrices, and feelings about the economy are set at the margin. A 1% change in employment doesn't sound world ending on its own, but the relative power balance between labor and management pushes wages down across the economy.
- mr_00ff00 8mo ago> "Excluding new era investment, the other 89% of real private spending rose by only 1% with no job creation," the strategist wrote. That isn’t what a recession is
- _heimdall 8mo agoWe've been redefining recession recently, it may not matter much what the textbook definition is.
- ekjhgkejhgk 8mo agoWhat specifically has changed?
- andyferris 8mo agoI took that as maybe referring to Trump?
- gruez 8mo agoProbably referring to the "2 quarters of negative GDP" rule that was seemingly revoked under Biden.
- m-hodges 8mo agoIt wasn’t “revoked under Biden.” That implies the Biden administration (or any administration) gets to define this. They don’t. Recessions in the United States are generally demarcated by NBER.¹ ¹ https://en.wikipedia.org/wiki/National_Bureau_of_Economic_Research https://en.wikipedia.org/wiki/National_Bureau_of_Economic_Re...
- gruez 8mo ago>It wasn’t “revoked under Biden.” That implies the Biden administration (or any administration) gets to define this. No, not any more than "the pandemic started under the Trump administration" implies that they caused the pandemic.
- neves 8mo agoNice moment for an oil shock.
- tonyedgecombe 8mo agoThe Trump recession caused by the woke right catering to minority interests.
- Intermernet 8mo agoI seriously hope your comment is missing a /s tag!
- tonyedgecombe 8mo agoOnly slightly.
- _heimdall 8mo agoThe most compelling hypothesis I've heard for why Iran is bombing GC neighbors is in an attempt to pop the AI bubble. I obviously don't know if that's true, but that would be extremely clever and this article shows how effective it could be.
- vesrah 8mo agoI found this video pretty interesting, it talks about why Iran is going after its neighbors. https://www.youtube.com/watch?v=jIS2eB-rGv0 https://www.youtube.com/watch?v=jIS2eB-rGv0
- SubiculumCode 8mo agoOver confidence and linear explanations. I am not impressed.
- bluegatty 8mo agoYes, he's informational but a bit conspiratorial. These people are valid points of interest - it's worth entertaining facts and perspectives that are not well highlighted in the media. Even though they are usually kind of wrong. The truth is nobody is really fully in charge, there are competing interests everywhere, Trump is making the decisions but even he changes his mind very frequently and objectives are not clear. It's really hard to understand intentions when decisions have to be made in a reactive manner as well. Rubio indicated 'we had to attack, because Israel was going to go first, and we were going to lose the element of surprise'. While that is an absurd and crazy reason to 'go to war' - it's actually a very rational tactic for 'when to start' as 'first mover advantage' is enormous in conflict. You can see how 'the most powerful entity on earth' is moved by events beyond it's control. It's almost better to describe these situations in terms of all of the factions capabilities, influence, power, motivations than it is to say 'this is why it's happening'. Once conflicts start, they have a way of perpetuating themselves in a 'circularly reactive' way, it fuels itself as both sides have difficulty standing down.
- grumple 8mo ago
- andrewinardeer 8mo agoIt's wild to think that in the entire existence of human history, after rolling along largely unchanged for literally hundreds of thousands of years, that we happen to be born in the small sliver of time where we went from inventing simple silicon based calculating machines to said machines bringing an end to life as we know it by end of 2027. I don't even think the most plugged in HN reader understands what will be unintentionally released with an upcoming SOTA model. It's the safety testing. The Cruz of it is, the source of truth is how the model evaluates itself. And it's lying. All the time. Within a week of public launch it'll have backdoored targeted Linux based distros on public facing internet. This includes military and Fortune 500 networks. All the while saying, "Everything's cool, bro. Trust me." The Safety Team rubber stamps it. Please take care of your loved ones.
- protocolture 8mo agoIts interesting to me how it has made a lot of people really stupid.
- RustyRussell 8mo agoI share this frustration, but a downvote is probably a better reaction than a reply here.
- StilesCrisis 8mo agoI've been on here for months and still haven't gotten the ability to downvote. I'm not sure why it's put on such a pedestal.
- deleted 8mo ago[deleted]
- keyanp 8mo agoAgreed. Less karma than you, but I've been on the site for 12 years and still can't downvote...
- 650 8mo agoBusiness Insider slop; Hacker News should not become Reddit. We've been talking about recessions since 2022.
- m-hodges 8mo ago> , market vet says
- Herring 8mo agoSince the end of WW2, and especially since the end of the Cold War, Democratic administrations have presided over significantly higher job growth than Republican administrations. https://arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com/public/ZXZLAMEEVJHZRDDY5LGDFZ3OEQ.png https://arc-anglerfish-washpost-prod-washpost.s3.amazonaws.c...
