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I think people are blaming AI for a recession caused by trump’s tarrifs and the oil crisis. Businesses fear that oil prices may explode until enough of the eco

I think people are blaming AI for a recession caused by trump’s tarrifs and the oil crisis. Businesses fear that oil prices may explode until enough of the economy enters a recession that oil demand decreases, and are already feeling the supply crunch

agentifysh 5mo ago
Yet the stock market is reaching ATH, I don't think recession is the accurate word. I also think the fixation on Trump is misleading and takes away from the actual structural side effects of dollar issuance via unbacked fiat. It's convenient scapegoating to take your attention away from the long lingering issue of US dollar dominance and debt that is now causing large social divide and standard of living. The physics of a reserve currency is that it reverts to zero through endless supply to fuel the engine to accelerate inequality at home and abroad. You see that an increasingly smaller club of people are politically opposed yet benefit by creating a narrative that takes your attention away from it. This is the uncomfortable truth that not enough people understand and they are stuck in a loop chasing after things invented and created specifically to keep you there.
- toomanyrichies 5mo ago
  Note for others - "ATH" => "All-Time High"
  - stavros 5mo ago
    Also the IATA code for the Athens International Airport Eleftherios Venizelos, could have meant one or the other, no way to know which.
- Forgeties79 5mo ago
  > Yet the stock market is reaching ATH, I don't think recession is the accurate word. It did under Biden as well yet nobody had any issues claiming the economy was in terrible shape and that we were entering a potential recession. Which frankly I agreed with! The stock market tells a fraction of the story. Especially because institutional investors now dominate investment in a way they didn’t only a few decades ago. A booming stock market does not benefit “the common man” like it once did unless one believes in trickle down economics or something. Employee pensions have become rare in the private sector, matched 401(k)s used for investment are also becoming more scarce. The stock market just isn’t tied to “the average person” like it once was, relatively speaking. I do think Biden deserves immense blame for inflation getting out of control, but I also think as usual people overlooked what the Democrat president was handed, which was a Covid economy in this case. There was going to be fallout from that for years no matter what he did. No one blames Trump for the economy he handed off either.
  - dualvariable 5mo ago
    Biden inherited COVID, which required a very accommodating policy response, but then had the AI/LLM spending/hiring boom surprise sort of overlap that, which turned out to be highly inflationary, but nobody was predicting that back in 2021. There really was no winning move to play without precise knowledge of future events. And Pandemic-era stimulus started under Trump (including Trump putting his name on the checks), and the Federal Reserve were the ones controlling monetary policy and financial sector support through the pandemic. I don't see how you can say that he deserves "immense blame" for the inflation that we suffered. He was a passenger for most of it, and lacked a crystal ball to see the events of 2023 with the release of ChatGPT. Unlike the current inflationary spike which is entirely due to an energy shock caused by a President starting a war of choice.
    - Forgeties79 5mo ago
      Maybe I need to go back and read some more there but my understanding was that the American Rescue Plan, in tandem with some of the stuff that you mentioned that I probably should’ve emphasized more, really drove inflation to new heights and arguably wasn’t necessary as Covid was winding down. Also a ton of spending on top of that. You’re right though that I should emphasize Trump engaged a lot of the same behaviors. It’s certainly unambiguous that the current situation is entirely his fault.
      - dualvariable 5mo ago
        Yeah, I probably grossly oversimplified that and forgot about a bunch of other factors. Stimulus was split about 50/50 between Trump and Biden. The ARP probably was a bit too large and contributed something like 1.5% to the eventual inflation spike. A lot of the inflation spike, though, was due to supply shocks, then energy shocks from Ukraine, then "revenge spending" demand shocks as society reopened with not enough goods and a lot of excess savings. Then we had the nascent AI tech hiring boom which was pushing up costs and housing in places like SF and Seattle. By 2024 we were well on our way into the current K-shaped economy with the hypersclar buildout driving inflation due to private sector spending (even in the face of the Fed hiking rates like crazy). Really it is likely that only about ~20% or less of the inflation under Biden was due to