Fox cable hosts are doing the job of the chair of the White House Council of Economic Advisers, Jared Bernstein, by admitting that the economy under President Biden is strong. Bernstein joins MSNBC’s Ali Velshi to discuss the latest “expectation-busting” jobs report.
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Yes but have you considered that the rich are getting richer and therefore the economy is great? Doesn’t matter that us normal folks can’t afford groceries as long as stocks go up.
Just a fyi…we don’t need to take the rich more, we can literally pay for single payer now. This is what kills me, we already spend 3xs as much in healthcare than any other single payer system out there. We’re more than capable of providing that yesterday if we wanted to, but the insurance companies would shit a brick if we told them to pound sand.
Pro-tip: Tech isn’t the whole economy. Over-indexing on that one sector–and SV tech companies in particular–is incredibly myopic.
That’s not to say it doesn’t suck for people in the industry (which includes me, by the way), but tech is just one sector that’s experiencing some very specific dynamics (e.g. rising interest rates killing VC investment, overhiring during COVID, the need to goose share prices after stocks reverted to the pre-COVID mean, etc) that should not be extrapolated when considering the broader economy.
LOUDER FOR THE PEOPLE IN THE BACK!
The stock market is held aloft pretty much solely because of tech.
I’ll be honest, I don’t understand your point.
What does the value of those company’s stocks (which it’s worth noting are rallying in response to those layoffs) have to do with my point that the underlying causes of the layoffs in tech cannot be extrapolated to the broader economy, and thus action in that sector should not be used as a proxy for overall economic health?
So much emphasis is placed on the stock market and yet the stock market is boosted to all-time highs thanks to a handful of tech companies. In fact, these handful of tech companies make up about 25% of the entire S&P 500 (not even counting the many other tech companies on the S&P 500 that aren’t part of this handful). With how much the stock market is talked about as evidence that the economy is doing great, tech plays an oversized role. So if tech companies are being temporarily boosted by layoffs, what do you think comes after? The AI hype cycle will hit a slump and tech stocks will eat shit, as will the broad stock market because tech makes up so much of it. Then suddenly “the economy” ain’t doing so great.
A lot of great speculation that has absolutely nothing to do with how the economy is doing right now, which is what I thought we were talking about.
Also, and I cannot emphasize this enough: the stock market is correlated with economic health but does not measure it directly. In the first half of 2023 the stock market was erratic due to rising interest rates while the real economy–measured by unemployment rates, salaries, etc–was quite healthy. Conversely, the post-2008 recovery was anemic at best for the non-rich while the stock market rallied to all time highs. There’s a reason I’ve never once mentioned the stock market while making the case that the economy is healthy.
Put another way: your predicted future slump in tech stocks does not therefore mean the economy more broadly will suffer.
And that’s assuming your prediction plays out, and that remains to be seen. After all, I’ll bet you were predicting that Facebook is on the decline, and yet they announced a truly astonishing quarter.
And again, none of this is relevant to the state of the economy right now.