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Why our economy may be headed for a decade of depression (nymag.com)
92 points by Balgair 13 days ago | hide | past | web | favorite | 127 comments

> Because tomorrow, every piece of consumer electronics, even your lowly coffee machine or microwave or toaster, is going to have a 5G chip. That’s what the internet of things is about. If the Chinese can listen to you through your smartphone, they can listen to you through your toaster. Once we declare that 5G is going to allow China to listen to our communication, we will also have to ban all household electronics made in China.

This is a ridiculous conclusion. Even if we make the generous assumption that people want internet connected toasters, we're likely not getting rid of WiFi. And even if we did ban hypothetical 5G toasters, manufacturers in China wouldn't shut down their factories, they would simply make different toasters.

It is hard to take this article seriously as legitimate analysis after reading things like this.

I think some legitimate concerns are popping up with so many poorly-engineereed iot devices hitting the market. I think the fears are amplified due to simple lack of understanding. I'd propose we start certifying consumer electronics for data safety the same way we certify them for electrical safety. We should start recognizing some groups like UL or ETL for software.

Except security is more of a moving target, so I'd rather see 1-3 open-source embedded distros that commit to supporting hardware for 10 years with over-the-air updates. Fly-by-night device makers have made it clear they can't be trusted with this. I'd also like to see a standard for a IoT gateway so you can easily observe your IoT traffic. Finding a way to open this up would go a long way in building trust.

> I'd rather see 1-3 open-source embedded distros that commit to supporting hardware for 10 years with over-the-air updates

I don't see this happening unless a large company boostraps the funding for a distro like this, similar to how Microsoft boostrapped an open source election machine standard. "Over the air updates" requires the ability to pay for the bandwidth.

I do think there's an interesting synergy with your IoT gateway idea and Bit Torrent distribution of the Over the air updates.

The article just want you to believe that 'The Chinese' would want to put a microphone with 5G into your toaster.

So that they could listen to YOU through the said toaster, because whatever shit you said near the toaster is obviously very important to the Chinese.

Is there a more moronic idea? If someone were to listen to you, wouldn't it be easier to say... do it through the phone?

>> because whatever shit you said near the toaster is obviously very important to the Chinese.

Amazon and google think it important enough. The line between comercial utility and national security is blurry at best. Whould the chinese be interested in how many people were chatting about a paticular presidential candidate during breakfast? Whould that candidiate be interested?

And yes, some normaly everyday people do say things that are more direct\ly interesting to China. Anyone here in the military? Anyone here with family in the military? Anyone here work for a company that does work for the military? Big-net intelligence collection is a real thing.

I don't know about you, but I have very sensitive conversations with my self--out loud--while making toast.

I too engage in classified discussions regarding geopolitics and military operations while making toast.

I dislike this kind of thinking in security -- it is a very 19th century.

The reason we only think about state security in the context of "geopolitics and military operations" is because that's all we hear about and that's probably all that nation-states used to be able to resource.

But with cloud + machine learning + sufficient sensors, the old assumptions about resource scarcity for security intelligence collection is flipped. It used to take a few "James Bond" agents, a few "Q" engineers, and a large support staff to work one case at a time. That scarcity calculus is completely different now. Instead of "1 civilian to every 300 police officers", new data collection feels more like "300 police officers to every 1 civilian".

The only thing that stops any sufficiently large organization from collecting dossiers on every person on Earth is "complexity versus competence".

Agreed. So to me, it's just a matter of time - with the data advertisers already have, it would only take getting that data in the same room with a few smart spooks, and you'd have something to act on to police thinking, if your government was so inclined.

The enemy would rather you to have conversations about private matters they can blackmail you with though (or any piece of information that would help them find out how to help you tip to their side).

They're going to find out you eat Dijon mustard, disqualifying you from running for president

I don't. But I imagine I would if it was my job.

Putting a microphone in the kitchen is probably one of the best ways to spy on people in their homes.

The kitchen is a natural gathering place, and spot for conversations.

And if I thought someone was spying on me, I would check the inside of my toaster last.

> And if I thought someone was spying on me, I would check the inside of my toaster last.

I assume that organizations that spy for a living learn from their previous mistakes and the natural selection effect means that the obvious places to plant bugs are skipped.

Speaking of fun ways to hide surveillance equipment: if you're looking for hidden cameras in your home, check the lightbulbs.

You could consider the subject through the perspective of, say, David Petraeus:


> So that they could listen to YOU through the said toaster, because whatever shit you said near the toaster is obviously very important to the Chinese.

Sure. But maybe they'd care a lot about some tiny percentage of toaster talkers. And they likely know how to find it.