government spending. It is true in 2024 that there was a hell of a lot of gaslighting going on that the economy was great for everyone and that we were having a "vibecession" and praising "Bidenomics" when the K-shaped economy was already appearing, and this DNC messaging effort clearly failed. But it also didn't have a lot to do with Biden, and arguably pushing the message that implicitly accepted that Biden was entirely responsible for the economic conditions of the previous 4 years was flawed and factually inaccurate messaging. Maybe it wouldn't have been possible to argue otherwise, but I do remember a lot of Democrats who argued that Trump's economy had relatively little to do with any of his policies in his first term. I similarly think that Biden had relatively little control over the economy in his term. Currently, though, Trump pretty well owns this economy due to what his war with Iran is doing. He doesn't own the background of what is going on with AI and hyperscalar spending and the likely bubble and the inflationary pressure and K-shaped economy (although Republican tax cuts over the past 45+ years are cumulatively responsible for the K-shaped economy and Trump owns some of that), but Trump is doing his best to just pour gas over the economy and light it all on fire.
- marcosdumay 5mo ago
  It shouldn't require pointing out, but asset prices are not a measure of economic activity. Rain amount and air temperature aren't either, if somehow somebody needs that pointed too. Those are independent things. You are describing stagflation, that is a kind of recession. Despite all the fundamentals pointing towards it for a while, the US hasn't seen a lot of inflation (at least yet), so that's not what is happening.
- b112 5mo ago
  This is the uncomfortable truth that not enough people understand and they are stuck in a loop chasing after things invented and created specifically to keep you there. Hardly. Those 'invented things' are invented for one purpose, to make the inventor money. That's how capitalism works. Fun fact, let's say that tomorrow, all new credit was outlawed. And by law, all existing credit would require payments that took 3 years to pay off. In this fantasy world where we ignore mortgages, my point is that salaries would diminish. Right now, the cost of everything a person buys is factored into salary costs. Take away interest, and all those 30% interest credit card debts would eventually no longer be part of your salary. This process takes years of course, but no one would issue credit cards, if every person defaulted on them, yet if you look at where salaries really go? With a lot of people, 30%+ goes to just holding debt.
- rvz 5mo ago
  Well said. Although the stock market isn't a reflection of the economy, the most relevant concern is the staggering 40TN+ of debt that can't ever go down as long as the dollar is the reserve currency and have no choice but to endlessly supply more dollars. The issue with oil rising will make it completely impossible for the Federal Reserve to cut any rates and instead will either hold or raise them. Then the stock market will have a problem; and those that have properties tied to their RSUs will start panicking.
- jjk166 5mo ago
  The stock market isn't the economy. Note that stock prices are denominated in dollars. If the dollar price of a stock doubles, but in the same time period the value of the dollar halves, then the stock's value hasn't gone up at all. Compare the price of the Dow Jones to to gold and its value peaked in 1999, and has been nosediving for the past 18 months[0]. The ratio right now is the same as it was in late 2008. Obviously gold isn't a perfect standard candle, but given that inflation has obviously been rampant in recent years, we should obviously treat any economic metric that does not control for inflation with healthy skepticism. [0] https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-...
  - drstewart 5mo ago
    Cool. Now use the value of a dollar denominated in Bitcoin. Or do you only like cherry picking your statistics?
    - shwaj 5mo ago
      I’m as skeptical of fiat currencies as the next guy, but denominating in Bitcoin is the ultimate cherry pick. The price of everything has crashed in the last 10 years when denominated in Bitcoin. If we measured GDP in Bitcoins, the statistics would show that we’re in an unprecedented depression.
    - jjk166 5mo ago
      Pretty sure that would just reinforce my point...
      - drstewart 5mo ago
        Great. Do it against the European stock market and really drive home your point. Bitcoin versus the European market, indexed from 2010.
Amfy 5mo ago
^ this! And higher interest rates than before Over hiring from Covid is still an overhang
- bobthepanda 5mo ago
  At this point, the interest rates have been around for quite a while and the ultralow rates after the GFC should not be treated as any kind of norm.
onlyrealcuzzo 5mo ago
