4 ms·

I'm sorry, what the feck does "value creation" mean here? I live in a place where people are so, insanely squeezed from every angle. Wages are stagnant, prices

I'm sorry, what the feck does "value creation" mean here? I live in a place where people are so, insanely squeezed from every angle. Wages are stagnant, prices rocketing. Where is the money to pay for this value going to come from? No one I know feels richer than they did a decade back. I've not been able to meaningfully put up my prices for a decade. People are tired and stressed and scared, particularly scared of a technology everyone keeps telling them will make them redundant. There is no rising tide lifting all boats, just most of us drowning whilst a few whizz past in their yachts. I honestly hope these guys faceplant ASAP. Couldn't happen to a nicer bunch of people.

dirck-norman 4mo ago
Feelings aren’t fact. A lot of data shows the doomerism is not reflected in the actual numbers and much of it has to do with rapid inflation and continued vibes. Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. Most social mobility has been the middle class moving into the upper middle class, not moving to the lower class. The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. Value creation is growth. If it didn’t exist the S&P would still be 42.55$.
- jacobgkau 4mo ago
  > Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. My wages haven't risen for nearly 5 years, while inflation has occurred over the past 5 years. Why the blanket statements? > The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. Are you suggesting a "housing crisis," in your words, wouldn't impact consumption? I'm watching my spending (and living like a child in his parent's house, except it's not my parent and I have to pay for it) in the hopes that in about a decade, I'll have saved up enough of a down payment for a home somewhere in my state that I could actually afford the mortgage on the remaining amount. There are plenty of things I'd potentially spend money on but won't as long as I feel like I'm economically stuck and have a chance in hell of saving my way out of it. So this feeling translates to fact. If you think my personal experience is just an anecdote and doesn't count because it's not being told through the lens of large-scale numbers, fine. But I really agree with the person you replied to that you're gonna have to be a whole lot more specific than "value creation" if you want people to spend money on your AI products "in this economy," whether it's because they're actually strapped for cash or just pretending like you seem to think they are.
- geraneum 4mo ago
  > Feelings aren’t fact... much of it has to do with rapid inflation and "continued vibes". Oh the lost irony.
  - dirck-norman 4mo ago
    Is it ironic? Or did you just read the comment incorrectly?
- everforward 4mo ago
  > The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. This feels wholly at odds with saying most social mobility is upwards. So most of the social movement is into a class where a home and vacations are a given, but we also have a growing class of people who can't afford a home? Per BLS, average real wages are down 0.3% YoY https://www.bls.gov/news.release/realer.nr0.htm https://www.bls.gov/news.release/realer.nr0.htm . > Value creation is growth. If it didn’t exist the S&P would still be 42.55$. This reductively assumes "value creation" is the only effect on the S&P pricing. You'll note a ton of graphs correlate with it, e.g. https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi is the US inflation rate, which also tracks the S&P pricing. Ie if a company is worth $100 a year ago and inflation was 4%, I'd expect to pay $104 for their stock with 0 value creation whatsoever.
  - dirck-norman 4mo ago
    Home ownership is not the definition of economic class. The s&p has vastly outstripped inflation, this isn’t even an argument. It’s a very bizarre and uninformed opinion to say “inflation is correlated with s&p value”. In economics, you deduct the inflation rate from growth to get the real rate of return. I wonder why so many people with such little understanding of financial markets make comments like these. https://www.multpl.com/inflation-adjusted-s-p-500 https://www.multpl.com/inflation-adjusted-s-p-500