You didnt mention the biggest flaw in the argument: 5g has nothing to do with microphones.. and saying that 5g == microphones kind of says a lot about the writer's understanding of tech.

Adding a microphone to a toaster would also be easy to recognize if the device were torn down. Maybe people won't do that to every toaster, but if this were widespread, a few toasters from different brands would eventually be torn down, and finding a microphone repeatedly would raise alarm.... I doubt this would work for very long before Chinese goods faced restrictions.

Unless all sorts of consumer goods start integrating a generic IOT controller, one with a 5g connection and a sensor package that includes a microphone.

I could see use for this. A microphone is essentially a vibration sensor, a useful generic item in many connected home appliances. For toasters specifically, a microphone listening for a smoke alarm (code in most kitchens) would be very interesting. A toaster could hear when it was burning the toast turn itself off.

Put 5G connection in a SoC, and then have vendors use it under the guise of the toaster needing a CPU for timers and making perfect toast with machine learning, whatnot.

Using a microphone to listen to other devices is more of a hack that hobbyists would do to monitor some dumb devices in their custom home automation network. I'd be surprised to ever see it in an IoT device; I think it's too unreliable.

(Not to mention, a toaster listening to a fire alarm is a bit absurdish as systems architecture. But then again, I've given up on expecting the market to deliver intelligent solutions to actual problems.)

The thing with wifi is that you increasingly need a password to join. If a device comes with its own 4G/5G internet connection, it doesn't need your permission to phone home anymore.

Carriers still need to let a device on their network to get paid.

Carriers offer bulk-pricing for manufacturers to prepay these SIMs so that they get service without any interaction of the end user. And the prices are so low for these telemetry/low bandwidth plans that it doesn't take too much potential monetization to offset the cost to the manufacturer. A big part of 5G is really enabling these multitudes of low-traffic devices to have low marginal cost on the network.

I can imagine a hundred products that can benefit from 5G, and I’m just one person. WiFi is great for high power products that stay within trusted networks, but not everything does stay within a trusted network. 5G can also offer a convince of being pre-configured out of the box to work.

It's funny, because I imagine what you consider "benefit" I'd consider a disaster. Wi-Fi at least usually connects to the network you control. Mobile connections hook up directly to the telecom provider, and if we're talking appliances and not smartphones, that means you have zero control over what the device is sending.

It's not just a matter of surveillance, but also a matter of further enabling shitty, user-hostile business models, where the physical hardware is only a proxy for a service.

Yeah I ran across some scaremongers on Twitter 6 months ago who were going on about vaccines (??) And 5G. I had and still have no clue about that.

As a real aside, networking everything does definitely have upsides and downsides.

Upsides: seamless monitoring, remote control via api, integration across a house/car/phone, remote presence (never worry that door was open, or coffee pot is on, or garage door up).

Downsides: DRM at every level, unupdated devices, non-service things are now shorehorned into a service model, you no longer own your possessions, hacking, pay for a plan per device?

There's also spectrum discussions with 10-100x devices chattering. That's going to raise noise floors even higher.


Relevant edit of where I see IoT going towards:

“The door refused to open. It said, “Five cents, please.”

He searched his pockets. No more coins; nothing. “I’ll pay you tomorrow,” he told the door. Again he tried the knob. Again it remained locked tight. “What I pay you,” he informed it, “is in the nature of a gratuity; I don’t have to pay you.”

“I think otherwise,” the door said. “Look in the purchase contract you signed when you bought this conapt.”

In his desk drawer he found the contract; since signing it he had found it necessary to refer to the document many times. Sure enough; payment to his door for opening and shutting constituted a mandatory fee. Not a tip.

“You discover I’m right,” the door said. It sounded smug.

From the drawer beside the sink Joe Chip got a stainless steel knife; with it he began systematically to unscrew the bolt assembly of his apt’s money-gulping door.

“I’ll sue you,” the door said as the first screw fell out.

Joe Chip said, “I’ve never been sued by a door. But I guess I can live through it.”

--- Phllip K Dick, "Ubik".

Networking things makes sense when remote interaction is useful.

There is very little you can do with a toaster, microwave, or coffee machine while you are not physically present. You can't send toast, coffee, or leftovers over a network. The 'internet of things' isn't useful in and of itself. There has to first be a practical use-case that justifies it.

I haven't had to worry about the coffee pot being on for decades. My $20 coffee pot has a positive temperature coefficient heating element, thermal fuse, and automatic shutoff.

> There has to first be a practical use-case that justifies it.

The use case is additional revenue streams for appliance makers from selling surveillance derived data. Every smart tv is a revenue stream for the manufacturer. That's why you can't buy dumb tvs anymore.