In economies that revolve around credit/debt (the US), once credit stops EXPANDING, that's a huge force pushing the economy down. If everyone's already taken on as much debt as they can, and interest rates aren't consistently marching lower for ~25 straight years, it's going to be a little harder to grow. Doesn't make it impossible, just harder. We're paying for growth we got 25 years ago now. Wish we invested that money better. You can't change the past. But you can change the future.
- e40 5mo ago
  This is precisely why DJT wants to control the Fed and lower interest rates. It would be a short-term win for him and the economy.
  - mikeyouse 5mo ago
    At the expense of much worse inflation..
    - raydev 5mo ago
      Unfortunately we get the inflation anyway from military action in/around Iran.
    - e40 5mo ago
      Agreed. That's what I implied but forgot to state.
- philipov 5mo ago
  The future will certainly change things, but who can change the direction of a tidal wave? It will go where it wants, not where we want. The best a single individual can do is flee to higher ground. Unless you happen to have a media empire at your disposal. Maybe then you can change the future. The problem is that those people are changing things for the worse.
paulddraper 5mo ago
GDP is not suffering — quite the opposite, 2% real annual growth in Q1 — so recession is definitionally inaccurate.
- bombcar 5mo ago
  We’ll need new terms if Musk and Altman make infinity GDP and everyone else is unemployable.
  - rsoto2 5mo ago
    Let's use percentage of people below the poverty line ( the actual poverty line is estimated between 97k(single) - 145k(family with children) Anybody reading hackernews that cares about GDP growth is profoundly misinformed. https://www.cbsnews.com/news/income-needed-get-ahead-145k-half-americans-study/ https://www.cbsnews.com/news/income-needed-get-ahead-145k-ha...
    - jdietrich 5mo ago
      As a Brit, it seems hilarious that a single person with an income of $97k would be on the poverty line. That's more than double the median income for all households in the UK. A lot of Americans don't seem to realise how fantastically wealthy they are compared to the rest of the world. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2024 https://www.ons.gov.uk/peoplepopulationandcommunity/personal...
      - lotsofpulp 5mo ago
        $97k per year isn’t that much when health insurance premiums are $500 to $1,500 per person per month with $5k to $15k annual out of pocket maximums. You have to build up decent savings to ensure you can take care of yourself for when you lose your income.
        5mo ago
hn_throwaway_99 5mo ago
This comment is completely divorced from the facts given in the article. The main point is that certain types of jobs like customer service reps, secretaries and sales people are being disproportionately affected. If it was just general fears about the economy overall one would expect a more broad-based impact.
- themafia 5mo ago
  If you replace customer service with LLMs I will look for a way to stop doing business with you.
  - lbrito 5mo ago
    Competitors will be using LLM too.
  - ACCount37 5mo ago
    Why care if "unthinking execution of a generic customer service script" is performed by an interpreter made of silicon or flesh? Neither has any free will to deviate from the script. Both are useless in any case that's not handled by the script. The silicon one has better wait times though.
    - 0gs 5mo ago
      because the customer doesn't get to pretend that if they got angry enough, a real live person could be made to suffer by being fired. if anything, making the humans follow the canned responses only encourages this thirst for revenge in the customer. now THAT'S efficiency!
    - themafia 5mo ago
      Why care if I spend my money with you or someone I perceive to provide better service? I mean, it's my money, you need to justify your reasons for deserving it.
  - csallen 5mo ago
    You will probably be in the minority, and that minority will keep shrinking as AI keeps improving.
gdulli 5mo ago
We have an invention that aims to replace labor and employers want nothing more than to replace labor. It's silly to pretend that AI isn't responsible. But you're right that an incompetent administration is piling on with additional factors.
- LogicFailsMe 5mo ago
  AI isn't ready to replace us but employers are more than ready to use it as cover for laying off all the dingdongs they hired during the pandemic. I give up. I'm rich and out of f***s and the hilarity of VC approaching me to invest in their idiocy will never be lost on me given they wouldn't spare a dime when I was a disruptive young turk.
nradov 5mo ago
The overall US economy is less impacted by higher oil prices than ever before. As a net oil exporter now in a way it's actually a positive, although the effects vary by sector.
- fn-mote 5mo ago
  The fact that the US is a net exporter is irrelevant to the impact of much higher oil and gas prices across the economy. Also, supply chain shortages will continue to impact us - they are not even beginning to reach our shores.