    - everforward 4mo ago
      > Home ownership is not the definition of economic class. It was at one point, so if you're saying it doesn't now then your "social movement" is really just goalpost moving. I'm sure the upper class does grow if you just declare that the boundaries of it are now lower. We're all millionaires if we just redefine millionaire to mean "not currently overdrafted". > In economics, you deduct the inflation rate from growth to get the real rate of return. Which neglects the impact of inflation on the principal. If I put $100k into the S&P in 2016 I'd have 303k now (303% value). Cumulative inflation during that period was 38.8%, so your metric says I'm at 164% rate of return. $303k today is only worth $218k in 2016 dollars though, so I'm really only up 118% in absolute value. That's also only using the CPI, and neglecting asset inflation which impacts stock prices outside of actual value creation. More money floating around means more gets parked in index funds, regardless of whether the company is actually doing anything better.
- decidu0us9034 4mo ago
  The upper decile of income earners account for more than half of all consumption in the US. Household balance sheets and wealth have never looked stronger, again when you account for all the appreciated stocks and properties owned by the upper quartile. True incomes for the lowest decile rose significantly for the first time since 1970 in 2022 and then sort of stayed flat again. Sure, statistically significantly, not "significantly" as in personally meaningful after figuring in rising consumer costs. There is a narrative where you can see all this as hugely positive but this is also largely a "vibes" based narrative. I don't know why you'd expect most people to care about what the "vibes" are like for the best off in society, that's a bit removed from their daily concerns.
deaton 4mo ago
Thats the thing; the "increase in productivity" isn't being felt by the general public, the end user. If your "increase in productivity" just means more money being shifted around at the corporate level then it is meaningless.
jgbuddy 4mo ago
A literal example is that I can use AI to file my taxes instead of spending a weekend and hundreds of dollars to have an accountant do it for me. It costs me like $5. that 245$ delta is the value of that output to me, as long as I am confident it is correct.
- smnc 4mo ago
  > as long as I am confident it is correct Are you? Does it cost you extra (time or money) to be?
  - jgbuddy 4mo ago
    Yes, and they were accepted. A year or two ago I would have been less confident but now almost UX is happy to cite sources.
    - redfern314 4mo ago
      Not speaking to the wisdom of filing taxes using LLMs, but just FYI (assuming US here) taxes being accepted doesn't mean they were correct. It just means the IRS hasn't found anything major wrong (e.g. SSN used on multiple returns). Even being approved isn't a guarantee, an audit could come later.
      - topaz0 4mo ago
        Even if an audit never comes they could be incorrect.
        redfern314 4mo ago
        For sure.
        bluGill 4mo ago
        Audits often find incorrect in favor of the person audited as well. If you are not audited that is a bad thing as you have no idea if things are wrong, and it could be costing you a lot of they are wrong.
WarmWash 4mo ago
Sounds like internet sentiment and not research data. It's kind of become socially taboo to not be suffering "in this economy", but on paper it's hard to see weakness in places that there isn't always weakness. As long as the 65-95% are doing well, there isn't going to be a collapse.
- forlorn_mammoth 4mo ago
  The most recent U Michigan 'Survey of Consumer Sentiment', which is THE authorative source in the US, shows consumer sentiment at the lowest levels since the survey started in 1977 From the U Michigan page: https://www.sca.isr.umich.edu/ https://www.sca.isr.umich.edu/ or from the FED https://fred.stlouisfed.org/series/UMCSENT https://fred.stlouisfed.org/series/UMCSENT
  - WarmWash 4mo ago
    Sentiment is just vibes though. Everyone hates Walmart but they still do gangbusters numbers. So people may be hating, but they sure as hell are also still spending https://fred.stlouisfed.org/series/PCEC96 https://fred.stlouisfed.org/series/PCEC96