Soon your coffee maker, your toothbrush, your car, your refrigerator, and everything else that plugs in or has a battery will be "smart" in the same way.

Here's the Vizio exec explaining why they would have to charge a premium for "dumb" tvs:


That works works out for TVs because of a few specific things:

1. The consumer wants to hook their TV up to the internet to get content

2. TVs ads have a well established market of buyers who will pay for that data

3. TVs are expensive and consumers often buy primarily on price

By comparison, there is no market for the data from my coffee pot, and little to no incentive for a consumer to choose a model that collects data over one that doesn't.

> 1. The consumer wants to hook their TV up to the internet to get content

As the cost of 5G iot chips fall it won't matter what the consumer wants.

> 2. TVs ads have a well established market of buyers who will pay for that data

The data collected from Smart TVs is much more than ads. They track and report everything you watch, including dvds and blurays, with media fingerprinting techniques.

> By comparison, there is no market for the data from my coffee pot

Oh but there will be. Soon some data scientist at your health insurer will notice that people who drink more than 3.5 cups of Folgers a day are 5% more likely to suffer heatstroke or whatever. Then they can adjust premiums and deny claims more effectively. Not allowed to use this information due to regulations? Apply parallel construction and use it to focus limited investigation resources.

I really hope you're right and this doesn't happen.

> As the cost of 5G iot chips fall it won't matter what the consumer wants.

If the consumer doesn't want that connectivity as a feature, you'll need to find a buyer for the data who is willing to subsidize >= 100% of the price of the additional hardware and service to have a viable product. Alternative data from other sources is probably still going to be a lot cheaper for most things... because a lot of competing data sources have way less overhead, approaching zero in some cases.

> The data collected from Smart TVs is much more than ads. They track and report everything you watch, including dvds and blurays, with media fingerprinting techniques.

I was referring to the purchasers of the data, not the subject of the data.

> Soon some data scientist at your health insurer will notice that people who drink more than 3.5 cups of Folgers a day are 5% more likely to suffer heatstroke or whatever. Then they can adjust premiums and deny claims more effectively.

If they wanted to do this, they could have done it any time over the past 20+ years ago by purchasing transaction data. But insurers have already found better ways to collect even better quality data: Just ask for it directly and offer a discount.

Playing devil's advocate, but I can see how people would appreciate a network connected coffee maker. My wife likes to stay in bed and scroll through her newsfeeds in the morning. If she could start the coffee maker from her phone, it would probably get her out of bed a lot faster.

Some people like to use their Cuisinart Grind & Brew instead of an alarm clock. The grinder will wake you up at the programmed time, and if you get up, you are rewarded with freshly ground coffee.

You can get a pretty dumb coffee maker that has a delayed brew setting. You'd have to put the grounds and water in anyway, so the extra effort is pressing a couple buttons on the machine right after you do that, rather than a couple buttons on your phone in the morning.

Having it made at a specific time is a totally different dynamic than having it made on demand with a press of a button. We don't use alarm clocks, so our wakeup times are different every day.

But regardless, if the coffee made itself at 8am sharp, I would feel pressure to get out of bed immediately, ruining the chillness of the morning. I want to be able to lounge around, scroll the feeds, and then tap the button to make the coffee when Im feeling somewhat ready to make the step out of bed, but need a bit of extra motivation.

this solves the problem for most people, but coffee enthusiasts aren't going to like the idea of grinding the beans 8+ hours before brewing.

Well of course not but if you're an enthusiast you'll probably spend more for one that grinds, too. Or not use a machine, so the whole issue of brew-by-wire is moot. Point is this is a pretty common feature even on cheap machines, with no Internet connectivity required, and the effort required to use it is about the same.

Toaster art https://art-sheep.com/a-toaster-that-can-print-your-selfie/

specifically toaster porn needs to be networked.

ugh, the future is awful.

> integration across a house/car/phone

While this sounds absolutely lovely on paper, here's the thing: I do not trust the free market to deliver on that. What will happen is just a bunch of silos where things sorta work together as long as you stick to a single vendor, but half of the things are garbage, as there's no point in making them good when the users are already captive due to buying into the one expensive thing that's best-in-class.

> Joe Chip said, “I’ve never been sued by a door. But I guess I can live through it.”

What a genius visionary...


PKD gets IoT,EULAs, and contact law in one shot.

It's similar to when that engineer was investigating his purchased Tesla, and Tesla called and threatened him to not 'tamper with their car'.

Cory Doctorow has an excellent short story Unauthorized Bread about this very topic.

i want less integration to the internet and online services, not more.