agentifysh 5mo ago

Yet the stock market is reaching ATH, I don't think recession is the accurate word. I also think the fixation on Trump is misleading and takes away from the actual structural side effects of dollar issuance via unbacked fiat. It's convenient scapegoating to take your attention away from the long lingering issue of US dollar dominance and debt that is now causing large social divide and standard of living. The physics of a reserve currency is that it reverts to zero through endless supply to fuel the engine to accelerate inequality at home and abroad. You see that an increasingly smaller club of people are politically opposed yet benefit by creating a narrative that takes your attention away from it. This is the uncomfortable truth that not enough people understand and they are stuck in a loop chasing after things invented and created specifically to keep you there.

toomanyrichies 5mo ago
Note for others - "ATH" => "All-Time High"
- stavros 5mo ago
  Also the IATA code for the Athens International Airport Eleftherios Venizelos, could have meant one or the other, no way to know which.
Forgeties79 5mo ago
> Yet the stock market is reaching ATH, I don't think recession is the accurate word. It did under Biden as well yet nobody had any issues claiming the economy was in terrible shape and that we were entering a potential recession. Which frankly I agreed with! The stock market tells a fraction of the story. Especially because institutional investors now dominate investment in a way they didn’t only a few decades ago. A booming stock market does not benefit “the common man” like it once did unless one believes in trickle down economics or something. Employee pensions have become rare in the private sector, matched 401(k)s used for investment are also becoming more scarce. The stock market just isn’t tied to “the average person” like it once was, relatively speaking. I do think Biden deserves immense blame for inflation getting out of control, but I also think as usual people overlooked what the Democrat president was handed, which was a Covid economy in this case. There was going to be fallout from that for years no matter what he did. No one blames Trump for the economy he handed off either.
- dualvariable 5mo ago
  Biden inherited COVID, which required a very accommodating policy response, but then had the AI/LLM spending/hiring boom surprise sort of overlap that, which turned out to be highly inflationary, but nobody was predicting that back in 2021. There really was no winning move to play without precise knowledge of future events. And Pandemic-era stimulus started under Trump (including Trump putting his name on the checks), and the Federal Reserve were the ones controlling monetary policy and financial sector support through the pandemic. I don't see how you can say that he deserves "immense blame" for the inflation that we suffered. He was a passenger for most of it, and lacked a crystal ball to see the events of 2023 with the release of ChatGPT. Unlike the current inflationary spike which is entirely due to an energy shock caused by a President starting a war of choice.
  - Forgeties79 5mo ago
    Maybe I need to go back and read some more there but my understanding was that the American Rescue Plan, in tandem with some of the stuff that you mentioned that I probably should’ve emphasized more, really drove inflation to new heights and arguably wasn’t necessary as Covid was winding down. Also a ton of spending on top of that. You’re right though that I should emphasize Trump engaged a lot of the same behaviors. It’s certainly unambiguous that the current situation is entirely his fault.
    - dualvariable 5mo ago
      Yeah, I probably grossly oversimplified that and forgot about a bunch of other factors. Stimulus was split about 50/50 between Trump and Biden. The ARP probably was a bit too large and contributed something like 1.5% to the eventual inflation spike. A lot of the inflation spike, though, was due to supply shocks, then energy shocks from Ukraine, then "revenge spending" demand shocks as society reopened with not enough goods and a lot of excess savings. Then we had the nascent AI tech hiring boom which was pushing up costs and housing in places like SF and Seattle. By 2024 we were well on our way into the current K-shaped economy with the hypersclar buildout driving inflation due to private sector spending (even in the face of the Fed hiking rates like crazy). Really it is likely that only about ~20% or less of the inflation under Biden was due to government spending. It is true in 2024 that there was a hell of a lot