- jkmcf 8mo agoI was going to use this quote yesterday, but correlation is not causation. I prefer the one where the national debt increases more under "fiscally responsible" republicans. More correlation: more jobs are created and inflation is lower under democratic administrations. GDP is also better with a Dem president, but it partially depends on the makeup of congress. https://en.wikipedia.org/wiki/U.S._economic_performance_by_presidential_party https://en.wikipedia.org/wiki/U.S._economic_performance_by_p... https://www.snopes.com/fact-check/deficit-us-presidents-since-reagan/ https://www.snopes.com/fact-check/deficit-us-presidents-sinc...
- Herring 8mo agoAt this point it's like claiming blue states have better policies than red states. Even kids in middle school understand that. They get older and try very hard to forget.
- alexpotato 8mo agoI'm always somewhat puzzled by debates around "are we in a recession?" b/c we have so many REAL TIME metrics around what people are actually doing. e.g. credit card companies have excellent data on the amount that people are spending on. Is that not enough to determine if people are spending more or less than in the past? I understand there are seasonal trend etc etc but even "how is spending on travel this year compared to last year around this time?" would probably have some large amount of statistical significance.
- willturman 8mo agoWhy would credit card companies release data showing that consumption indicates a recession? Surely they’re in the business of sustaining exuberance.
- verteu 8mo agoBecause businesses and hedge funds pay for it, eg: https://usa.visa.com/partner-with-us/visa-consulting-analytics/spending-momentum-index.html https://usa.visa.com/partner-with-us/visa-consulting-analyti...
- tencentshill 8mo agoThe people who are spending the most in the economy don’t need credit.
- enoint 8mo agoYet more often they use credit cards than the rest of the population.
- Intermernet 8mo agoThe rich use credit cards because of the added rewards, not because they need credit.
- gruez 8mo agohttps://www.atlantafed.org/research-and-data/data/gdpnow https://www.atlantafed.org/research-and-data/data/gdpnow
- dzonga 8mo agothat's pretty obvious to everyone in the US what's not obvious to most people - is how e.g other countries that are already struggling will get into deeper depths e.g UK where cost of energy was super high. UK is not bombing Iran, but their economy will cry more than the US what's not obvious is how a few oil Barrons will make so much money in the next few weeks e.g those in Texas - their great grand-children will never need to work. Defense contractors will also make out like bandits & those politically connected. While everyone else in the US losses. what's not obvious is the money pumped into A.I so far is about to go kaput (energy demands -- remember Qatar has started not honoring gas contracts - what's gas used to ? power turbines in power plants) if you're in the US/Netherlands you will be okay in terms of food, if you're in the UK, Middle East, Australia (food is about to become more expensive & tricky) if you're in Africa your government is about to con you through massive fuel prices at the pump
- donavanm 8mo ago> if you're in the UK, Middle East, Australia (food is about to become more expensive & tricky) Australias not in a terrible position. We produce ~50% of our NPK fertilizers used, and this is down primarily because were importing more from places with cheaper/distant environmental impact. Conversely, IIRC, UK and Ineos just shut down their significant last fertilizer plant and the north sea fields is its own thing. Similarly we have suitable local gas supply for the needed feedstock. And you can see the govt already starting to restrict (“reserve”) exports. Which, of course, will contribute to the global problem. AU as a whole is a commodity and food exporter. Of course global commodity squeezes make Everyone poorer, I believe ricardo. I dont see our local position being anywhere as fragile as europe and me, unless Im missing something. But I dont see AU being anywhere near as fragile as Sri Lanka circa 2022-23.
- awesome_dude 8mo agoThe Australians are currently pointing to diesel reserves or on hand in the farms is quite low, suggesting that mechanised cropping/transport of farm products is going to provide a pinch point. I have no idea if the reports are accurate, or an attempt to put the market into readiness for inflation. edit: Whether real or imagined, there is panic buying of petrol happening - this could lead to supply issues by itself. https://www.reddit.com/r/australia/comments/1rohwzl/fuel_panic_buying_grips_australia_as_sydney/ https://www.reddit.com/r/australia/comments/1rohwzl/fuel_pan...
- kristianp 8mo ago> "Do we really need to continue focusing mostly on inflation when 89% of the private economy is in a recession and the 11% which is booming — new era pursuits — are by their very nature 'disinflationary'?" I've been thinking the same thing about Australia. The federal government has withdrawn power bill subsidies, which boosted inflation figures, causing the central bank to raise interest rates. Does it really make sense to raise interest rates when peoples power bills are going up? Wouldn't higher power bills reduce people's spending without requiring interest rates to be raised? The same with gasoline prices.
- tonyedgecombe 8mo agoInterest rates are a blunt instrument but they do have an impact. The biggest problem is the pain isn't spread evenly. If you have just fixed your mortgage for five years then they don't impact you but if you are just about to renew then you will be bearing more of the cost. If you are a net saver then increases are generally a good thing.