I'm trying to decide where the line between sound economic advice and scaremongering sits. I think it may be around "You’re going to start having food riots soon enough."

At least I hope that's scaremongering. Given that everyone is doing their best to return to normal, I feel like running out of unemployment may not be as big of an issue as stated.

Wait what? Unemployment payments are the only things that are preventing a full scale depression and hardship for millions. These people have lost their jobs, have no savings or assets, nothing. How are they going to get food? Pay rent?

The quick action by Congress in boosting unemployment payments has been the only thing keeping the economy from going belly up. If that stops, we’re in for a lot of hurt.

He argues that that's going to happen in July. I just can't see the States letting that happening. Here in Canada they are continually expanding out benefits, and I think the States will have to follow that as well. I can't see the tap being just turned off.

There are enough people completely divorced from reality in congress and in and around the presidency that it will potentially get incredibly hairy. I can absolutely see it getting to the absolute brink before they suddenly realize "oh shit this is bad" and pass an emergency "freedom payment" which again will be a one time thing and not be completely enough.

My pessimism says we're also going to be dancing from one stimulus to another without addressing the long term

> absolute brink

I would agree, but in an election year maybe they won't play it that way. The party in power has more incentive to keep voters mollified than they do in preserving their ideological purity.

> we're also going to be dancing from one stimulus to another without addressing the long term

100% agree. This is the classical American response, we have mastered the art of kicking the can down the road.

The federal stimulus never was nor was intended to be a long term solution to anything.

Social safety nets in the US are mostly handled at the state level, and that doesn't look like it's showing any signs of changing.

what happens when the states run out of money though, that is ultimately the problem. how long are the states going to be able to keep up without federal intervention?

They are having this argument in congress right now. Republicans want to shrink unemployment because its bad for people, they don't want to give money to states because (that only helps blue states, red state budget deficits are different?), they want to shrink the size of unemployment because its higher than minimum wage in some places.

Right, even our federal shutdowns eventually come to an end with both parties reaching a budget agreement. The consequences of neglecting this unemployment crisis would be worse than a prolonged shutdown.

You're thinking of a government that has rational people in charge. We have an extended family running one branch and a party holding on to power by its fingernails in the Senate. Look at the latest developments in the Inspector General purge. Trump is firing his 5th (6th? I lost count) IG, and illegally installing the replacement before the last one has been officially processed out. The new one is still an employee of the department, which not only compromises the whole idea, but exposes whistleblower complaints to management. The Senate hasn't even called a hearing about it.

I don't mean to argue over any details, just pointing out that our federal government has had an axe taken to it for the last few years and it might not be able to do very obvious things right now.

Right but will the States actually let this happen? If there are food riots, it’s the locals who suffer.

Will Florida really wait for the federal government when Jacksonville is full of rioters, or will they setup food banks far in advance of that situation?

I predict the later. Especially since States can do debt financing for their operations.

Maybe. But states can also call out the National Guard. Florida's police departments have been heavily militarized, even more so since the Orlando nightclub shooting in 2016. And that means that people will expect to be met with real force, so they will wait until they're in some serious deprivation before large riots even start.

You're totally right - the state of Denmark is thoroughly rotten, but even under this administration the debt ceiling crises were able to be resolved. The government shut down for a good long while, but it resumed function. Maybe it's past the point of no return, but sanity does seem to shine through at the last second when it must.

I do not want to downplay the severity of such an outcome, but it is worth recalling that this type of event ( and worse ) has occurred to multiple developed nations within recent memory. Ultimately the economy will recover and normalize, even if the availability of certain items is limited for a period of time.

The fall of the soviet union saw unemployment at 40% and widespread food rationing/limitations. I don't believe there is historic precedent for unemployment growing beyond 20-25% without widespread economic and societal restructuring, the great depression in the US saw the change from a government spending .3% of the economy to >30%.

Past recovery is not a guarantee for future. I am very surprised at how much faith people seem to have in the stability of advanced economies. What we face today is not simply an economic recession; it’s a pandemic which is actively preventing people from engaging in the system, and the reality is that we might face more such natural disasters in the future. We have seen civilizations get undone quite dramatically in the past; it’s not guaranteed that it won’t happen again.

In the case of the US: the economy was hollowed out by the 08 recession and Republicans prevented economic stimulus packages that would help in speedy recovery from passing. All the gains of the past 10 years were wiped out in a few months. At some point you have to ask how much pain people are willing to accept before casting aside a system which does not work.

Nobody in history is immune from disaster. The world goes on. One can remember to be humble, that us humans are but a small part of nature and subject to her whims.

There is no perfect system to avoid catastrophe. Not yours, not mine. Humanity progresses. It will continue to do so.