of gaslighting going on that the economy was great for everyone and that we were having a "vibecession" and praising "Bidenomics" when the K-shaped economy was already appearing, and this DNC messaging effort clearly failed. But it also didn't have a lot to do with Biden, and arguably pushing the message that implicitly accepted that Biden was entirely responsible for the economic conditions of the previous 4 years was flawed and factually inaccurate messaging. Maybe it wouldn't have been possible to argue otherwise, but I do remember a lot of Democrats who argued that Trump's economy had relatively little to do with any of his policies in his first term. I similarly think that Biden had relatively little control over the economy in his term. Currently, though, Trump pretty well owns this economy due to what his war with Iran is doing. He doesn't own the background of what is going on with AI and hyperscalar spending and the likely bubble and the inflationary pressure and K-shaped economy (although Republican tax cuts over the past 45+ years are cumulatively responsible for the K-shaped economy and Trump owns some of that), but Trump is doing his best to just pour gas over the economy and light it all on fire.
marcosdumay 5mo ago
It shouldn't require pointing out, but asset prices are not a measure of economic activity. Rain amount and air temperature aren't either, if somehow somebody needs that pointed too. Those are independent things. You are describing stagflation, that is a kind of recession. Despite all the fundamentals pointing towards it for a while, the US hasn't seen a lot of inflation (at least yet), so that's not what is happening.
b112 5mo ago
This is the uncomfortable truth that not enough people understand and they are stuck in a loop chasing after things invented and created specifically to keep you there. Hardly. Those 'invented things' are invented for one purpose, to make the inventor money. That's how capitalism works. Fun fact, let's say that tomorrow, all new credit was outlawed. And by law, all existing credit would require payments that took 3 years to pay off. In this fantasy world where we ignore mortgages, my point is that salaries would diminish. Right now, the cost of everything a person buys is factored into salary costs. Take away interest, and all those 30% interest credit card debts would eventually no longer be part of your salary. This process takes years of course, but no one would issue credit cards, if every person defaulted on them, yet if you look at where salaries really go? With a lot of people, 30%+ goes to just holding debt.
rvz 5mo ago
Well said. Although the stock market isn't a reflection of the economy, the most relevant concern is the staggering 40TN+ of debt that can't ever go down as long as the dollar is the reserve currency and have no choice but to endlessly supply more dollars. The issue with oil rising will make it completely impossible for the Federal Reserve to cut any rates and instead will either hold or raise them. Then the stock market will have a problem; and those that have properties tied to their RSUs will start panicking.
jjk166 5mo ago
The stock market isn't the economy. Note that stock prices are denominated in dollars. If the dollar price of a stock doubles, but in the same time period the value of the dollar halves, then the stock's value hasn't gone up at all. Compare the price of the Dow Jones to to gold and its value peaked in 1999, and has been nosediving for the past 18 months[0]. The ratio right now is the same as it was in late 2008. Obviously gold isn't a perfect standard candle, but given that inflation has obviously been rampant in recent years, we should obviously treat any economic metric that does not control for inflation with healthy skepticism. [0] https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-historical-chart https://www.macrotrends.net/1378/dow-to-gold-ratio-100-year-...
- drstewart 5mo ago
  Cool. Now use the value of a dollar denominated in Bitcoin. Or do you only like cherry picking your statistics?
  - shwaj 5mo ago
    I’m as skeptical of fiat currencies as the next guy, but denominating in Bitcoin is the ultimate cherry pick. The price of everything has crashed in the last 10 years when denominated in Bitcoin. If we measured GDP in Bitcoins, the statistics would show that we’re in an unprecedented depression.
  - jjk166 5mo ago
    Pretty sure that would just reinforce my point...
    - drstewart 5mo ago
      Great. Do it against the European stock market and really drive home your point. Bitcoin versus the European market, indexed from 2010.