dirck-norman 4mo ago

Feelings aren’t fact. A lot of data shows the doomerism is not reflected in the actual numbers and much of it has to do with rapid inflation and continued vibes. Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. Most social mobility has been the middle class moving into the upper middle class, not moving to the lower class. The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. Value creation is growth. If it didn’t exist the S&P would still be 42.55$.

jacobgkau 4mo ago
> Consumption has risen, inflation adjusted wages have risen for blue collar and white collar alike. My wages haven't risen for nearly 5 years, while inflation has occurred over the past 5 years. Why the blanket statements? > The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. Are you suggesting a "housing crisis," in your words, wouldn't impact consumption? I'm watching my spending (and living like a child in his parent's house, except it's not my parent and I have to pay for it) in the hopes that in about a decade, I'll have saved up enough of a down payment for a home somewhere in my state that I could actually afford the mortgage on the remaining amount. There are plenty of things I'd potentially spend money on but won't as long as I feel like I'm economically stuck and have a chance in hell of saving my way out of it. So this feeling translates to fact. If you think my personal experience is just an anecdote and doesn't count because it's not being told through the lens of large-scale numbers, fine. But I really agree with the person you replied to that you're gonna have to be a whole lot more specific than "value creation" if you want people to spend money on your AI products "in this economy," whether it's because they're actually strapped for cash or just pretending like you seem to think they are.
geraneum 4mo ago
> Feelings aren’t fact... much of it has to do with rapid inflation and "continued vibes". Oh the lost irony.
- dirck-norman 4mo ago
  Is it ironic? Or did you just read the comment incorrectly?
everforward 4mo ago
> The main thing holding people back is the housing crisis. This is orthogonal to the value creation of businesses. This feels wholly at odds with saying most social mobility is upwards. So most of the social movement is into a class where a home and vacations are a given, but we also have a growing class of people who can't afford a home? Per BLS, average real wages are down 0.3% YoY https://www.bls.gov/news.release/realer.nr0.htm https://www.bls.gov/news.release/realer.nr0.htm . > Value creation is growth. If it didn’t exist the S&P would still be 42.55$. This reductively assumes "value creation" is the only effect on the S&P pricing. You'll note a ton of graphs correlate with it, e.g. https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi is the US inflation rate, which also tracks the S&P pricing. Ie if a company is worth $100 a year ago and inflation was 4%, I'd expect to pay $104 for their stock with 0 value creation whatsoever.
- dirck-norman 4mo ago
  Home ownership is not the definition of economic class. The s&p has vastly outstripped inflation, this isn’t even an argument. It’s a very bizarre and uninformed opinion to say “inflation is correlated with s&p value”. In economics, you deduct the inflation rate from growth to get the real rate of return. I wonder why so many people with such little understanding of financial markets make comments like these. https://www.multpl.com/inflation-adjusted-s-p-500 https://www.multpl.com/inflation-adjusted-s-p-500
  - everforward 4mo ago
    > Home ownership is not the definition of economic class. It was at one point, so if you're saying it doesn't now then your "social movement" is really just goalpost moving. I'm sure the upper class does grow if you just declare that the boundaries of it are now lower. We're all millionaires if we just redefine millionaire to mean "not currently overdrafted". > In economics, you deduct the inflation rate from growth to get the real rate of return. Which neglects the impact of inflation on the principal. If I put $100k into the S&P in 2016 I'd have 303k now (303% value). Cumulative inflation during that period was 38.8%, so your metric says I'm at 164% rate of return. $303k today is only worth $218k in 2016 dollars though, so I'm really only up 118% in absolute value. That's also only using the CPI, and neglecting asset inflation which impacts stock prices outside of actual value creation. More money floating around means more gets parked in index funds, regardless of whether the company is actually doing anything better.
decidu0us9034 4mo ago
The upper decile of income earners account for more than half of all consumption in the US. Household balance sheets and wealth have never looked stronger, again when you account for all the appreciated stocks and properties owned by the upper quartile. True incomes for the lowest decile rose significantly for the first time since 1970 in 2022 and then sort of stayed flat again. Sure, statistically significantly, not "significantly" as in personally meaningful after figuring in rising consumer costs. There is a narrative where you can see all this as hugely positive but this is also largely a "vibes" based narrative. I don't know why you'd expect most people to care about what the "vibes" are like for the best off in society, that's a bit removed from their daily concerns.

deaton 4mo ago

Thats the thing; the "increase in productivity" isn't being felt by the general public, the end user. If your "increase in productivity" just means more money being shifted around at the corporate level then it is meaningless.

jgbuddy 4mo ago

A literal example is that I can use AI to file my taxes instead of spending a weekend and hundreds of dollars to have an accountant do it for me. It costs me like $5. that 245$ delta is the value of that output to me, as long as I am confident it is correct.

smnc 4mo ago
> as long as I am confident it is correct Are you? Does it cost you extra (time or money) to be?
- jgbuddy 4mo ago
  Yes, and they were accepted. A year or two ago I would have been less confident but now almost UX is happy to cite sources.
  - redfern314 4mo ago
    Not speaking to the wisdom of filing taxes using LLMs, but just FYI (assuming US here) taxes being accepted doesn't mean they were correct. It just means the IRS hasn't found anything major wrong (e.g. SSN used on multiple returns). Even being approved isn't a guarantee, an audit could come later.
    - topaz0 4mo ago
      Even if an audit never comes they could be incorrect.
      - redfern314 4mo ago
        For sure.
      - bluGill 4mo ago
        Audits often find incorrect in favor of the person audited as well. If you are not audited that is a bad thing as you have no idea if things are wrong, and it could be costing you a lot of they are wrong.

WarmWash 4mo ago

Sounds like internet sentiment and not research data. It's kind of become socially taboo to not be suffering "in this economy", but on paper it's hard to see weakness in places that there isn't always weakness. As long as the 65-95% are doing well, there isn't going to be a collapse.

forlorn_mammoth 4mo ago
The most recent U Michigan 'Survey of Consumer Sentiment', which is THE authorative source in the US, shows consumer sentiment at the lowest levels since the survey started in 1977 From the U Michigan page: https://www.sca.isr.umich.edu/ https://www.sca.isr.umich.edu/ or from the FED https://fred.stlouisfed.org/series/UMCSENT https://fred.stlouisfed.org/series/UMCSENT
- WarmWash 4mo ago
  Sentiment is just vibes though. Everyone hates Walmart but they still do gangbusters numbers. So people may be hating, but they sure as hell are also still spending https://fred.stlouisfed.org/series/PCEC96 https://fred.stlouisfed.org/series/PCEC96