Sometimes the best way to fix something is to riot in the streets. I hope it doesn't come to that, but often it does.

Every couple hundred years or so a fraction of humanity dies due to disaster and/or strife, and we collectively continue to thrive and improve. This has been the pattern for all of recorded history. Why do you think it will be any different now?

> Nobody in history is immune from disaster. The world goes on. One can remember to be humble, that us humans are but a small part of nature and subject to her whims.

It's a nice sentiment to have when you aren't the one counting your formula stock and worrying how you'll take care of your 1 y.o. if shit hits the fan and there's no longer food to be found in the foreseeable future.

Taking things from perspective isn't as fun if there's a real possibility you'll end in the middle of it. Catastrophes and collapses are part of humanity's growth, but that's not going to be a consolation if your society starts disintegrating about you. Some people will survive such an event. Neither you nor me will likely be among those.

My point in the quoted text was that nature is not sentimental. Sentiment doesn't matter. Disasters happen.

You can stockpile against the next disaster to the best of your ability, if you want. Collectively we can prepare for disasters, to the extant we agree on how to do so. And the world keeps going on, some are lucky, some are not, kind of like every other creature in nature. We are no different.

I don't know man, just looked at front page of /r/ unemployment: https://www.reddit.com/r/Unemployment/comments/gofuf5/illino...

The "anti-rich" topic has been going on for so long without a real conclusion, I definitely would not discredit the possibility of riots in certain US cities.

From that thread:

> Can we riot on the internet?

And I think that hits the core issue. There's a lot of "eat the rich" on reddit and imgur and undoubtedly other platforms, but that's like #kony2012: clicktivism and online LARPing as revolutionaries.

Riots are always a possibility, a sports event can be the cause, and so may be severe economic issues, but I doubt that they will be widespread and large. If they happen, I expect swift and violent suppression, and since they won't be bi-partisan, that suppression will find a lot of support in the population.

I imagine that the distributed nature of the internet is actually what hurts it in this case - you riot over sports because your team won and the energy is palpable when you go out into the streets to join the crowd. There's less physical location to share this unrest, so it's largely just spent harmlessly online.

That's my impression as well, and online excitement is a bad predictor of offline activity. It's one thing to comment "smash the system" below a picture of a guillotine, it's quite another to go out to tango with the riot police or national guard. One of can have very real consequences, and that'll filter out the large majority.

Thats already happened once in recent times.

Occupy Wall Street.

Now, what happens when that expands to 1/10 of citizens due to lack of food, people getting evicted, no work, and more? Covid-19 is only accelerating the road we're currently on, in a very quick fashion.

And there's a reason why police departments were buying military surplus. They view us citizens as the enemy. There's nary a reason why you need APCs with 50cal's mounted for the local police force, or armed with a variety of grenades, or microwave cannons, or acoustic weapons.

Whatever it is that's forming and coming to a head, it doesn't look peaceful. At. All.

In my opinion, I think you are right.

Part of me thinks that this is exaggerations as there’s no way all food banks have lines that are miles long, as stated in the article. I did notice that there are security guards outside my Whole Foods and Trader Joe’s now though.

> Given that everyone is doing their best to return to normal, I feel like running out of unemployment may not be as big of an issue as stated.

The bigger test may be once the PPP funds are exhausted in about a month.

Most high income nations have been overproduce food via subsidies for decades. For most countries, food security is part of national security. The obesity crisis is a side effect of that:


I think there's enough slack in the system we won't see food shortage. The lines at food banks are a different problem entirely. That's because people don't have jobs, and are afraid to spend what they do have in savings and unemployment.

There doesn't have to be a shortage for people to be hungry - just a breakdown in distribution, and we are already seeing that.

And....no, people aren't lining up at food banks because they are "afraid to spend what they have". They mostly don't have anything to spend. Free food means they can afford the electricity bill, not that they can leave savings untouched.

Electricity is payment deferred during the pandemic.

Not every necessity is deferred. Also, getting food from the food bank may mean saving money that you'll need to buy food on a day when you can't get to the food bank.

Having been through the experience of "large" financial loss (though not to the point of going hungry), I can attest that it changes the way you think about the world, your role in society, who you trust, etc. I wouldn't necessarily discount the idea of dramatic change of behavior if a lot of people get desperate enough.

What I've been reminded of this year is that panicking is not useful. Shit can happen at anytime, and being prepared to weather a downturn of any type is always in fashion. Have a 3 to 6 month emergency fund is a good idea, improving your skills for unexpected job loss is a good idea, regular disciplined investing if a good idea, yada yada. So I'm just doing my best to ensure my butt is covered for if/when the defecation hits the ventilation.