Amfy 5mo ago

^ this! And higher interest rates than before Over hiring from Covid is still an overhang

bobthepanda 5mo ago
At this point, the interest rates have been around for quite a while and the ultralow rates after the GFC should not be treated as any kind of norm.

onlyrealcuzzo 5mo ago

In economies that revolve around credit/debt (the US), once credit stops EXPANDING, that's a huge force pushing the economy down. If everyone's already taken on as much debt as they can, and interest rates aren't consistently marching lower for ~25 straight years, it's going to be a little harder to grow. Doesn't make it impossible, just harder. We're paying for growth we got 25 years ago now. Wish we invested that money better. You can't change the past. But you can change the future.

e40 5mo ago
This is precisely why DJT wants to control the Fed and lower interest rates. It would be a short-term win for him and the economy.
- mikeyouse 5mo ago
  At the expense of much worse inflation..
  - raydev 5mo ago
    Unfortunately we get the inflation anyway from military action in/around Iran.
  - e40 5mo ago
    Agreed. That's what I implied but forgot to state.
philipov 5mo ago
The future will certainly change things, but who can change the direction of a tidal wave? It will go where it wants, not where we want. The best a single individual can do is flee to higher ground. Unless you happen to have a media empire at your disposal. Maybe then you can change the future. The problem is that those people are changing things for the worse.

paulddraper 5mo ago

GDP is not suffering — quite the opposite, 2% real annual growth in Q1 — so recession is definitionally inaccurate.

bombcar 5mo ago
We’ll need new terms if Musk and Altman make infinity GDP and everyone else is unemployable.
- rsoto2 5mo ago
  Let's use percentage of people below the poverty line ( the actual poverty line is estimated between 97k(single) - 145k(family with children) Anybody reading hackernews that cares about GDP growth is profoundly misinformed. https://www.cbsnews.com/news/income-needed-get-ahead-145k-half-americans-study/ https://www.cbsnews.com/news/income-needed-get-ahead-145k-ha...
  - jdietrich 5mo ago
    As a Brit, it seems hilarious that a single person with an income of $97k would be on the poverty line. That's more than double the median income for all households in the UK. A lot of Americans don't seem to realise how fantastically wealthy they are compared to the rest of the world. https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2024 https://www.ons.gov.uk/peoplepopulationandcommunity/personal...
    - lotsofpulp 5mo ago
      $97k per year isn’t that much when health insurance premiums are $500 to $1,500 per person per month with $5k to $15k annual out of pocket maximums. You have to build up decent savings to ensure you can take care of yourself for when you lose your income.
      - 5mo ago

hn_throwaway_99 5mo ago

This comment is completely divorced from the facts given in the article. The main point is that certain types of jobs like customer service reps, secretaries and sales people are being disproportionately affected. If it was just general fears about the economy overall one would expect a more broad-based impact.

themafia 5mo ago
If you replace customer service with LLMs I will look for a way to stop doing business with you.
- lbrito 5mo ago
  Competitors will be using LLM too.
- ACCount37 5mo ago
  Why care if "unthinking execution of a generic customer service script" is performed by an interpreter made of silicon or flesh? Neither has any free will to deviate from the script. Both are useless in any case that's not handled by the script. The silicon one has better wait times though.
  - 0gs 5mo ago
    because the customer doesn't get to pretend that if they got angry enough, a real live person could be made to suffer by being fired. if anything, making the humans follow the canned responses only encourages this thirst for revenge in the customer. now THAT'S efficiency!
  - themafia 5mo ago
    Why care if I spend my money with you or someone I perceive to provide better service? I mean, it's my money, you need to justify your reasons for deserving it.
- csallen 5mo ago
  You will probably be in the minority, and that minority will keep shrinking as AI keeps improving.

gdulli 5mo ago

We have an invention that aims to replace labor and employers want nothing more than to replace labor. It's silly to pretend that AI isn't responsible. But you're right that an incompetent administration is piling on with additional factors.

LogicFailsMe 5mo ago
AI isn't ready to replace us but employers are more than ready to use it as cover for laying off all the dingdongs they hired during the pandemic. I give up. I'm rich and out of f***s and the hilarity of VC approaching me to invest in their idiocy will never be lost on me given they wouldn't spare a dime when I was a disruptive young turk.

nradov 5mo ago

The overall US economy is less impacted by higher oil prices than ever before. As a net oil exporter now in a way it's actually a positive, although the effects vary by sector.

fn-mote 5mo ago
The fact that the US is a net exporter is irrelevant to the impact of much higher oil and gas prices across the economy. Also, supply chain shortages will continue to impact us - they are not even beginning to reach our shores.