I was thinking about this today. I think this is fundamentally different than the situation during the pandemic recession or the 2008 crash. In both of those cases there were parts of the US economy that were growing and the crash occurred elsewhere, not affecting them directly. Once the capital/labour problems were resolved, the growing parts of the economy kept growing, the stock market recovered reflecting the expected future profits from those growing parts. This time around the only thing that's growing is the thing that's under threat of destruction. Thus once it dies, there's no obvious other bit of the economy to throw money at that could expand and grow productively. So I think given Trump and his sycophants predispositions, this one is gonna last significantly longer than the previous two before a growing part of the economy emerges and recovery is seen. I don't think they'll have the ideological predisposition to begin massive infrastructure projects with public employment, which is a known working solution. I think if the AI bubble pops they're in for a bad time for a while, and anyone else who's hitched to this wagon, like us (Canada), and it might look more like 1929 than 2008.
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Totally not a bubble. Trust me, bro!
It's the opposite. The non-AI economy is in recession because the AI bubble is sucking the oxygen out of the rest of the market.
Which actually presents a possible upside to the bubble bursting: maybe the rest of the economy will actually recover.
Probably not. But maybe!
This is the exact type of shit you read near the peak of a bubble.
What they include and exclude when deciding recessions, inflation and other economic issues is really a black art. Investment in data centres and dodgy sw really affects the economy 🤭
Jason Furman, Economist and former Deputy Director of the US National Economic Council, estimated in a New York Times podcast that 92 percent of the economic demand in the first two quarters of this year came from information processing equipment and software.
"Ultimately, what we're really hoping for is that AI shows up on the supply side of the economy, actually helping us do more with less," he said. Some of that is happening, he claimed, "but there hasn't been anything particularly special about productivity growth to date."
I am assuming that the 92% refers to "net new" economic demand, not total.
This is damning for AI hucksters and conmen. The worse thing is that since many of them are based in the US, not a single one will be prosecuted (how many financial fraud conmen were prosecuted under Obama?)
The US likely has many years of recession to look forward to. There might even be a civil war. The country is utterly broken and the ones to blame are capitalists and useful idiots preaching and implementing their propaganda (neoliberalism and its even more degenerated derivates).
it's this the first bubble, where investment is done not due to speculation.
but because we all know we're in a massive financial crisis but they continue to invest in order to pretend it isn't there?
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