I agree with a lot of what you're saying - assuming it's possible for someone to do it - low wages make much of that difficult.

> improving your skills for unexpected job loss is a good idea

This is the one I struggle with when I see it - if your industry collapses what skills are the ones you should have been working on? Software is our own special beast, but I don't know what skills in a lesser paid profession should work on that will keep them employable. I suppose they could dabble in something like code, but that's not relevant to their current profession and if the economy goes all topsy turvy it'll be hard to get a job with little skill and no experience in your plan b.

I don't think anything can prepare you for an entire, sudden collapse. If the world software biz goes full quantum programming, qubits and all, in the span of a few days, I'm screwed. But if I get canned from my job as a dev, that work I put into learning a few algorithms, scaling on AWS, and some marketable programming language will give me a fighting chance. If I were a MUMPS programmer who had never used version control in my 20 year run in some job and I'd never learned JavaScript, losing my job would be traumatic.

Yeah, I think this sort of thing works for our profession, I just don't know if it helps those outside it.

I also doubt we'll see widespread food riots in the rich world. Our issues are mostly specific food scarcity due to supply chain issues and increases in food prices that likely won't be too painful for people who are still employed. That said, I would say it's a near certainty in parts of the developing world, where a food supplies are more tight and food costs a much more significant part of the average person's budget.

See also: https://en.wikipedia.org/wiki/2007%E2%80%9308_world_food_pri...

Think of all predictions as set of possible outcomes. Yes, there is a possible decade long depression outcome. Based on my reading its W recovery staggered growth, with US pulling back all its supply chains to North America and Export-Oriented economies holding the bag.

These economic and global dislocations resulting in events we have not seen Post-WW2.

In spite of all these, US/North America is where you would rather be than say, Europe, Africa or even Asia.

> In spite of all these, US/North America is where you would rather be than say, Europe, Africa or even Asia.


Lower population density and land that's only been tapped for a few centuries instead of millennia. When the famines and natural disasters start, it's going to hit the old world a lot harder than the new.

I thought the parent to my comment was more an assertion around economic woes, but I'll bite.

I'm interpreting your response as an assertion around the USA doing better in the case of major climate shift. I don't perceive the US to be making significant effort towards more sustainable agriculture (compared to say the Netherlands) or keeping pace in proportion of energy generated from renewables or implementing meaningful social policy to address the disproportionate impact a climate crisis has on the poor.

The US has a lot to recommend it, but I find your argument to be a bit lacking in convincing me it'll have and easier time in the coming decades.

Assumes those continents don’t develop tech to combat climate change or famine. Assumes those continents don’t colonize other continents.

He is making lots of wild predictions about technology and automation.

5G in toasters? Come on. Is 5G really such a ground breaking technology that will change everything?

Automating car manufacturing? Tesla tried and it failed them - https://www.theverge.com/2018/4/13/17234296/tesla-model-3-ro... No way Hyundai can do it tomorrow.

Replacing janitors with Roombas?? What the hell is he talking about.

Lots of promises about AI, but so far, it has underdelivered.

> Is 5G really such a ground breaking technology that will change everything?

If it enables cheap enough connectivity - i.e. being able to place a 5G chip with a prepaid SIM card in a low-cost device - then absolutely, companies will jump at the opportunity to do everything from inventing bullshit "smart" "value-add" features, to selling surveillance to marketers.

Predicting the future is inherently stupid. Trying to show what will happen in our complex world using models is the stuff of Science Fiction.

Going back to the article and economics, if you follow David Graber (Debt The First 5,000 Years and Bullshit Jobs), he talks in his books about how every great civilization needs to have debt resets. Going back to the Babylonians, the Sumerians, and tons of others, there were always leaders or kings or emperors who would rise to power on the promise of debt relief. Israel had the year of Jubilee, where ever 50 years debts would be forgiven and slaves set free.

Continue inflationary debt is never sustainable. At some point, the world bank will lose its influence, smaller autocratic States will pull out of the "debt" they "owe" to their "liberators" and larger States will no longer be able to extract resources without force, that they're going to have a harder time paying for.

Debt reset needs to happen. Ever American student loan, loans with ballooning interest, medical debt, debt that's normally written off, debt that's never written off ... at some point we need less tracking and a bigger reset for each human being to start fresh.

Student loan debt is interesting because it could swing an election. All it needs is a candidate offering to write it off and a large enough portion of the population that stands to gain. I'll be surprised if it doesn't happen in the next decade or two.