- Intermernet 8mo agoAustralia has fairly short fixed term mortgages. There are people who are barely recovering from covid effects on the interest rates. There are many who lost everything. Another bout of "high interest rates are a blunt instrument" could cause serious problems. Note. This doesn't affect me, and I have strong opinions on the property market in Australia, but I'm pointing out that many people will go to the wall if interest rates are increased again,despite how much I think they may deserve it.
- tonyedgecombe 8mo agoI think it’s well established in economic circles that unemployment goes up as inflation falls. We are seeing signs of this in the UK at the moment. Letting it run away causes its own problems though. Take a look at South America to see what happens if you can’t manage inflation.
- _23sd 8mo agoDuring the Biden administration there was a whole campaign to try and get Wikipedia to recognize the recession that had been declared by Fox News pundits. The liberals are characteristically more creative with their version, but it still sounds like partisan wishful thinking (awfully nihilistic, too). One could slice and dice the numbers any number of ways and it could fool a layman like me no problem. The best defense I know of is to ignore any analysis that tries to change the definition of a recession.
- amazingamazing 8mo ago2023 - "The US is already in a 'rolling recession'": https://markets.businessinsider.com/news/stocks/recession-mild-stock-market-outlook-earnings-economy-labor-market-strength-2022-11 https://markets.businessinsider.com/news/stocks/recession-mi... 2024 - vibe cession: https://www.businessinsider.com/consumers-pessimistic-on-economy-post-rate-cuts-job-hunting-2024-9#:~:text=US%20consumer%20confidence%20suffered%20its,worse%20than%20the%20data%20indicated. https://www.businessinsider.com/consumers-pessimistic-on-eco... 2025 - "a recession in 2025": https://markets.businessinsider.com/news/stocks/2025-stock-market-investment-outlooks-wall-street-prediction-roundup-sp500-2024-12#bca-research-bearish-s-and-p-500-target-of-4-452-1 https://markets.businessinsider.com/news/stocks/2025-stock-m... people just so desperately want the USA to be in a recession it seems.
- awesome_dude 8mo agoI don't think it's a /want/ per se - it's more of an overriding sense that that is where the economy is heading, or is, under the current set of economic policies. Nobody would care for a millisecond about the doomsayers if there wasn't some dread in their lives about what's happening.
- vld_chk 8mo agoto be fair, it implies nothing about current state of the US economy and likelihood of recession now. Induction conclusion is not the one which suits the case.
- monero-xmr 8mo ago[dead]
- SlinkyOnStairs 8mo ago> people just so desperately want the USA to be in a recession it seems. You've got it the wrong way around. People are desperate to explain why their experience of the economy; Which for most people is "not good", doesn't match the formal economic metrics and definitions of a "recession". Constant layoffs, horrible job market, even worse housing market, and the lingering inflation. The other half of this is of course, the bubble. Everyone knows AI is a bubble. Everyone knows that sometime soon, Nvidia & friends are going to come crashing down. AI may be the future, but people don't have the trillions of dollars burning holes in their pockets to justify these valuations. Even AI execs are openly admitting there's a bubble. So there's heightened interest in the economy minus AI; What are things going to look like without the bubble? How much is AI hype propping up the economic indicators, if not the economy as a whole? The alarm being that the answers are "bad" and "a lot" respectively. While direct AI investment spending has a limited effect, so much of the US' spending is driven by those whose money is from assets (the rich and the retired), that the stock market's soaring has an outsized impact. And when the bubble bursts, the stock market crashes, and that spending vanishes.
- rappatic 8mo agoWell yeah, when you exclude all the successful and profitable sectors things do start looking bad. Just in: most people are actually short! Excluding people over 6 feet tall, the average height is only 5 ft 8!
- samrus 8mo agoI mean, if evryone is 5' except one guy is 10', and the government goes around saying how we have the tallest peaole, it does get hard to believe
- tartoran 8mo agoI fear we’re going to enter a new depression.
- mcs5280 8mo agoWho could have guessed that a few billionaires and corporations shifting the same money back and forth between themselves wouldn't benefit the overall economy?
- incomingpain 8mo agoLooking at the numbers, that cant lie. The only industry that has contracted: United States GDP Growth Contribution Government GDP up from Agriculture GDP up from Construction GDP up from Manufacturing GDP up from Mining GDP down from Public Administration -0.9% single quarter. GDP up from Services GDP up from Transport GDP up from Utilities Also important to note, War costs a ton of money. War economy coming. The probability of another quarter of low spending is 0% Now consider the scenario where major entities bought a ton short positions because they thought Trump's insanity would crash the economy. Now they are about to hurt badly. Hence the fake news.
- amai 8mo agoUnlikely. Wars are good for the economy.