I doubt it. Less than 15% of adults have student loan debt, and only a small portion of those are past due. Plus young people don’t vote. The only thing that might happen, is what has happened which is to delay payments or maybe interest, but politically, student loan borrowers are not a sympathetic group to other voters.


Any solution to student loan debt that doesn't fix the problem of how we wound up in the situation shouldn't (and probably won't) get widespread support for at least another 5 years or so.

Even as someone who's still paying off student loans, it's hard to want blanket forgiveness unless there is a system put in place to help minimize the number of people taking out loans for degrees that have a low chance of being able to make enough to make the cost worth it.

IOW, if a degreeholder in Underwater basket weaving on average makes only 5k/year more than someone who doesn't, we probably should limit the number of loans given to people pursuing those degrees.

Yes, this means many universities will have to trim down or eliminate programs. Perhaps it doesn't make sense for more than one or two colleges in a state (especially in smaller states) to have underwater basket weaving degrees.

There's also the psychological aspect to keep in mind; I recall my time in college and the first few years of what I was doing with my career, versus many of the people I know who are now complaining about student loans.

I graduated close enough to the 2008 crash that I couldn't get a job in my field after college. Building my career was years of long hours, cost me my marriage, and left me without a social life. Most of my associates who now complain about their student loans constantly were waiting for the next job to 'drop in their lap' (I even helped one get a job. They eventually got fired because they were incapable of even showing up to work less than an hour late for 6 months straight. No, they didn't think to save any of the extra money they made.)

That really there is the biggest rift: What's the solution that doesn't make people who sacrificed other parts of themselves to pay their bills feel like they got ripped off for doing the right thing?

I agree, it is completely unfair to give one group of people tens of thousands of dollars. If they are going to do that, then they should give everyone the same amount of money, even if you repaid your loans, even if you didn't take out loans!

On the one hand I worry about the moral hazard, the devaluing of the currency, and the debt being passed to future generations. On the other hand I recognize that it is almost criminal how we pressured 18 year olds into this situation.

Presidential elections have been pretty close lately. A candidate might increase their odds of winning substantially by swinging a fraction of a percent of actual voters.

They would have to swing voters who live in swing states. Voters in non swing states don’t matter. I also don’t think voters in swing states are particularly sympathetic to those with student loans either.

It could have the opposite effect too. For every person with an outstanding student debt, there may be another 3 people who absolutely do not want to "pay" someone else's student debt. Those who have gone to great lengths to successfully pay off their student debts might be particular vehement against such policy.

I'm pretty angry that young people don't vote much. It's idiotic. I've never understood this. My whole life I've voted since I turned 18, even when I was in college (mostly, oops). Then people vote more as they get older. I can't understand this, can't they see the impact?

And vice versa.

Peter Thiel had the idea of allowing student loan debt to be dischargable in bankruptcy to the university that granted the degree. Seems like a reasonable idea to me.

We absolutely need a way to have colleges suffer repercussions for poor degree outcomes. It's at least part of the problem that colleges just want you to finish your degree (so you don't scare people way) and sign those maximal govt loan papers. They don't care what happens next much. The nicest thing you can say is they need to be incentivized for your post college success more.

Predicting is stupid.. but since we do many stupid things -- predicting what will not change is less stupid than what will.

What will not change -- US will still have the most powerful navy in a economically declining world. What would that mean?

If there is one country that can go from free trade to mercantile on a dime.. its Murica!

In a world full of zero sum games -- Hard Power matters.

>Predicting the future is inherently stupid. Trying to show what will happen in our complex world using models is the stuff of Science Fiction.

I think stupid is the wrong word to use here. "Flawed" would have worked just as well without having potential for misunderstandings. Attempts of predicting the future is _essential_ for our society to work. The reason we move forward at the pace we currently do is because we use assumptions and approximations of reality to plan ahead.

> Israel had the year of Jubilee, where every 50 years debts would be forgiven

How would this work? Wouldn't people just not enter into contracts near that 50 year mark? Is it randomized?

If everyone knew that debt resets were to happen, the contracts in the 49th year would likely be only for small things.

That probably also means that for larger purchases, more cash up-front is required the closer it is to the Jubilee year.

It did end up having that effect, which is why Hillel the Elder created a device called the "Prozbul" which transferred debt to the court before the Jubilee year, thus preventing forgiveness and enabling borrowers to borrow even close to the Jubilee. This is one of the few (maybe only) true loopholes invented by the Rabbis, with the justification "so as not to close the door to borrowers."

Edit: Wikipedia link https://en.wikipedia.org/wiki/Prozbul

Some interesting points but some of them are not internally consistent:

Author claims that the stock market is up because people are sitting at home day-trading driving up prices. Then a few paragraphs later claims that cash is king and people are unlikely to spend.

Author claims that 2009 Fed spending made sense because it was an aggregate demand issue. That was not very clear then as it was unclear that many of the mortgage-backed securities actually had a positive value. Coronavirus in comparison is much more clearly a demand issue (people are effectively being ordered not to go out and spend).

sorry but lmao at people who think small daytrading drives these markets.

The author has zero credibility. Never listen to this dangerous moron ever again. He doesn't deserve a conversation thread.

the headline is very optimistic for what the article contains

I'd take what Roubini says with a grain of salt. Economists have predicted 10 of the last 7 recessions, and a broken clock is right twice daily.

In recent history, he was a bit late to the coronavirus party, not really being on-board until late February. Preppers were all over it in January.

Preppers also predicted 10 of the last 1 world debacles too, so that's not very predictive either (year 2000 crisis, nuclear war, etc). I'm no better myself.

However, in 2008 there was a giant amount of poor mortgage debt, it was a real thing. We've had near 0% interest rates in much of the western world, more in europe, wasteful debt increases and tax cuts in the us that didn't go to long term useful infrastructure. And our economy hasn't been growing that much. China has a giant debt bomb, how will that work out?

Never mind China's debt bomb. Their demographic bomb is bigger. It's going to look like Japan in 20 years. Between that, the possibility of parts splitting off, and the possibility of the fall of the Communist part, The "China will overtake the US" narrative is premature. If Xi can hold it together, maybe it will, but that's not a given.

I forgot about the age issue and also the too many males, too few females in China. The Communist part is looking pretty strong right now. I wonder, is there any reason to hope that China will eventually democratize? I see nothing like the demographic trends that is so clear. China has a lot of room to grow their economy and military before the demographic issues hit. Look at Japan, very powerful in both dimensions.

Stop it my SPY puts already expired worthless.

wallstreetbets in my HN? obligatory SPY 6/11 285c

It sounds a lot like the jackpot, as William Gibson calls it in Peripheral and Agency.

Can anyone explain why banning credit/usury wouldn't help in the longer term?

What, and force people reconcile with the real cost of owning material goods and receiving services? Sir, this is America.

I've also heard private debt jubilee put forward as a solution. Don't know which (if either) is preferable.

Given who's in charge of the CDC + Senate I can't say I'm holding my breath.

Important to understand with all the US-China stuff - working class people in both countries should mutually benefit from higher productivity, the open development and sharing of technology, from trade, etc. The only thing driving a rift and opening up a "cold war" is that US and Chinese capitalists can never get along because they are competing for the same pool of profits. Everyone else has pretty mutually beneficial material interests.

So when you read about "the Chinese" (who in China?) listening to you through your toaster, there's really no reason to care or pay attention to that absurdly nationalist sentence, just as there's no reason for anyone in China specifically to listen, unless you're the owner of a significant portion of a technology company and are hiding that company's tech knowledge from the rest of the world in order to profit from it. And that's against all of the rest of our interests.

People seem to want to downvote this. A similar contradiction exists with automation, which the article explains a little. Automation should be a good thing. It means that if we could all feed ourselves and make commodities yesterday, after we automate some people out of jobs today, we should still easily be able to support them at the same high living standard, except they're free to do nothing (or something else useful instead, or shorten the work week for everyone). But instead, automation is used to crush labor costs, ie, our living conditions. Labor arbitrage across the pacific ocean is similar. Workers in the US shouldn't be in competition for jobs with either robots or Chinese people. But when the owners of companies have to always desperately compete for maximal profits, these are all nightmares for workers.

A lot of people in this country have lost their jobs due to outsourcing.

Their jobs were most often outsourced by US companies looking to get higher profits from cheaper labor. It would be a lot more effective to solve this by enforcing equivalent, high working standards across the world, rather than blaming Chinese people for desperately needing a job like everyone else. But then profits would be lower, oh no.

Not only would profits be lower (disincentive for companies), Chinese [or other off-shore] employment prospects would be worse (disincentive for them to comply).

Trade makes people better off in general, but it doesn't make every person better off.

Just as the USA goes to extreme efforts to avoid the higher labour standards offered in Northern Europe.

Always look up and down the continuum.

I don't understand, disincentive for who, to comply with what?

If China would make themselves less competitive "by enforcing equivalent, high working standards across the world", they have clear disincentives to enforce compliance.

Oh, yes. That's been used to drive down the standard of living in the US (including within it) forever. That's why competition is bad for labor. The only real escape from the market's race to the bottom is a democratically planned economy IMO.

Competition is both good and bad for labor. It’s bad for labor-as-suppliers. It’s good for labor-as-consumers.

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